Company: ACTG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000934549-25-000004
Chunk: 119

Company: ACACIA RESEARCH CORP
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 119
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 liabilities in order to induce a buyer to complete a divestiture;

•the disruption of our Manufacturing Operations Business’s business;

•the potential loss of key employees; and

•disputes or litigation with the buyers.

Our Manufacturing Operations Business may not be successful in managing these or any other significant risks that it may encounter in divesting, discontinuing or exiting a brand, business or product line, which could have a material adverse effect on its business.

Our Manufacturing Operations Business could be subject to product liability claims and involved in product recalls.

If our Manufacturing Operations Business’s products cause injury or property damage, we could be subject to product liability claims. The successful assertion of this type of claim could have an adverse effect on our business, results of operations or financial condition. In addition, we may become involved in the recall of a product that is determined to be defective. More generally, a recall involving alternative products, even if we did not sell the recalled products, could adversely affect the perceived quality of products such as our Manufacturing Operations Business’s products, leading to decreased usage of our Manufacturing Operations Business’s products. The expenses of a recall and the damage to our reputation, or the reputation of alternative products generally, could have an adverse effect on our Manufacturing Operations Business’s results of operations or financial condition.

Our Manufacturing Operations Business’s indebtedness may limit its financial and operating flexibility, and our Manufacturing Operations Business may incur additional debt, which could increase the associated risks.

Our Manufacturing Operations Business has, and is expected to continue to have, substantial indebtedness. Such indebtedness could have adverse consequences for our Manufacturing Operations Business and may:

•require our Manufacturing Operations Business to dedicate a large portion of cash flow to pay principal and interest on indebtedness, which will reduce the availability of cash flow to fund working capital, capital expenditures, research and development expenditures and other business activities;

•increase vulnerability to general adverse economic and industry conditions;

•subject our Manufacturing Operations Business to the risk of credit facility default (including with respect to financial covenant compliance) and the associated consequences; 

•limit flexibility in planning for, or reacting to, changes in business and the industry in which our Manufacturing Operations Business operates;

•restrict our Manufacturing Operations Business’s ability to make strategic acquisitions, dispositions or to exploit business opportunities;

•place our Manufacturing Operations Business at a competitive disadvantage compared to our competitors that have less debt; and

•limit our Manufacturing Operations Business’s ability to borrow additional funds (even when necessary to maintain adequate liquidity) or dispose of assets.

Our Manufacturing Operations Business may incur