Company: ACTG
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000934549-25-000054
Chunk: 47

Company: ACACIA RESEARCH CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 incurred by the drilling of new oil and natural gas wells, the change in estimated asset retirement obligations, and the 

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carrying value of proved and unproved oil and natural gas properties following impairment. The fair value of the asset retirement obligations is measured using valuation techniques consistent with the income approach, which converts future cash flows to a single discounted amount and significant inputs include the estimated plug and abandonment cost per well, the estimated life per well and the credit-adjusted risk-free rate. The fair value of the asset retirement obligations are within Level 3 of the fair value hierarchy. In connection with our Revolution Transaction, the fair value of the oil and gas properties was determined based upon estimated future discounted cash flow, a Level 3 input, using estimated production which we reasonably expect, and estimated prices adjusted for differentials. Unobservable inputs include estimated future oil and natural gas production, prices, operating and development costs and a discount rate 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