What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-17 · 197 added, 259 removed, 376 unchanged (55% of the section changed)

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Our strategy centers around quality sourcing, execution, and improvement.

We find unique situations, bring a flexible and creative approach to transacting, and rely on our relationships and expertise to drive continual improvement in operating performance.

We find unique situations and bring a flexible and creative approach to transacting, combining relationships and expertise to drive continual improvement in operating performance.

We approach transactions as business owners and operators rather than purely as financial investors, and we believe this is our core differentiator for creating long-term value for shareholders and partners.

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• strong expertise in corporate governance and operational transformation.

We regularly evaluate opportunities to acquire new businesses, where our research, execution and operating partners can drive attractive earnings and book value per share growth.

We regularly evaluate opportunities to acquire new businesses, where our research, execution and operating partners can drive attractive earnings, cash flow and book value per share growth.

Our long-term focus positions our businesses to navigate economic cycles and allows sellers and other counterparties to have confidence that a transaction is not dependent on achieving the types of performance hurdles demanded by private equity sponsors.

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While we partner from time to time with inventors and patent owners, ranging in size and including large corporations, we control and assume all responsibility in pursuing patent licensing and enforcement programs, and for the related operating expenses.

When applicable, share licensing revenue, net of costs, with our patent partners after we have achieved our agreed upon minimum return threshold.

When applicable, we share licensing revenue, net of costs, with our patent partners after we have achieved our agreed upon minimum return threshold.

We may also provide upfront capital to patent owners as an advance against future licensing revenue.

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Our current active patent portfolios are:

our Atlas Technologies portfolio, which covers Wi-Fi 6 standard essential patents, our Unification Technologies portfolio, which covers flash memory technology;

our Monarch Networking Technologies portfolio, which covers IP networking technology;

our Atlas Technologies portfolio, which covers Wi-Fi 6 standard essential patents, our Avalon Technologies portfolio, which covers Wi-Fi 7 standard essential patents, our Unification Technologies portfolio, which covers flash memory technology;

our Monarch Networking Technologies portfolio, which covers IP networking

our Stingray IP Solutions portfolio, which covers wireless networking;

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As of December 31, 2025, we have generated gross licensing revenue of approximately $1.9 billion, and have returned $898.2 million to our patent partners.

During the past five calendar years ending on December 31, 2024, we generated gross licensing revenue of approximately $234.0 million and returned approximately $91.2 million to our patent partners.

Since January 1, 2021, we generated gross licensing revenue of approximately $282.6 million and returned approximately $87.3 million to our patent partners.

As attractive opportunities become available, we remain open to opportunistically deploying additional capital into the IP business in the future, consistent with our mission to maximize value for shareholders.

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Printronix has a manufacturing site located in Malaysia and third-party configuration sites located in the United States, Singapore and Holland, along with sales and support locations around the world to support its global network of users, channel partners and strategic alliances.

This acquisition was made at what we believe to be an attractive purchase price, and we are now supporting existing management in its initiative to reduce costs and operate more efficiently and in its execution of strategic partnerships to generate growth.

We are supporting Printronix as it transitions its business mix from lower-margin printer sales to higher-margin consumable products including ink cartridges and specialty ribbons.

This acquisition was made at what we believe to be an attractive purchase price.

We are supporting Printronix and existing management as it transitions its business mix from lower-margin printer sales to higher-margin consumable products including ink cartridges and specialty ribbons, along with its initiative to reduce costs and operate more efficiently to generate growth.

Printronix’s dual hardware and consumables business model, combined with a streamlined operating structure, represents a steady source of cash flow for Acacia.

The Printronix team is focused on topline initiatives and reducing G&A, and we expect Printronix to continue to generate free cash flow on an annual basis.

The Printronix team is focused on topline initiatives and reducing general and administrative expenses, and we expect Printronix to continue to generate free cash flow on an annual basis.

For more information related to our Industrial Operations, refer to the section entitled “ Industrial Operations Business ” below.

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In November 2023, we acquired a 50.4% equity interest in Benchmark.

Headquartered in Austin, Texas, Benchmark is an independent oil and gas company that acquires, produces and develops oil and gas assets in Texas and Oklahoma.

Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring.

Headquartered in Austin, Texas, Benchmark is an independent oil and natural gas company that acquires, produces and develops oil and natural gas assets in Texas and Oklahoma.

Benchmark is run by an experienced management team.

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 December 31, 2024.

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 natural 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 natural gas assets at attractive valuations.

Refer to Note 1 to the consolidated financial statements elsewhere herein for additional information.

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The remainder of the Revolution Purchase Price was funded by a combination of borrowings under the Benchmark Revolving Credit Facility and a cash contribution of $15.25 million from other investors in Benchmark, including McArron Partners.

Following closing of the Revolution Transaction, the

Company’s interest in Benchmark is approximately 73.5%.

Refer to Note 11 to the accompanying consolidated financial statements for additional information regarding the Benchmark Revolving Credit Facility.

As of December 31, 2025, the Company’s interest in

Benchmark is approximately 73.5%.

Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information regarding the Benchmark Revolving Credit Facility.

For more information, refer to the section entitled “Energy Operations Business” below.

Manufacturing Operations

On October 18, 2024, Deflecto Holdco LLC (“Deflecto Purchaser”), a wholly-owned subsidiary of Acacia, acquired Deflecto Acquisition, Inc.

(“Deflecto”), pursuant to that certain Stock Purchase Agreement (the “Deflecto Stock Purchase Agreement”) entered into on the same day with Deflecto Holdings, LLC and Evriholder Finance LLC (collectively, the “Deflecto Sellers”), Deflecto and the Sellers’ Representative named therein.

Pursuant to the Deflecto Stock Purchase Agreement, Deflecto Purchaser purchased all of the issued and outstanding equity interests of Deflecto, upon the terms and subject to the conditions of the Deflecto Stock Purchase Agreement (such purchase and sale, together with the other transactions contemplated by the Deflecto Stock Purchase Agreement, the “Deflecto Transaction”).

Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC, and office markets.

The Deflecto Transaction closed simultaneously with the execution of the Deflecto Stock Purchase Agreement on October 18, 2024.

Under the terms and conditions of the Deflecto Stock Purchase Agreement, the aggregate consideration paid to the Deflecto Sellers in the Deflecto Transaction consisted of $103.7 million, subject to certain working capital, debt and other customary adjustments set forth in the Stock Purchase Agreement (the “Deflecto Purchase Price”).

The Deflecto Purchase Price was funded with a combination of borrowings of a $48.0 million secured term loan (the “Deflecto Term Loan”) and cash on hand.

A portion of the Deflecto Purchase Price is being held in escrow to indemnify Deflecto Purchaser against certain claims, losses and liabilities.

The Company’s consolidated financial statements include Deflecto’s consolidated operations from October 18, 2024 through December 31, 2024.

Refer to Notes 3 and 11 to the consolidated financial statements elsewhere herein for additional information regarding the acquisition and the Deflecto Term Loan.

In October 2024, we acquired Deflecto.

Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.

On October 18, 2024, we acquired Deflecto a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets that is headquartered in Indianapolis, Indiana.

