Financial Analysis

ACQUISITIONS Benchmark In November 2023, we invested $10.0 million to acquire a 50.4% equity interest in Benchmark. As of December 31, 2024, management has finalized the valuations of all acquired assets and liabilities assumed in the acquisition and no measurement period adjustments were recorded during the year ended December 31, 2024. On April 17, 2024, Benchmark consummated the transaction contemplated in the Revolution Purchase Agreement. At the closing of Revolution Transaction pursuant to the Revolution Purchase Agreement, among other things, 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, upon the terms and subject to the conditions of the Revolution Purchase Agreement for a purchase price of $145 million in cash, subject to customary post-closing adjustments. Acacia funded a portion of the Revolution Purchase Price and related fees amounting to $59.9 million with cash on hand. The remainder of the Revolution Purchase Price was funded by a combination of borrowings under the Benchmark Revolving Credit Facility and the remaining being funded through a cash contribution of $15.3 million from other investors. Following closing, the Companys interest in Benchmark is approximately 73.5%. The Revolution Transaction was accounted for as an asset acquisition under ASC 805, Business Combinations as substantially all of the fair value …

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COMMITMENTS AND CONTINGENCIES Inventor Royalties and Contingent Legal Expenses In connection with the investment in certain patents and patent rights, ARG and its subsidiaries executed related agreements which grant to the former owners of the respective patents or patent rights, the right to receive inventor royalties based on future net revenues (as defined in the respective agreements) generated as a result of licensing and otherwise enforcing the respective patents or patent portfolios. ARG or its subsidiaries may retain the services of law firms that specialize in patent licensing and enforcement and patent law in connection with their licensing and enforcement activities. These law firms may be retained on a contingent fee basis whereby such law firms are paid on a scaled percentage of any negotiated fees, settlements or judgments awarded based on how and when the fees, settlements or judgments are obtained. Patent Enforcement and Legal Proceedings The Company is subject to claims, counterclaims and legal actions that arise in the ordinary course of business. Management believes that the ultimate liability with respect to these claims and legal actions, if any, will not have a material effect on the Companys consolidated financial position, results of operations or cash flows. Subsidiaries of ARG are often required to engage in litigation to enforce their patents and patent rights. In connection with any such patent enforcement actions, it is possible that a defendant m …

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EQUITY-BASED INCENTIVE PLANS Stock-Based Incentive Plans The 2024 Acacia Research Corporation Stock Incentive Plan (2024 Plan), the 2016 Acacia Research Corporation Stock Incentive Plan (2016 Plan) and the 2013 Acacia Research Corporation Stock Incentive Plan (2013 Plan) (collectively, the Plans) were approved by the stockholders of Acacia in June 2024, June 2016 and May 2013, respectively. The Plans allow grants of stock options, restricted stock units, and in the case of the 2013 Plan, allowed stock awards with respect to Acacia common stock to eligible individuals, which generally includes directors, officers, employees and consultants. The 2013 Plan expired in May 2023, and as of the effective date of the 2024 Plan, the remaining shares available for issuance under the 2016 Plan were transferred to the 2024 Plan. Therefore, Acacia exclusively grants awards under the 2024 Plan. Acacias compensation committee administers the Plans. The compensation committee determines which eligible individuals are to receive option grants, stock issuances or restricted stock units under the 2024 Plan, the time or times when the grants or issuances are to be made, the number of shares subject to each grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant, stock issuance or restricted stock units and the maximum term for which any granted opt …

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License revenues were comprised of the following for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (In thousands) Paid-up license revenue agreements $ 7,375 $ $ 76,865 $ 17,253 Recurring license revenue agreements 420 486 1,164 2,189 Total $ 7,795 $ 486 $ 78,029 $ 19,442 Printronixs net revenues were comprised of the following for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (In thousands) Printers, consumables and parts $ 5,859 $ 6,149 $ 18,557 $ 19,678 Services 801 858 2,369 2,505 Total $ 6,660 $ 7,007 $ 20,926 $ 22,183 Benchmarks revenues were comprised of the following for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (In thousands) Oil sales $ 6,614 $ 8,997 $ 21,480 $ 17,740 Natural gas sales 3,738 2,829 13,112 5,550 Natural gas liquids sales 3,207 3,837 11,779 8,390 Other service sales 617 154 1,428 163 Total $ 14,176 $ 15,817 $ 47,799 $ 31,843 Three Months Ended September 30, Nine Months Ended September 30, 2025 2025 (In thousands) Transportation safety $ 11,287 $ 32,420 Air distribution 10,226 29,684 Office products 9,302 26,247 Total $ 30,815 $ 88,351 …

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FAIR VALUE MEASUREMENTS U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows: (i) Level 1 - Observable Inputs : Quoted prices in active markets for identical investments; (ii) Level 2 - Pricing Models with Significant Observable Inputs : Other significant observable inputs, including quoted prices for similar investments, interest rates, credit risk, etc.; and (iii) Level 3 - Unobservable Inputs : Unobservable inputs reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Management estimates include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs, including the entitys own assumptions in determining the fair value of derivatives and certain investments. Whenever possible, the Company is required to use observable market inputs (Level 1) when measuring fair value. In such ca …

