ACACIA RESEARCH CORP

Previous wording

We adhere closely to our philosophy of building strong and like-minded relationships with business leaders and, importantly, finding opportunities to make our return owning a business, rather through selling a business.

Current wording

We adhere closely to our philosophy of building strong and like-minded relationships with business leaders and, importantly, finding opportunities to make our return owning a business, rather than through selling a business.

Previous wording

We have established a proven track record of licensing and enforcement success with over 1,600 license agreements executed as of June 30, 2026, across nearly 200 patent portfolio licensing and enforcement programs. As of June 30, 2026, we have generated gross licensing revenue of approximately $2.0 billion, and have returned $918.5 million to our patent partners. Since January 1, 2022, we generated gross licensing revenue of approximately $268.2 million and returned approximately $81.5 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 September 30, 2026, across nearly 200 patent portfolio licensing and enforcement programs. As of September 30, 2026, we have generated gross licensing revenue of approximately $2.0 billion, and have returned $918.6 million to our patent partners. Since January 1, 2022, we generated gross licensing revenue of approximately $268.4 million and returned approximately $81.6 million to our patent partners.

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 ARG’s 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 ARG’s 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

We didnot acquire any new patent portfolios during thesix months ended June 30, 2026. During the year ended December 31, 2025, we acquired one new patent portfolio consisting of Wi-Fi 7 standard essential patents. 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 have estimated economic useful lives ranging from two to five years.

Current wording

We didnot acquire any new patent portfolios during thenine months ended September 30, 2026. During the year ended December 31, 2025, we acquired one new patent portfolio consisting of Wi-Fi 7 standard essential patents. 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 have estimated economic useful lives ranging from two to five years.

Previous wording

Total revenues increased $63.3 million to $114.6 million for the three months ended June 30, 2026, as compared to $51.2 million for the three months ended June 30, 2025, due to increases in our Intellectual Property Operations revenue of $60.6 million and in our Energy Operations revenue of $5.2 million. Refer to “Energy Operations - Revenues” below for further discussion and “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 increases were offset by a decrease in Manufacturing Operations revenue of $1.9 million and in Industrial Operations revenues of $588,000. Refer to “Manufacturing Operations - Revenues” and “Industrial Operations – Revenues” below for further detailed discussion.

Current wording

Total revenues decreased $5.0 million to $54.4 million for the three months ended September 30, 2026, as compared to $59.4 million for the three months ended September 30, 2025, due to decreases in our Intellectual Property Operations revenue of $7.5 million and in our Manufacturing Operations of $3.6 million. Refer to “Manufacturing Operations - Revenues” below for further discussion and “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 decreases were partially offset by an increase in Energy Operations revenue of $5.3 million. Refer to “Manufacturing Operations - Revenues” below for further detailed discussion.

Previous wording

Loss before income taxes was $9.8 million for the three months ended June 30, 2026, as compared to loss of $890,000 in the comparable prior period. The increase in loss comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 as follows:

Current wording

Loss before income taxes was $7.1 million for the three months ended September 30, 2026, as compared to loss of $3.4 million in the comparable prior period. The increase in loss comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 as follows:

Previous wording

•Total costs and expenses increased $18.9 million, from $149.7 million to $168.6 million in 2026 primarily due to the following:

Current wording

•Total costs and expenses decreased $7.8 million, from $65.9 million to $58.0 million in 2026 primarily due to the following:

Previous wording

◦Cost of revenues for Intellectual Property Operations increased $39.7 million, from $6.6 million to $46.2 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in patent amortization expense.

Current wording

◦Cost of revenues for Intellectual Property Operations decreased $6.0 million, from $8.3 million to $2.3 million in 2026 primarily due to a decrease in contingent legal fees partially and in patent amortization expense.

Previous wording

▪Contingent legal fees increased $25.5 million, from $18,000 to $25.5 million in 2026 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 decreased $1.2 million, from $1.3 million to $125,000 in 2026 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

▪Amortization of patents expense from our Intellectual Property Operations decreased $4.0 million, from $5.4 million to $1.5 million in 2026, due to certain patents becoming fully amortized during the period.

