Acacia Research Corporation (Acacia Tech)

ITEM 1A. RISK FACTORS

An investment in our common stock involves risks. Before making an investment decision, you should carefully consider all of the information in this Quarterly Report on Form 10-Q, including in Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations, as well as our condensed consosolidated financial statements and the accompanying notes thereto. In addition, you should carefully consider the risks and uncertainties in Item 1A. Risk Factors in our 2024 Annual Report, as well as in our other public filings with the SEC. If any of the identified risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that case, the trading price of our common stock may decline, and you could lose all or part of your investment. In addition, other risks of which we are currently unaware, Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for which we do not currently view as material, could have a mathe quarterial adverse effect on our business, financial condition, operating results and prospects. There have been no material changes to the risk factors previously reported in our  ended March 31, 2024 Annual Report, except as described below.

Our Manufacturing Operations Businesss operating results can be adversely affected by inflation, changes in 5 as well as in our othe cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as r public filings with the impact of tariffs and changes in a countrys or regions political or economic conditions.

Our Manufacturing Operations Businesss success is dependent, in part, on its continuSEC. If any of the identified ability to reduce its exposure to or mitigate the impact of increases in the cost of raw materials, finished goods, energy, transportation and other necessary supplies, while maintaining and improving margins and market share. Significant inflation in the costs of laborrisks are realized, our business, finished goods, raw materials, energy and transportation has negatively impacted, and will likely continue to negatively impact results of oancial condition, operations. There is no assurance that we will be able to fully offsetng results any such cost increases through cost

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reduction programs or price increases of our products, especially given the competitive environment. If we generally are not able to sufficiently increase our pricing to offset these increased costs or if increased costs and prolonged inflation were to occur, it could spects could be materially and adversely affect our business, operating results and profitability. Sustained price increases may lead to declines in volume as competitors may not adjust their prices or customers may decide not to pay the highered. In that case, the trading prices, which could lead to sales declines and loss of market share. While we seek to project tradeoffs between price increases and volume, our projections may not accurately predict the volume impact of price increases. Conversely, when raw material prices  of our common stock may decline, customer demands for lower prices c you could result in lower sale prices and, to the extent our Manufacturing Operations Business has existing inventory, lower margins. As a result, fluctuations in raw material prices could have a material adverse effeclose all or part on f your Manufacturing Operations Businesss results of operations and financial condition.

investment. In addition, some of othe products our Manufacturing Operations Business manufactures require particular types r risks of customized materials. Supply shortages for a particular type of material can delay production or cause increases in the cost of manufacturing our Manufacturing Operations Businesss products. Pricing and availability of finished goods, raw materials, energy, transportation and other necessary supplies and services for use in our Manufacturing Operations Businesss businesses can be volatile due to numerous factors beyond its control, including general, domestic and international economic conditions, natural disasters, labwhich we are currently unaware, or costs, production levels, competition, consumer demand, import duties and tariffs, currency exchange rates, international treaties, and changes in laws, regulations, and related interpretations.

Specifically, evolving trade policies could continue to make sourcing products from foreign countries difficult and costly, as our Manufacturing Operations Business sources a significant amount of its products from outside of the United States. In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the which we do not currently view as material, countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States hald have led anda may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on seterial adveral foreign jurisdictions, which has increased uncertainty regarding the ultimate ese effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or n our business, financial contribute to inflation in the markets in which we dition, operate. Our Manufacturing Operations Business operates 9 manufacturing facilitieresults across the United States, Canada, the United Kingdom and China. Given our Manufacturing Operations Businesss reliance upon non-domestic suppliers, the rapidly evolving changes to United States trade policies (and those of other countries in response)nd prospects. There have been no may cause a material adverse effect on its ability to source products from other countries or the chchanges could significantly increase the costs of obtaining products, which could result in a material adverse effect on our financial results.

Further, a material increase in the cost of our Manufacturing Operations Businesss products may result in the products becoming less attractive relative to products offered by our competitors. In addition, the increased economic and operational uncertainty causto the risk factors previously reported by the rapidly evolving international trade environment could reduce demand for our Manufacturing Operations Businesss products and result in a material adverse effect on our financial results. To date, we have seen tariffs and general macro-economic uncertainty cause some customers to delay purchasing decisions.

The foregoing changes, as well as any other changes in social, political, regulatory and economic conditions, or further changes to foreign or domestic laws and policies governing in our 2024 Annual Report and Quarterly Report on Form 10-Q foreign trade (including export, import and sanctions), manufacturing and development and foreign direct investment in t the territories and countries where we or our customers operate could adversely affect our operating results and our business including our ability to repatriate cash accumulated outside the United States in a tax efficient mannerquarter ended March 31, 2025.