ACACIA RESEARCH CORP

Previous wording

We are focused on acquiring and managing companies across industries – including but not limited to the industrial, energy, technology, and healthcare verticals. We focus on identifying, pursuing and acquiring businesses where we are uniquely positioned to deploy our differentiated strategy, people and processes to generate and compound shareholder value. We have a wide range of transactional and operational capabilities to realize the intrinsic value in the businesses that we acquire. Our ideal transactions include the acquisition of public or private companies, the acquisition of divisions of other companies, or structured transactions that can result in the recapitalization or restructuring of the ownership of a business to enhance value.

Current wording

We are focused on acquiring and managing companies across industries – including but not limited to the technology, energy and industrials verticals. We focus on identifying, pursuing and acquiring businesses where we are uniquely positioned to deploy our differentiated strategy, people and processes to generate and compound shareholder value. We have a wide range of transactional and operational capabilities to realize the intrinsic value in the businesses that we acquire. Our ideal transactions include the acquisition of public or private companies, the acquisition of divisions of other companies, or structured transactions that can result in the recapitalization or restructuring of the ownership of a business to enhance value.

Previous wording

We have established a proven track record of licensing and enforcement success with over 1,600 license agreements executed as of March 31, 2024, across nearly 200 patent portfolio licensing and enforcement programs. As of March 31, 2024, we have generated gross licensing revenue of approximately $1.8 billion, and have returned $869.8 million to our patent partners. Since January 1, 2020, we have generated gross licensing revenue of approximately $228.1 million and returned approximately $80.1 million to our patent partners.

Current wording

We have established a proven track record of licensing and enforcement success with over 1,600 license agreements executed as of June 30, 2024, across nearly 200 patent portfolio licensing and enforcement programs. As of June 30, 2024, we have generated gross licensing revenue of approximately $1.9 billion, and have returned $875.6 million to our patent partners. Since January 1, 2020, we have generated gross licensing revenue of approximately $233.4 million and returned approximately $85.9 million to our patent partners.

Previous wording

In November 2023, we invested $10.0 million to acquire a 50.4% equity interest in Benchmark. Headquartered in Austin, Texas, Benchmark is an independent oil and gas company engaged in the acquisition, production and development of oil and gas assets in mature resource plays in Texas and Oklahoma. Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring, who previously served as Chief Operating Officer of both Benchmark and Jones Energy, Inc. Prior to Benchmark's acquisition of additional assets in April 2024 (as discussed below), Benchmark’s assets consisted of over 13,000 net acres primarily located in Roberts and Hemphill Counties in Texas, and an interest in over 125 wells, the majority of which are operated. Acacia made a control investment in Benchmark and intends to utilize its significant capital base to acquire predictable and shallow decline, cash-flowing oil and gas properties whose value can be enhanced via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. Through its investment in Benchmark, the Company, along with the Benchmark management team, will evaluate future growth and acquisitions of oil and gas assets at attractive valuations. The Company’s consolidated financial statements include Benchmark’s consolidated operations from November 13, 2023 through March 31, 2024. Refer to Note 1 to the consolidated financial statements elsewhere herein for additional information.

Current wording

In November 2023, we invested $10.0 million to acquire a 50.4% equity interest in Benchmark. Headquartered in Austin, Texas, Benchmark is an independent oil and gas company engaged in the acquisition, production and development of oil and gas assets in mature resource plays in Texas and Oklahoma. Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring, who previously served as Chief Operating Officer of both Benchmark and Jones Energy, Inc. Prior to Benchmark's acquisition of additional assets in April 2024, Benchmark’s assets consisted of over 13,000 net acres primarily located in Roberts and Hemphill Counties in Texas, and an interest in over 125 wells, the majority of which are operated. Acacia made a control investment in Benchmark and intends to utilize its significant capital base to acquire predictable and shallow decline, cash-flowing oil and gas properties whose value can be enhanced via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. Through its investment in Benchmark, the Company, along with the Benchmark management team, will evaluate future growth and acquisitions of oil and gas assets at attractive valuations. The Company’s consolidated financial statements include Benchmark’s consolidated operations from November 13, 2023 through June 30, 2024. Refer to Note 1 to the consolidated financial statements elsewhere herein for additional information.