Under Acacia’s ownership, Deflecto is a market leader across each of its segments and end markets, supplying essential, regulatory mandated products to a blue-chip customer base via long-term relationships with more than 1,500 leading retail, wholesale and OEM customers and distribution partners globally.

Its products include emergency warning triangles and vehicle mudguards used by the transportation industry, various airducts and air registers used by the HVAC market and literature, sign holders and floormats used by the office market.

As of December 31, 2025, Deflecto’s products include emergency warning triangles and vehicle mud flaps used by the transportation industry, various airducts and air registers used by the HVAC market and literature and sign holders used by the office market.

Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and China.

For more information, refer to the section entitled “ Manufacturing Operations ” below.

T he aggregate consideration paid to the Deflecto Sellers in the Deflecto Transaction consisted of $103.7 million in cash, subject to certain working capital, debt and other customary adjustments set forth in the Deflecto Stock Purchase Agreement, which was funded with a combination of borrowings under the $48.0 million Deflecto Term Loan and cash on hand.

Refer to Notes 3 and 11 for additional information related to the Deflecto Transaction and the Deflecto Term Loan, respectively.

For more information, refer to the section entitled “ Manufacturing Operations Business ” below.

Recent Business Developments and Trends

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We intend to grow our Company by acquiring additional operating businesses, energy assets and intellectual property assets.

However, we may not complete any acquisitions, and any acquisitions that we complete will be costly and could negatively affect our results of operations, and dilute our stockholders’ ownership, or cause us to incur significant expense, and we may not realize the expected benefits of acquisitions.

However, we may not complete any acquisitions, and any acquisitions that we complete may be costly and could negatively affect our results of operations, and dilute our stockholders’ ownership, or cause us to incur significant expense, and we may not realize the expected benefits of acquisitions.

Recent Acquisitions

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.

On April 17, 2024, Benchmark consummated the Revolution Transaction contemplated in the Revolution Purchase Agreement pursuant to which 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 (as described further in Note 1 to the accompanying consolidated financial statements).

Following closing, the Company’s interest in Benchmark is approximately 73.5%.

On October 18, 2024, Deflecto Purchaser, a wholly-owned subsidiary of Acacia, acquired Deflecto.

Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.

Under the terms and conditions of the Deflecto Stock Purchase Agreement, the aggregate consideration paid to the sellers in the Deflecto Transaction consisted of $103.7 million, subject to certain working capital, debt and other customary adjustments set forth in the Deflecto Stock Purchase Agreement.

The Deflecto Purchase Price was funded with a combination of borrowings of a $48.0 million secured term loan and cash on hand.

A portion of the Deflecto Purchase Price is being held in escrow to indemnify Purchaser against certain claims, losses and liabilities.

Refer to Note 1 to the accompanying consolidated financial statements for additional information.

On October 18, 2024, we acquired Deflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets that is headquartered in Indianapolis, Indiana.

The aggregate consideration paid to the Deflecto Sellers in the Deflecto Transaction consisted of $103.7 million in cash, subject to certain working capital, debt and other customary adjustments set forth in the Deflecto Stock Purchase Agreement, which was funded with a combination of borrowings under the $48.0 million Deflecto Term Loan and cash on hand.

A portion of the Deflecto purchase price is being held in escrow to indemnify us against certain claims, losses and liabilities.

Refer to “Manufacturing Operations” above and Note 1 to the consolidated financial statements elsewhere herein for additional information.

Life Sciences Portfolio

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We retained an investment in the Life Sciences Portfolio consisting of public and private securities valued at $25.7 million at December 31, 2025.

On January 19, 2024, we completed the sale of our 33,023,210 shares of Arix Bioscience PLC (“Arix”) to RTW Biotech Opportunities Operating Ltd, a subsidiary of RTW Biotech Opportunities Ltd, for $57.1 million in aggregate (representing £1.43 per share at an exchange rate of 1.2087 USD/GBP).

exchange rate of 1.2087 USD/GBP).

Following the completion of the share sale, we no longer own any shares of Arix.

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Refer to Note 4 to the consolidated financial statements elsewhere herein for more information.

Historically, inflation has not had a significant impact on us or any of our subsidiaries.

Our Manufacturing and Industrial Operations will continue to adjust their selling prices as required in response to higher costs and may also implement cost rationalization measures, as applicable.

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.

We expect that our Manufacturing and Industrial Operations will continue to adjust their selling prices as required in response to higher costs.

During the first half of 2025, the U.S.

government announced additional tariffs on a broad range of imports.

In an effort to mitigate any adverse impact of these tariffs and other non-tariff trade practices and policies to our Industrial and Manufacturing Operations, we have taken proactive measures to reduce our exposure to tariffs by moving certain production and working closely with our supplier and vendor base to manage any impacts.

These countermeasures may prove to be ineffective and the ability to predict tariff rates in different countries may be difficult as policies may change on short notice.

Uncertainty about trade policy, tariff rates, and other changes in practices affecting international trade might have an adverse effect on our business and results of operation and we may face challenges in implementing the optimal responses to changing trade conditions.

There can be no assurances that such factors will not impact our business in the future.

Please refer to Item 1A “Risk Factors — Risks Related to Our Business and Business Strategy — Changes in U.S.

foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition ” of this Annual Report for additional information regarding risks associated with changes in U.S.

trade policy.

Patent Licensing and Enforcement

Patent Litigation Trial Dates and Related Trials

As of the date of this Annual Report, our Patent Licensing, Enforcement and Technologies Business has two 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.

As of the date of this Annual 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.

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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.

Refer to Item 1A “Risk Factors — Risks Related to our Intellectual Property Business and Industry” of this Annual Report for additional information regarding patent litigation and related risks.

Litigation and Licensing Expense

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One of the significant challenges in the intellectual property industry continues to be quality patent intake due to the challenges and complexity associated with the current patent environment.

We did not acquire any new patent portfolios in calendar years 2024 , 2023 and 2022 .

We acquired one new patent portfolio during the year ended December 31, 2025 consisting of Wi-Fi 7 standard essential patents.

Dur ing 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.

The patents and patent rights acquired have estimated economic useful lives ranging from two to five years.

Industrial Operations Business

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Energy Operations Business

Headquartered in Austin, Texas, Benchmark is an independent oil and gas company that acquires, produces and develops oil and gas assets in Texas and Oklahoma.

Benchmark is run by an experienced management team led by Chief Executive Officer Kirk Goehring.

Headquartered in Austin, Texas, Benchmark is an independent oil and natural gas company that acquires, produces and develops oil and natural gas assets in Texas and Oklahoma.

Benchmark is run by an experienced management team.

After the acquisition of Revolution, Benchmark’s existing assets consist of approximately 155,000 net acres and an interest in approximately 600 wells, the majority of which are operated.

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Benchmark intends to enhance the value of such assets 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.

Through its investment in Benchmark, the Company, along with the Benchmark management team, will evaluate future growth and acquisitions of oil and natural gas assets at attractive valuations.

Manufacturing Operations Business

In October 2024, we acquired Deflecto.

Headquartered in Indianapolis, Indiana, Deflecto is a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets.

In October 2024, we acquired Deflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets that is headquartered in Indianapolis, Indiana.

Deflecto manufactures its products at nine manufacturing facilities across the United States, Canada, the United Kingdom and China.

