ACTG 10-K & 10-Q changes, risk factors and insider trading
Acacia Research Corp. · Nasdaq · Patent Owners & Lessors · CIK 934549 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Changes in U.S. foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition.”
New heading “Disruptions in the worldwide economy may adversely affect our business, results of operations, and financial condition.”
New heading “For more information, refer to “—Risks Related to our Manufacturing Operations Business—Our Manufacturing Operations Business’s operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as the impact of tariffs and changes in a country’s or region’s political or economic conditions.””
Largest changes
“For more information, refer to “—Risks Related to our Manufacturing Operations Business—Our Manufacturing Operations Business’s operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as the impact of tariffs and changes in a country’s or region’s political or economic conditions.””see in full comparison
see in full comparisonFurther, the United States has recently imposed tariffs on goods imported from China and certain other countries, and increasingly levied sanctions and export controls on China and other countries. It is currently unclear what additional actions, if any, will be taken by the United States and other countries with respect to the imposition of tariffs on goods imported into the United States. During his campaign and during the first months of his administration, President Trump expressed various intentions to impose tariffs on goods shipped from China, Canada, Mexico and other countries to the United States, including up to 60% tariffs on goods shipped from China.Our Manufacturing Operations Business operates9nine manufacturing facilities across the United States, Canada, the United Kingdom and China, and we are continuing to evaluate the impact oftheseannounced and other proposed tariffs. Implementation of additional tariffs by the United States, or the imposition of additional retaliatory tariffs and other restrictions by other countries, could result in a material increase in the cost of our Manufacturing Operations Business’s products, which may result in the products becoming less attractive relative to products offered by our competitors. These changes, as well as any other changes in social, political, regulatory and economic conditions, or further changes to foreign or domestic laws and policies governing foreign trade (including export, import and sanctions), manufacturing and development and foreign direct investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business including our ability to repatriate cash accumulated outside the United States in a tax efficient manner.
“The global economy can be negatively impacted by a variety of factors such as the spread of fear, the occurrence of man-made or natural disasters, severe weather, actual or threatened hostilities or war, terrorist activity, political unrest, civil strife, and other geopolitical events of uncertainty. Such adverse and uncertain economic conditions may impact demand for our products generally and may cause disruptions in our supply chain. …”see in full comparison
“Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to include in its annual report on Form 10-K an assessment of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we are required to issue a statement as to whether or not our internal control over financial reporting is effective; and our independent auditors are required to issue an audit opinion on our internal control over financial reporting. …”see in full comparison
“As of December 31, 2024, a material weakness existed in our internal control over financial reporting. We describe this material weakness in Item 9A, “Controls and Procedures,” in this Annual Report on Form 10-K. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. …”see in full comparison
“U.S. foreign trade policy continues to evolve, and recent actions have resulted in the imposition of new and increased tariffs, as well as other trade barriers on the import of certain materials and products. For example, in April 2025, the U.S. government announced a new tariff regime that included a 10% baseline tariff on most products imported from other countries and an additional individualized reciprocal tariffs on countries with which the U.S. has the largest trade deficits, including China. Since that time, the U.S. …”see in full comparison
Full comparison: every changed paragraph (29)
We intend to grow our company by acquiring additional operating businessesbusinesses, energy assets and intellectual property assetsassets, which may not occur, and any acquisitions that we complete will be costly and could negatively affect our results of operations, and dilute our stockholders’ ownership, or cause us to incur significant expense, and we may not realize the expected benefits of our operating businesses because of difficulties related to integration.
We intend to grow our company by acquiring additional operating businessesbusinesses, energy assets and intellectual property assets. Our growth and success will be dependent on identifying and acquiring operating companies and intellectual property at attractive prices to realize their intrinsic value. However, there can be no assurance that we will identify attractive acquisition targets, that acquisition opportunities we identify will be available on acceptable terms or at attractive prices, or that we will be able to obtain necessary financing or regulatory approvals to complete any acquisitions.
We have identified a material weakness in our internal control over financial reporting at Benchmark, which could, if not remediated, have negative consequences for the Company.Benchmark.
As of December 31, 2024, a material weakness existed in our internal control over financial reporting. We describe this material weakness in Item 9A, “Controls and Procedures,” in this Annual Report on Form 10-K. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to include in its annual report on Form 10-K an assessment of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we are required to issue a statement as to whether or not our internal control over financial reporting is effective; and our independent auditors are required to issue an audit opinion on our internal control over financial reporting.
During the year ended December 31, 2025, we remediated the material weaknesses by designing and implementing new or enhanced controls that operated effectively for a sufficient period. Although we believe we addressed the internal control deficiencies that led to this material weakness, the measures we have taken may not be effective. We cannot guarantee that we have identified all, or that we will not in the future have additional material weaknesses. If one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could, in turn, harm our reputation, cause a decline in investor confidence and in the market price of our stock, or restrict our access to capital markets.
Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to include in its annual report on Form 10-K an assessment of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we are required to issue a statement as to whether or not our internal control over financial reporting is effective; and our independent auditors are required to issue an audit opinion on our internal control over financial reporting. As of December 31, 2024, we did not maintain effective internal control over financial reporting attributable to a certain identified material weakness. We describe this material weakness in Item 9A, “Controls and Procedures,” in this Annual Report on Form 10-K. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses will not be considered remediated until the applicable new or enhanced controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively. If our remedial measures are insufficient to address the material weakness, or if one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could, in turn, harm our reputation, cause a decline in investor confidence and in the market price of our stock, or restrict our access to capital markets.
While we achieved profitability in 2023,2023 and 2025, we incurred net losses in 2024 and have incurred net losses in certain years prior. We will need to generate and sustain increased revenue levels in future periods in order to become consistently profitable, and even if we do, we may not be able to maintain or increase our level of profitability. We may incur losses in the future for a number of reasons, including the risks described in these risk factors, an increase in operating expense, and other unknown risks. Any failure by us to sustain profitability on a consistent basis could cause the value of our common stock to decline.
Changes in U.S. foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition.
U.S. foreign trade policy continues to evolve, and recent actions have resulted in the imposition of new and increased tariffs, as well as other trade barriers on the import of certain materials and products. For example, in April 2025, the U.S. government announced a new tariff regime that included a 10% baseline tariff on most products imported from other countries and an additional individualized reciprocal tariffs on countries with which the U.S. has the largest trade deficits, including China. Since that time, the U.S. has expanded tariffs on key industrial inputs, including steel and aluminum imports, and has at times announced, rescinded, modified and temporarily suspended multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. In August 2025, however, the U.S. Court of Appeals for the Federal Circuit ruled that the tariffs imposed under the Trump Administration exceed presidential authority and therefore are invalid, and in February 2026, the U.S. Supreme Court affirmed such decision. Following the ruling, the Trump Administration signed an executive order imposing a 10% “global tariff” and later indicated an intention to increase such “global tariff” to 15% effective immediately, using presidential powers under certain U.S. trade laws. If implemented, such tariffs can remain in effect for up to 150 days, which may be extended by the U.S. Congress. The Trump Administration may continue to impose additional tariffs under other U.S. trade laws. In addition, from time to time, certain leaders in the U.S. government, including in the Trump administration, have indicated a willingness to revise, renegotiate or terminate various existing bilateral and multilateral trade agreements. The uncertainty over such policies has caused volatility in commodity, capital and financial markets, increased concerns over domestic and global inflation, and adversely impacted consumer confidence in the U.S. and worldwide. Any future tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy, and ultimately reduced demand for oil and natural gas and adversely affect our business.
Changes in tariffs and trade restrictions can be announced with little or no advance notice. We cannot predict what additional changes to trade policy or tariffs will be made by the Trump administration or Congress, including whether existing tariff policies will be maintained or modified, what materials or products may be subject to such policies or whether the entry into new bilateral or multilateral trade agreements, or the amendment or termination of existing trade agreements, will occur, nor can we predict the effects that any such changes would have on our business. However, such steps, if adopted, could increase our costs, disrupt supply chains, delay project timelines or otherwise adversely impact our businesses and operations.
In addition, changes in U.S. trade policy and tariffs have resulted, and could again result, in reactions from U.S. trading partners, including adopting responsive trade policies. For example, in response to the U.S. government’s additional tariff on imports from China, on February 4, 2025, the Chinese government announced that it would implement tariffs on certain goods being imported into China from the U.S. Similar responsive measures have been announced or implemented by other countries affected by U.S. trade actions. There can be no assurance that such changes in U.S. or foreign trade policy or tariffs or in laws and policies governing foreign trade, and any resulting negative sentiments towards the United States as a result of such changes, would not materially and adversely affect our business, financial condition and results of operations.
Disruptions in the worldwide economy may adversely affect our business, results of operations, and financial condition.
The global economy can be negatively impacted by a variety of factors such as the spread of fear, the occurrence of man-made or natural disasters, severe weather, actual or threatened hostilities or war, terrorist activity, political unrest, civil strife, and other geopolitical events of uncertainty. Such adverse and uncertain economic conditions may impact demand for our products generally and may cause disruptions in our supply chain. Further escalation of geopolitical tensions (such as those between Israel and Gaza, Taiwan and China, and the U.S., Israel, and Iran) could generate a broader impact, which could expand into other markets where we do business and could adversely affect our business and/or our supply chain, our international subsidiaries, business partners, or customers in the broader region. This could include potentially destabilizing effects for Europe, Asia, and the Middle East or the global oil and natural gas markets.