Current wording

▪Amortization of patents expense from our Intellectual Property Operations decreased $3.8 million, from $5.3 million to $1.5 million in 2026, due to certain patents becoming fully amortized during the period.

Previous wording

◦Unrealized gain from the change in fair value of our equity securities was $3.4 million in 2026, as compared to an unrealized loss of $2.6 million in the comparable prior year period. The unrealized gain and loss was derived from our trading securities portfolio.

Current wording

◦Unrealized loss from the change in fair value of our equity securities was $6.0 million in 2026, as compared to an unrealized gain of $900,000 in 2025. The unrealized loss and gain was derived from our trading securities portfolio. Refer to "Equity Securities Investments" below for further discussion.

Previous wording

◦Realized gain from the sale of equity securities increased $2.6 million, from $1.9 million to $4.5 million in 2026. The realized gains were derived from the sales activity from our trading securities portfolio. Refer to "Equity Securities Investments" below for further discussion.

Current wording

◦Realized gain from the sale of equity securities increased $8.2 million, from zero to $8.2 million in 2026. The realized gain was derived from the sales activity from our trading securities portfolio. Refer to "Equity Securities Investments" below for further discussion.

Previous wording

◦Gain on derivatives decreased $3.3 million, from $6.6 million to $3.3 million in 2026 due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain on its commodity derivatives.

Current wording

◦Loss on derivatives was $6.1 million in 2026, as compared to a gain on derivatives of $1.9 million in 2025 due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain on its commodity derivatives.

Previous wording

Results of Operations - six months ended June 30, 2026 compared with the six months ended June 30, 2025

Current wording

Results of Operations - nine months ended September 30, 2026 compared with the nine months ended September 30, 2025

Previous wording

Total revenues decreased $6.9 million to $168.8 million for the six months ended June 30, 2026, as compared to $175.7 million for the six months ended June 30, 2025, primarily due to a decrease in our Intellectual Property Operations revenues, our Manufacturing Operations revenues, and to a lesser extent, a decrease in Industrial Operations revenues. Intellectual Property Operations revenues decreased by $8.6 million due to a lower license fee revenue compared to the comparable prior year period. 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. Manufacturing Operations revenues decreased $2.8 million largely due to a decrease in revenues from our air distribution end market and Industrial Operations decreased $1.1 million due to a decrease in the number of printer units sold. The decreases were offset by an increase in Energy Operations of $5.6 million primarily due to increase in oil production and oil prices as a result of drilling activities.

Current wording

Total revenues decreased $11.9 million to $223.2 million for the nine months ended September 30, 2026, as compared to $235.1 million for the nine months ended September 30, 2025, primarily due to a decrease in our Intellectual Property Operations revenues and our Manufacturing Operations revenues. Intellectual Property Operations revenues decreased by $16.1 million due to lower license fee revenue compared to the comparable prior year period. 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. Manufacturing Operations revenues decreased $6.4 million largely due to a decrease in revenues from our air distribution end market and office products. The decreases were offset by an increase in Energy Operations of $10.9 million primarily due to increase in oil production and oil prices as a result of drilling activities.

Previous wording

Loss before income taxes was $29.9 million for the six months ended June 30, 2026, as compared to income of $28.7 million for the six months ended June 30, 2025. The net decrease comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 as follows:

Current wording

Loss before income taxes was $37.1 million for the nine months ended September 30, 2026, as compared to income of $25.4 million for the nine months ended September 30, 2025. The net decrease comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 as follows:

Previous wording

•Total costs and expenses increased $42.4 million, from $63.6 million to $106.0 million in 2026 primarily due to the following:

Current wording

•Total costs and expenses increased $11.1 million, from $215.6 million to $226.7 million in 2026 primarily due to the following:

Previous wording

◦Cost of revenues for Intellectual Property Operations increased $16.6 million, from $34.5 million to $51.1 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in litigation and licensing expenses and patent amortization expense. Refer to “Intellectual Property Operations –Cost of Revenues” below for further discussion.