While we believe our Manufacturing Operations Business has been reasonably protected from tariffs from a cost standpoint, we maintain a global production footprint, and have been re-shoring certain manufacturing functions and exploring sourcing alternatives to mitigate tariff and duty impacts.

However, like many of its peers, our Manufacturing Operations Business has seen tariff-specific demand headwinds.

While the business environment remains challenging, our Manufacturing Operations Business continues to invest to optimize its business in order to maximize cash flow when the cycle returns.

Operating Activities

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The results reflected in this section with respect to Deflecto for the year ended December 31, 2024 include results for the period from October 18, 2024 to December 31, 2024 following our acquisition of Deflecto.

The results reflected in this section with respect to Benchmark include results for the full year ended December 31, 2024 compared to an approximate two month period ended December 31, 2023 following our acquisition of Benchmark.

Summary of Results of Operations

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Total costs and expenses 278,823 155,238 123,585 80 %

Operating (loss) income (32,926) 20,936 (53,862) (257 %)

Total other (expense) income (5,221) 46,490 (51,711) (111 %)

(Loss) income before income taxes (38,147) 67,426 (105,573) (157 %)

Income tax benefit 3,449 1,504 1,945 129 %

Net (loss) income attributable to Acacia Research Corporation (36,057) 67,060 (103,117) (154 %)

Operating income (loss) 6,409 (32,926) 39,335 n/m

Total other income (expense) 24,902 (5,221) 30,123 n/m

Income (loss) before income taxes 31,311 (38,147) 69,458 n/m

Income tax (expense) benefit (6,841) 3,449 (10,290) n/m

Net income (loss) attributable to Acacia Research Corporation 21,682 (36,057) 57,739 n/m

Results of Operations - year ended December 31, 2025 compared with the year ended December 31, 2024

Total revenues decreased $2.8 million to $122.3 million for the year ended December 31, 2024, as compared to $125.1 million for the year ended December 31, 2023, primarily due to a decrease in our Intellectual Property Operations revenues and a decrease in Industrial Operations revenues, partially offset by revenues contributed from our Energy Operations and our Manufacturing Operations.

ARG revenues decreased due to a decrease in the number of license agreements executed and a decrease in average license fees, which contributed to Intellectual Property Operations revenues decreasing by $69.6 million.

Total revenues increased $162.9 million to $285.2 million for the year ended December 31, 2025, as compared to $122.3 million for the year ended December 31, 2024, primarily due to an increase in our Intellectual Property Operations revenues and increases in Energy Operations and Manufacturing Operations revenues from acquisitions in the prior year.

Intellectual Property Operations revenues increased due to an increase in average license fees, which contributed to Intellectual Property Operations revenues increasing by $58.8 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 $4.7 million is due to lower units of printers sold.

The increases were offset by a decrease in Industrial Operations revenue of $2.2 million.

Refer to “Industrial Operations – Revenues” below for further detailed discussion.

Revenues contributed from Benchmark was $49.2 million for the year ended December 31, 2024, which include post-asset acquisition revenues from Revolution compared to an approximate two month period ended December 31, 2023 revenues from Benchmark.

Post-acquisition revenues contributed from Deflecto was $23.2 million for the period from October 18, 2024 to December 31, 2024.

Refer to “Energy Operations - Revenues” and “Manufacturing Operations - Revenues” below for further discussion.

Loss before income taxes was $38.1 million for the year ended December 31, 2024, as compared to income before income taxes of $67.4 million for the year ended December 31, 2023.

The net decrease was comprised of the change in total revenues described above and other changes in operating expenses and other income or expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 as follows:

• Inventor royalties increased $706,000, from $1.0 million to $1.7 million in 2024, primarily due to a higher mix of portfolios generating revenue in 2024 with inventor royalties.

Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.

• Contingent legal fees decreased $8.7 million, from $11.0 million to $2.3 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.

• Litigation and licensing expenses decreased $6.3 million, from $10.8 million to $4.4 million in 2024, primarily due to a net decrease in litigation support expenses associated with ongoing litigation.

Income before income taxes was $31.3 million for the year ended December 31, 2025, as compared to a loss of $38.1 million for the year ended December 31, 2024.

The net increase comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 as follows:

• Total costs and expenses increased $123.6 million, from $155.2 million to $278.8 million in 2025 primarily due to the following:

◦ Cost of revenues for Intellectual Property Operations increased $25.5 million, from $24.6 million to $50.0 million in 2025 primarily due to an increase in inventor royalties, contingent legal fees and patent amortization expense associated with the revenue increase noted above.

Refer to Intellectual Property Operations – Cost of Revenues” below for further discussion.

• Amortization of patents expense from our Intellectual Property Operations increased $4.7 million, from $11.4 million to $16.1 million in 2024, due to an increase in scheduled amortization from our additional preferential future returns paid from our existing patent portfolios.

Refer to Note 8 to the consolidated financial statements elsewhere herein for additional information regarding certain patent and patent rights costs related to ARG.

• Printronix cost of sales, engineering and development expenses, and sales and marketing expenses decreased approximately $4.5 million, from $25.7 million to $21.1 million in 2024, primarily due to a decrease in revenue offset by higher margins.

Refer to “Industrial Operations – Cost of Revenues ” and “Operating Expenses” below for further discussion.

• Benchmark’s cost of production for the year ended December 31, 2024 added a total of $35.6 million to our consolidated operating expenses.

◦ Energy Operations cost of production increased $13.0 million from $36.3 million to $49.3 million in 2025 due to a full year of activity for the assets acquired in the Revolution Transaction in the second quarter of 2024.

Refer to "Energy Operations – Cost of Production" below for further discussion.

• Post-acquisition cost of sales, engineering and development expenses, and sales and marketing expenses from Deflecto for the period from October 18, 2024 to December 31, 2024 added operating expenses in the amount of $18.6 million.

◦ Manufacturing Operations cost of revenues and sales and marketing expenses for 2025 contributed an increase of $76.0 million to our consolidated operating expenses.

Refer to "Manufacturing Operations – Cost of Revenues" below for further discussion.

• General and administrative expenses increased $10.9 million, from $44.4 million to $55.4 million in 2024, primarily due to our Energy Operations which contributed $3.4 million of general and administrative costs in 2024 and our Manufacturing Operations which contributed $4.2 million of post-acquisition general administrative costs from Deflecto for the period from October 18, 2024 through December 31, 2024.

In addition, the increase is due to higher parent company and Intellectual Property Operations costs including variable performance-based compensation costs and severance costs, partially offset by a decrease in our Industrial Operations general and administrative costs.

◦ General and administrative expenses increased $9.8 million, from $55.4 million to $65.1 million in 2025, primarily due to our Manufacturing Operations which contributed $15.2 million of general administrative costs due to the acquisition in the fourth quarter of 2024.

The increases were partially offset by a decrease in parent company costs.

Refer to “ General and Administrative Expenses ” below for further detail and discussion.

• Compensation expense for share-based awards, included in general and administrative expenses above, increased $1.5 million, from $3.3 million to $4.8 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, and an increase in compensation expense related to PSUs granted in 2023 based on the probability assessment performed as of December 31, 2024.

Refer to Note 17 to the consolidated financial statements elsewhere herein for additional information regarding compensation expense.