In addition, our ability to manage normal commercial relationships with our suppliers, distributors, and customers may suffer. As a result, certain customers may shift purchases to lower-priced or other perceived value-offerings during economic downturns as a result of various factors, including: job losses, inflation, higher taxes, reduced access to credit, change in federal economic policy, and recent international trade disputes. Our suppliers and distributors may become more conservative in response to these conditions and seek to reduce their inventories. Changes to trade policy, import laws, and tariffs may also have a material adverse effect on our business, financial condition and results of operations. The effects of current and future economic and political conditions and other events beyond our control on us, our suppliers, distributors, and customers could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition, and prospects. Our results of operations depend upon, among other things, our ability to maintain and increase sales volumes with our existing customers, our ability to attract new consumers, the financial condition of our customers, and our ability to provide products that appeal to customers at the right price. Decreases in demand for our products without a corresponding decrease in costs would put downward pressure on margins and would negatively impact our financial results. Prolonged unfavorable economic conditions or uncertainty may have an adverse effect on our revenues and profitability and may result in customers making long-lasting changes to their discretionary spending behavior on a more permanent basis.
For more information, refer to “—Risks Related to our Manufacturing Operations Business—Our Manufacturing Operations Business’s operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as the impact of tariffs and changes in a country’s or region’s political or economic conditions.”
If oil and natural gas prices decline from current levels, or if there is an increase in the differential between the NYMEX-WTI and NYMEX-Henry Hub or other benchmark prices of oil and the wellhead price we receive for our production, our cash flows from our Energy Operations Business will decline.
Also, the prices that our Energy Operations Business receives for oil and natural gas production often reflects a regional discount, based on the location of the production, to the relevant benchmark prices, such as the NYMEX-WTI and NYMEX-Henry Hub, that are used for calculating hedge positions. These discounts, if significant, could similarly adversely affect cash flows from operations and financial condition.
Inflation in the U.S. has been much more significant in recent years. Energy companies have experienced significant increases in the costs of certain oilfield services, materials and equipment, including diesel, steel, labor, trucking, sand, personnel and completion costs, among others, as a result of recent increases in oil and natural gas prices, as well as availability constraints, supply chain disruptions, increased demand, labor shortages and wage inflation associated with a low U.SU.S. unemployment rate, inflation and other factors. These supply and demand fundamentals have been further aggravated by disruptions in global energy supply caused by multiple geopolitical events, including the ongoing military conflict between Russia and Ukraine and actions of U.S. and other governments and governmental organizations relating to Russia’s oil, natural gas and NGLs, including through sanctions, embargoes, import restrictions and commodity price caps. For the foreseeable future, our Energy Operations Business expects to experience supply chain constraints and inflationary pressure on its cost structure. Should oil and natural gas prices remain at their current levels or increase, our Energy Operations Business expects to be subject to additional service cost inflation in future periods, which may increase costs to drill, complete, equip and operate wells. In addition, supply chain disruptions and other inflationary pressures being experienced throughout the U.S. and global economy and in the oil and natural gas industry may limit our Energy Operations Business’ ability to procure the necessary products and services needed for drilling, completing and producing wells in a timely and cost-effective manner, which could result in reduced margins and delays to its operations and could, in turn, have a material adverse effect on our business, financial condition, results of operations and cash flows.
One of the growth strategies of our Energy Operations Business is to capitalize on opportunistic acquisitions of oil and natural gas reserves. Our Energy Operations Business may not achieve the expected results of any acquisition it completes, and any adverse conditions or developments related to any such acquisition may have a negative impact on its operations and financial condition. Any acquisition involves potential risks, including, among other things: the validity of assumptions about estimated proved reserves, future production, commodity prices, revenues, operating expenses and costs; an inability to successfully integrate the assets it acquires; a decrease in liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions; a significant increase in interest expense or financial leverage if it incurs additional debt to finance acquisitions; the assumption of unknown liabilities, losses or costs for which it is not indemnified or for which its indemnity is inadequate; the diversion of management’s attention from other business concerns; an inability to hire, train or retain qualified personnel to manage and operate its growing assets; and the occurrence of other significant charges, such as the impairment of oil properties, goodwill or other intangible assets, asset devaluations or restructuring charges.
Our oil and natural gas properties can become damaged, our operations may be curtailed, delayed or canceled and the costs of such operations may increase as a result of a variety of factors, including, but not limited to:
Water is an essential component of oil and natural gas production during the drilling, and in particular, hydraulic fracturing, process. Our inability to locate sufficient amounts of water, or dispose of or recycle water resulting from our exploration and production operations, could adversely impact our operations. For water sourcing, we first seek to use non-potable water supplies for our operational needs. In certain areas, there may be insufficient local aquifer capacity to provide a source of water for drilling activities. Water must then be obtained from other sources and transported to the drilling site, which may adversely impact operating costs or result in a delay or interruption of operations. Further, an inability to secure sufficient amounts of water or to dispose of or recycle the water used in our operations could adversely impact our operations in certain areas. The imposition of new environmental regulations that limit the ability to dispose of waste waters we generate could further restrict our ability to conduct operations such as hydraulic fracturing by restricting the disposal of substances such as produced water and drilling fluids.
We believe it is likely that scientific, political and public attention to issues concerning the extent, causes of and responsibility for climate change will continue, with the potential for regulatory changes and litigation that could affect the operations of our Energy Operations Business. Our Energy Operations Business operations result GHG emissions. In December 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHG present a danger to public health and the environment. Based on this endangerment findings, the EPA began adopting and implementing regulations that restrict emissions of GHG under existing provisions of the federal Clean Air Act (“CAA”). However, in January 2025, the Trump administration issued an executive order directing the EPA to re-evaluate the legality and continuing applicability of the endangerment finding. Although there have been attempts at comprehensive federal legislation establishing a GHG cap and trade program, these efforts were not successful. Moreover, on August 1, 2025, the EPA published a proposal to reconsider and rescind the 2009 EPA endangerment finding that underpins EPA regulation of GHG emissions and, on February 12, 2026, announced that it has finalized a rule rescinding the 2009 EPA endangerment finding. Various states have considered or adopted legislation that seeks to control or reduce GHG emissions from a wide range of sources and there may be future such efforts at the state level. In addition, the United States has at times been a party to certain international agreements, pacts and other commitments designed to address climate change and reduce GHG emissions, including the Paris Agreement and the Glasgow Climate Pact. However,The inUnited JanuaryStates 2025, the Trump administration issuedwas an executiveoriginal order directing the U.S. Ambassadorparty to the Paris Agreement, but withdrew in 2020, rejoined in 2021, and withdrew again, effective January 27, 2026, pursuant a January 2025 order issued by President Trump. On January 7, 2026, President Trump issued a Presidential Memorandum entitled “Withdrawing the United NationsStates from International Organizations, Conventions, and Treaties that Are Contrary to immediatelythe submit formal written notificationInterests of the U.S.’sUnited withdrawalStates,” fromwhich thedirects Parisexecutive Agreementagencies andto anytake agreement,immediate pact,steps accordto or similar commitment made underremove the United NationsStates from 66 listed treaties or organizations, including the UN Framework Convention on Climate Change, which would include the Glasgow Climate Pact.Pact, and the Intergovernmental Panel on Climate Change. It is possible that the United States will rejoin the Paris Agreement and other climate change-focused international treaties and organizations in the future and make commitments to reduce GHG emissions as it has done in the past.
In recent years, the EPA issued final rules to subject oil and natural gas operations to regulation under the New Source Performance Standards (“NSPS”) and National Emission Standards for Hazardous Air Pollutants (“NESHAP”) programs under the CAA and to impose new and amended requirements under both programs. The EPA rules include NSPS standards for completions of hydraulically fractured oil and natural gas wells, compressors, controllers, dehydrators, storage tanks, natural gas processing plants and certain other equipment. These rules have required changes to our operations, including the installation of new equipment to control emissions. InOn DecemberMarch 2023,8, 2024, the EPA issued a final NSPS updates and emission guidelinesrule to reduceregulate methane and other pollutantsemissions from the oil and natural gas industry.sources that includes NSPS to limit greenhouse gas and volatile organic compound emissions for new, modified or reconstructed sources, as well as emissions guidelines for states to follow when establishing plans to limit methane emissions from existing sources. On December 3, 2025, the EPA issued a final rule extending certain compliance deadlines in the March 8, 2024 rule. In April 2024, the EPA issued a final consent decree that established a December 10, 2024 deadline for the EPA to review and propose revisions to the NESHAP for oil and natural gas production facilities and natural gas transmission and storage facilities, which may require us to make additional changes to our operations. The EPA has not yet proposed any such revisions. The EPA issued a final rule on October 22, 2024, removing the affirmative defense for violations caused by malfunctions from the NESHAP for the oil and natural gas production source category and natural gas transmission and storage source category. On November 18, 2024, the EPA published a final rule under authority of the IRA that imposes a waste emissions charge on large emitters of waste methane from the oil and gas sector. MultipleThe statesrule havewas filednullified suitpursuant againstto a Joint Resolution of Disapproval under the Congressional Review Act signed by President Trump in March 2025, and the EPA issued a final rule in theMay United2025 States Court of Appeals for the District of Columbia claiming thatremoving the waste emissions charge exceedsrules from the agency’sCode statutoryof authority,Federal andRegulations. variousHowever, proposalsthe haveunderlying beenstatute advanced in Congress to either repealmandating the waste emissions charge portionremains in effect, though collection of the IRAcharge orunder that law with respect to reverse the EPA’soil implementingand regulationsgas throughsector thehas Congressionalbeen Reviewdelayed Act.until 2034. Several states are pursuing measures similar to those proposed or adopted by the EPA top regulate emissions of methane from new and existing sources within the oil and natural gas source category.