Current wording

◦Cost of revenues for Intellectual Property Operations increased $10.7 million, from $42.8 million to $53.4 million in 2026 primarily due to an increase in inventor royalties and contingent legal fees partially offset by a decrease in litigation and licensing expenses and patent amortization expense. Refer to “Intellectual Property Operations –Cost of Revenues” below for further discussion.

Previous wording

▪Contingent legal fees increased $20.7 million, or 430%, as compared to a 12% decrease in Intellectual Property Operations revenues, primarily due to higher average contingent legal fee rates associated with the portfolios generating revenues during 2026. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Current wording

▪Contingent legal fees increased $19.5 million, from $6.2 million to $25.7 million in 2026, or 317% increase, as compared to a 21% decrease in Intellectual Property Operations revenues, primarily due to higher average contingent legal fee rates associated with the portfolios generating revenues during 2026. Refer to "Intellectual Property Operations –Cost of Revenues" below for further discussion.

Previous wording

▪Litigation and licensing expenses decreased $1.3 million, from $3.0 million to $1.8 million in 2026, 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 $1.9 million, from $4.3 million to $2.4 million in 2026, 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

▪Amortization of patents expense from our Intellectual Property Operations decreased $4.7 million, from $9.9 million to $5.2 million in 2026, due to certain patents becoming fully amortized during the period.

Current wording

▪Amortization of patents expense from our Intellectual Property Operations decreased $8.5 million, from $15.2 million to $6.7 million in 2026, due to certain patents becoming fully amortized during the period.

Previous wording

◦Energy Operations cost of production decreased $1.6 million, from $25.0 million to $23.4 million in 2026. Refer to “Energy Operations –Cost of Production” below for further detail and discussion.

Current wording

◦Energy Operations cost of production decreased $1.6 million, from $36.9 million to $35.3 million in 2026. Refer to “Energy Operations –Cost of Production” below for further detail and discussion.

Previous wording

◦General and administrative expenses increased $4.1 million from $32.9 million to $36.9 million in 2026, due to an increase in our parent company and our Intellectual Property Operations general and administrative costs, driven by increased corporate legal fees and personnel costs. The increases were partially offset by a decrease in our Manufacturing Operations general and administrative costs. Refer to “General and Administrative Expenses” below for further detail and discussion.

Current wording

◦General and administrative expenses increased $3.5 million from $48.8 million to $52.3 million in 2026, due to an increase in our parent company and our Intellectual Property Operations general and administrative costs, driven by increased corporate legal fees and personnel costs. The increases were partially offset by a decrease in our Manufacturing Operations general and administrative costs. Refer to “Operating Expenses” below for further detail and discussion.

Previous wording

•Total other expense was $30.1 million in 2026, as compared to other income of $2.8 million in the comparable prior year period. The changes in other expense and income are due to the following:

Current wording

•Total other expense was $33.6 million in 2026, as compared to other income of $5.9 million in the comparable prior year period. The changes in other expense and income are due to the following:

Previous wording

◦Realized and unrealized loss on derivatives from our Energy Operations was $7.4 million in 2026, as compared to a realized and unrealized gain on derivatives of $1.6 million in the comparable prior year period due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain on its commodity derivatives.

Current wording

◦Loss on derivatives from our Energy Operations was $13.4 million in 2026, as compared to a gain on derivatives of $3.5 million in the comparable prior year period due to the commodity derivative activities contributed from our Energy Operations. Refer to Note 12 for additional information regarding Benchmark's gain and loss on its commodity derivatives.

Previous wording

◦Interest expense decreased $1.1 million from $4.8 million to $3.7 million in 2026, primarily due to a lower average balance from the Deflecto Facility and lower interest rates in 2026 versus 2025. Refer to Note 10 to the consolidated financial statements elsewhere herein for additional information regarding the Deflecto Facility.

Current wording

◦Interest expense decreased $1.4 million from $7.0 million to $5.6 million in 2026, primarily due to a lower average balance from the Deflecto Facility and lower interest rates in 2026 versus 2025. Refer to Note 10 to the consolidated financial statements elsewhere herein for additional information regarding the Deflecto Facility.

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 $60.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to an increase in the number of executed license agreements. Paid-up revenue decreased $8.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to a decrease in average license fees.