• 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 $31.4 million in the prior year.

The unrealized gain and loss were derived from our Life Sciences Portfolio and trading securities portfolio.

The 2024 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.

• Realized gain from the sale of equity securities was $28.9 million in 2024, as compared to a realized loss of $10.9 million in the prior year.

The realized gains and losses were similarly derived from the sales activity from our Life Sciences Portfolio and trading securities portfolio.

The 2024 period realized gains primarily relates to the Arix shares sold in January 2024.

• Earnings on equity investment in joint venture was zero in 2024, as compared to $4.2 million in the prior year primarily due to the earnings on equity investment in joint venture from one milestone in 2023.

• Non-recurring legacy legal expense of $14.9 million in 2024 is related to the AIP Matter (as defined in Note 15 to the consolidated financial statements elsewhere herein) and expenses related to the settlement agreement with Slingshot (as defined in Note 15 to the consolidated financial statements elsewhere herein).

Refer to Note 15 to the consolidated financial statements elsewhere herein for additional information regarding the accrual in connection with the AIP Matter and the settlement agreement with Slingshot.

• Unrealized gain from the Series B Warrants and the embedded derivative fair value measurements was zero in 2024, as compared to a gain of $8.2 million in the prior year, 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 12 and 13 to the consolidated financial statements elsewhere herein for additional information regarding the Series B Warrants and Series A Redeemable Convertible Preferred Stock and fair value measurements.

• Gain on derivatives was $2.0 million in 2024, as compared to $1.2 million in the prior year due to the commodity derivative activities contributed from our Energy Operations.

Refer to Note 13 for additional information regarding Benchmark’s gain on its commodity derivatives.

• Interest expense increased $4.4 million, from $2.1 million to $6.4 million in 2024, primarily due to the interest expense incurred in relation to the Benchmark Revolving Credit Facility and the Deflecto Term Loan.

Interest expense from Benchmark Revolving Credit Facility included a full year of interest expense in 2024 compared to an approximate two month period in the prior year and post-acquisition related interest expense contributed to the increase from the Deflecto Term Loan.

Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information regarding the Benchmark Revolving Credit Facility and the Deflecto Term Loan.

The increase is partially offset by a decrease in interest expense related 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 12 to the consolidated financial statements elsewhere herein for additional information regarding the Senior Secured Notes.

• Interest income and other, net increased $2.6 million from $14.4 million to $17.0 million in 2024, primarily due to the increase in interest income from our cash equivalents.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding our cash and cash equivalents and investments in equity securities.

• Total other income (expense) increased $30.1 million, from other expense of $5.2 million to other income of $24.9 million in 2025, primarily due to a $15.8 million service provider settlement, net, a $5.4 million increase in gain on derivatives from our Energy Operations, a $14.9 million decrease in non-recurring legacy legal expense, offset by a $6.4 million decrease in interest income.

Refer to “ Other Income/Expense ” below for further detail and discussion.

Intellectual Property Operations

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generating revenues 7 6 1 17 %

Licensing and enforcement programs

with initial revenues 1 — 1 n/m

New patent portfolios 1 — 1 n/m

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 $70.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to a decrease in the number of new license agreements in 2024 and a decrease in average license fees.

Recurring revenue, that provides for quarterly sales-based license fees, increased $1.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, from various on-going license arrangements.

Paid-up revenue increased $59.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to an increase in average license fees per agreement.

Recurring revenue, that provides for quarterly sales-based license fees, decreased $782,000 for the year ended December 31, 2025 compared to the year ended December 31, 2024, due to the expiration of certain on-going license arrangements.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding our revenue arrangements and related concentrations for the periods presented herein.

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Total $ 50,013 $ 24,551 $ 25,462 104 %

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

Cost of revenues for Intellectual Property Operations increased $25.5 million, from $24.6 million to $50.0 million in 2025 primarily due to an increase in inventor royalties, contingent legal fees and patent amortization expense.

• Inventor royalties increased $15.5 million, from $1.7 million to $17.2 million in 2025, primarily due to higher license fees being generated in 2025 with inventor royalties.

Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.

• Contingent legal fees increased $5.3 million, from $2.3 million to $7.6 million in 2025, primarily due to the change in Intellectual Property Operations revenues described above.

Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.

• Amortization of patents expense from our Intellectual Property Operations increased $4.4 million, from $16.1 million to $20.5 million in 2025, due to an increase in amortization from the 2025 patent portfolio acquisition.

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 certain patent portfolios without future patent partner royalty obligations.

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.

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Litigation and licensing expenses also includes third-party patent research, development, patent prosecution and maintenance fees, re-exam and inter partes reviews, consulting and other costs incurred in connection with the licensing and enforcement of patent portfolios.

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.

Industrial Operations

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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 and consumable products for the year ended December 31, 2024 decreased $2.5 million and $2.0 million, respectively compared to the year ended December 31, 2023, due to a decrease in the number of printer units and consumable products sold.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s revenue arrangements and related concentrations.

Revenue from consumable products decreased $1.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in line matrix consumables 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.

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Cost of revenues - industrial operations $ 14,475 $ 14,912 $ (437) (3 %)

Refer to detailed change explanations above for the years ended December 31, 2024 and 2023 regarding cost of revenues for our Industrial Operations.

The decrease in Printronix's cost of revenues for the year ended December 31, 2024 is due to change in revenue described above.

Cost of revenues were lower for the year ended December 31, 2025 primarily due to lower revenues.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s cost of sales.

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The following table provides the components of Benchmark’s revenues for the periods indicated, as well as each period’s respective average realized prices and production volumes.

This table shows production on a barrel of oil equivalent basis in which natural gas is converted to oil at the ratio of 6 Mcf of natural gas to one barrel of oil.

This table shows production on a barrel of oil (“boe”) equivalent basis in which natural gas is converted to oil at the ratio of 6 thousand cubic feet (“Mcf”) of natural gas to one barrel of oil.

This ratio may not be reflective of the current price ratio between two products.

Year Ended December 31, 2024 November 13, 2023 to December 31, 2023 $ Change % Change

2025 2024 $ Change % Change

(In thousands, except per unit data and percentage change values)

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Average daily production:

Oil (Bbl/d) 999 71 928 1,307 %

Natural gas (Mcf/d) 12,816 3,020 9,796 324 %

Natural gas liquids (Bbl/d) 1,467 207 1,260 609 %

Total (boe/d) 4,601 3,298 1,303 40 %

Oil (Bbl/day) 1,240 999 241 24 %

Natural gas (Mcf/day) 15,964 12,816 3,148 25 %

Natural gas liquids (Bbl/day) 1,800 1,467 333 23 %

Total (boe/day) 5,701 4,601 1,100 24 %

Oil sales $ 28,524 $ 26,468 $ 2,056 8 %

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Natural gas liquids sales 15,086 13,014 2,072 16 %

Other service sales 507 — 507 n/a

Other service sales 2,022 507 1,515 299 %

Total $ 63,818 $ 49,183 14,635 30 %

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Natural gas liquids (per Bbl) $ 22.96 $ 24.30 $ (1.34) (6) %

For the periods presented above, revenues increased $14.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to the full year impact of the assets acquired in the Revolution Transaction in April 2024.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark’s revenue arrangements and related concentrations.