Our Industrial Operations Business’s success depends in part on its, or licenses to use others’, brand names, proprietary technology and manufacturing techniques. It relies on a combination of patents, trademarks, copyrights, trade secrets, confidentiality procedures and contractual provisions to protect these intellectual property rights. The steps they have taken to protect their intellectual property rights may not prevent third parties from using their intellectual property and other proprietary information without their authorization or independently developing intellectual property and other proprietary information that is similar. In addition, the laws of foreign countries may not protect our businesses’business’s intellectual property rights effectively or to the same extent as the laws of the United States.
Our Industrial Operations Business is dependent on a limited number of customers to derive a large portion of its revenue, and the loss of one of these customers may adversely affect its financial condition, business and operational results.
Although our Industrial Operations Business may attempt to select reputable providers and suppliers and attempt to secure its performance on terms documented in written contracts, it is possible that one or more of these providers or suppliers could fail to perform as we expect, or fail to secure or protect intellectual property rights, and such failure could have an adverse impact on our Industrial Operations Business. In some cases, the requirements of Industrial Operations Business’sPrintronix’s business mandate that it obtain certain components and sub-assemblies included in its products from a single supplier or a limited group of suppliers. Where practical, our Industrial Operations Business endeavors to establish alternative sources to mitigate the risk that the failure of any single provider or supplier will adversely affect its business, but this is not feasible in all circumstances. There is therefore a risk that a prolonged inability to obtain certain components or secure key services could impair our Industrial Operations Business’s ability to manage operations, ship products and generate revenues, which could adversely affect its results of operations and damage its customer relationships.
Specifically, evolving trade policies could continue to make sourcing products from foreign countries difficult and costly, as our Manufacturing Operations Business sources a significant amount of its products from outside of the United States. Given our Manufacturing Operations Business’s reliance upon non-domestic suppliers, any significant changes to the United States trade policies (and those of other countries in response) may cause a material adverse effect on its ability to source products from other countries or significant changes could significantly increase the costs of obtaining products, which could result in a material adverse effect on our financial results. In April 2025, the United States government announced a new tariff regime that included a 10% baseline tariff on most products imported from other countries and an additional individualized reciprocal tariffs on countries with which the United States has the largest trade deficits, including China. Any additional tariffs on Chinese-origin goods, or on other certain products imported into the United States or European Union, such as carbon import taxes could increase the cost of some of our products and reduce our margins.
Further, the United States has recently imposed tariffs on goods imported from China and certain other countries, and increasingly levied sanctions and export controls on China and other countries. It is currently unclear what additional actions, if any, will be taken by the United States and other countries with respect to the imposition of tariffs on goods imported into the United States. During his campaign and during the first months of his administration, President Trump expressed various intentions to impose tariffs on goods shipped from China, Canada, Mexico and other countries to the United States, including up to 60% tariffs on goods shipped from China. Our Manufacturing Operations Business operates 9nine manufacturing facilities across the United States, Canada, the United Kingdom and China, and we are continuing to evaluate the impact of these announced and other proposed tariffs. Implementation of additional tariffs by the United States, or the imposition of additional retaliatory tariffs and other restrictions by other countries, could result in a material increase in the cost of our Manufacturing Operations Business’s products, which may result in the products becoming less attractive relative to products offered by our competitors. These changes, as well as any other changes in social, political, regulatory and economic conditions, or further changes to foreign or domestic laws and policies governing foreign trade (including export, import and sanctions), manufacturing and development and foreign direct investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business including our ability to repatriate cash accumulated outside the United States in a tax efficient manner.
For more information about recent changes in United States foreign trade policies and associated risks, refer to “—Risks Related to Our Business and Business Strategy—Changes in U.S. foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition.”
Management's Discussion & Analysis (MD&A)
New heading “Service provider settlement”
New heading “Gain on derivatives - Energy Operations”
New heading “Interest expense and Interest Income”
New heading “Recent Legislation”
Removed heading “General and Administrative Expenses”
Largest changes
“During the first half of 2025, the U.S. government announced additional tariffs on a broad range of imports. In an effort to mitigate any adverse impact of these tariffs and other non-tariff trade practices and policies to our Industrial and Manufacturing Operations, we have taken proactive measures to reduce our exposure to tariffs by moving certain production and working closely with our supplier and vendor base to manage any impacts. …”see in full comparison
“While we believe our Manufacturing Operations Business has been reasonably protected from tariffs from a cost standpoint, we maintain a global production footprint, and have been re-shoring certain manufacturing functions and exploring sourcing alternatives to mitigate tariff and duty impacts. However, like many of its peers, our Manufacturing Operations Business has seen tariff-specific demand headwinds. While the business environment remains challenging, our Manufacturing Operations Business continues to invest to optimize its business in order to maximize cash flow when the cycle returns.”see in full comparison
Full comparison: every changed paragraph (110)
The following discussion should be read in conjunction with our consolidated financial statements included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these “forward-looking statements” as a result of various factors including the risks we discuss in Item 1A. "Risk Factors,Factors" and elsewhere herein. For additional information, refer to the section above entitled “Cautionary Note Regarding Forward-Looking Statements.”
We are a disciplined value-oriented acquirer and operator of businesses across public and private markets and industries including, but not limited to, the industrial, energy and technology sectors. We acquire businesses with a view towards strong free cash flow generation and an ability to scale, and look to identify opportunities where we can tap into our deep industry relationships, significant capital base, and transaction expertise to materially improve performance. Our strategy centers around quality sourcing, execution, and improvement. We find unique situations,situations and bring a flexible and creative approach to transacting, and rely on ourcombining relationships and expertise to drive continual improvement in operating performance. We approach transactions as business owners and operators rather than purely as financial investors, and we believe this is our core differentiator for creating long-term value for shareholders and partners. We define value through free cash flow generation, book value appreciation, and stock price growth. These are the pillars of the Acacia story.
We regularly evaluate opportunities to acquire new businesses, where our research, execution and operating partners can drive attractive earningsearnings, cash flow and book value per share growth. Our long-term focus positions our businesses to navigate economic cycles and allows sellers and other counterparties to have confidence that a transaction is not dependent on achieving the types of performance hurdles demanded by private equity sponsors. We consider opportunities based on the attractiveness of the underlying cash flows, without regard to a specific fund life or investment horizon.
The Company through its Patent Licensing, Enforcement and Technologies Business invests in IP and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business, operated under our wholly owned subsidiary, Acacia Research Group, LLC, and its wholly-owned subsidiaries (collectively, “ARG”), we are a principal in the licensing and enforcement of patent portfolios, with our operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. On a consolidated basis, we currently own or control the rights to multiple patent portfolios, including U.S. patents and certain foreign counterparts, which cover technologies used in a variety of industries. We generate revenues and related cash flows from the granting of IP rights for the use of patented technologies that our operating subsidiaries control or own. While we partner from time to time with inventors and patent owners, ranging in size and including large corporations, we control and assume all responsibility in pursuing patent licensing and enforcement programs, and for the related operating expenses. When applicable, we share licensing revenue, net of costs, with our patent partners after we have achieved our agreed upon minimum return threshold. We may also provide upfront capital to patent owners as an advance against future licensing revenue.
Currently, on a consolidated basis, our operating subsidiaries own or control the rights to multiple patent portfolios, which include U.S. patents and certain foreign counterparts, covering technologies used in a variety of industries. Our current active patent portfolios are: our Atlas Technologies portfolio, which covers Wi-Fi 6 standard essential patents, our Avalon Technologies portfolio, which covers Wi-Fi 7 standard essential patents, our Unification Technologies portfolio, which covers flash memory technology; our Monarch Networking Technologies portfolio, which covers IP networking technology; our Stingray IP Solutions portfolio, which covers wireless networking; and our R2 Solutions portfolio, which covers internet search, advertising and cloud computing technology.
We have established a proven track record of licensing and enforcement success with over 1,600 license agreements executed as of December 31, 2024,2025, across nearly 200 patent portfolio licensing and enforcement programs. As of December 31, 2024,2025, we have generated gross licensing revenue of approximately $1.9 billion, and have returned $881.0$898.2 million to our patent partners. DuringSince theJanuary past1, five calendar years ending on December 31, 2024,2021, we generated gross licensing revenue of approximately $234.0$282.6 million and returned approximately $91.2$87.3 million to our patent partners.