Previous wording

On April 17, 2024, Benchmark consummated the previously announced transactions contemplated in the Purchase and Sale Agreement. Pursuant to the Purchase Agreement, Benchmark acquired certain upstream assets and related facilities in Texas and Oklahoma, including approximately 140,000 net acres and an interest in approximately 470 operated producing wells for a purchase price of $145 million in cash, subject to customary post-closing adjustments. The Company’s contribution to Benchmark to fund its portion of the Purchase Price and related fees was $59.9 million, which was funded from cash on hand. The remainder of the Purchase Price was funded by a combination of borrowings under the Revolving Credit Facility and a cash contribution of $15.25 million from other investors in Benchmark, including McArron Partners. Following closing, the Company’s interest in Benchmark is approximately 73.5%. Refer to Note 2 to the accompanying consolidated financial statements for additional information regarding the Revolving Credit Facility.

Current wording

On April 17, 2024, Benchmark consummated the previously announced transactions contemplated in the Purchase Agreement. Pursuant to the Purchase Agreement, Benchmark acquired certain upstream assets and related facilities in Texas and Oklahoma, including approximately 140,000 net acres and an interest in approximately 470 operated producing wells for a purchase price of $145 million in cash, subject to customary post-closing adjustments. The Company’s contribution to Benchmark to fund its portion of the Purchase Price and related fees was $59.9 million, which was funded from cash on hand. The remainder of the Purchase Price was funded by a combination of borrowings under the Revolving Credit Facility and a cash contribution of $15.25 million from other investors in Benchmark, including McArron Partners. Following closing, the Company’s interest in Benchmark is approximately 73.5%. Refer to Note 2 to the accompanying consolidated financial statements for additional information regarding the Revolving Credit Facility.

Previous wording

Starboard beneficially owns 61,123,595 shares of our common stock as of May 6, 2024, representing approximately 61.2% of the common stock based on 100,021,951 shares of common stock issued and outstanding as of such date and no shares of Series A Redeemable Convertible Preferred Stock, no Series B Warrants, nor any Senior Secured Notes remain outstanding.

Current wording

Starboard beneficially owns 61,123,595 shares of our common stock as of August 5, 2024, representing approximately 60.9% of the common stock based on 100,375,459 shares of common stock issued and outstanding as of such date and no shares of Series A Redeemable Convertible Preferred Stock, no Series B Warrants, nor any Senior Secured Notes remain outstanding.

Previous wording

In February 2024, after over one year of service from Mr. McNulty as the Company’s Interim Chief Executive Officer, the Board appointed Mr. McNulty as Chief Executive Officer of the Company on a permanent basis. In addition, the Board expanded the size of the Board from six to seven directors and the Board appointed Mr. McNulty Jr. as a director of the Company to serve until the Company’s 2024 annual meeting of stockholders and until his successor is duly elected and qualified.

Current wording

In February 2024, after over one year of service from Mr. McNulty as the Company’s Interim Chief Executive Officer, the Board appointed Mr. McNulty as Chief Executive Officer of the Company on a permanent basis. In addition, the Board expanded the size of the Board from six to seven directors and the Board appointed Mr. McNulty Jr. as a director of the Company.

Previous wording

Historically, inflation has not had a significant impact on us or any of our subsidiaries. While insignificant to our consolidated enterprise, during the three months ended March 31, 2024, inflation for our Printronix subsidiary slowed down with only a small increase in cost of raw materials than in previous years related to its electronic and electrical and metal components. Printronix will continue to adjust its selling price as required in response to higher costs. Printronix have also implemented cost rationalization measures to combat the rising cost that is driven by inflation and currency pressures. Additionally, our Energy Operations Business may experience inflation. The oil and natural gas industry and the broader U.S. economy have experienced higher than expected inflationary pressures in recent years related to increases in oil and natural gas prices, continued supply chain disruptions, labor shortages and geopolitical instability, among other pressures.

