Company: ACTG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000934549-25-000021
Chunk: 2

Company: ACACIA RESEARCH CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 2
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 expense

Three Months EndedMarch 31,20252024$ Change% Change(In thousands, except percentage change values)Non-recurring legacy legal expense$— $(6,243)$6,243 (100 %)

During the three months ended March 31, 2024, we recorded $6.2 million in connection with the AIP Matter in other income (expense) in the condensed consolidated statements of operations.

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Income Taxes

Three Months EndedMarch 31,20252024$ Change% Change(In thousands, except percentage change values)Income tax (expense) benefit$(6,081)$1,109 $(7,190)(648 %)Effective tax rate(21)%85 %n/a(106)%

Our income tax expense for the three months ended March 31, 2025 is primarily attributable to the statutory rate applied to our earnings.  Our income tax benefit for the three months ended March 31, 2024 primarily attributable to recognizing an income tax benefit on losses incurred to date offset by foreign withholding taxes.

Our 2025 effective tax rate was slightly lower than the U.S. federal statutory rate primarily due to non-controlling partnership earning allocated to minority shareholders. The effective tax rate may be subject to fluctuations during the year as new information is obtained which may affect the assumptions used to estimate the effective tax rate, including factors such as expected utilization of net operating loss carryforwards, changes in or the interpretation of tax laws in jurisdictions where the Company conducts business, the Company’s expansion into new states or foreign countries, and the amount of valuation allowances against deferred tax assets.

The Company has recorded a partial valuation allowance against our net deferred tax assets as of March 31, 2025 and December 31, 2024 on foreign tax credits and certain state net operating losses. Refer to Note 2 to the condensed consolidated financial statements elsewhere herein for additional income tax information.

Liquidity and Capital Resources

General

Our foreseeable material cash requirements as of March 31, 2025, are recognized as liabilities or generally are otherwise described in Note 15, “Commitments and Contingencies,” to the condensed consolidated financial statements included elsewhere herein. In particular, our facilities lease obligations, guarantees and certain contingent obligations are further described in Note 15 to the accompanying condensed consolidated financial statements. Historically, we have not entered into off-balance sheet financing arrangements. In addition, the obligations of our Energy Operations Business related to the Benchmark Revolving Credit Facility and the