Cost of Production

Benchmark’s cost of production for the years ended December 31, 2024 and 2023 was $36.3 million and $656,000, respectively.

Benchmark’s cost of production figures include the full year ended December 31, 2024 compared to an

approximate two month period ended December 31, 2023 following our acquisition of Benchmark.

2025 2024 $ Change % Change

(In thousands, except percentage change values)

Cost of production - energy operations $ 49,315 $ 36,291 $ 13,024 36 %

Cost of production increased $13.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to the full year impact of the assets acquired in the Revolution Transaction in April 2024.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Benchmark’s cost of production.

Manufacturing Operations

Deflecto’s revenues from October 18, 2024 through December 31, 2024 included the following (in thousands):

Air distribution $ 7,782

Safety products 7,977

Office products 7,424

Total $ 23,183

Deflecto’s net revenues included the following:

December 31, 2025 October 18, 2024 to December 31, 2024 $ Change % Change

(In thousands, except percentage change values)

Air distribution $ 37,586 $ 7,782 $ 29,804 n/m

Transportation safety 42,568 7,977 34,591 n/m

Office products 34,638 7,424 27,214 n/m

Total $ 114,792 $ 23,183 $ 91,609 n/m

For the periods presented above, revenues increased $91.6 million for the year ended December 31, 2025 compared to an approximate three month period ended December 31, 2024 following our acquisition of Deflecto.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Deflecto’s revenue arrangements and related concentrations.

Cost of Revenues

Deflecto’s cost of revenues from October 18, 2024 through December 31, 2024 was $16.9 million.

Deflecto’s cost of revenues for the year ended December 31, 2025 was $86.9 million and for the period from October 18, 2024 to December 31, 2024 was $16.9 million.

Deflecto’s cost of revenues figures include the full year ended December 31, 2025 compared to an approximate three month period ended December 31, 2024 following our acquisition of Deflecto.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Deflecto’s cost of revenues.

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Sales and marketing expenses - industrial operations $ 5,456 $ 5,681 $ (225) (4 %)

Sales and marketing expenses - manufacturing operations 1,536 — 1,536 n/a

Sales and marketing expenses - manufacturing operations 7,498 1,536 5,962 388 %

General and administrative costs - intellectual property operations 8,985 8,826 159 2 %

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General and administrative costs - energy operations 4,320 3,427 893 26 %

General and administrative costs - manufacturing operations 4,767 — 4,767 n/a

General and administrative costs - manufacturing operations 19,999 4,767 15,232 320 %

Parent general and administrative expenses 24,672 30,319 (5,647) (19 %)

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Total $ 78,071 $ 62,580 $ 15,491 25 %

The operating expenses table above includes the Company’s general and administrative expenses by operation, Printronix’s sales and marketing expenses, and Benchmark’s general and administrative costs.

The periods presented above include Benchmark’s general and administrative costs for the full year ended December 31, 2024 compared to an approximate two month period ended December 31, 2023 following our acquisition of Benchmark.

The table also includes Deflecto’s sales and marketing expenses and general and administrative costs for the post acquisition period from October 18, 2024 through December 31, 2024.

The operating expenses table above includes the Company’s general and administrative expense by segment and Industrial Operations and Manufacturing Operations’ sales and marketing expenses.

The periods presented above include Deflecto’s sales and marketing expenses and general and administrative costs for the full year ended December 31, 2025 compared to an approximate three month period ended December 31, 2024 following our acquisition of Deflecto.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding Printronix’s and Deflecto’s operating expenses.

General and Administrative Expenses

A summary of the main drivers of the increases (decreases) in general and administrative expenses is as follows:

(In thousands)

Personnel costs and board fees $ (285)

Variable performance-based compensation costs 1,375

Other general and administrative costs 1,065

General and administrative costs - industrial operations (1,435)

General and administrative costs - energy operations 3,163

General and administrative costs - manufacturing operations 4,158

Amortization of industrial operations intangible assets 2

Amortization of manufacturing operations intangible assets 609

Compensation expense for share-based awards 1,498

Non-recurring employee severance costs 784

Total change in general and administrative expenses $ 10,934

General and administrative expenses include employee compensation and related personnel costs, including variable performance based compensation and compensation expense for share-based awards, office and facilities costs, legal and accounting professional fees, public relations, stock administration, business development, fixed asset depreciation, amortization of Industrial Operations and Manufacturing Operations’ intangible assets, state taxes based on gross receipts and other corporate costs.

The periods presented above include Energy Operations’ general administrative expenses for the full year ended December 31, 2024 compared to an approximate two month period ended December 31, 2023 following our acquisition of Benchmark.

The table above also includes our Manufacturing Operations general and administrative expenses for the post acquisition period from October 18, 2024 through December 31, 2024.

The increase in variable performance-based compensation costs was primarily due to fluctuations in performance-based compensation.

The increase in other general and administrative costs, which relates to our parent company and our Intellectual Property Operations, were primarily due to increases in accounting professional fees.

The increase in compensation expense for share-based awards was primarily due to compensation expense incurred related to PSUs granted in 2023 based on the probability assessment performed as of December 31, 2024.

Refer to Note 17 to the consolidated financial statements elsewhere herein for additional information regarding compensation expense.

The decrease in general and administrative costs of Industrial Operations is due to Printronix’s initiative to reduce costs and operate more efficiently.

Non-recurring employee severance costs fluctuate based on the severance arrangements of terminated employees.

In addition, our Energy Operations related general and administrative costs contributed an increase of $3.2 million and Manufacturing Operations related general and administrative costs and amortization of intangible assets contributed $4.2 million and $609,000, respectively, in each case driven by the acquisitions of Revolution and Deflecto.

Refer to additional general and administrative change explanations above.

The decrease in parent general and administrative costs was primarily due to a decrease in corporate legal fees.

In addition, our Manufacturing Operations related general and administrative costs contributed an increase of $15.2 million compared to 2024 primarily driven by the acquisition of Deflecto during the fourth quarter of 2024.

Other Income/Expense

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(In thousands, except percentage change values)

Change in fair value of equity securities $ (31,412) $ 31,423 $ (62,835) (200 %)

Gain (loss) on sale of equity securities 28,861 (10,930) 39,791 (364 %)

Earnings on equity investment in joint venture — 4,167 (4,167) (100 %)

Total net realized and unrealized gain $ (2,551) $ 24,660 $ (27,211) (110 %)

Change in fair value of equity securities $ 1,092 $ (31,412) $ 32,504 n/m

(Loss) gain on sale of equity securities (25) 28,861 (28,886) n/m

Total net realized and unrealized gain (loss) $ 1,067 $ (2,551) $ 3,618 n/m

Our equity securities investments, including the Life Sciences Portfolio and trading securities portfolio, are recorded at fair value at each balance sheet date.

During the first quarter of 2024, Acacia fully exited its position in Arix.

During the first quarter of 2024, Acacia fully exited its position in Arix, included in the gain on sale of equity securities in the year ended December 31, 2024.

The 2024 period unrealized loss and realized gain primarily relates to the sale of Arix shares.

Refer to periodic change explanations above.

Refer to Notes 2 and 4 to the consolidated financial statements elsewhere herein for additional information regarding our investment in the Life Sciences Portfolio and other equity securities.

