Company: ACTG
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000934549-25-000042
Chunk: 47

Company: ACACIA RESEARCH CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 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 June 30, 2025 and December 31, 2024, the Loan Facility balance including interest receivable was $4.3 million and $3.5 million, respectively. The Loan Facility is not impaired and no allowance for credit loss was deemed necessary as of June 30, 2025. The Loan Facility bore an interest rate of 9.5% per annum. We recorded $187,000 and $125,000 in interest income during the six months ended June 30, 2025 and 2024, respectively. The receivable is included in other non-current assets in the consolidated balance sheets.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, ARG and its subsidiaries executed related agreements which grant to the former owners of the respective patents or patent rights, the right to receive inventor royalties based on future net revenues (as defined in the respective agreements) generated as a result of licensing and otherwise enforcing the respective patents or patent portfolios.ARG or its subsidiaries may retain the services of law firms that specialize in patent licensing and enforcement and patent law in connection with their licensing and enforcement activities. These law firms may be retained on a contingent fee basis whereby such law firms are paid on a scaled percentage of any negotiated fees, settlements or judgments awarded based on how and when the fees, settlements or judgments are obtained.Patent Enforcement and Legal ProceedingsThe Company is subject to claims, counterclaims and legal actions that arise in the ordinary course of business. Management believes that the ultimate liability with respect to these claims and legal actions, if any, will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.Subsidiaries of ARG are often required to engage in litigation to enforce their patents and patent rights. In connection with any such patent enforcement actions, it is possible that a defendant may request and/or a court