Company: ACTG
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000934549-25-000054
Chunk: 136

Company: ACACIA RESEARCH CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 136
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 of 12%, all Level 3 inputs within the fair value hierarchy. The Company also reviews the carrying value of equity securities without readily determinable fair value, equity method investments and patents on a quarterly basis for indications of impairment, and other long-lived assets at least annually. When indications of potential impairment are identified, the Company may be required to determine the fair value of those assets and record an adjustment for the carrying amount in excess of the fair value determined. Any fair value determination would be based on valuation approaches, which are appropriate under the circumstances and utilize Level 2 and Level 3 measurements as required. In connection with our Deflecto acquisition, nonrecurring Level 3 valuations were performed for certain intangible assets, refer to Note 3 for additional information.

14. RELATED PARTY TRANSACTIONS

In 2023, the Company entered into a Loan Facility (“Loan Facility”) with a related private portfolio company. As of September 30, 2025 and December 31, 2024, the Loan Facility balance including interest receivable was $4.7 million and $3.5 million, respectively. The Loan Facility is not impaired and no allowance for credit loss was deemed necessary as of September 30, 2025. The Loan Facility bore an interest rate of 9.5% per annum. We recorded $297,000 and $209,000 in interest income during the nine months ended September 30, 2025 and 2024, respectively. The receivable is included in other non-current assets in the consolidated balance sheets.In August 2025, the Company partnered with Unchained and Build to purchase the Loans. The Loans were originated by an affiliate of Unchained and sold to a wholly owned subsidiary of Acacia. Build is providing administrative and other services to Acacia in connection with Acacia’s purchase and holding of the Loans. Gavin Molinelli, Chairman of the Board and a Senior Partner and Co-Portfolio Manager of Starboard, is a limited partner in Build Secured Income Fund I, a private investment fund managed by Build, which also purchases loans originated by Unchained. During the  nine months ended September 30, 2025, the Company paid Build approximately $2,000 for its services.Refer to Note 12 for information about the Recapitalization Agreement and Services Agreement with Starboard.

15. COMMITMENTS AND CONTINGENCIES

Inventor Royalties and Contingent Legal ExpensesIn connection with the investment in certain patents and patent rights