Our results included an unrealized loss from the change in fair value of our equity securities as compared to an unrealized gain in the comparable prior period, and included realized gain from the sale of our equity securities as compared to a realized loss in the prior year.

These changes were derived from our Life Sciences Portfolio and trading securities portfolio.

The 2024 period unrealized loss and realized gain primarily relates to the sale of Arix shares.

During 2023, we recorded consolidated earnings on equity investment in joint venture, which is part of the Life Sciences Portfolio, of $4.2 million for two milestones earned during the period.

There were no milestones earned during the year ended December 31, 2024.

Refer to Note 4 to the consolidated financial statements elsewhere herein for additional information.

Our results also include unrealized gains and losses from the change in fair value of our equity securities, and, when equity securities are sold, the realized gains from those sales.

The results during the year ended December 31, 2025 relate to our trading securities portfolio.

Non-recurring legacy legal expense

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(In thousands, except percentage change values)

Non-recurring legacy legal expense $ (14,857) $ — $ (14,857) n/a

During the year ended December 31, 2024, we recorded $12.9 million in connection with the AIP Matter in other income (expense) and $2.0 million in other income (expense) in connection with the Slingshot settlement in the consolidated statements of operations.

Refer to Note 15 to the consolidated financial statements elsewhere herein for additional information.

Non-recurring legacy legal expense $ — $ (14,857) $ 14,857 (100 %)

During the year ended December 31, 2024, we recorded $12.9 million in connection with the AIP Matter in other income (expense) and an accrual of $2.0 million in other income (expense) in connection with the Slingshot settlement in the consolidated statements of operations.

There were no comparable expenses for the year ended December 31, 2025.

Refer to Note 16 to the consolidated financial statements elsewhere herein for additional information regarding the AIP Matter.

Service provider settlement

During the year ended December 31, 2025, we recognized income of $15.8 million in connection with a settlement with a service provider that was previously engaged by our Intellectual Property Business.

Gain on derivatives - Energy Operations

Gain on derivatives increased $5.4 million, from $2.0 million to $7.4 million in 2025, primarily due to the commodity derivative activities contributed from our Energy Operations.

Refer to Note 13 for additional information regarding Benchmark’s gain and loss on its commodity derivatives.

Interest expense and Interest Income

Interest expense increased $2.5 million, from $6.5 million to $9.0 million in 2025, primarily due to the full-year impact of interest expense from the Deflecto Facility associated with the acquisition of Deflecto in the fourth quarter of 2024.

Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information regarding the Deflecto Facility.

Interest income decreased $6.4 million, from $17.7 million to $11.3 million in 2025 due to lower interest rates and a decrease in average cash balances.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding our cash and cash equivalents.

2025 2024 $ Change % Change

(In thousands, except percentage change values)

Income tax benefit $ 3,449 $ 1,504 $ 1,945 129 %

Effective tax rate (9) % (2) % n/a (7) %

Income tax (expense) benefit $ (6,841) $ 3,449 $ (10,290) n/m

Effective tax rate 22 % (9) % n/a n/m

Our income tax expense for the year ended December 31, 2025 is primarily attributable to the statutory rate applied to our year-to date earnings.

Our income tax benefit for the year ended December 31, 2024 is primarily attributable to recognizing a benefit for losses incurred year to date offset by foreign withholding taxes.

Our income tax benefit for the year ended December 31, 2023 is primarily attributable to the use of tax attributes against 2023 earnings and the release of valuation allowance on the remaining federal net operating losses.

Our 2024 effective tax rate in each period differed from the U.S.

Our 2025 effective tax rate was slightly higher than the U.S.

federal statutory rate primarily due to nondeductible stock based compensation.

Our 2024 effective tax rate differed from the U.S.

federal statutory rate primarily due to foreign withholding taxes which we could not recognize as a foreign tax credit and non-deductible items.

The Company has recorded a partial valuation allowance against our net deferred tax assets as of December 31, 2024 and 2023 on foreign tax credits and certain state net operating losses.

The Company has recorded a partial valuation allowance against our net deferred tax assets as of December 31, 2025 and 2024 for foreign tax credits and certain state net operating losses.

Refer to Notes 2 and 20 to the consolidated financial statements elsewhere herein for additional income tax information.

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Historically, we have not entered into off-balance sheet financing arrangements.

In addition, the obligations of our Energy Operations Business related to the

Benchmark Revolving Credit Facility and the obligations of our Manufacturing Operations Business related to the Deflecto Term Loan are further described in Note 11 to the accompanying consolidated financial statements.

In addition, the obligations of our Energy Operations Business related to the Benchmark Revolving Credit Facility and the obligations of our Manufacturing Operations Business related to the Deflecto Facility are further described in Note 11 to the accompanying consolidated financial statements.

The obligations of our Energy Operations Business related to the asset retirement obligations are further described in Note 10 to the accompanying consolidated financial statements.

Additional cash requirements are generally derived from our operating and investing activities including expenditures for working capital (discussed below), human capital, business development, investments in equity securities and intellectual property, and business combinations.

At December 31, 2024, we had unrecognized tax benefits, as further described in Note 19 to the consolidated financial statements.

Certain of our operating subsidiaries are often required to engage in litigation to enforce their patents and patent rights.

Additional cash requirements are generally derived from our operating and investing activities including expenditures for working capital (discussed below), property and equipment, additions to oil and natural gas properties, human capital, business development, investments in equity securities and intellectual property, and business combinations.

Certain of our Intellectual Property Operations operating subsidiaries are often required to engage in litigation to enforce their patents and patent rights.

In connection with any of our operating subsidiaries’ patent enforcement actions, it is possible that a defendant may request and/or a court may rule that an operating subsidiary has violated statutory authority, regulatory authority, federal rules, local court rules, or governing standards relating to the substantive or procedural aspects of such enforcement actions.

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At December 31, 2025, our primary sources of liquidity were cash and cash equivalents on hand and cash generated from our operating activities.

The Company’s contribution to Benchmark to fund its portion of the Revolution Purchase Price and related fees for the Benchmark Transaction was $59.9 million, which was funded from cash on hand.

The remainder of the Revolution Purchase Price was funded by a combination of borrowings under the Benchmark Revolving Credit Facility of approximately $82.7 million and a cash contribution of approximately $15.3 million from other investors in Benchmark, including McArron Partners.

Refer to Note 11 to the accompanying consolidated financial statements for additional information regarding the Benchmark Revolving Credit Facility.

On October 18, 2024 the Company acquired Deflecto for a purchase price of $103.7 million, which was funded with a combination of borrowings under the Deflecto Term Loan and from cash on hand.

Refer to Note 11 to the accompanying consolidated financial statements for additional information regarding the Deflecto Term Loan.

Furthermore, we intend to grow our company by acquiring additional operating businesses and intellectual property assets.

Furthermore, we intend to grow our company by acquiring additional operating businesses, energy assets and intellectual property assets.

We expect to finance such acquisitions through cash on hand or by engaging in equity or debt financing.

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Our consolidated cash, cash equivalents and equity securities totaled $324.3 million at December 31, 2025, compared to $297.0 million at December 31, 2024.

