Company: ACTG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000934549-25-000021
Chunk: 12

Company: ACACIA RESEARCH CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 12
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. In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Our Manufacturing Operations Business operates 9 manufacturing facilities across the United States, Canada, the United Kingdom and China. Given our Manufacturing Operations Business’s reliance upon non-domestic suppliers, the rapidly evolving changes to 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 the changes could significantly increase the costs of obtaining products, which could result in a material adverse effect on our financial results. 

Further, a material increase in the cost of our Manufacturing Operations Business’s products may result in the products becoming less attractive relative to products offered by our competitors. In addition, the increased economic and operational uncertainty caused by the rapidly evolving international trade environment could reduce demand for our Manufacturing Operations Business’s products and result in a material adverse effect on our financial results. To date, we have seen tariffs and general macro-economic uncertainty cause some customers to delay purchasing decisions.

The foregoing 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.