Company: ACTG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000934549-25-000004
Chunk: 117

Company: ACACIA RESEARCH CORP
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 117
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 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. 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.

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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 9 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 tariffs by the United States, or the imposition of 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. 

Unfavorable shifts in industry-wide demand for our Manufacturing Operations Business’s products could result in inventory valuation risk.

Our Manufacturing Operations Business evaluates its ending inventories for excess quantities, impairment of value, and obsolescence. This evaluation includes analysis of sales levels by product and projections of future demand based upon input received from our customers, sales team, and management. If inventories on hand are in excess of demand or slow moving, appropriate write-downs may be recorded. In addition, our Manufacturing Operations Business writes off inventories that are considered obsolete based upon changes in customer demand, product design changes including