Company: ACTG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000934549-25-000004
Chunk: 86

Company: ACACIA RESEARCH CORP
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 86
---
 Benchmark, which could, if not remediated, have negative consequences for the Company. 

Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to include in its annual report on Form 10-K an assessment of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we are required to issue a statement as to whether or not our internal control over financial reporting is effective; and our independent auditors are required to issue an audit opinion on our internal control over financial reporting. As of December 31, 2024, we did not maintain effective internal control over financial reporting attributable to a certain identified material weakness. We describe this material weakness in Item 9A, “Controls and Procedures,” in this Annual Report on Form 10-K. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses will not be considered remediated until the applicable new or enhanced controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively. If our remedial measures are insufficient to address the material weakness, or if one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could, in turn, harm our reputation, cause a decline in investor confidence and in the market price of our stock, or restrict our access to capital markets. 

Data security and integrity are critically important to our business, and cybersecurity incidents—including cyberattacks, breaches of security, unauthorized access to or disclosure of confidential information, business disruption, or the perception that confidential information is not secure—could result in a material loss of business, regulatory enforcement, substantial legal liability and/or significant harm to our reputation, which could have a material adverse effect on our business, financial condition and results of operations.

Improper access to, misappropriation, destruction or disclosure of confidential, personal or proprietary data could result in significant harm to our reputation or the reputation of any of our operating businesses.

The security and protection of our and their data is a top priority. We and our operating businesses have devoted significant resources to maintain and regularly upgrade the wide array of