Company: ACTG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000934549-25-000004
Chunk: 1

Company: ACACIA RESEARCH CORP
Filing Date: 2025-03-17
Form: 10-K
Item: Item 8
Chunk 1
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 not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Our management, with the participation of our principal executive officer and our principal financial officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

Material Weakness Related to Benchmark

Based on the assessment, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2024, as a result of certain deficiencies in information technology (“IT”) general controls (“ITGCs”) for IT systems and applications utilized by Benchmark that are relevant to the preparation of the consolidated financial statements, including appropriate segregation of duties, appropriate restriction of user access and periodic reviews, and program change management controls. These IT deficiencies also resulted in related manual IT-dependent and automated application controls being ineffective. These deficiencies, in the aggregate, constitute a material weakness. Because the material weakness relates to Benchmark, its impact is limited to our Energy Operations and does not impact our other operations. 

There were no identified material misstatements to our current year financial statements, no restatements of prior period financial statements and no changes in previously released financial results required as a result of these control deficiencies. In addition, notwithstanding the identified material weakness, management, including our principal executive officer and our principal financial officer, believes the consolidated financial statements included in this Annual Report on Form 10-K fairly represent, in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. Generally Accepted Accounting Principles. 

Management has excluded Deflecto from its assessment of the internal control over financial reporting as of December 31, 2024, because it was acquired in a business combination during 2024. Deflecto is a wholly-owned subsidiary whose total assets and total revenues represent approximately 18% and 19%, respectively, of our total consolidated assets and revenues as of and for the year ended December 31, 2024.

Our independent registered public accounting firm, Grant Thornton LLP, who audited the 2024 consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting included in this Annual Report on Form