Current wording

Historically, inflation has not had a significant impact on us or any of our subsidiaries. While insignificant to our consolidated enterprise, during the three and six months ended June 30, 2024, inflation for our Printronix subsidiary slowed down with only a small increase in cost of raw materials than in previous years related to its electronic and electrical and metal components. Printronix will continue to adjust its selling price as required in response to higher costs. Printronix have also implemented cost rationalization measures to combat the rising cost that is driven by inflation and currency pressures. Additionally, our Energy Operations Business may experience inflation. The oil and natural gas industry and the broader U.S. economy have experienced higher than expected inflationary pressures in recent years related to increases in oil and natural gas prices, continued supply chain disruptions, labor shortages and geopolitical instability, among other pressures.

Previous wording

As of the date of this Quarterly Report, our Patent Licensing, Enforcement and Technologies Business has no pending patent infringement case with scheduled trial dates in the next twelve months. Patent infringement trials are components of its overall patent licensing process and are one of many factors that contribute to possible future revenue generating opportunities. Scheduled trial dates, as promulgated by the respective court, merely provide an indication of when, in future periods, the trials may occur according to the court’s scheduling calendar at a specific point in time. A court may change previously scheduled trial dates. In fact, courts often reschedule trial dates for various reasons that are unrelated to the underlying patent assets and typically for reasons that are beyond the control of our Patent Licensing, Enforcement and Technologies Business. While scheduled trial dates provide an indication of the timing of possible future revenue generating opportunities, the trials themselves and the immediately preceding periods represent the possible future revenue generating opportunities.

Current wording

As of the date of this Quarterly Report, our Patent Licensing, Enforcement and Technologies Business has one pending patent infringement case with scheduled trial dates in the next twelve months. Patent infringement trials are components of its overall patent licensing process and are one of many factors that contribute to possible future revenue generating opportunities. Scheduled trial dates, as promulgated by the respective court, merely provide an indication of when, in future periods, the trials may occur according to the court’s scheduling calendar at a specific point in time. A court may change previously scheduled trial dates. In fact, courts often reschedule trial dates for various reasons that are unrelated to the underlying patent assets and typically for reasons that are beyond the control of our Patent Licensing, Enforcement and Technologies Business. While scheduled trial dates provide an indication of the timing of possible future revenue generating opportunities, the trials themselves and the immediately preceding periods represent the possible future revenue generating opportunities.

Previous wording

During the three months ended March 31, 2024 as well as 2023 and 2022, we did not acquire any new patent portfolios. During 2021, we acquired one new patent portfolio consisting of Wi-Fi 6 standard essential patents. In 2020, we acquired five new patent portfolios consisting of (i) flash memory technology, (ii) voice activation and control technology, (iii)

Current wording

During the six months ended June 30, 2024 as well as 2023 and 2022, we did not acquire any new patent portfolios. During 2021, we acquired one new patent portfolio consisting of Wi-Fi 6 standard essential patents. In 2020, we acquired five new patent portfolios consisting of (i) flash memory technology, (ii) voice activation and control technology, (iii) wireless networks, (iv) internet search, advertising and cloud computing technology and (v) GPS navigation. The patents and patent rights acquired in 2021 and 2020 have estimated economic useful lives of approximately five years.