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 decreased $7.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 as no paid-up license agreements were executed during the three months ended September 30, 2026. Paid-up revenue decreased $16.2 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to a decrease in the number of executed license agreements.

Previous wording

Refer to detailed change explanations above for the three and six months ended June 30, 2026 and 2025 regarding cost of revenues for our Intellectual Property Operations.

Current wording

Refer to detailed change explanations above for the three and nine months ended September 30, 2026 and 2025 regarding cost of revenues for our Intellectual Property Operations.

Previous wording

The economic terms of patent portfolio related partnering agreements and contingent legal fee arrangements, if any, including royalty obligations, if any, royalty rates, contingent fee rates and other terms and conditions, vary across the patent portfolios owned or controlled by our operating subsidiaries. In certain instances, we have invested in patent portfolios without future patent partner royalty obligations. The costs associated with the forementioned obligations fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed each period and the mix of specific patent portfolios, with varying economic terms and conditions, generating revenues each period.

Current wording

The economic terms of patent portfolio related partnering agreements and contingent legal fee arrangements, if any, including royalty obligations, if any, royalty rates, contingent fee rates and other terms and conditions, vary across the patent portfolios owned or controlled by our operating subsidiaries. In certain instances, we have invested in patent portfolios without future patent partner royalty obligations. The costs associated with the aforementioned obligations fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed each period and the mix of specific patent portfolios, with varying economic terms and conditions, generating revenues each period.

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 $1.1 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a decrease in 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. 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

Cost of revenues were lower for the six months ended June 30, 2026 primarily due to lower revenues. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Printronix’s cost of revenues.

Current wording

Cost of revenues were lower for the nine months ended September 30, 2026 primarily due to lower revenues. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Printronix’s cost of revenues.

Previous wording

For the periods presented above, revenues increased $5.2 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Revenues increased $5.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Revenues in both periods increased primarily due to increase in oil production and higher oil prices and an increase in natural gas liquid prices in the three months ended June 30, 2026. This was partially offset by lower natural gas liquid volumes and lower natural gas prices in the three months ended June 30, 2026. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark’s revenue arrangements and related concentrations.

Current wording

For the periods presented above, revenues increased $5.3 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Revenues increased $10.9 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Revenues in both periods increased primarily due to increase in oil production and higher oil prices and an increase in natural gas liquid prices. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark’s revenue arrangements and related concentrations.

Previous wording

Cost of production decreased $1.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to lower depreciation, depletion and amortization and lower lease operating expenses in 2026. Depreciation, depletion and amortization decreased primarily due to an increase in total proved reserves recorded at December 31, 2025, which reduced the depletion rate. Lease operating expenses decreased largely due to lower well repairs and maintenance related costs during the six months ended June 30, 2026, as well as continued realization of operational efficiencies.

Current wording

Cost of production decreased $1.6 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to lower depreciation, depletion and amortization and lower lease operating expenses in 2026. Depreciation, depletion and amortization decreased primarily due to an increase in total proved reserves recorded at December 31, 2025, which reduced the depletion rate. Lease operating expenses decreased largely due to lower well repairs and maintenance related costs during the nine months ended September 30, 2026, as well as continued realization of operational efficiencies.

Previous wording

For the periods presented above, revenues decreased $1.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to lower revenue in air distribution, transportation safety and office products. Revenues decreased $2.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to lower revenue in our air distribution end market. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Deflecto’s revenue arrangements and related concentrations.

Current wording

For the periods presented above, revenues decreased $3.6 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to lower revenue in air distribution and office products. Revenues decreased $6.4 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to lower revenue in our air distribution end market and office products. The decline in office products revenues was primarily driven by the decline in revenues associated with our floor mat assets, which were sold in November 2025. Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Deflecto’s revenue arrangements and related concentrations.

Previous wording

Cost of revenues increased $2.1 million for thesix months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher material costs. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Deflecto’s cost of revenues.

Current wording

Cost of revenues decreased $1.2 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 primarily due to lower revenue as explained above. Cost of revenues increased $925,000 for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to higher material costs. Refer to Note 2 included in our 2025 Annual Report for additional information regarding Deflecto’s cost of revenues.