In October 2021, we acquired Printronix Holding Corp. (“Printronix”). Printronix is a leading manufacturer and distributor of industrial impact printers, also known as line matrix printers, and related consumables and services. The Printronix business serves a diverse group of customers that operate across healthcare, food and beverage, manufacturing and logistics, and other sectors. This mature technology is known for its ability to operate in hazardous environments. Printronix has a manufacturing site located in Malaysia and third-party configuration sites located in the United States, Singapore and Holland, along with sales and support locations around the world to support its global network of users, channel partners and strategic alliances. This acquisition was made at what we believe to be an attractive purchase price,price. and weWe are nowsupporting supportingPrintronix and existing management inas it transitions its business mix from lower-margin printer sales to higher-margin consumable products including ink cartridges and specialty ribbons, along with its initiative to reduce costs and operate more efficiently and in its execution of strategic partnerships to generate growth.
We are supporting Printronix as it transitions its business mix from lower-margin printer sales to higher-margin consumable products including ink cartridges and specialty ribbons. Printronix’s dual hardware and consumables business model, combined with a streamlined operating structure, represents a steady source of cash flow for Acacia. The Printronix team is focused on topline initiatives and reducing G&A,general and administrative expenses, and we expect Printronix to continue to generate free cash flow on an annual basis.
In November 2023, we acquired a 50.4% equity interest in Benchmark. Headquartered in Austin, Texas, Benchmark is an independent oil and natural gas company that acquires, produces and develops oil and natural gas assets in Texas and Oklahoma. Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring.team. Prior to Benchmark’s acquisition of additional assets in April 2024, Benchmark’s assets consisted of over 13,000 net acres primarily located in Roberts and Hemphill Counties in Texas, and an interest in over 125 wells, the majority of which are operated. Acacia made a control investment in Benchmark and intends to utilize its significant capital base to acquire predictable and shallow decline, cash-flowing oil and natural gas properties whose value can be enhanced via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. Through its investment in Benchmark, the Company, along with the Benchmark management team, will evaluate future growth and acquisitions of oil and natural gas assets at attractive valuations. The Company’s consolidated financial statements include Benchmark’s consolidated operations from November 13, 2023 through December 31, 2024. Refer to Note 1 to the consolidated financial statements elsewhere herein for additional information.
On April 17, 2024, Benchmark consummated the Revolution Transaction contemplated in the Revolution Purchase Agreement. Pursuant to the Revolution Purchase Agreement, Benchmark acquired certain upstream assets and related facilities in Texas and Oklahoma, including approximately 140,000 net acres and an interest in approximately 470 operated producing wells for a purchase price of $145 million in cash, subject to customary post-closing adjustments. The Company’s contribution to Benchmark to fund its portion of the Revolution Purchase Price and related fees was $59.9 million, which was funded from cash on hand. The remainder of the Revolution Purchase Price was funded by a combination of borrowings under the Benchmark Revolving Credit Facility and a cash contribution of $15.25 million from other investors in Benchmark, including McArron Partners. Following closingAs of theDecember Revolution31, Transaction,2025, the Company’s interest in Benchmark is approximately 73.5%. Refer to Note 11 to the accompanying consolidated financial statements elsewhere herein for additional information regarding the Benchmark Revolving Credit Facility.
On October 18, 2024, Deflecto Holdco LLC (“Deflecto Purchaser”), a wholly-owned subsidiary of Acacia, acquired Deflecto Acquisition, Inc. (“Deflecto”), pursuant to that certain Stock Purchase Agreement (the “Deflecto Stock Purchase Agreement”) entered into on the same day with Deflecto Holdings, LLC and Evriholder Finance LLC (collectively, the “Deflecto Sellers”), Deflecto and the Sellers’ Representative named therein. Pursuant to the Deflecto Stock Purchase Agreement, Deflecto Purchaser purchased all of the issued and outstanding equity interests of Deflecto, upon the terms and subject to the conditions of the Deflecto Stock Purchase Agreement (such purchase and sale, together with the other transactions contemplated by the Deflecto Stock Purchase Agreement, the “Deflecto Transaction”). Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC, and office markets. The Deflecto Transaction closed simultaneously with the execution of the Deflecto Stock Purchase Agreement on October 18, 2024. Under the terms and conditions of the Deflecto Stock Purchase Agreement, the aggregate consideration paid to the Deflecto Sellers in the Deflecto Transaction consisted of $103.7 million, subject to certain working capital, debt and other customary adjustments set forth in the Stock Purchase Agreement (the “Deflecto Purchase Price”). The Deflecto Purchase Price was funded with a combination of borrowings of a $48.0 million secured term loan (the “Deflecto Term Loan”) and cash on hand. A portion of the Deflecto Purchase Price is being held in escrow to indemnify Deflecto Purchaser against certain claims, losses and liabilities. The Company’s consolidated financial statements include Deflecto’s consolidated operations from October 18, 2024 through December 31, 2024. Refer to Notes 3 and 11 to the consolidated financial statements elsewhere herein for additional information regarding the acquisition and the Deflecto Term Loan.
InOn October 18, 2024, we acquired Deflecto. Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.markets that is headquartered in Indianapolis, Indiana. Under Acacia’s ownership, Deflecto is a market leader across each of its segments and end markets, supplying essential, regulatory mandated products to a blue-chip customer base via long-term relationships with more than 1,500 leading retail, wholesale and OEM customers and distribution partners globally. ItsAs of December 31, 2025, Deflecto’s products include emergency warning triangles and vehicle mudguardsmud flaps used by the transportation industry, various airducts and air registers used by the HVAC market and literature,literature and sign holders and floormats used by the office market. Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and China. The aggregate consideration paid to the Deflecto Sellers in the Deflecto Transaction consisted of $103.7 million in cash, subject to certain working capital, debt and other customary adjustments set forth in the Deflecto Stock Purchase Agreement, which was funded with a combination of borrowings under the $48.0 million Deflecto Term Loan and cash on hand. Refer to Notes 3 and 11 for additional information related to the Deflecto Transaction and the Deflecto Term Loan, respectively.
For more information, refer to the section entitled “Manufacturing Operations Business” below.
We intend to grow our Company by acquiring additional operating businesses, energy assets and intellectual property assets. However, we may not complete any acquisitions, and any acquisitions that we complete willmay be costly and could negatively affect our results of operations, and dilute our stockholders’ ownership, or cause us to incur significant expense, and we may not realize the expected benefits of acquisitions.
In November 2023, we invested $10.0 million to acquire a 50.4% equity interest in Benchmark. Headquartered in Austin, Texas, Benchmark is an independent oil and gas company engaged in the acquisition, production and development of oil and gas assets in mature resource plays in Texas and Oklahoma.
On October 18, 2024, Deflecto Purchaser, a wholly-owned subsidiary of Acacia,we acquired Deflecto. Headquartered in Indianapolis, Indiana, Deflecto isDeflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.markets Underthat theis termsheadquartered andin conditionsIndianapolis, ofIndiana. the Deflecto Stock Purchase Agreement, theThe aggregate consideration paid to the sellersDeflecto Sellers in the Deflecto Transaction consisted of $103.7 million,million in cash, subject to certain working capital, debt and other customary adjustments set forth in the Deflecto Stock Purchase Agreement.Agreement, The Deflecto Purchase Pricewhich was funded with a combination of borrowings ofunder athe $48.0 million securedDeflecto termTerm loanLoan and cash on hand. A portion of the Deflecto Purchasepurchase Priceprice is being held in escrow to indemnify Purchaserus against certain claims, losses and liabilities. Refer to “Manufacturing Operations” above and Note 1 to the accompanying consolidated financial statements elsewhere herein for additional information.
Historically, inflation has not had a significant impact on us or any of our subsidiaries. Our Manufacturing and Industrial Operations will continue to adjust their selling prices as required in response to higher costs and may also implement cost rationalization measures, as applicable. Additionally, our Energy Operations Business may experience inflation. The oil and natural gas industry and the broader U.S. economy have experienced higher than expected inflationary pressures in recent years related to increases in oil and natural gas prices, continued supply chain disruptions, labor shortages and geopolitical instability, among other pressures. We expect that our Manufacturing and Industrial Operations will continue to adjust their selling prices as required in response to higher costs.
Tariffs
During the first half of 2025, the U.S. government announced additional tariffs on a broad range of imports. In an effort to mitigate any adverse impact of these tariffs and other non-tariff trade practices and policies to our Industrial and Manufacturing Operations, we have taken proactive measures to reduce our exposure to tariffs by moving certain production and working closely with our supplier and vendor base to manage any impacts. These countermeasures may prove to be ineffective and the ability to predict tariff rates in different countries may be difficult as policies may change on short notice. Uncertainty about trade policy, tariff rates, and other changes in practices affecting international trade might have an adverse effect on our business and results of operation and we may face challenges in implementing the optimal responses to changing trade conditions. There can be no assurances that such factors will not impact our business in the future.
Please refer to Item 1A “Risk Factors — Risks Related to Our Business and Business Strategy — Changes in U.S. foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition” of this Annual Report for additional information regarding risks associated with changes in U.S. trade policy.
As of the date of this Annual Report, our Patent Licensing, Enforcement and Technologies Business has twoone pending patent infringement case with scheduled trial dates in the next twelve months. Patent infringement trials are components of itsARG’s overall patent licensing process and are one of many factors that contribute to possible future revenue generating opportunities. Scheduled trial dates, as promulgated by the respective court, merely provide an indication of when, in future periods, the trials may occur according to the court’s scheduling calendar at a specific point in time. A court may change previously scheduled trial dates. In fact, courts often reschedule trial dates for various reasons that are unrelated to the underlying patent assets and typically for reasons that are beyond the control of our Patent Licensing, Enforcement and Technologies Business. While scheduled trial dates provide an indication of the timing of possible future revenue generating opportunities, the trials themselves and the immediately preceding periods represent the possible future revenue generating opportunities. Refer to Item 1A “Risk Factors — Risks Related to our Intellectual Property Business and Industry” of this Annual Report for additional information regarding patent litigation and related risks.