The Benchmark Revolving Credit Facility and Deflecto Revolving Credit Facility include covenants potentially limiting our borrowing capacity as determined by a leverage ratio.

As of December 31, 2024, we were in compliance with all financial covenants applicable to our debt agreements.

Refer to Note 11 to the accompanying consolidated financial statements for additional information.

The Benchmark Revolving Credit Facility and Deflecto Facility include covenants potentially limiting our borrowing capacity as determined by a leverage ratio.

As of December 31, 2025, we were in compliance with all financial covenants applicable to the Benchmark Revolving Credit Facility and the Deflecto Facility.

Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information.

Cash Flows Summary

2 unchanged sentences

(In thousands)

Net cash (used in) provided by:

Net cash provided by (used in):

Operating activities $ 75,242 $ 50,122

2 unchanged sentences

Effect of exchange rates on cash and cash equivalents 1,337 (926)

(Decrease) increase in cash and cash equivalents $ (66,211) $ 52,305

Increase (decrease) in cash and cash equivalents $ 32,839 $ (66,211)

Cash Flows from Operating Activities

2 unchanged sentences

(In thousands)

Net (loss) income including noncontrolling interests in subsidiaries $ (34,698) $ 68,930

Adjustments to reconcile net loss including noncontrolling interests in

Net income (loss) including noncontrolling interests in subsidiaries $ 24,470 $ (34,698)

Adjustments to reconcile net income (loss) including noncontrolling interests in

subsidiaries to net cash provided by (used in) operating activities:

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Accretion of asset retirement obligation 1,734 986

Change in fair values Series A redeemable convertible preferred stock embedded derivatives and Series B warrants — (6,716)

Gain on exercise of Series B warrants — (1,525)

Loss on disposal of assets 169 —

Compensation expense for share-based awards 5,738 4,795

Loss (gain) on foreign currency exchange 370 (53)

(Gain) loss on foreign currency exchange (414) 370

Change in fair value of equity securities (1,092) 31,412

(Gain) loss on sale of equity securities (28,861) 10,930

Unrealized loss (gain) on derivatives 610 (781)

Earnings on equity investment in joint venture — (4,167)

Deferred income taxes, net of acquired net deferred tax assets (6,051) (3,657)

Changes in assets and liabilities:

Loss (gain) on sale of equity securities 25 (28,861)

Unrealized (gain) loss on derivatives (3,718) 610

Deferred income taxes 4,839 (6,051)

Changes in operating assets and liabilities:

Accounts receivable 664 69,225

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Deferred revenue 98 497

Net cash provided by (used in) operating activities $ 50,122 $ (22,506)

Net cash provided by operating activities $ 75,242 $ 50,122

Cash receipts from ARG’s licensees totaled $76.7 million and $91.3 million for the years ended December 31, 2025 and 2024, respectively.

Cash receipts from Printronix’s customers totaled $28.5 million and $31.0 million for the years ended December 31, 2025 and 2024, respectively.

Cash receipts from Benchmark’s customers totaled $61.7 million for the year ended December 31, 2024 and $1.8 million for the period from November 13, 2023 through December 31, 2023.

Cash receipts from Deflecto’s customers totaled $24.3 million for the post acquisition period from October 18, 2024 through December 31, 2024.

The fluctuations in cash receipts for the periods presented primarily reflects the corresponding fluctuations in revenues recognized during the same periods, as described above, and the related timing of payments received from licensees and customers.

Our reported cash provided by operations for the year ended December 31, 2024 was $50.1 million, compared to cash used in operations of $22.5 million in the prior year.

The increase in cash provided by operations was primarily due to net inflows from the total changes in assets and liabilities (refer to Working Capital discussion below), decrease in accounts receivable, decrease in inventories, increase in prepaid expense and other assets, decrease in accounts payable, decrease in royalties and contingent legal fees payable and by the total change in net income (described above) and related noncash adjustments.

Cash receipts from Benchmark’s customers totaled $95.6 million and $61.7 million for the years ended December 31, 2025 and 2024, respectively.

Cash receipts from Deflecto’s customers totaled $115.1 million for the year ended December 31, 2025 and $24.3 million for the period from October 18, 2024 through December 31, 2024.

The fluctuations in cash receipts for the periods presented primarily reflect the corresponding fluctuations in revenues recognized during the same periods, as described above, and the related timing of payments received from licensees and customers.

Our reported cash provided by operations for the year ended December 31, 2025 was $75.2 million, compared to cash provided by operations of $50.1 million in the prior year.

The increase in cash provided by operations was primarily due to increases from the IP business and full-year impacts of the Revolution Transaction and Deflecto Transaction offset by changes in cash used in operations by the parent company.

Working Capital

Our working capital related to cash flows from operating activities at December 31, 2024 decreased to $39.1 million, compared to $87.0 million at December 31, 2023, which was comprised of the changes in assets and liabilities presented above.

The decrease is primarily due to change in accounts receivable and royalties and contingent legal fees payable, which is related to the timing of the cash receipts related to Intellectual Property Operations Business.

The decrease in working capital is also due to the increase in accounts payable and accrued expenses and other current liabilities related to our Energy Operations Business and Manufacturing Operations Business.

The decreases were partially offset by increases in inventory and prepaid expenses.

Our cash flows from working capital related changes decreased from $48.0 million in for the year ended December 31, 2024 to $143,000 for the year ended December 31, 2025.

The decline was primarily due to a decline in accounts receivable related to the timing of cash receipts related to the Intellectual Property Operations Business in 2024, offset by changes in prepaid expenses and other assets, accounts payable and accrued expense and royalties and contingent legal fees payable.

Cash Flows from Investing Activities

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(In thousands)

Acquisition, net of cash acquired (Note 3) $ (87,678) $ (9,409)

Cash reinvested — 9,965

Acquisition, net of cash acquired and working capital adjustments $ 1,230 $ (87,678)

Patent acquisition — (14,000)

Proceeds from sale of floor mat assets 2,988 —

Purchases of equity securities (24,705) (20,472)

Sales of equity securities 31,357 57,854

Distributions received from equity investment in joint venture — 2,777

Net purchases of property and equipment and additions to oil and gas properties (148,667) (189)

Net cash (used in) provided by investing activities $ (212,963) $ 16,178

Cash outflows from investing activities for the year ended December 31, 2024 was $213.0 million, as compared to cash inflows of $16.2 million in the prior year, primarily due to the net effect of the acquisition of oil and gas properties in the Revolution Transaction, the acquisition of Deflecto, and net cash inflows from our trading securities portfolio equity securities transactions and sale of Arix shares.

Refer to Notes 1 and 3 to the consolidated financial statements elsewhere herein for additional information regarding the Revolution Transaction and Deflecto Transaction.

Refer to “Other Income/Expense – Equity Securities Investments ” above and Note 4 to the consolidated financial statements elsewhere herein for additional information related to Life Sciences Portfolio.

Purchases of loans receivable (15,183) —

Purchases of property and equipment (2,520) —

Net additions to oil and gas properties (14,174) (148,667)

Net cash used in investing activities $ (21,007) $ (212,963)

Cash flows used in investing activities for the year ended December 31, 2025 were $21.0 million, as compared to cash outflows of $213.0 million in the prior year, primarily due to the 2024 net cash outflows related to the acquisitions of Deflecto and the Revolution assets offset by cash inflows from the sale of Arix shares.

