Company: ACTG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000934549-25-000021
Chunk: 29

Company: ACACIA RESEARCH CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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-owned subsidiary of Acacia, is the majority shareholder of MalinJ1.The Company holds a variable interest in Benchmark as the Company is obligated to absorb the loss and has the right to receive the benefit from Benchmark after the acquisition date and therefore, Benchmark is considered a variable interest entity (“VIE”). We determined that we have the power to direct the activities that most significantly impact Benchmark’s economic performance and we (i) are obligated to absorb the losses that could be significant to Benchmark or (ii) hold the right to receive benefits from Benchmark that could potentially be significant to it.

9

Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures required by U.S. GAAP in annual financial statements have been omitted or condensed in accordance with quarterly reporting requirements of the SEC. These interim unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024, as reported by Acacia in its 2024 Annual Report, as well as in our other public filings with the SEC. The condensed consolidated interim financial statements of Acacia include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of Acacia's consolidated financial position as of March 31, 2025, and results of operations and its cash flows for the interim periods presented. The consolidated results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year.Revenue RecognitionIntellectual Property OperationsARG’s revenue is recognized upon transfer of control (i.e., by the granting) of promised bundled IP Rights and other contractual performance obligations to licensees in an amount that reflects the consideration we expect to receive in exchange for those IP Rights. Revenue contracts that provide promises to grant the right to use IP Rights as they exist at the point in time at which the IP Rights are granted, are accounted for as performance obligations satisfied at a point in time and revenue is recognized at the point in time that the applicable performance obligations are satisfied and all other revenue recognition criteria have been met.For the periods presented, revenue contracts executed by ARG primarily provided for the payment of contractually determined, one-time, paid-up license fees in consideration for the grant of certain IP