With respect to our licensing, enforcement and overall business, neither we nor our operating subsidiaries invent new technologies or products; rather, we depend upon the identification and investment in patents, inventions and companies that own IP through our relationships with inventors, universities, research institutions, technology companies and others. If our operating subsidiaries are unable to maintain those relationships and identify and grow new relationships, then we may not be able to identify new technology-based patent opportunities for sustainable revenue and /or revenue growth.
If our operating subsidiaries are unable to maintain those relationships and identify and grow new relationships, then we may not be able to identify new technology-based patent opportunities for sustainable revenue and/or revenue growth.
We didacquired not acquire anyone new patent portfoliosportfolio induring calendarthe yearsyear 2024,ended 2023December and31, 2022.2025 consisting of Wi-Fi 7 standard essential patents. During 2021, we acquired one new patent portfolio consisting of Wi-Fi 6 standard essential patents. In 2020, we acquired five new patent portfolios consisting of (i) flash memory technology, (ii) voice activation and control technology, (iii) wireless networks, (iv) internet search, advertising and cloud computing technology and (v) GPS navigation. The patents and patent rights acquired in 2021 and 2020 have estimated economic useful lives ofranging approximatelyfrom two to five years.
Headquartered in Austin, Texas, Benchmark is an independent oil and natural gas company that acquires, produces and develops oil and natural gas assets in Texas and Oklahoma. Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring.team. After the acquisition of Revolution, Benchmark’s existing assets consist of approximately 156,000155,000 net acres and an interest in approximately 615600 wells, the majority of which are operated. Acacia owns approximately 73.5% of Benchmark. Benchmark intends to enhance the value of such assets via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. Through its investment in Benchmark, the Company, along with the Benchmark management team, will evaluate future growth and acquisitions of oil and natural gas assets at attractive valuations.
In October 2024, we acquired Deflecto. Headquartered in Indianapolis, Indiana, Deflecto isDeflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.markets that is headquartered in Indianapolis, Indiana. Under Acacia’s ownership, Deflecto is a market leader across each of its segments and end markets, supplying essential, regulatory mandated products to a blue-chip customer base via long-term relationships with more than 1,500 leading retail, wholesale and OEM customers and distribution partners globally. ItsAs of December 31, 2025, Deflecto’s products include emergency warning triangles and vehicle mudguardsmud flaps used by the transportation industry, various airducts and air registers used by the HVAC market and literature,literature and sign holders and floormats used by the office market. Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and ChinaChina.
While we believe our Manufacturing Operations Business has been reasonably protected from tariffs from a cost standpoint, we maintain a global production footprint, and have been re-shoring certain manufacturing functions and exploring sourcing alternatives to mitigate tariff and duty impacts. However, like many of its peers, our Manufacturing Operations Business has seen tariff-specific demand headwinds. While the business environment remains challenging, our Manufacturing Operations Business continues to invest to optimize its business in order to maximize cash flow when the cycle returns.
The results reflected in this section with respect to Deflecto for the year ended December 31, 2024 include results for the period from October 18, 2024 to December 31, 2024 following our acquisition of Deflecto. The results reflected in this section with respect to Benchmark include results for the full year ended December 31, 2024 compared to an approximate two month period ended December 31, 2023 following our acquisition of Benchmark.
Total revenues decreasedincreased $2.8$162.9 million to $285.2 million for the year ended December 31, 2025, as compared to $122.3 million for the year ended December 31, 2024, as compared to $125.1 million for the year ended December 31, 2023, primarily due to aan decreaseincrease in our Intellectual Property Operations revenues and a decreaseincreases in Industrial Operations revenues, partially offset by revenues contributed from our Energy Operations and our Manufacturing Operations. ARGOperations revenues decreasedfrom acquisitions in the prior year. Intellectual Property Operations revenues increased due to aan decrease in the number of license agreements executed and a decreaseincrease in average license fees, which contributed to Intellectual Property Operations revenues decreasingincreasing by $69.6$58.8 million. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. The increases were offset by a decrease in Industrial Operations revenue of $4.7$2.2 million is due to lower units of printers sold.million. Refer to “Industrial Operations – Revenues” below for further detailed discussion. Revenues contributed from Benchmark was $49.2 million for the year ended December 31, 2024, which include post-asset acquisition revenues from Revolution compared to an approximate two month period ended December 31, 2023 revenues from Benchmark. Post-acquisition revenues contributed from Deflecto was $23.2 million for the period from October 18, 2024 to December 31, 2024. Refer to “Energy Operations - Revenues” and “Manufacturing Operations - Revenues” below for further discussion.
LossIncome before income taxes was $31.3 million for the year ended December 31, 2025, as compared to a loss of $38.1 million for the year ended December 31, 2024, as compared to income before income taxes of $67.4 million for the year ended December 31, 2023.2024. The net decrease wasincrease comprised of the change in total revenues described above and other changes in operating expenses and other income or expense for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 as follows:
•Total costs and expenses increased $123.6 million, from $155.2 million to $278.8 million in 2025 primarily due to the following:
•Inventor royalties increased $706,000, from $1.0 million to $1.7 million in 2024, primarily due to a higher mix of portfolios generating revenue in 2024 with inventor royalties. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
•Contingent legal fees decreased $8.7 million, from $11.0 million to $2.3 million in 2024, primarily due to the change in Intellectual Property Operations revenues described above. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
•Litigation◦Cost andof licensingrevenues expensesfor decreasedIntellectual $6.3Property Operations increased $25.5 million, from $10.8$24.6 million to $4.4$50.0 million in 2024,2025 primarily due to aan net decreaseincrease in litigationinventor supportroyalties, expensescontingent legal fees and patent amortization expense associated with ongoingthe litigation.revenue increase noted above. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
•Amortization of patents expense from our Intellectual Property Operations increased $4.7 million, from $11.4 million to $16.1 million in 2024, due to an increase in scheduled amortization from our additional preferential future returns paid from our existing patent portfolios. Refer to Note 8 to the consolidated financial statements elsewhere herein for additional information regarding certain patent and patent rights costs related to ARG.
•Printronix cost of sales, engineering and development expenses, and sales and marketing expenses decreased approximately $4.5 million, from $25.7 million to $21.1 million in 2024, primarily due to a decrease in revenue offset by higher margins. Refer to “Industrial Operations – Cost of Revenues” and “Operating Expenses” below for further discussion.
•Benchmark’s◦Energy Operations cost of production forincreased the$13.0 yearmillion endedfrom December 31, 2024 added a total of $35.6$36.3 million to our$49.3 consolidatedmillion operatingin expenses.2025 due to a full year of activity for the assets acquired in the Revolution Transaction in the second quarter of 2024. Refer to “"Energy Operations – Cost of Production”" below for further discussion.
•Post-acquisition◦Manufacturing Operations cost of sales, engineering and development expenses,revenues and sales and marketing expenses from Deflecto for the2025 periodcontributed froman Octoberincrease 18,of 2024$76.0 million to Decemberour 31, 2024 addedconsolidated operating expenses in the amount of $18.6 million.expenses. Refer to “"Manufacturing Operations – Cost of Revenues”" below for further discussion.
•◦General and administrative expenses increased $10.9$9.8 million, from $44.4$55.4 million to $55.4$65.1 million in 2024,2025, primarily due to our Energy Operations which contributed $3.4 million of general and administrative costs in 2024 and our Manufacturing Operations which contributed $4.2$15.2 million of post-acquisition general administrative costs from Deflecto for the period from October 18, 2024 through December 31, 2024. In addition, the increase is due to higherthe parentacquisition companyin andthe Intellectualfourth Propertyquarter Operationsof costs2024. includingThe variableincreases performance-based compensation costs and severance costs,were partially offset by a decrease in ourparent Industrial Operations general and administrativecompany costs. Refer to “General and Administrative Expenses” below for further detail and discussion.
•Total other income (expense) increased $30.1 million, from other expense of $5.2 million to other income of $24.9 million in 2025, primarily due to a $15.8 million service provider settlement, net, a $5.4 million increase in gain on derivatives from our Energy Operations, a $14.9 million decrease in non-recurring legacy legal expense, offset by a $6.4 million decrease in interest income. Refer to “Other Income/Expense” below for further detail and discussion.
•Compensation expense for share-based awards, included in general and administrative expenses above, increased $1.5 million, from $3.3 million to $4.8 million in 2024, primarily due to restricted stock and option grants issued to employees and the Board in 2024 and 2023, which includes a partial offset for forfeitures, and an increase in compensation expense related to PSUs granted in 2023 based on the probability assessment performed as of December 31, 2024. Refer to Note 17 to the consolidated financial statements elsewhere herein for additional information regarding compensation expense.