Previous wording

Our Printronix subsidiary is a worldwide leader in multi‐technology supply‐chain printing solutions for a variety of industries, including manufacturing, transportation and logistics, retail distribution, food and beverage distribution, and pharmaceutical distribution. Printronix’s line matrix printers are used for mission critical applications within these industries, including labeling and inventory management, build sheets, invoicing, manifests and bills of lading, and reporting. In China, India and other developing countries in Asia and Africa, our printers are also prevalent in the banking and government sectors. Printronix has manufacturing, configuration and/or distribution sites located in Malaysia, the United States, Singapore, China and the Netherlands, along with sales and support locations around the world to support its global network of users, channel partners, and strategic alliances. Printronix designs and manufactures printers and related consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements, which are serviced by outside contractors. Consumable products include inked ribbons which are used within Printronix's printers. Printronix’s products are primarily sold through Printronix’s global network of channel partners, such as dealers and distributors, to end‐users.

Current wording

Our Printronix subsidiary is a worldwide leader in multi‐technology supply‐chain printing solutions for a variety of industries, including auto manufacturing, transportation and logistics, retail distribution, food and beverage distribution, and pharmaceutical distribution. Printronix’s line matrix printers are used for mission critical applications within these industries, including labeling and inventory management, build sheets, invoicing, manifests and bills of lading, and reporting. In China, India and other developing countries in Asia and Africa, our printers are also prevalent in the banking and government sectors. Printronix has manufacturing, configuration and/or distribution sites located in Malaysia, the United States, Singapore, China and the Netherlands, along with sales and support locations around the world to support its global network of users, channel partners, and strategic alliances. Printronix designs and manufactures printers and related consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements, which are serviced by outside contractors. Consumable products include inked ribbons which are used within Printronix's printers. Printronix’s products are primarily sold through Printronix’s global network of channel partners, such as dealers and distributors, to end‐users.

Previous wording

In addition to the following results of operations discussion, more information related to our Intellectual Property Operations, Industrial Operations and Energy Operations segment revenues, cost of revenues and cost of production may be found in Notes 2 and 16 to the consolidated financial statements.

Current wording

In addition to the following results of operations discussion, more information related to our Intellectual Property Operations, Industrial Operations and Energy Operations segment revenues may be found in Notes 2 and 18 to the consolidated financial statements. Refer to Note 2 included in our 2023 Annual Report for additional information regarding our our Intellectual Property Operations, Industrial Operations and Energy Operations segment cost of revenues and cost of production.

Previous wording

Loss before income taxes was $1.3 million for the three months ended March 31, 2024, as compared to income of $11.9 million in the comparable prior period. The net decrease was comprised of the change in total revenues described above and other changes in operating expenses and other income or expense as follows:

Current wording

Loss before income taxes was $15.9 million for the three months ended June 30, 2024, as compared to loss of $20.4 million in the comparable prior period. The decrease in net loss was comprised of the change in total revenues described above and other changes in operating expenses and other income or expense as follows:

Previous wording

•Litigation and licensing expenses decreased $246,000, from $1.4 million to $1.1 million in 2024, primarily due to a net decrease in litigation support and third-party technical consulting expenses associated with ongoing litigation. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Current wording

•Litigation and licensing expenses decreased $1.1 million, from $2.3 million to $1.2 million in 2024, primarily due to a net decrease in litigation support and third-party technical consulting expenses associated with ongoing litigation. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Previous wording

•Legal liability fee of $6.2 million in 2024 is related to the additional accrual made in connection with the AIP Matter. Refer to Note 12 to the consolidated financial statements elsewhere herein for additional information regarding the legal liability fee accrued in connection with the AIP Matter.

Current wording

•Legal liability fee of $6.6 million in 2024 is related to the additional accruals made in connection with the AIP Matter. Refer to Note 14 to the consolidated financial statements elsewhere herein for additional information regarding the legal liability fee accrued in connection with the AIP Matter.