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REVOLVING CREDIT FACILITY AND TERM LOAN Benchmark Loan Agreement On April 17, 2024 (the Revolution Closing Date), in connection with the Revolution Transaction, BE Anadarko II, LLC, a subsidiary of Benchmark, entered into a Loan Agreement (the Benchmark Loan Agreement) with Frost Bank, as Administrative Agent and LC Issuer (Frost Bank) and the lenders from time to time party thereto (the Benchmark Lenders), governing a revolving credit facility with a maximum aggregate credit amount of $150 million (the Benchmark Revolving Credit Facility), approximately $85 million of which was available at the Revolution Closing Date, that Benchmark may draw upon from time to time subject to the terms and conditions set forth in the Benchmark Loan Agreement. The Benchmark Revolving Credit Facility will mature April 17, 2027 and includes a letter of credit subfacility. On the Revolution Closing Date, $82.7 million, including $660,000 related to letters of credit, was drawn under the Benchmark Revolving Credit Facility. Benchmark pledged substantially all of its oil and gas properties and other assets as collateral to secure amounts outstanding under the Benchmark Loan Agreement. During the nine months ended September 30, 2025, Benchmark drew $4.0 million from the Benchmark Revolving Credit Facility and during the three and nine months ended September 30, 2025, Benchmark made payments of $3.5 million and $12.0 million, respectively, under the Benchmark Revolving Credit Facility reducing the b …

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Recent Accounting Pronouncements Recently Adopted There have been no recent accounting pronouncements adopted by the Company which would have a material impact on the Companys financial statements. Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities on an annual basis (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 also requires that entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of this standard will occur in the fourth quarter of 2025 and will not have an impact on the Companys consolidated statements of operations and balance sheets, as the standard is expected to result in enhanced disclosures only. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, that req …

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RELATED PARTY TRANSACTIONS In 2023, the Company entered into a Loan Facility (Loan Facility) with a related private portfolio company. As of September 30, 2025 and December 31, 2024, the Loan Facility balance including interest receivable was $4.7 million and $3.5 million, respectively. The Loan Facility is not impaired and no allowance for credit loss was deemed necessary as of September 30, 2025. The Loan Facility bore an interest rate of 9.5% per annum. We recorded $297,000 and $209,000 in interest income during the nine months ended September 30, 2025 and 2024, respectively. The receivable is included in other non-current assets in the consolidated balance sheets. In August 2025, the Company partnered with Unchained and Build to purchase the Loans. The Loans were originated by an affiliate of Unchained and sold to a wholly owned subsidiary of Acacia. Build is providing administrative and other services to Acacia in connection with Acacias purchase and holding of the Loans. Gavin Molinelli, Chairman of the Board and a Senior Partner and Co-Portfolio Manager of Starboard, is a limited partner in Build Secured Income Fund I, a private investment fund managed by Build, which also purchases loans originated by Unchained. During the nine months ended September 30, 2025, the Company paid Build approximately $2,000 for its services. Refer to Note 12 for information about the Recapitalization Agreement and Services Agreement with Starboard. …

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SEGMENT REPORTING As of September 30, 2025, the Company operates and reports its results in four reportable segments: Intellectual Property Operations, Industrial Operations, Energy Operations and Manufacturing Operations. The Company reports segment information based on the management approach and organizes its businesses based on products and services. The Companys Chief Operating Decision Maker (CODM) is its Chief Executive Officer, and the management approach designates the internal reporting used by the Chief Executive Officer for decision making, allocating resources and performance assessment as the basis for determining the Companys reportable segments. The performance measure of the Companys reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. Specific asset information is not included in managements review at this time. The Companys Intellectual Property Operations segment invests in IP and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business 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. While we, from time to time, partner with inventors and patent owners, …

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Principles The consolidated financial statements and accompanying notes are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). Reclassifications Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated results of operations or cash flows. Principles of Consolidation The consolidated financial statements include the accounts of Acacia and its wholly and majority-owned and controlled subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Noncontrolling interests in Acacias majority-owned and controlled operating subsidiaries (noncontrolling interests) are separately presented as a component of stockholders equity. Consolidated net income or (loss) is adjusted to include the net (income) or loss attributed to noncontrolling interests in the consolidated statements of operations and comprehensive income (loss). Refer to the consolidated statements of changes in stockholders equity for noncontrolling interests activity. In 2020, in connection with the transaction with Link Fund Solutions Limited, which is more fully described in Note 4, the Company acquired equity securities of Malin J1 Limited (MalinJ1). MalinJ1 is included in the Companys co …

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STOCKHOLDERS EQUITY Repurchases of Common Stock On November 9, 2023, the Board approved a stock repurchase program (the Repurchase Program) for up to $20.0 million of the Company's common stock, subject to a cap of 5,800,000 shares of common stock. The Repurchase Program had no time limit and did not require the repurchase of a minimum number of shares. The common stock could be repurchased on the open market, in block trades, or in privately negotiated transactions, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Exchange Act. During December 2024, the Company completed the Repurchase Program with total common stock purchases of 4,358,361 shares for the aggregate amount of $20.0 million. …

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SUBSEQUENT EVENTS On November 3, 2025, BE Anadarko II, LLC, a subsidiary of Benchmark, entered into a Second Amendment to the original Benchmark Loan Agreement (Second Amendment) with Frost Bank and the Benchmark Lenders. Pursuant to the Second Amendment, the Benchmark Revolving Credit Facility has been amended to mature on April 17, 2029. All other terms, conditions and provisions of the Benchmark Loan Agreement remain materially unchanged. …

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