•Unrealized loss from the change in fair value of our equity securities was $31.4 million in 2024, as compared to an unrealized gain of $31.4 million in the prior year. The unrealized gain and loss were derived from our Life Sciences Portfolio and trading securities portfolio. The 2024 period unrealized loss primarily relates to the reversal of unrealized gains previously recorded for Arix shares sold in January 2024 for realized gains. Refer to Note 4 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to “Equity Securities Investments” below for further discussion.
•Realized gain from the sale of equity securities was $28.9 million in 2024, as compared to a realized loss of $10.9 million in the prior year. The realized gains and losses were similarly derived from the sales activity from our Life Sciences Portfolio and trading securities portfolio. The 2024 period realized gains primarily relates to the Arix shares sold in January 2024. Refer to Note 4 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to “Equity Securities Investments” below for further discussion.
•Earnings on equity investment in joint venture was zero in 2024, as compared to $4.2 million in the prior year primarily due to the earnings on equity investment in joint venture from one milestone in 2023.
•Non-recurring legacy legal expense of $14.9 million in 2024 is related to the AIP Matter (as defined in Note 15 to the consolidated financial statements elsewhere herein) and expenses related to the settlement agreement with Slingshot (as defined in Note 15 to the consolidated financial statements elsewhere herein). Refer to Note 15 to the consolidated financial statements elsewhere herein for additional information regarding the accrual in connection with the AIP Matter and the settlement agreement with Slingshot.
•Unrealized gain from the Series B Warrants and the embedded derivative fair value measurements was zero in 2024, as compared to a gain of $8.2 million in the prior year, primarily due to the exercise of the remaining Series B Warrants and conversion of the Series A Redeemable Convertible Preferred Stock into the Company’s common stock in 2023. In 2024, no shares of Series A Redeemable Convertible Preferred Stock and no Series B Warrants remained outstanding. Refer to Notes 12 and 13 to the consolidated financial statements elsewhere herein for additional information regarding the Series B Warrants and Series A Redeemable Convertible Preferred Stock and fair value measurements.
•Gain on derivatives was $2.0 million in 2024, as compared to $1.2 million in the prior year due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 13 for additional information regarding Benchmark’s gain on its commodity derivatives.
•Interest expense increased $4.4 million, from $2.1 million to $6.4 million in 2024, primarily due to the interest expense incurred in relation to the Benchmark Revolving Credit Facility and the Deflecto Term Loan. Interest expense from Benchmark Revolving Credit Facility included a full year of interest expense in 2024 compared to an approximate two month period in the prior year and post-acquisition related interest expense contributed to the increase from the Deflecto Term Loan. Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information regarding the Benchmark Revolving Credit Facility and the Deflecto Term Loan. The increase is partially offset by a decrease in interest expense related to the cancellation of the remaining $60.0 million aggregate principal amount outstanding of the Senior Secured Notes on July 13, 2023, pursuant to the Series B Warrants Exercise. Refer to Note 12 to the consolidated financial statements elsewhere herein for additional information regarding the Senior Secured Notes.
•Interest income and other, net increased $2.6 million from $14.4 million to $17.0 million in 2024, primarily due to the increase in interest income from our cash equivalents. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding our cash and cash equivalents and investments in equity securities.
For the periods presented above, the majority of the revenue agreements executed during the relevant period provided for the payment of one-time, paid-up license fees in consideration for the grant of certain IP Rights for patented technology owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Paid-up revenue decreasedincreased $70.6$59.6 million for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 due to aan decrease in the number of new license agreements in 2024 and a decreaseincrease in average license fees.fees per agreement. Recurring revenue, that provides for quarterly sales-based license fees, increaseddecreased $1.0 million$782,000 for the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, fromdue variousto the expiration of certain on-going license arrangements.
Cost of revenues for Intellectual Property Operations increased $25.5 million, from $24.6 million to $50.0 million in 2025 primarily due to an increase in inventor royalties, contingent legal fees and patent amortization expense.
•Inventor royalties increased $15.5 million, from $1.7 million to $17.2 million in 2025, primarily due to higher license fees being generated in 2025 with inventor royalties. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
•Contingent legal fees increased $5.3 million, from $2.3 million to $7.6 million in 2025, primarily due to the change in Intellectual Property Operations revenues described above. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
•Amortization of patents expense from our Intellectual Property Operations increased $4.4 million, from $16.1 million to $20.5 million in 2025, due to an increase in amortization from the 2025 patent portfolio acquisition.
Refer to detailed change explanations above for the years ended December 31, 2024 and 2023 regarding cost of revenues for our Intellectual Property Operations.
The economic terms of patent portfolio related partnering agreements and contingent legal fee arrangements, if any, including royalty obligations, if any, royalty rates, contingent fee rates and other terms and conditions, vary across the patent portfolios owned or controlled by our operating subsidiaries. In certain instances, we have invested in certain patent portfolios without future patent partner royalty obligations. The costs associated with the forementioned obligations fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed each period and the mix of specific patent portfolios, with varying economic terms and conditions, generating revenues each period.
Litigation and licensing expenses include patent-related litigation, enforcement and prosecution costs incurred by law firms and external patent attorneys engaged on either an hourly basis or a contingent fee basis. Litigation and licensing expenses also includes third-party patent research, development, patent prosecution and maintenance fees, re-exam and inter partes reviews, consulting and other costs incurred in connection with the licensing and enforcement of patent portfolios. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues.
For the periods presented above, the majority of the contract agreements executed in the relevant period include various combinations of tangible products (which include printers, consumables and parts) and services. Revenue from printers and parts and consumable products decreased $1.6 million for the year ended December 31, 2024 decreased $2.5 million and $2.0 million, respectively2025, compared to the year ended December 31, 2023,2024, primarily due to a decrease in theline numbermatrix of printer units and consumable productsconsumables sold. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s revenue arrangements and related concentrations. Refer to “Industrial Operations Business” above for additional information related to Printronix’sPrintronix's operating activities.
Refer to detailed change explanations above for the years ended December 31, 2024 and 2023 regarding costCost of revenues forwere our Industrial Operations. The decrease in Printronix's cost of revenueslower for the year ended December 31, 20242025 isprimarily due to changelower in revenue described above.revenues. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s cost of sales.
The following table provides the components of Benchmark’s revenues for the periods indicated, as well as each period’s respective average realized prices and production volumes. This table shows production on a barrel of oil (“boe”) equivalent basis in which natural gas is converted to oil at the ratio of 6 thousand cubic feet (“Mcf”) of natural gas to one barrel of oil. This ratio may not be reflective of the current price ratio between two products.
What changed in the latest 10-Q
Risk Factors
An investment in our common stock involves risks. Before making an investment decision, you should carefully consider all of the information in this Quarterly Report on Form 10-Q, including in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as our consolidated financial statements and the accompanying notes thereto. In addition, you should carefully consider the risks and uncertainties in “Item 1A. Risk Factors” in our 2025 Annual Report, as well as in our other public filings with the SEC. If any of the identified risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that case, the trading price of our common stock may decline, and you could lose all or part of your investment. In addition, other risks of which we are currently unaware, or which we do not currently view as material, could have a material adverse effect on our business, financial condition, operating results and prospects. There have been no material changes to the risk factors previously reported in our 2025 Annual Report.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “Results of Operations - six months ended June 30, 2026 compared with the six months ended June 30, 2025”
New heading “Net Loss/Income Attributable to Noncontrolling Interests in Subsidiaries”
Removed heading “Loss on derivatives - Energy Operations”
Removed heading “Interest expense”
Removed heading “Other income (expense), net”
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“Results of Operations - six months ended June 30, 2026 compared with the six months ended June 30, 2025”see in full comparison
“Net Loss/Income Attributable to Noncontrolling Interests in Subsidiaries”see in full comparison
see in full comparisonOther income (expense), net increased $902,000, from other expenseImpairment of$717,000equity method investment charge of $30.9 million in the three and six months ended June 30, 2026 is related toothertheincomeinvestment in MalinJ1 - the carrying amount of$185,000the investment was reduced to zero in2026,theprimarilyquarterdueendedtoJunesale30,of unoccupied units of Deflecto’s U.K. facility.2026. Refer to Note53 to the consolidated financial statements elsewhere herein for additional information regardingtheoursale.investment in MalinJ1.
“◦Cost of revenues for Intellectual Property Operations increased $16.6 million, from $34.5 million to $51.1 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in litigation and licensing expenses and patent amortization expense. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.”see in full comparison
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We have established a proven track record of licensing and enforcement success with over 1,600 license agreements executed as of MarchJune 31,30, 2026, across nearly 200 patent portfolio licensing and enforcement programs. As of MarchJune 31,30, 2026, we have generated gross licensing revenue of approximately $1.9$2.0 billion, and have returned $900.1$918.5 million to our patent partners. Since January 1, 2022, we generated gross licensing revenue of approximately $207.3$268.2 million and returned approximately $63.1$81.5 million to our patent partners.
On April 17, 2024, Benchmark consummated the Revolution Transaction contemplated in the Revolution Purchase Agreement. Pursuant to the Revolution Purchase Agreement, Benchmark acquired certain upstream assets and related facilities in Texas and Oklahoma, including approximately 140,000 net acres and an interest in approximately 470 operated producing wells. As of MarchJune 31,30, 2026, the Company’s interest in Benchmark is approximately 73.5%.
Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets. Deflecto is a market leader across each of its segments and end markets, supplying essential, regulatory mandated products to a blue-chip customer base via long-term relationships with more than 1,500 leading retail, wholesale and OEM customers and distribution partners globally. As of MarchJune 31,30, 2026, Deflecto’s products include emergency warning triangles and vehicle mud flaps used by the transportation industry, various airducts and air registers used by the HVAC market and literature and sign holders used by the office market. Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and China.
In June 2020 we acquired a portfolio of investments in 18 public and private life sciences companies (the “Life Sciences Portfolio”). That purchase was funded with a combination of available cash and capital from Starboard, for a total of approximately $282.0 million at the time of acquisition. Through the end of MarchJune 31,30, 2026, we have received proceeds of $564.1 million as we monetized the Life Sciences portfolio. We retained an investment in the Life Sciences Portfolio consisting of private securities valued at $25.7$5.8 million at MarchJune 31,30, 2026. Refer to Note 3 to the consolidated financial statements elsewhere herein for more information.
As of the date of this Quarterly Report, our Patent Licensing, Enforcement and Technologies Business has oneno pending patent infringement case with scheduled trial dates in the next twelve months. Patent infringement trials are components of ARG’s overall patent licensing process and are one of many factors that contribute to possible future revenue generating opportunities. Scheduled trial dates, as promulgated by the respective court, merely provide an indication of when, in future periods, the trials may occur according to the court’s scheduling calendar at a specific point in time. A court may change previously scheduled trial dates. In fact, courts often reschedule trial dates for various reasons that are unrelated to the underlying patent assets and typically for reasons that are beyond the control of our Patent Licensing, Enforcement and Technologies Business. While scheduled trial dates provide an indication of the timing of possible future revenue generating opportunities, the trials themselves and the immediately preceding periods represent the possible future revenue generating opportunities.
We did not acquire any new patent portfolios during the threesix months ended MarchJune 31,30, 2026. During the year ended December 31, 2025, we acquired one new patent portfolio consisting of Wi-Fi 7 standard essential patents. During 2021, we acquired one new patent portfolio consisting of Wi-Fi 6 standard essential patents. In 2020, we acquired five new patent portfolios consisting of (i) flash memory technology, (ii) voice activation and control technology, (iii) wireless networks, (iv) internet search, advertising and cloud computing technology and (v) GPS navigation. The patents and patent rights acquired have estimated economic useful lives ranging from two to five years.
In October 2024, we acquired Deflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets that is headquartered in Indianapolis, Indiana. Under Acacia’s ownership, Deflecto is a market leader across each of its segments and end markets, supplying essential, regulatory mandated products to a blue-chip customer base via long-term relationships with more than 1,500 leading retail, wholesale and OEM customers and distribution partners globally. As of MarchJune 31,30, 2026, Deflecto’s products include emergency warning triangles and vehicle mud flaps used by the transportation industry, various airducts and air registers used by the HVAC market and literature and sign holders used by the office market. Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and China.
Results of Operations - three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025
Total revenues decreasedincreased $70.2$63.3 million to $54.2$114.6 million for the three months ended MarchJune 31,30, 2026, as compared to $124.4$51.2 million for the three months ended MarchJune 31,30, 2025, primarily due to a decreaseincreases in our Intellectual Property Operations revenuesrevenue of $60.6 million and to a lesser extent, a decrease in Manufacturingour Energy Operations revenues.revenue Intellectualof Property Operations revenues decreased due to a decrease in new license agreements and a decrease in average license fees, which contributed to Intellectual Property Operations revenues decreasing by $69.2$5.2 million. Refer to “Energy Operations - Revenues” below for further discussion and “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. ManufacturingThe Operationsincreases revenueswere decreasedoffset $869,000 largely due toby a decrease in Manufacturing Operations revenue of $1.9 million and in Industrial Operations revenues fromof our$588,000. airRefer distributionto end“Manufacturing market.Operations - Revenues” and “Industrial Operations – Revenues” below for further detailed discussion.
Loss before income taxes was $20.2$9.8 million for the three months ended MarchJune 31,30, 2026, as compared to incomeloss of $29.6$890,000 million forin the threecomparable monthsprior ended March 31, 2025.period. The netincrease decreasein loss comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025 as follows:
•Total costs and expenses decreasedincreased $23.5$42.4 million, from $86.1$63.6 million to $62.6$106.0 million in 2026 primarily due to the following:
◦Cost of revenues for Intellectual Property Operations decreasedincreased $23.1$39.7 million, from $27.9$6.6 million in 2025 to $4.8$46.2 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in inventor royalties, contingent legal fees, litigation and licensing expenses and patent amortization expense associated with the revenue decrease noted above. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.expense.
▪Inventor royalties increased $18.2 million, from $154,000 to $18.4 million in 2026, primarily due to higher license fees being generated in the three months ended June 30, 2026 with inventor royalties. Refer to "Intellectual Property Operations – Cost of Revenues" below for further discussion.
▪Contingent legal fees increased $25.5 million, from $18,000 to $25.5 million in 2026 due to the change in Intellectual Property Operations revenues described above. Refer to "Intellectual Property Operations – Cost of Revenues" below for further discussion.
•Total▪Amortization otherof patents expense increasedfrom $3.1our Intellectual Property Operations decreased $4.0 million, from $8.7$5.4 million to $11.8$1.5 million in 2026, primarily due to certain patents becoming fully amortized during the following:period.
◦Total general and administrative expenses increased $4.1 million, from $15.5 million to $19.6 million in 2026, primarily due to our parent company and our Intellectual Property Operations general and administrative costs, driven by increased corporate legal fees and an increase in personnel related expenses
•Total other income (expense) increased $29.8 million, from $11.5 million other income to $18.3 million other expense in 2026 primarily due to the following:
◦Unrealized gain from the change in fair value of our equity securities increased $2.7 million, from $2.2 million to $4.9 million in 2026. The unrealized gain was derived from our trading securities portfolio. Refer to "Equity Securities Investments" below for further discussion.
◦Realized gain from the sale of equity securities increased $2.6 million, from $1.9 million to $4.5 million in 2026. The realized gains were derived from the sales activity from our trading securities portfolio. Refer to "Equity Securities Investments" below for further discussion.
◦Impairment of equity method investment was $30.9 million in 2026. The Company recognized an impairment charge of $30.9 million related to its investment in MalinJ1, reducing the carrying amount of the investment to zero. Refer to Note 3 to the consolidated financial statements elsewhere herein for additional information regarding our investment in MalinJ1.
◦Gain on derivatives decreased $3.3 million, from $6.6 million to $3.3 million in 2026 due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain on its commodity derivatives.
Results of Operations - six months ended June 30, 2026 compared with the six months ended June 30, 2025
Total revenues decreased $6.9 million to $168.8 million for the six months ended June 30, 2026, as compared to $175.7 million for the six months ended June 30, 2025, primarily due to a decrease in our Intellectual Property Operations revenues, our Manufacturing Operations revenues, and to a lesser extent, a decrease in Industrial Operations revenues. Intellectual Property Operations revenues decreased by $8.6 million due to a lower license fee revenue compared to the comparable prior year period. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. Manufacturing Operations revenues decreased $2.8 million largely due to a decrease in revenues from our air distribution end market and Industrial Operations decreased $1.1 million due to a decrease in the number of printer units sold. The decreases were offset by an increase in Energy Operations of $5.6 million primarily due to increase in oil production and oil prices as a result of drilling activities.
Loss before income taxes was $29.9 million for the six months ended June 30, 2026, as compared to income of $28.7 million for the six months ended June 30, 2025. The net decrease comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 as follows:
•Total costs and expenses increased $18.9 million, from $149.7 million to $168.6 million in 2026 primarily due to the following:
◦Cost of revenues for Intellectual Property Operations increased $16.6 million, from $34.5 million to $51.1 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in litigation and licensing expenses and patent amortization expense. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.
▪Inventor royalties increased $1.9 million, from $16.7 million to $18.5 million in 2026, primarily due to the license fees being generated in 2026 with inventor royalties. Refer to "Intellectual Property Operations – Cost of Revenues" below for further discussion.
▪Contingent legal fees increased $20.7 million, or 430%, as compared to a 12% decrease in Intellectual Property Operations revenues, primarily due to higher average contingent legal fee rates associated with the portfolios generating revenues during 2026. Refer to "Intellectual Property Operations – Cost of Revenues" below for further discussion.
▪Litigation and licensing expenses decreased $1.3 million, from $3.0 million to $1.8 million in 2026, primarily due to a net decrease in litigation support and third-party technical consulting expenses associated with ongoing litigation. Refer to "Intellectual Property Operations – Cost of Revenues" below for further discussion.
▪Amortization of patents expense from our Intellectual Property Operations decreased $4.7 million, from $9.9 million to $5.2 million in 2026, due to certain patents becoming fully amortized during the period.
◦Energy Operations cost of production decreased $1.6 million, from $25.0 million to $23.4 million in 2026. Refer to “Energy Operations – Cost of Production” below for further detail and discussion.
◦General and administrative expenses increased $4.1 million from $32.9 million to $36.9 million in 2026, due to an increase in our parent company and our Intellectual Property Operations general and administrative costs, driven by increased corporate legal fees and personnel costs. The increases were partially offset by a decrease in our Manufacturing Operations general and administrative costs. Refer to “General and Administrative Expenses” below for further detail and discussion.