Previous wording

Total revenues increased $9.5 million to $24.3 million for the three months ended March 31, 2024, as compared to $14.8 million for the three months ended March 31, 2023, primarily due to an increase in our Intellectual Property Operations revenues and revenues contributed from Benchmark of $1.9 million partially offset by a decrease in Industrial Operations revenues. ARG revenues increased due to an increase in the number of license agreements executed and higher average license fees, which contributed to Intellectual Property Operations revenues increasing by $9.4 million. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. The decrease in Industrial Operations revenue of $1.8 million is due to lower units of printers sold. Refer to “Industrial Operations –Revenues” below for further detailed discussion.

Current wording

Total revenues increased $27.5 million to $50.2 million for the six months ended June 30, 2024, as compared to $22.7 million for the six months ended June 30, 2023, primarily due to an increase in our Intellectual Property Operations revenues and revenues contributed from Benchmark of $16.0 million partially offset by a decrease in Industrial Operations revenues. ARG revenues increased due to an increase in the number of license agreements executed and higher average license fees, which contributed to Intellectual Property Operations revenues increasing by $14.4 million. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. The decrease in Industrial Operations revenue of $3.0 million is due to lower units of printers sold. Refer to “Industrial Operations –Revenues” below for further detailed discussion.

Previous wording

•Inventor royalties increased $385,000, from $221,000 to $606,000 in 2024, primarily due to license agreement activity and related revenues generated in 2024. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Current wording

•Inventor royalties increased $1.0 million, from $366,000 to $1.4 million in 2024, primarily due to license agreement activity and related revenues generated in 2024. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Previous wording

•Contingent legal fees increased $1.3 million, from $532,000 to $1.8 million in 2024, primarily due to the change in Intellectual Property Operations revenues described above. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Current wording

•Contingent legal fees increased $1.9 million, from $544,000 to $2.4 million in 2024, primarily due to the change in Intellectual Property Operations revenues described above. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Previous wording

•Printronix cost of sales, engineering and development expenses, and sales and marketing expenses decreased approximately $1.6 million, from $7.3 million to $5.7 million in 2024. Refer to "Industrial Operations –Cost of Revenues" and "Operating Expenses" below for further discussion.

Current wording

•Printronix cost of sales, engineering and development expenses, and sales and marketing expenses decreased approximately $2.8 million, from $13.3 million to $10.6 million in 2024. Refer to "Industrial Operations –Cost of Revenues" and "Operating Expenses" below for further discussion.

Previous wording

•Benchmark's cost of production for the first quarter of 2024 added a total of $1.3 million to our consolidated operating expenses. Refer to "Energy Operations –Cost of Production"below for further discussion.

Current wording

•Benchmark's cost of production for the first six months of 2024 added a total of $11.4 million to our consolidated operating expenses. Refer to "Energy Operations –Cost of Production"below for further discussion.

Previous wording

•General and administrative expenses increased $313,000, from $12.0 million to $12.4 million in 2024, primarily due to an increase in Intellectual Property Operations variable performance-based compensation costs and an increase in parent compensation expense for share-based awards and $385,000 from our Energy Operations general and administrative costs for the first quarter of 2024, partially offset by a decrease in our Industrial Operations general and administrative costs, other general and administrative costs and severance costs. Refer to "General and Administrative Expenses" below for further detail and discussion.

Current wording

•General and administrative expenses increased $838,000, from $21.5 million to $22.3 million in 2024, primarily due to an increase in Intellectual Property Operations variable performance-based compensation costs and an increase in parent compensation expense for share-based awards and $1.3 million from our Energy Operations general and administrative costs for 2024, partially offset by a decrease in our Industrial Operations general and administrative costs, other general and administrative costs and severance costs. Refer to "General and Administrative Expenses" below for further detail and discussion.

Previous wording

•Compensation expense for share-based awards, included in general and administrative expenses above, increased $381,000, from $477,000 to $858,000 in 2024, primarily due to restricted stock and option grants issued to employees and the Board in 2023, which includes a partial offset for forfeitures.

