Company: ACTG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000934549-25-000021
Chunk: 8

Company: ACACIA RESEARCH CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 8
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 to changes in the underlying financial condition of certain of our equity investments in technology companies. The fair value of these investments can be significantly impacted by the risk of adverse changes in securities markets generally, as well as risks related to the performance of the companies whose securities we have invested in, risks associated with specific industries, and other factors. These investments are subject to significant fluctuations in fair value due to the volatility of the securities markets and of the underlying businesses.

As of March 31, 2025 and 2024, the carrying value of our equity investments in public and private companies was $54.8 million and $59.9 million, respectively.

We record our equity investments in publicly traded companies at fair value, which are subject to market price volatility. As of March 31, 2025, a hypothetical 10% adverse change in the market price of our investments in publicly traded common stock would have resulted in a decrease of approximately $1.8 million in such equity investments. We evaluate our equity investments in private companies for impairment when events and circumstances indicate that the decline in fair value of such assets below the carrying value is other-than temporary.

Foreign Currency Exchange Risk

Although we historically have not had material foreign operations, we are also exposed to market risks related to fluctuations in foreign currency exchange rates between the U.S. dollar, and the British Pound, Canadian Dollar, Chinese Yuan and Euro currency exchange rates, primarily related to foreign cash accounts. As of March 31, 2025, we did not have any foreign denominated equity securities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on this evaluation, our principal executive officer and principal financial officer concluded that as a result of the material weakness and control deficiencies as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, our disclosure controls and procedures were not effective as of March 31, 2025. 

Changes in Internal Control Over Financial Reporting

Other than planned remediation efforts previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, there were no changes in our internal control over financial reporting that occurred during the three 

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