•Total other expense was $30.1 million in 2026, as compared to other income of $2.8 million in the comparable prior year period. The changes in other expense and income are due to the following:
◦Unrealized gain from the change in fair value of our equity securities was $3.4 million in 2026, as compared to an unrealized loss of $2.6 million in the comparable prior year period. The unrealized gain and loss was derived from our trading securities portfolio.
◦Impairment of equity method investment was $30.9 million in 2026. The Company recognized an impairment charge of $30.9 million related to its investment in MalinJ1, reducing the carrying amount of the investment to zero. Refer to Note 3 to the consolidated financial statements elsewhere herein for additional information regarding our investment in MalinJ1.
◦Realized and unrealized loss on derivatives from our Energy Operations was $7.4 million in 2026, as compared to a realized and unrealized gain on derivatives of $1.6 million in the comparable prior year period due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain on its commodity derivatives.
◦Interest expense decreased $1.1 million from $4.8 million to $3.7 million in 2026, primarily due to a lower average balance from the Deflecto Facility and lower interest rates in 2026 versus 2025. Refer to Note 10 to the consolidated financial statements elsewhere herein for additional information regarding the Deflecto Facility.
◦Realized and unrealized loss on derivatives from our Energy Operations increased by $5.7 million. This was partially offset by a $1.0 million decrease in the net realized and unrealized loss on equity securities, a $565,000 decrease in interest expense and a $902,000 net change in other income (expense), net, primarily driven by a gain on disposal of assets from our Manufacturing Operations. Refer to “Other Income/Expense” below for further detail and discussion.
For the periods presented above, the majority of the revenue agreements executed during the relevant period provided for the payment of one-time, paid-up license fees in consideration for the grant of certain IP Rights for patented technology owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Paid-up revenue decreasedincreased $69.4$60.6 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 due to an increase in the number of executed license agreements. Paid-up revenue decreased $8.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to a decrease in average license fees.
Refer to detailed change explanations above for the three and six months ended June 30, 2026 and 2025 regarding cost of revenues for our Intellectual Property Operations.
Cost of revenues for Intellectual Property Operations decreased $23.1 million, from $27.9 million to $4.8 million in 2026 primarily due to a decrease in inventor royalties, contingent legal fees and patent amortization expense.
•Inventor royalties decreased $16.4 million, from $16.5 million to $188,000 in 2026, contingent legal fees decreased $4.8 million, from $4.8 million to $32,000 in 2026 and litigation and licensing expenses decreased $1.2 million, from $2.1 million to $853,000 in 2026, primarily due to lower license fees generated in 2026.
•Amortization of patents expense from our Intellectual Property Operations decreased $759,000, from $4.5 million to $3.8 million in 2026, due to certain patents becoming fully amortized during the period.
For the periods presented above, the majority of the contract agreements executed in the relevant period include various combinations of tangible products (which include printers, consumables and parts) and services. Revenue from printers and parts decreased $519,000$1.1 million for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, primarily due to a decrease in number of printer units sold. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s revenue arrangements and related concentrations. Refer to “Industrial Operations Business” above for additional information related to Printronix's operating activities.
Cost of revenues were lower for the threesix months ended MarchJune 31,30, 2026 primarily due to lower revenues. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Printronix’s cost of revenues.
For the periods presented above, revenues increased $363,000$5.2 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 20252025. Revenues increased $5.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Revenues in both periods increased primarily due to increase in oil production and higher oil prices and an increase in natural gas prices,liquid prices in the three months ended June 30, 2026. This was partially offset by lower natural gas liquid volumes and prices.lower natural gas prices in the three months ended June 30, 2026. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark’s revenue arrangements and related concentrations.
Cost of production decreased $1.0$1.6 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 due to lower depreciation, depletion and amortization and lower lease operating expenses in 2026. Depreciation, depletion and amortization decreased primarily due to an increase in total proved reserves recorded at December 31, 2025, which reduced the depletion rate. Lease operating expenses decreased largely due to lower well repairs and maintenance related costs during the six months ended June 30, 2026, as well as continued realization of operational efficiencies.
For the periods presented above, revenues decreased $869,000$1.9 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 due to lower revenue in air distribution, transportation safety and office products. Revenues decreased $2.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to lower revenue in our air distribution end market, partially offset by growth in our transportation safety end market. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Deflecto’s revenue arrangements and related concentrations.
Cost of revenues increased $1.6$2.1 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 primarily due to higher material costs. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Deflecto’s cost of revenues.
The operating expenses table above includes the Company’s general and administrative expense by segment and Industrial Operations and Manufacturing Operations’ sales and marketing expenses. Refer to Note 2 to included in our 2025 Annual Report for additional information regarding Printronix’s and Deflecto’s operating expenses.
The increase in Intellectual Property Operations was due to legal fees related to a dispute with a service provider. The increase in parent general and administrative costs was primarily due to an increase in parent company compensation and thirdoperating party consulting, legal and accountingpartner fees. The decrease in general and administrative costs of Manufacturing Operations is due to certain one-time severance expenses and professional fees related to the acquisition of Deflecto in October 2024 that were incurred during 2025 and did not recur in 2026.
Our equity securities investments, including the Life Sciences Portfolio and trading securities portfolio, are recorded at fair value at each balance sheet date. Our results primarily include unrealized gains and losses from the change in fair value of our equity securities, and, when equity securities are sold, the realized gains from those sales. The results during the three and six months ended MarchJune 31,30, 2026 and 2025 relate to our trading securities portfolio.
Loss on derivatives - Energy Operations
Loss on derivatives increased $5.7 million, from $5.0 million to $10.7 million in 2026, primarily due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark’s gain and loss on its commodity derivatives.
Interest expense
Interest expense decreased $565,000, from $2.5 million to $1.9 million in 2026, primarily due to a lower average balance from the Deflecto Facility and lower interest rates in 2026 versus 2025. Refer to Note 10 to the consolidated financial statements elsewhere herein for additional information regarding the Deflecto Facility.
Other income (expense), net
Other income (expense), net increased $902,000, from other expenseImpairment of $717,000equity method investment charge of $30.9 million in the three and six months ended June 30, 2026 is related to otherthe incomeinvestment in MalinJ1 - the carrying amount of $185,000the investment was reduced to zero in 2026,the primarilyquarter dueended toJune sale30, of unoccupied units of Deflecto’s U.K. facility.2026. Refer to Note 53 to the consolidated financial statements elsewhere herein for additional information regarding theour sale.investment in MalinJ1.
Net Loss/Income Attributable to Noncontrolling Interests in Subsidiaries
Net loss attributable to noncontrolling interests in MalinJ1 was $11.0 million in 2026, primarily due to the allocation of the impairment charge recognized on the Company’s investment in MalinJ1 to the noncontrolling interest. Refer to Note 3 to the consolidated financial statements elsewhere herein for additional information regarding our investment in MalinJ1.
ACTG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 4 filings (2 insiders, 5 trade dates, 99,188 shares, about $457.6K). Net open-market shares: -99,188 (purchases minus sales); net value about -$457.6K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Molinelli Gavin |
Grant/award | 6,961 | $4.31 | $30.0K |
| 2026-09-15 | Kohlberg Isaac T. |
Open-market sale | 24,000 | $4.55 | $109.2K |
| 2026-09-03 | Oconnell Maureen |
Open-market sale | 12,466 | $4.57 | $57.0K |
| 2026-09-02 | Oconnell Maureen |
Open-market sale | 20,534 | $4.63 | $95.1K |
| 2026-08-28 | Felman Michelle |
Gift | 16,086 | $4.49 | $72.2K |
| 2026-08-28 | Felman Michelle |
Gift | 16,086 | $4.49 | $72.2K |
| 2026-08-19 | Oconnell Maureen |
Open-market sale | 10,000 | $4.60 | $46.0K |
| 2026-08-12 | Kohlberg Isaac T. |
Open-market sale | 32,188 | $4.67 | $150.3K |
| 2026-06-30 | Molinelli Gavin |
Grant/award | 6,438 | $4.66 | $30.0K |
| 2026-06-23 | Sundar Ajay |
Grant/award | 4,175 | $4.79 | $20.0K |
| 2026-06-23 | Molinelli Gavin |
Grant/award | 25,052 | — | — |
| 2026-06-23 | Kohlberg Isaac T. |
Grant/award | 25,052 | — | — |
| 2026-06-23 | Oconnell Maureen |
Grant/award | 25,052 | — | — |
| 2026-06-23 | Felman Michelle |
Grant/award | 25,052 | — | — |
| 2026-06-08 | Soncini Jason W. |
Shares withheld for tax | 48,985 | $4.62 | $226.3K |
| 2026-06-08 | Rasamny Robert |
Shares withheld for tax | 28,390 | $4.62 | $131.2K |
| 2026-06-08 | Mcnulty Martin D. Jr. |
Shares withheld for tax | 287,133 | $4.62 | $1.3M |
| 2026-06-05 | Soncini Jason W. |
Grant/award | 93,049 | — | — |
| 2026-06-05 | Rasamny Robert |
Grant/award | 60,285 | — | — |
| 2026-06-05 | Mcnulty Martin D. Jr. |
Grant/award | 539,160 | — | — |
Well-known investors holding ACTG (13F)
None of the 59 investors we track reported a position in their latest 13F.