Current wording

•Compensation expense for share-based awards, included in general and administrative expenses above, increased $398,000, from $1.4 million to $1.7 million in 2024, primarily due to restricted stock and option grants issued to employees and the Board in 2024 and 2023, which includes a partial offset for forfeitures.

Previous wording

•Unrealized loss from the change in fair value of our equity securities was $26.7 million in 2024, as compared to an unrealized gain of $3.3 million in the comparable prior period. The unrealized gain and loss were derived from our Life Sciences Portfolio and trading securities portfolio. The current period unrealized loss primarily relates to the reversal of unrealized gains previously recorded for Arix shares sold in January 2024 for realized gains. Refer to Note 3 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to "Equity Securities Investments" below for further discussion.

Current wording

•Unrealized loss from the change in fair value of our equity securities was $31.4 million in 2024, as compared to an unrealized gain of $10.0 million in the comparable prior period. The unrealized gain and loss were derived from our Life Sciences Portfolio and trading securities portfolio. The current period unrealized loss primarily relates to the reversal of unrealized gains previously recorded for Arix shares sold in January 2024 for realized gains. Refer to Note 4 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to "Equity Securities Investments" below for further discussion.

Previous wording

•Realized gain from the sale of equity securities was $28.9 million in 2024, as compared to a realized loss of $1.4 million in the comparable prior period. The realized gains and losses were similarly derived from the sales activity from our Life Sciences Portfolio and trading securities portfolio. The current period realized gains primarily relates to the Arix shares sold in January 2024. Refer to Note 3 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to "Equity Securities Investments" below for further discussion.

Current wording

•Realized gain from the sale of equity securities was $28.9 million in 2024, as compared to a realized loss of $9.4 million in the comparable prior period. The realized gains and losses were similarly derived from the sales activity from our Life Sciences Portfolio and trading securities portfolio. The current period realized gains primarily relates to the Arix shares sold in January 2024. Refer to Note 4 to the consolidated financial statements elsewhere herein for additional information regarding the sale of Arix shares and refer to "Equity Securities Investments" below for further discussion.

Previous wording

•Unrealized gain from the Series B warrants and the embedded derivative fair value measurements was zero in 2024, as compared to a gain of $16.7 million in the comparable prior period, primarily due to the exercise of the remaining Series B Warrants and conversion of the Series A Redeemable Convertible Preferred Stock into the Company's common stock in 2023. In 2024, no shares of Series A Redeemable Convertible Preferred Stock and no Series B Warrants remained outstanding. Refer to Notes 9 and 10 to the consolidated financial statements elsewhere herein for additional information regarding the Starboard Securities and fair value measurements.

Current wording

•Unrealized gain from the Series B warrants and the embedded derivative fair value measurements was zero in 2024, as compared to a gain of $6.7 million in the comparable prior period, primarily due to the exercise of the remaining Series B Warrants and conversion of the Series A Redeemable Convertible Preferred Stock into the Company's common stock in 2023. In 2024, no shares of Series A Redeemable Convertible Preferred Stock and no Series B Warrants remained outstanding. Refer to Notes 11 and 12 to the consolidated financial statements elsewhere herein for additional information regarding the Starboard Securities and fair value measurements.

Previous wording

•Interest expense on Senior Secured Notes was zero in 2024, as compared to interest expense of $900,000 in the comparable prior period, due to the cancellation of the remaining $60.0 million aggregate principal amount outstanding of the Senior Secured Notes on July 13, 2023, pursuant to the Series B Warrants Exercise. Refer to Note 9 to the consolidated financial statements elsewhere herein for additional information.

Current wording

•Interest expense on Senior Secured Notes was zero in 2024, as compared to interest expense of $1.8 million in the comparable prior period, due to the cancellation of the remaining $60.0 million aggregate principal amount outstanding of the Senior Secured Notes on July 13, 2023, pursuant to the Series B Warrants Exercise. Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information.

Previous wording

•Interest income and other, net was $4.9 million in 2024, as compared to $3.4 million in the comparable prior period, mainly due to an increase in interest income from our cash equivalents. Refer to Note 2 included in our 2023 Annual Report for additional information regarding our cash and cash equivalents and investments in equity securities.

Current wording

•Interest income and other, net was $5.2 million in 2024, as compared to $7.7 million in the comparable prior period, mainly due to interest expense from Benchmark's Revolving Credit Facility and Benchmark's net realized and unrealized gain or loss on its commodity derivatives, which were partially offset by an increase in interest income from our cash equivalents. Refer to Notes 2 and 12 for additional information regarding Benchmark's Revolving Credit Facility and net realized and unrealized gain or loss on its commodity derivatives, respectively. Refer to Note 2 included in our 2023 Annual Report for additional information regarding our cash and cash equivalents and investments in equity securities.

Previous wording

For the periods presented above, the majority of the revenue agreements executed during the relevant period provided for the payment of one-time, paid-up license fees in consideration for the grant of certain IP Rights for patented technology owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Paid-up revenue increased $8.5 million due to one patent portfolio that generated license revenue in the first quarter of 2024. Recurring revenue, that provides for quarterly sales-based license fees, increased $982,000 from various on-going license arrangements.

Current wording

For the periods presented above, the majority of the revenue agreements executed during the relevant period provided for the payment of one-time, paid-up license fees in consideration for the grant of certain IP Rights for patented technology owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Paid-up revenue increased $4.8 million for the three months ended June 30, 2024 and increased $13.3 million for the six months ended June 30, 2024 due to an increase in the number of new license agreements that generated license revenue in 2024. Recurring revenue, that provides for quarterly sales-based license fees, increased $126,000 for the three months ended June 30, 2024 and increased $1.1 million for the six months ended June 30, 2024 from various on-going license arrangements.

Previous wording

Refer to detailed change explanations above for the three months ended March 31, 2024 and 2023 regarding cost of revenues for our Intellectual Property Operations.

Current wording

Refer to detailed change explanations above for the three and six months ended June 30, 2024 and 2023 regarding cost of revenues for our Intellectual Property Operations.

Previous wording

For the periods presented above, the majority of the contract agreements executed in the relevant period include various combinations of tangible products (which include printers, consumables and parts) and services. Revenue from printers and parts decreased $1.4 million due to a decrease in the number of printer units sold. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix's revenue arrangements and related concentrations. Refer to “Industrial Operations Business” above for additional information related to Printronix's operating activities.

Current wording

For the periods presented above, the majority of the contract agreements executed in the relevant period include various combinations of tangible products (which include printers, consumables and parts) and services. Revenue from printers and parts decreased $440,000 for the three months ended June 30, 2024 and decreased $1.8 million for the six months ended June 30, 2024 due to a decrease in the number of printer units sold. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix's revenue arrangements and related concentrations. Refer to “Industrial Operations Business” above for additional information related to Printronix's operating activities.

Previous wording

Refer to detailed change explanations above for the three months ended March 31, 2024 and 2023 regarding cost of revenues for our Industrial Operations. The decrease in Printronix's cost of revenues for the three months ended March 31, 2024 is due to change in revenue described above. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix's cost of sales.

Current wording

Refer to detailed change explanations above for the three and six months ended June 30, 2024 and 2023 regarding cost of revenues for our Industrial Operations. The decrease in Printronix's cost of revenues for the three and six months ended June 30, 2024 is due to change in revenue described above. Refer to Note 2 included in our 2023 Annual Report for additional information regarding Printronix's cost of sales.

Previous wording

Benchmark's cost of production for the three months ended March 31, 2024 was $1.3 million. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark's cost of production.

Current wording

Benchmark's cost of production for the three and six months ended June 30, 2024 was $10.0 million and $11.4 million, respectively. Refer to Note 2 included in our 2023 Annual Report for additional information regarding Benchmark's cost of production.