Cash Flows from Financing Activities

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Repurchase of common stock $ — $ (20,288)

Paydown of Senior Secured Notes — (60,000)

Contributions from noncontrolling interest — 15,250

Borrowings on the Revolving credit facility 86,010 —

Paydown of Revolving Credit Facility (30,035) (7,700)

Borrowings on the Term Loan 47,488 —

Dividend on Series A Redeemable Convertible Preferred Stock — (1,400)

Borrowings on the Benchmark revolving credit facility 5,000 86,010

Paydown of Benchmark revolving credit facility (12,000) (30,035)

Borrowings on the Deflecto Facility — 47,488

Paydown of Deflecto Facility (15,088) —

Taxes paid related to net share settlement of share-based awards (675) (1,092)

Proceeds from Rights Offering — 79,111

Proceeds from exercise of Series B warrants — 49,000

Proceeds from exercise of stock options 30 223

Net cash provided by financing activities $ 97,556 $ 58,632

Cash inflows from financing activities for the year ended December 31, 2024 increased to $97.6 million, as compared to cash inflows of $58.6 million in the prior year, primarily due to net cash inflows from borrowings on the Benchmark Revolving Credit Facility and Deflecto Term Loan and contributions from noncontrolling interest related to the Revolution Transaction.

The increases were partially offset by decreases due to repurchases of common stock and proceeds in 2023 from a rights offering and exercise of warrants which were non-recurring.

Refer to Notes 1, 3 and 11 to the consolidated financial statements elsewhere herein for additional information regarding the Revolution Transaction, Benchmark Revolving Credit Facility and Deflecto Term Loan.

Refer to Note 16 to the consolidated financial statements elsewhere herein for additional information regarding the repurchase of common stock.

Net cash (used in) provided by financing activities $ (22,733) $ 97,556

Cash flows used in financing activities for the year ended December 31, 2025 were $22.7 million, as compared to cash inflows of $97.6 million in the prior year.

This was primarily due to borrowings on the Benchmark Revolving Credit Facility and Deflecto Facility in the prior year related to the acquisitions of Deflecto and the Revolution assets and net paydowns on the Benchmark Revolving Credit Facility and Deflecto Facility during the year ended December 31, 2025.

Refer to Note 11 to the consolidated financial statements elsewhere herein for additional information regarding the Benchmark Revolving Credit Facility and Deflecto Facility.

On March 11, 2026, the Company entered into an amendment to the Deflecto Credit Agreement.

Refer to Note 23 to the consolidated financial statements for additional information.

Recent Legislation

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

ASC 740, “Income Taxes,” requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted.

The Company has taken into account OBBBA in its tax accounting calculations for 2025 and concluded that the legislation is not expected to have a material impact its financial statements.

This conclusion is subject to change as additional guidance or interpretations become available.

Critical Accounting Estimates

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We discuss below the critical accounting assumptions, judgements and estimates associated with these policies.

Historically, our critical accounting estimates relative to our significant accounting policies have not differed materially

from actual results.

Historically, our critical accounting estimates relative to our significant accounting policies have not differed materially from actual results.

For further information on the related significant accounting policies, refer to Note 2 to the consolidated financial statements.

Revenue Recognition

As described below, significant management judgment must be made and used in connection with the revenue recognized in any accounting period.

Material differences may result in the amount and timing of revenue recognized or deferred for any period, if management made different judgments.

Printronix recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods or services.

To determine the transaction price, Printronix estimates the amount of consideration to which it expects to be entitled in exchange for transferring promised goods or services to a customer.

Elements of variable consideration are estimated at the time of sale which primarily include product rights of return, rebates, price protection and other incentives that occur under established sales programs.

These estimates are developed using the expected value or the most likely amount method and are reviewed and updated, as necessary, at each reporting period.

Revenues, inclusive of variable consideration, are recognized to the extent it is probable that a significant reversal recognized will not occur in future periods.

The provision for returns and sales allowances is determined by an analysis of the historical rate of returns and sales allowances over recent quarters, and adjusted to reflect management’s future expectations.

For additional information regarding Printronix’s net revenues, refer to Note 2 to the consolidated financial statements.

Benchmark recognizes revenue when performance obligations are satisfied at the point control of the product is transferred to the customer.

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The differences between such estimates and actual amounts of oil and natural gas sales are recorded in the following month upon receipt of payment from the customer and any differences have historically been insignificant.

Deflecto recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods or services.

To determine the transaction price, Deflecto estimates the amount of consideration to which it expects to be entitled in exchange for transferring promised goods or services to a customer.

Elements of variable consideration are estimated at the time of sale which primarily include incentives, discounts or rebates that occur under established sales programs.

These estimates are developed using the historical experience, anticipated performance and management’s best judgment at the time and are reviewed and updated, as necessary, at each reporting period.

Revenues, inclusive of variable consideration, are recognized to the extent it is probable that a significant reversal recognized will not occur in future periods.

The allowance for credit losses is determined by evaluating past events and historical loss experience, current events and also future events based on the expectation as of the balance sheet date.

For additional information regarding Deflecto’s net revenues, refer to Note 2 to the consolidated financial statements.

Estimate of Crude Oil and Natural Gas Reserves and Values and Standardized Measure of Discounted Future Net Cash Flows

Estimates of crude oil, natural gas and NGL reserves, as determined by independent petroleum engineers, are continually subject to revision based on price, production history and other factors.

Reserve and future net cash flow estimates require interpretation of geological, geophysical, production and engineering data, plus economic assumptions for commodity prices, production costs, gathering/processing/compression/storage/transportation costs, taxes, capital expenditures and workover costs.

Reserve estimates may change over time because of additional development and appraisal activity, the impact of spacing assumptions for future drilling locations and the viability of production under varying economic conditions, including commodity prices.

Estimated crude oil, natural gas and NGL reserves affect the carrying value of oil and gas properties, depreciation, depletion and amortizations, asset retirement obligations, and evaluation of impairment of oil and natural gas properties.

Changes in the estimated reserves could have a significant impact on future results of operations.

Significant inaccuracies in interpretations or assumptions could materially misstate reserves

and future net cash flows and resulting changes in the estimated reserves could have a significant impact on future results of operations.

Refer to the Unaudited Supplemental Information on Oil and Natural Gas Properties included elsewhere in this Annual Report for additional discussion of our net proved reserves and Standardized Measure.

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The Company reviews long-lived assets, patents and other intangible assets for potential impairment annually (quarterly for patents) and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of

the asset, an impairment loss is recorded in an amount equal to the excess of the asset’s carrying value over its fair value.

In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded in an amount equal to the excess of the asset’s carrying value over its fair value.

If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available.

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If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to operations as an impairment loss.

The Company’s goodwill balance relates to primarily Printronix, which was acquired on October 7, 2021, Benchmark, which was acquired on November 13, 2023, and Deflecto, which was acquired on October 18, 2024, refer to Notes 1 and 3 to the consolidated financial statements for additional information.

Refer to Notes 1 and 3 to the consolidated financial statements for additional information.

The Company did not record any goodwill impairment charges for the years ended December 31, 2025 and 2024.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis