Q2 2025 Acacia Research Corp Earnings Call

Jenny: Good morning, everyone. Thank you for joining Acacia Research's second quarter 2025 earnings conference call. My name is Jenny, and I will be your conference facilitator today. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through audio webcast on Acacia's website. Following the speaker's remarks, there will be time for questions. Questions can also be directed anytime to ir@acaciares.com. That is ir@acaciares.com. I would now like to turn the conference over to Mr. Brent Anderson of Gagne Communications. Mr. Anderson, you may begin.

Good morning, everyone. Thank you for joining Acacia Research's second quarter 2025 earnings conference call.

My name is Jenny and I'll be your conference facilitator today.

All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through audio webcast on occasions website.

Following the speaker's remarks, there will be time for questions. Questions can also be directed anytime to Acacia at IR. Acacia res.com. That's i r, a c. I a r e s.com. I would now like to turn the conference over to Mr. Brent Anderson of ganya communications, Mr. Anderson. You may begin.

Brent Anderson: Thank you, operator. Leading today's call are MJ McNulty, Acacia's Chief Executive Officer, and Michael Zambito, Acacia's Chief Financial Officer. Before MJ and Mike begin their prepared remarks, please be reminded that certain information provided during this call may contain forward-looking statements relating to current expectations, estimates, forecasts, and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on current estimates and projections, future results, and trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For discussion of such risks and uncertainties, please see the risk factors described in Acacia's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

Thank you. Operator leading today's call are Martin McNulty, Acacia's Chief Executive Officer, and Michael Zambito, Acacia's Chief Financial Officer.

Before MJ and Mike begin their prepared remarks. Please be reminded that certain information. Provided during this call may contain forward-looking statements relating to current expectations estimates forecasts and projections about future events that are forward-looking as defined in the private Securities. Litigation Reform, Act of 1995.

These 4 looking statements, generally relate to the company's plans, objectives and expectations for future operations and are based on current estimates and projections future results and trends.

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Brent Anderson: Earlier this morning, Acacia issued a press release disclosing its second quarter 2025 financial results. The press release may be accessed on the company's website under the Press Releases section of the Investor Relations tab at acaciaresearch.com. The company also posted its Q2 2025 earnings presentation to its website, which can be found under the Quarterly Results tab. On today's call, the team will discuss certain non-GAAP financial matters, including adjusted EBITDA for the company and each of its operating segments. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, can be found in the press release disclosing second quarter 2025 financial results, available under the Press Releases section of the Investor Relations tab at acaciaresearch.com. I will now turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

Earlier this morning, the Kasia issued, a press release. Disclosing its second quarter 2025 Financial results.

the press release may be accessed on the company's website under the press releases section of the investor relations tab at aesa research.com

The company. Also appoint posted its Q2 2025 earnings presentation to its website which can be found under the quarterly results table.

On today's call, the team will discuss certain non-GAAP financial measures, including adjusted EVA for the company and each of its operating segments.

Information regarding the comparable, gaap metrics, along with the required definitions and reconciliations can be found in the press release. Disclosing second quarter, 2025 Financial results available under the press releases section of the investor relations Tab and in case your research.com

I'll now turn the call over to acacia's chief executive officer and J. McNulty.

MJ McNulty: Thank you, Brent, and thank you, everyone, for joining us this morning for our second quarter 2025 earnings call. I would like to begin today's call by introducing and welcoming Mike Zambito, who joined the Acacia team in June as our Chief Financial Officer. We will let Mike give a more formal introduction, but quickly, most recently, he worked as a partner in Ernst & Young's EY Parthenon practice and brings more than 30 years of finance, accounting, and M&A expertise to our team. I speak for the entire Acacia team when I say we are thrilled to have Mike on board.

Thank you, Brad. And thank you everyone, for joining us this morning for our second.

Quarter 2025 earnings call.

I'd like to begin today's call by introducing and welcoming Mike zambito who joined the acacia team in June as our Chief Financial Officer.

Well that might give a more formal introduction. But quickly most recently, he worked as a partner in ernston, Young's ey, parthanon, practice and brings more than 30 years of Finance accounting and m&a expertise to our team.

MJ McNulty: Mike's breadth and depth of industry experience and his finance and accounting skill sets are already driving expanded reach for us in our long-term approach of identifying and executing value creation strategies across our business. I have worked with Mike in different capacities over the past 15 years, and we are very excited to have him as part of the team. I also want to thank Kirsten Hoover for the instrumental role she has played in Acacia's success over the past two years as our interim CFO. Kirsten is a dedicated and valued part of our team, and not surprisingly, she has continued to excel as a key member of our finance team. She has been a valuable resource for Mike as he has gotten up to speed in his new role.

I speak for the entire Acacia team when I say we're thrilled to have Mike on board. Mike's breadth and depth of industry experience, along with his finance and accounting skill sets, are already driving expanded reach for us in our long-term approach of identifying and executing value creation strategies across our business.

I worked with Mike in different capacities over the past 15 years, and we're very excited to have him as part of the team.

I also want to thank Kirsten Hoover for the instrumental role she's played in Acacia success over the past 2 years as our interim CFO.

Pearson is a dedicated and valued part of our team and not surprisingly, she's continued to excel as a key member of our finance team.

She's been a valuable resource for Mike as he's gotten up to speed in his new role.

MJ McNulty: As we discuss in more detail in our press release this morning, we announced a partnership with Unchained Capital, a leader in financial services tailored for Bitcoin holders, and Build Asset Management, an investment advisor focused on the Bitcoin space. As Bitcoin increasingly becomes a strategic treasury reserve for companies, both large and small, a growing number of commercial borrowers are seeking ways to access dollar-based liquidity without selling their Bitcoin. We believe this has created a compelling opportunity for secured lending solutions that allow businesses to unlock the value of their Bitcoin while maintaining long-term exposure. In our view, Unchained has built a market-leading platform designed to meet this need, offering fully collateralized U.S.-based commercial loans backed by Bitcoin. Loans are originated at a conservative 50% loan-to-value ratio and secured through a three-party multi-signature cold storage vault with servicing provided by an affiliate of Unchained.

As we discussed in more detail, in our press release this morning, we announced a partnership with Unchained Capital, a leader in financial services tailored for Bitcoin holders.

And build asset management and investment adviser, focused on the Bitcoin space.

It's Bitcoin, increasingly becomes a strategic treas treasury reserve for companies both large and small. A growing number of commercial borrowers are seeking ways to access dollar-based liquidity without selling their Bitcoin.

We believe this has created a compelling opportunity for secured lending solutions that allow businesses to unlock the value of their Bitcoin while maintaining long-term exposure.

In our view, Unchained is built a market-leading platform designed to meet this need offering fully collateralized us-based commercial loans backed by Bitcoin.

MJ McNulty: The underlying infrastructure is engineered for institutional-grade security with key safeguards such as no rehypothecation and controlled liquidation rates. We are initially committing $20 million to acquire a portfolio of these fully recourse loans, which we believe offer an attractive risk-adjusted return profile supported by high-quality collateral and our hedging risk management strategy. As Bitcoin continues to institutionalize, we see potential for this investment to grow over time for additional strategic opportunities to emerge alongside trusted partners like Unchained and Build. Turning now to our quarterly results, we continued in the second quarter to pursue our value-oriented strategy, including opportunities within our existing stable of businesses, while at the same time growing our pipeline and evaluating several actionable M&A situations in an uncertain macroeconomic environment. We have made significant progress in both these initiatives, all while maintaining a focus on free cash flow and our strong balance sheet.

Loans are originated at a conservative 50% loan to value ratio and secured through a 3-party multi-signature, cold storage Vault with servicing provided by an affiliate of Unchained.

The underlying infrastructure is engineered for institutional-grade security with keys safeguards such as no rehypothecation and control liquidation rights.

We are initially committing 20 million dollars to acquire a portfolio of these fully recourse loans which we believe offer an attractive risk-adjusted return profile supported by high-quality collateral and our hedging risk management strategy.

Is Bitcoin continues to institutionalize. We see potential for this investment to grow over time for additional strategic opportunities. To emerge. Alongside trusted Partners, like Unchained and build.

Turning now to our quarterly results.

We continued in the second quarter to pursue our value oriented strategy including opportunities within our existing stable of businesses.

While at the same time, growing our Pipeline and evaluating several actionable m&a situations in an uncertain macroeconomic environment.

We've made significant progress in both these initiatives all while maintaining a focus on free cash flow and our strong balance sheet.

MJ McNulty: Mike will get into more detail on the numbers, but from a high level, we generated total company revenue of $51.2 million, total company adjusted EBITDA of $1.9 million, and free cash flow of $47.9 million, reflecting the cash collection around the previously announced settlement in our IP business. The net result was a diluted earnings per share loss of $0.03 a share, which when adjusted was a loss of $0.06 a share. Book value per share at the end of the second quarter was $5.99 per share, and book value to Acacia Research, excluding non-controlling interests, was $5.58 a share, essentially flat versus last quarter. To give a little more color on our subsidiaries, in the second quarter, Benchmark Energy showed a slight sequential improvement in operated production, and we lapped significant weather events in Q1.

Mike will get in into more detail on the numbers but from a high level we generated total company revenue of 51.2 million

total company adjusted evaa of 1.9 million and free cash flow of 47.9 million reflecting the cash collection around the previously announced settlement in our IP business.

The net result was a diluted earnings per share loss of 3 cents. A share, which when adjusted was a loss of 6 cents, a share.

Per share and Book value to aesia, excluding non-controlling, interests was 5.58, cents a share, essentially, flat versus last quarter.

To give a little more color on our subsidiaries.

MJ McNulty: During Q2, we slowed the pace of workovers relative to Q1 in an effort to preserve resource and reduce operating costs during the volatile commodity price environment. Importantly, our hedging strategy continues to perform as expected, mitigating some of the pressure from lower commodity prices. As a reminder, we have hedged over 70% of our operated oil and gas production through the end of 2027, which protects a substantial amount of our cash flow from downside pricing risk. During the quarter, Benchmark Energy also paid down an incremental $3.5 million in debt, bringing our total debt reduction at Benchmark Energy to $24 million over the last 12 months. We continue to see value in growing our oil and gas exposure.

In the second quarter, Benchmark showed slight sequential Improvement in operated production and relapse significant, weather events in q1.

During Q2, we slowed, the pace of work overs relative to q1 in an effort to preserve resource and reduce operating costs during the volatile commodity prices environment.

importantly our hedging strategy continues to perform as expected, mitigating some of the pressure from lower commodity prices,

As a reminder, we've hedged over 70% of our operated oil and gas production. Through the end of 2027, which protects a substantial amount of our cash flow from downside pricing risk.

During the quarter, Benchmark also paid down an incremental $3.5 million a day, bringing our total debt reduction at Benchmark to $24 million over the last 12 months.

MJ McNulty: Our team continues to evaluate new acquisition opportunities, though it does appear valuation multiples are increasing in our geographies. We will continue to evaluate M&A where we believe it is strategic, but we will maintain our valuation discipline. We have also continued to strategically build around our existing assets, specifically the Cherokee position we acquired as part of the revolution deal. As we accumulate attractive acreage in the core of this play, we will be considering additional monetization opportunities, including potential alternative capital partnerships to finance a targeted drilling program. We remain very excited about the value generation opportunities ahead of us at Benchmark Energy, and I look forward to updating you on our progress in the second half of the year. Moving now to our Deflecto business. During the quarter, Deflecto grew revenue sequentially, and our team continues to progress on our integration efforts.

We continue to see value in growing our oil and gas exposure. Our team continues to evaluate new acquisition opportunities, though it does appear valuation multiples are increasing in our geographies. We'll continue to evaluate M&A where we believe it is strategic, but will maintain our valuation discipline.

We've also continued to strategically build around our existing assets.

Specifically, the Cherokee position we acquired as part of the Revolution deal.

As we accumulate attractive acreage in the core of this play will be considering additional monetization opportunities. Including potential, alternative Capital Partnerships to finance a targeted drilling program.

We remain very excited about the value generation opportunities ahead of us at Benchmark. And I look forward to updating you on our progress, in the second half of the Year moving now to our deflecto business,

During the quarter, Deflecto grew revenue sequentially, and our team continues to progress on our integration efforts.

MJ McNulty: While in early days, we are pleased with the improvements we have made to optimize operations across Deflecto's three distinct business units. The changes we have made and will continue to make are improving accountability, reducing overhead costs, streamlining product offerings, improving business systems processes, optimizing our global production footprint, and improving go-to-market motions across all three businesses. The strategy is based on our long-term view of how best to capitalize on Deflecto's growth potential, substantial market share, and diversified customer and supplier base. While global trade flow uncertainty impacted Deflecto's end markets during the quarter, which we expect to continue in the near and medium term, we remain confident in the long-term value and compelling opportunities set that Deflecto presents. We maintain a global production footprint, and we have been reassuring certain manufacturing functions and exploring sourcing alternatives to help mitigate the impact of tariffs.

Well, in well early days we're pleased with the improvements. We've made to optimize operations across different defectives 3 distinct business units.

The changes that we we've made and will continue to make our improving accountability reducing overhead costs. Streamlining product offerings improving Business Systems processes. Optimizing our Global Production footprint and improving go to market motions across all 3 businesses. The strategy is based on our long-term view of how best to capitalize on deflective growth potential.

Substantial market share and diversified customer Inspire Bass.

Well, global trade flow, uncertainty impacted deflective and markets during the quarter which we expect to continue in the near and medium term.

We remain confident in the long-term value and compelling opportunity. Set to deflect or presents.

MJ McNulty: While these mitigation efforts have allowed us to partially offset recent cost volatility, we did feel the effects of tariff-specific demand headwinds in Deflecto's business. Most notably, we are seeing demand pressure on our transportation safety business, which sells products into the Class A truck market, as well as our consumer products business, for which manufacturing industry-wide is heavily geared toward China. The Class A truck market that we saw during the latter part of 2024 has persisted into 2025, which we believe is largely a result of tariff-related purchasing delays. Current data indicates new Class A orders are now at their lowest level since 2010, and fleet CapEx levels remain well below replacement rates, a dynamic that can only persist so long.

We maintain a Global Production footprint, and we've been reassuring certain manufacturing functions and exploring sourcing alternatives to help mitigate the impact of tariffs.

Well, these mitigation efforts have allowed us to partially offset, recent cost. Volatility, we did feel the effects of tariffs, specific demand headwinds in deflecto business.

Most notably we're seeing demand pressure on our Transportation safety business, which sells products into the class, 8 truck Market, as well as our consumer products business, for which manufacturing industrywide is heavily geared toward China.

We Class 8 truck Market that we saw during the latter part of 2024 has persisted into 2025, which we believe is largely a result of tariff related, purchasing delays.

MJ McNulty: On the consumer products side, we have seen customers who typically source our products and our competitors' products out of China pause purchasing until they receive more clarity on the global trade situation. We are managing our businesses prudently to navigate these considerations. Looking ahead, we will continue to invest to optimize these businesses while maintaining our typical disciplined approach to cost management and capital allocation as this market cycle normalizes. Many businesses that we evaluate require a lift to position them under our ownership to achieve their full potential. Our team has shown skill in transforming underlying operations and efficiencies in this situation. For example, our turnaround of Printronix. While our strategic countermeasures, including operational improvement and cash flow initiatives at Deflecto, are in full swing and we feel confident in them, we are subject to the prevailing macro environment, specifically tariffs.

Current data indicates new class A orders are now at their lowest level since 2010, and fleet capex levels remain well below replacement rates. This dynamic can only persist for so long.

On the consumer product side. We've seen customers who typically Source our products and our competitors products out of China. Pause purchasing until they receive more clarity on the global trade situation.

We are managing our businesses. Prudently to navigate these considerations.

Looking ahead. We will continue to invest to optimize these businesses while maintaining our T typical disciplined approach to cost management, Capital allocation, as this Market cycle normalizes,

Many businesses that we evaluate require lift to position them under our ownership to achieve their full potential. Our team has shown skill and transforming underlying operations and efficiencies in this situation. For example, our turnaround of printronix

Well, our strategic countermeasures including operational Improvement. Cash flow initiatives at deflecto are in full swing and we feel confident in them.

MJ McNulty: As we mentioned above, tariff-related demand headwinds resulting in delayed purchasing in the case of consumer products and Asian fleets, in the case of transportation safety, can only endure so long. Fundamental changes under our watch are making these businesses stronger and more competitive, and we would anticipate this to drive attractive outcomes as the macroeconomic environment stabilizes and our customers have more certainty around purchasing cycles. Turning now to our industrial segment, Printronix continued to demonstrate its resiliency during the quarter and is now performing ahead of plan. We acquired Printronix.

We're subject to the prevailing macro environment, specifically tariffs.

In the case of consumer products and aging fleets, in the case of Transportation, safety can only endorse so long.

The fundamental changes under our watch are making these businesses stronger and more competitive. And we would anticipate this to drive attractive outcomes as the macroeconomic environment stabilizes and our customers have more certainty around purchasing Cycles.

Turning now to our industrial segment andronix continue to demonstrate its resiliency during the quarter and is now performing ahead of plan.

MJ McNulty: Since we acquired Printronix, we have streamlined its operating structure to improve free cash flow on an annual basis. We have added new product lines and we have transitioned its business mix from lower margin printer sales to higher margin consumable products. We are confident in the integrity of the dual hardware and consumables business model moving forward, and I am pleased with the turnaround the team has made with this business. Now to touch a little bit on our intellectual property operations. Aside from the cash collection from our large settlement in Q1, it was a quiet quarter for our intellectual property business. Recall that in Q1, we generated $69.9 million in revenue, primarily related to our Wi-Fi 6 patents portfolio.

We acquired contronics. We've streamed since we acquired petraneks, we streamlined. Its operating structure to improve free, cash flow on an annual basis.

We've added new product lines and we've transitioned its business, mix from lower margin printer sales to higher margin consumable products.

We're confident in the Integrity of the Dual hardware and consumables business model moving forward. And I'm pleased with the turnaround. The team is made with this business.

Now, to touch a little bit on our intellectual property operations.

MJ McNulty: The quarter-over-quarter decrease in revenue from IP is largely the result of the episodic nature of this business, where value can be generated at sporadic intervals throughout the lifecycle of each investment. As attractive opportunities become available in the IP space, our team remains open to opportunistically committing capital to this business, consistent with our priorities of maximizing shareholder value. Acacia Research is a well-regarded leader in the IP space, and intellectual property owners continue to actively seek us out as a trusted partner. We also continue to actively track, monitor, and analyze the evolving regulatory landscape related to our IP business, particularly with respect to the potential for new regulations and/or fees that would impact patent holders. The landscape continues to change in real time, and to date, we do not see any of the currently discussed changes that would materially impact us.

Aside from the cash collection from our large settlement in q1. It was a quiet quarter for an intellectual property business. Recall that in q1, we generated 69.9 million in Revenue, primarily related to our Wi-Fi, 6 portfolio, the quarter over quarter, decrease in revenue from IP is largely the result of the episodic nature of this business.

Where value can be generated at sporadic intervals, throughout the life cycle of each investment.

As attractive opportunities become available in the IP space. Our team remains open to opportunistically committing Capital to this business consistent with our priorities of maximizing shareholder value.

Vacation is a well-regarded leader. In the IP space, an intellectual property. Owners, continue to actively seek us out as a trusted partner.

We also continue to actively track Monitor and analyze the evolving regulatory landscape related to our IP business, particularly with respect to the potential for new regulations and or fees that would impact patent holders. The landscape continues to change in real time. And to date, we do not see any of the currently discussed changes to would materially impact us.

MJ McNulty: I'd now like to turn the call over to Mike to provide additional details on our first quarter financial results.

I'd now like to turn the call over to Mike to provide additional details on our first quarter financial results.

Brent Anderson: Thank you, MJ, and hello, everyone. It is a pleasure to be here today to report on Acacia's second quarter financial results and my first quarter as the CFO. I am genuinely thrilled to be here and to be part of the Acacia team. I also want to echo MJ's comment on how instrumental Kirsten Hoover has been to Acacia's success and continues to be in my onboarding. Acacia Research recorded total revenue of $51.2 million during the second quarter. Our energy operations generated $15.3 million in revenue for the quarter, compared to $14.2 million in the same quarter last year. Manufacturing operations generated $29 million in revenue for the quarter. Our industrial operations generated $6.6 million in revenue during the quarter, compared to $6.3 million in the same quarter last year.

Thank you, MJ. And hello everyone. It's a pleasure to be here today to report on a case of second quarter Financial results. And my first quarter, the CFO

I'm genuinely thrilled to be here and to be part of the occasion team.

I also want to Echo MJ's comment on how instrumental tear some has been to Acacia success and continues to be in my on boarding.

Okay. So recorded total revenue of 51.2 million during the second quarter.

Our energy operations generated 15.3 million in revenue, for the quarter compared to 14.2 million in the same quarter last year.

Manufacturing operations generated 29 million in revenue for the quarter.

Our industrial operations generated 6.6 million in Revenue during the quarter.

Brent Anderson: Our intellectual property operations generated $0.3 million in licensing and other revenue during the quarter, compared to $5.3 million in the same quarter last year. Total consolidated G&A expenses were $15.5 million during the second quarter, compared to $10.1 million in the same quarter of last year, with $5.1 million of an increase related to the addition of Deflecto as part of the company's new manufacturing operations. Of the $5.1 million in Deflecto G&A expense, approximately $1.5 million is related to depreciation and amortization of intangible assets. Our energy operations G&A expense was flat year over year, while G&A at the parent level increased by $0.8 million year over year. The company recorded a second quarter GAAP operating loss of $12.4 million, compared to a GAAP operating loss of $4.8 million in the same quarter last year.

Compared to 6.3 million in the same quarter last year.

Our intellectual property operations, generated 0.3 million.

And Licensing and other Revenue during the quarter, compared to 5.3 million and the same quarter last year.

Total Consolidated GNA expenses. Were 15.5 million during the second quarter.

Compared to 10.1 million in the same quarter of last year.

With 5.1 million of the increase related to the addition of deflecto as part of the company's new manufacturing operations.

Of the 5.1 million in deflecto GNA expense.

Approximately 1.5 million is related to depreciation and amortization of intangible assets.

Our energy operations, G&A expense was flat year-over-year.

While GNA at the parent level increased by 08 million year-over-year.

As.

Brent Anderson: This was primarily due to a $5 million year-over-year revenue decline in the IP business and incremental IP business patent amortization. Energy operations contributed $2.1 million in operating income during the quarter, which included $4 million in non-cash depreciation, depletion, and amortization expense, and does not reflect the hedge gain we realized during the quarter. Adjusted EBITDA for our energy operations was $7 million. Free cash flow for the energy operations was $4.1 million in the quarter and $7.6 million year to date. Manufacturing operations had a $0.6 million GAAP operating loss during the quarter, which included $1.5 million in non-cash depreciation and amortization expense and $0.4 million in non-recurring transaction-related expenses and severance costs as part of our operational initiatives at Deflecto. Adjusted EBITDA for our manufacturing operations was $1.3 million.

The same quarter last year.

This was primarily due to a 5 million year-over-year Revenue decline in the IP business and incremental IP business taxation.

Energy operations contributed 2.1 million in operating income during the quarter.

Which included 4 million in non-cash depreciation, depletion and amortization expense.

And does not reflect the Hedge gain, we realized during the quarter.

Adjusted Eva for our energy operations was 7 million.

Free cash flow for the energy operations was 4.1 million in the quarter.

And 7.6 million Year date.

6 million gap operating loss during the quarter.

Which included 1.5 million in non-cash, depreciation and amortization expense.

And 4 million in non-recurring transaction related expenses and Severance costs.

As part of our operational initiatives at deflecto.

Adjusted ibida for our manufacturing operations was 1.3 million.

Brent Anderson: Industrial operations contributed $0.1 million in operating income during the quarter, which included $0.5 million in non-cash depreciation and amortization expense. Adjusted EBITDA for our industrial operations was $0.6 million. GAAP net loss attributable to Acacia Research Corporation in the second quarter was $3.3 million or $0.03 per share, compared to a net loss attributable to Acacia of $8.4 million or $0.08 per share in the prior year period. This increase was primarily due to gains from our Benchmark hedge book and our public equity portfolio. Included in GAAP net loss was $2.2 million in unrealized gains and $1.9 million in realized gains related to the fair value of equity securities at June 30, 2025. Adjusted net loss attributable to Acacia in the second quarter of 2025 was $5.9 million or $0.06 per share. Further details on these adjustments can be found in our press release.

Industrial operations contributed 0.1 million at operating income during the quarter which included 0.5 million in non-cash depreciation and amortization expense.

Adjusted ibida for our industrial operations was 0.6 million.

Gap. Net loss attributable to a cashier research Corporation in the second quarter was 3.3 million.

Or 3 cents per share compared to a net loss attributable, to Acacia of 8.4 million.

Or 8 cents per share in the prior year period.

This increase was primarily due to gains from our Benchmark hedge book and our public Equity portfolio.

Included in gap, met loss was 2.2 million and unrealized gains and 1.9 million in realized gains related to the fair value of equity securities.

At June 30th 2025.

Adjusted, net loss attributable, to Acacia. And the second quarter of 2025 was 5.9 million or 6 cents per share.

Further details on these adjustments can be found in our press release.

Brent Anderson: Turning to the balance sheet, cash equivalents and equity securities at fair value totaled $338.2 million at June 30, 2025, compared to $297 million at December 31, 2024. The parent company's total indebtedness was zero at June 30, 2025. On a consolidated basis, Acacia's total indebtedness as of June 30, 2025 was $104.4 million, consisting of $58 million and $46.4 million in non-recourse debt at Benchmark and Deflecto, respectively. Since closing the acquisition of the Revolution Assets in April 2024, Benchmark has paid down approximately $24 million in total debt, underscoring the strong free cash flow generation of the Benchmark business. For more information on Acacia's second quarter results, please see our press release issued this morning and our quarterly report on Form 10-Q, which we will file with the SEC later this week. I'd like to now turn the call back over to MJ.

Turning to the balance sheet.

Cash Cash equivalents and Equity Securities at fair value, total of 3038.2 million at June 30th 2025.

Compared to 297 million at the December, 31st 2024.

The parent companies, total indebtedness was 0 at June 30th 2025.

On a Consolidated basis locations, total indebtedness as of June 30th 2025.

Was 104.4 Million. Consisting of 58 million.

And 46.4 million in non-recourse debt at Benchmark and deflecto respectively.

Since closing, the acquisition of the Revolution assets and April 2024.

Benchmark has paid down approximately 24 million in total debt.

Underscoring, the strong free cash flow generation of the Benchmark businesses.

For more information on acacia's second quarter results.

Please see our press release issued this morning.

And our quarterly report on form 10q, which we will file with the SEC later this week.

MJ McNulty: Thanks, Mike. As you have heard today, our business continues to generate value amid a volatile market. While no business is immune to the macroeconomic headwinds we are all currently experiencing, I am confident in the inherent value of our assets and our ability to consistently execute our strategy for long-term value creation. Looking ahead, we will continue to focus on growing our platforms organically and through M&A to deliver significant value for our shareholders. We have exciting opportunities in the pipeline, and I look forward to updating you on our progress in due course. With that, I will turn the call back over to Jenny for questions.

I'd like to now turn the call back over to MJ. Thanks, Mike.

As you've heard today, our business continues to generate value amid, a volatile Market. Well, no business is immune to the macroeconomic, headwinds. We are all currently experiencing I'm confident in the inherent value of our assets and our ability to consistently execute our strategy for long-term value creation.

Looking ahead, we'll continue to focus on growing, our platforms organically and through m&a to deliver significant value for our shareholders.

We have exciting opportunities in the pipeline and I look forward to updating you on our progress. In due course that I'll turn the call back over to Jenny for questions.

Jenny: Thank you very much, MJ. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Your first question is coming from Anthony Stoss of Craig-Hallam. Anthony, your line is live.

Thank you very much MJ. At this time, we will be conducting

Option announced.

if you would like to,

Ask a question. Please press star 1 on your phone keypad. Now, a confirmation tone will indicate that your line is in the queue. You may press star 2. If you would like to remove your question from the key for any participants using speaker equipment, it may be necessary to pick up your handset before you press the keys, please wait a moment, it must be Poll for questions.

Anthony Stoss: Great, thank you, and welcome aboard, Mike.

Thank you. Your first question is coming from Anthony stosh of Craig Allen, Anthony, your line is live.

Great. Thank you, and welcome aboard, Mike.

MJ McNulty: Thank you.

Anthony Stoss: MJ, I wanted to maybe drill in a little bit on the Bitcoin commercial loans. Can you maybe share with us a range of expected interest that you would receive from these? Do you view these as a little bit more risky than a typical commercial loan or similar? Then I had a couple of follow-ups.

Thank you, mg MJ. I want to do maybe drill in a little bit on the, uh, the Bitcoin commercial loans. Um, can you maybe share with us, uh, a range of expected interest that you would receive from these and do you view these as a little bit more risky than a typical commercial loan or or similar. And then I had a couple follow-ups.

MJ McNulty: Yeah, hey, Anthony Stoss, hope you are well. Your first question, are you talking about what we are thinking of sizing, or I just want to make sure I have your question.

Yeah. Hey Tony. Um hope you're well. So uh your first question are you talking about kind of what we're thinking of sizing or I just want to make sure I have your question.

Anthony Stoss: No, just the, if you are taking on these loans, what is the expected return to Acacia in terms of interest rate?

No, just the if you're taking on these loans, what's the expected return to Acacia in terms of interest rate?

MJ McNulty: Yeah, great question. The loans are originated at pretty attractive rates, call it low teens type rates of return. We are going to hedge the loans, so we have a little bit of cost against that, and there is some origination cost. Think about it in kind of they are in excess of 10% net to Acacia type returns. When you think about these, these are loans originated to U.S. commercial borrowers at a 50% loan-to-value ratio collateralized by Bitcoin that these commercial borrowers hold in a cold storage unit where we have the ability with Unchained to manage the loan-to-value ratio through your calls to the borrowers of the loan to add more Bitcoin or cash into their account to maintain that loan-to-value ratio or ultimately the ability to liquidate that borrower's Bitcoin in order to maintain the loan-to-value ratio.

Yeah, uh, great question. So um,

Lost against that and there's some origination costs, but think about it and kind of they're they're uh, in excess of 10%, uh, and then to a casea type returns. And when you think about these um, these are

These are loans, uh, originated to us commercial Borrowers.

Um, at a 50% loan-to-value ratio, collateralized by...

MJ McNulty: When you think about the risk, these are, you know, like, I guess it is like an ABL type loan, which when you look at historical loss rates on ABL, they are very low. Rather than holding AR in inventory as collateral that takes time to liquidate if you need to, this Bitcoin is in our control as a lender. So I view the risk to be very minimal risk relative to other loans and the return on the loan to be very attractive. We actually really like these loans. We also are going to hedge some Bitcoin exposure. In the event there is a big gap down in Bitcoin, we are going to protect ourselves from that as a kind of outside risk.

Buy Bitcoin, that these commercial borrowers, hold, um, in a, in a cold storage unit, uh, where we have the ability with Unchained to manage the loan to value ratio through, uh, through either calls to the borrowers, or the loan to add more Bitcoin, or cash into their account to maintain that loan to value Ratio, or ultimately, uh, the ability to liquidate that that borrower's Bitcoin in order to, to maintain the loan to value ratio. And so, when you think about the risk, these are, you know like uh I guess it's like a an abl type loan which when you look at historical loss rates on abl, they're they're very low. But rather than holding

Are and inventory is collateral that takes time to to liquidate. If you need to, uh, this liquid, this Bitcoin is in our control, um, as a lender. So I I view the risk to be, uh, to be very minimal risk.

Um, and relative to other loans and the return on the loan, uh, to be very attractive. So we we actually really like these loans. Um, we also are going to hedge uh, some Bitcoin exposure. So, in the event, there's a, a big gap down in Bitcoin. Um, we're going to protect ourselves uh, from that as as a kind of outside risk.

Anthony Stoss: Got it. Just drilling in a little bit on Deflecto, you guys did a great job turning around Printronix. I trust you guys will step in, and if there is something that needs to be done specific to Deflecto versus the macro, is there any kind of light at the end of the tunnel you are seeing from any industry guys in the Class A truck market, or do you think this could extend on for a period of time if it is not, excuse me, just tariff, if it is more macro related?

Got it and then um, just Drilling in a little bit on. Deflecto you guys did a great job turning around printronix, so I trust you guys will will will step in and if there's something that needs to be done, specific to deflecto versus the macro. Um, is there any kind of light at the end of the tunnel that you're seeing from any industry guys in the class A Truck Market? Or do you think this could could extend on for, for a period of time? If it's not excuse me, just terrific. If it's more, macro related,

MJ McNulty: Yeah, I mean, it is really, I think the tariff surprised us all. I think the magnitude of the tariff surprised us even further. I do not think we are alone in that. It is early to tell what we are hearing from customers is that their buying patterns have changed while the uncertainty of where this will shake out sits. I think when we get through some of the uncertainty, some of the purchasing, the typical purchasing cycles, may return. I think pricing and cost for buyers could change. We are doing a lot around our business in terms of price increases to react to tariffs, as well as we have done with the Printronix business, cost rationalization, optimization, improving processes, all the things that I mentioned in the call. We are monitoring the market.

Yeah, I mean it's really you know the the I think the Tariff surprises us all.

MJ McNulty: We are constantly talking to customers. We are encouraged by the fact that fleets are aging past kind of refresh rates. We do think that there is going to be a good outcome here. I think we just need to clear some of this uncertainty in order to have, for the market to have a better view on what that looks like.

Um, I think the, the magnitude of the tariffs kritis even further. Um, I don't think we're alone in that. Um, and so we, I, I it's early to tell what we're hearing from customers. Is that they're buying patterns have changed, uh, well, the, the uncertainty of where this will shake out, uh, it sits. And so I, I think when we get through some of the uncertainty, uh, some of the purchasing, the typical purchasing Cycles, uh, you know, may return. Um, I think pricing and cost for for buyers could change, you know, we're doing a lot around our business. In terms of price increases to react to tariffs as well as we've done with the printronix business cost, rationalization optimization improving processes. All the things that I mentioned in the call and so we're monitoring the market, we're constantly talking to customers. Um, we we're

Anthony Stoss: Got it. The last question for me, your comments related to Cherokee, very positive. It seems like there is a step forward maybe being taken by Acacia Research. Can you kind of lay out your plans over the next one to two years, what you think you will do, and how many wells can be drilled, et cetera?

Encouraged by the fact that, uh, fleets are aging past kind of refresh rates. Um, and so, we do think that there is going to be a good outcome here. I think we just need to clear some of the uncertainty in order to have, you know, for the market to have a, a better view on what that looks like.

Got it. And the last question for me, your comments related to Cherokee

Very positive. Seems like there's a, a step forward maybe being taken by Acacia, can you kind of lay out your plans over the next 1 to 2 years? What you think you'll do and how many Wills are

Wells can be drilled Etc.

MJ McNulty: I mean, I can't get into the number of wells that can be drilled. We are evaluating ways to partner with third-party capital in order to pursue a drilling strategy in the Cherokee. That's kind of on the back of a lot of work that we and the team have done to identify the right blocks and the right wells and high grade those wells to go after a strategy. We're kind of in the, you know, kind of past the planning stage and into kind of the middle part of that process. I think we'll be, you know, hopefully in a position to take advantage of some of that Cherokee acreage, which, you know, which came with the PDPs that we bought as part of that Revolution deal.

Anthony Stoss: Got it. Thanks for all the color, MJ. Appreciate it.

Yeah. I mean I I can't get into the number of Wells that can be drilled. Um we are evaluating uh, ways to partner with third-party Capital um in order to to pursue a drilling strategy in the Cherokee. Um and and that's that's kind of on the back of a lot of work that we and the team have done to identify the right blocks and the right Wells and high-grade, those Wells to, to go after a strategy. And so we're kind of in the, you know, kind of past the planning stage and into, uh, kind of the middle part of that process. Um, and so, I think we'll be, you know, hopefully in a position to to take advantage of some of that Cherokee acreage, uh, which, you know, which came with the pdps that we bought as part of that Revolution deal.

MJ McNulty: Yeah, thanks, Tony.

Yeah, thanks Tony.

Jenny: Thank you very much. Your next question is coming from Brett Reiss of Janney Montgomery Scott. Brett, your line is live.

Thank you very much. Your next question is coming from Brett Reese of Johnny Monk. Marie Scott, Brett, your line is live.

Brett Reiss: Hi, MJ. Welcome aboard, Michael, and thank you to Kirsten Hoover for answering all my questions over the years. I appreciate it.

Um, hi MJ, welcome aboard, Michael, and thank you to Kirsten for answering all my questions over the years. I appreciate it.

MJ McNulty: Hey, Brent.

Anthony Stoss: Thanks, Brent.

Brett Reiss: Yeah, hi. I just want to make sure we drill down a little bit on the risk on these loans. I mean, you are basically going to be a margin department, like in a brokerage firm almost. Are the markets mature enough so that you can put hedges in? If you get a multi-standard deviation event, where Bitcoin really drops dramatically in price, will the hedges protect our loans?

Thanks Brett. Yeah hi. Um, I just want to make sure we drill down a little bit on. You know, the risk on these loans. I mean you're basically going to be a margin Department like in a in a brokerage firm almost

um,

Are the markets mature enough so that you can put hedges in. And if you get a multi-standard deviation event, you know, where Bitcoin, you know, really drops dramatically in price that the hedges, you know, will you know, protect our loans.

MJ McNulty: Yeah, so we've done a lot of work around that, Brent. The Bitcoin market is very large, and we're talking about Bitcoin here, not other cryptocurrencies, just to be clear. We are looking solely at Bitcoin. The depth of the market and the breadth of the market is substantial for us to be able to put these hedges in place.

Yeah, so we we've done a lot of work around that Brett. Um and and you know the

Bitcoin Market.

Uh, is very large and and we're talking about Bitcoin here, not other cryptocurrencies, just to be clear. So we are looking solely at Bitcoin the depth of the market and the breadth of the market uh is is substantial uh, for us to be able to put these hedges in place.

Brett Reiss: Okay. Can you just talk to me a little bit about this cold storage unit? I mean, we will be able to, with metaphysical certainty, know that these assets are segregated? There is a lot of neutering of regulation with the crypto markets with the Trump administration. So it is kind of the responsibility to protect ourselves or rests on us. Can you just talk to that a little bit?

Okay. And

Can you just?

Talk to me a little bit. This cold storage unit—I mean, we'll be able to, with metaphysical certainty, know that these assets are segregated. And you know, there's a lot of neutering of regulation, you know, with the crypto.

Markets, you know, with the Trump Administration. So it's it's kind of um

You know, the responsibility to, you know, protect ourselves or, you know, rests on us. Um, can you just talk to that a little bit?

MJ McNulty: Yeah, yeah. Maybe just to take a step back, there are an increasing number of companies that, as a treasury strategy, are holding Bitcoin. We, at Acacia Research, as a treasury strategy, are holding cash and treasuries, not Bitcoin. For those companies that are holding Bitcoin, they have a handful of ways to hold that Bitcoin. They can hold it on a key, a TREZOR, or something like that and put it in the drawer. Not very safe, not very smart. We all read the stories about Bitcoin being lost because a key was thrown out and people lost several hundred thousand Bitcoin. That is not a prudent way to manage people's capital. There are things like Coinbase where it is a claim on a pool of Bitcoin as opposed to holding an actual physical Bitcoin.

yeah, yeah, and and maybe just to take a a step back, um,

You know, there are there are increasing number of companies.

Uh, that as a treasury strategy is holding Bitcoin.

Right. We had a case shop. The treasury strategy are holding cash and treasuries, uh, not Bitcoin, um, but but the, for those companies that are holding Bitcoin, they have a handful of ways to hold that Bitcoin. They can hold it on a key and Trader or something like that and put it in the drawer. Not very safe, not very smart. We all read the stories about Bitcoin being lost because a key was thrown out and people lost you know several hundred thousand Bitcoins, right? Um so so that's not a prudent way to manage people's Capital. Um there there are things like

MJ McNulty: What Unchained has created is cold storage, an ability for an actual holder of a physical Bitcoin to have a custodian maintain that Bitcoin for them. Unchained, if Brent Anderson, if you hold physical Bitcoin, you can go to Unchained and you can pay Unchained to hold that Bitcoin in cold storage. What does that mean? It means that they have a software and a third party, effectively a bank, that holds that key for you in a safe and controlled storage environment where it can be accessed, in the case of our loans, by a holder of two of three keys. The only way that Bitcoin can come out of storage is if two of the three key holders present those keys and ask for that Bitcoin to come out of storage.

Coinbase, um, where it is a claim on a pool of Bitcoin as opposed to holding an actual physical Bitcoin. What Unchained is created is uh Cold Storage uh inability for a actual holder of a physical Bitcoin to have a custodian uh, maintain that Bitcoin for them. So so Unchained. Brett, if you hold physical Bitcoin, you can go to Unchained and you can pay Unchained to hold that Bitcoin in Cold Storage. So what does that mean? It means that they have a, a software and a third-party, uh, effectively a bank that holds that key for you in a safe and controlled storage environment, where it can be accessed, in the case of our loans, by uh holder of 2 of 3 keys. And the only way that Bitcoin can come out of storage is if 2 of

MJ McNulty: One of the reasons we really like this is that in the case of our loans, we and our custodian hold the key and can only unlock it at the direction of we and our custodian, which we think provides a lot of security. That is kind of the cold storage piece of it. On the lending and the security piece of it, the standard or typical UCC process, Bitcoin actually presents a really unique piece of collateral because the UCC goes in the chain of the actual Bitcoin. You can go on and see who the holders are, and you can ensure that there is no other holder in the chain before you.

The 3 key holders, present those keys and ask for that Bitcoin to come out of storage. And so 1 of the reasons we really like this is that in the case of our loans we and our custodian, hold the key and can only unlock it at the direction of we and our custodian, um, which we think provides a lot of security. So that's kind of the cold storage piece of it on the lending in the security piece of it, so that the standard or typical uccc process,

MJ McNulty: It becomes even more clear than with a physical piece of equipment or a building or so on and so forth that Unchained, Acacia Research are the owners or have a claim, have the most senior claim on that Bitcoin. We actually think it is a really elegant piece of collateral and in a lot of ways more superior than most other collateral.

We actually think it's a really elegant piece of collateral. Um, and and and in in in in a lot of ways, more Superior than most other collateral.

Brett Reiss: Incredible. So the UCC lien is actually flagged in the Bitcoin. Wow.

Right.

MJ McNulty: is in the coding of the Bitcoin.

Brett Reiss: Right, right. Incredible. Different subject. Because we are hedged 70% with the Benchmark Energy resolution business, if we go into a recession and oil and natural gas prices continue to decline, is it almost impossible for that business through 2027 to go cash flow negative?

Incredible. I said so the the UCC lean is actually flagged in the uh, in the Bitcoin. Wow. It's it's in the coding of the Bitcoin, right? Right. Incredible.

Uh, different subject. You know, because we're headed 70%, you know, with the uh, Benchmark resolution business.

If, if we go into a recession and an oil and natural gas prices continue to, uh, to decline, is it almost impossible for that business, through 2027, you know, to, to go cash flow negative.

MJ McNulty: Nothing's impossible, but I would say it would be highly improbable for it to go cash flow negative because of the hedges. We do have a little bit of unhedged exposure, primarily to non-op related and some of our small amount of our operating production. So far, our hedges have worked as we have expected them to work. We feel pretty comfortable that, in spite of the recent price volatility, we will be cash flow positive.

Brett Reiss: Right. Now, the 30% on the oil and natural gas that you're not hedged, is there a break-even price of oil and natural gas below which, you know, you just don't make any money?

Uh, nothing's impossible, but I would say it would be a highly improbable for it to go cash flow negative because of the hedges. We do have a little bit of unhedged exposure, um, primarily to non-operated and some of our small amount of our operated production. But so far, our Hedges have have have worked, um, and and as we have expected them to work. Uh, and so we feel pretty comfortable that, you know, in spite of the recent price volatility that um, that we will be cash flow positive.

Right now, the 30% on the oil and natural gas that you're not hedged. Is there a break? Even?

Price of oil and natural gas below which you know you you just don't make any money.

MJ McNulty: Theoretically, there is a break-even. I don't have that number in front of me, Brett, but we can follow up with that.

Brett Reiss: Okay. Different subject. There is a lot of stress in the private equity markets. Has it risen to a level such that the private equity potential sellers are finally going to come to the table with lower price so that we can get some deals done in that space?

Okay. Um, different subject.

you know, there's a lot of stress in the private Equity markets, has it risen to a level such that um,

You know the private Equity potential sellers are, you know, finally going to come down come to the table with, you know, lower, you know, price. So that we can get some uh deals done in in that space.

MJ McNulty: Yeah, I mean, this is an interesting question and one that we watch quite a bit because we are pretty plugged into what is going on in private equity. I would say there are multiple answers depending upon asset quality. So in the, call it, B and C quartile assets, where we like to play because we like the ability to go in and have a reason to be a buyer, usually around operational improvement, margin improvement, sales motion, so on and so forth, we are seeing a reasonable number of opportunities in that space. For the A quartile assets, the private equity funds are just going to hold those or they will put them into a continuation vehicle or find another way to continue to manage those assets.

Yeah, I mean, this is an interesting question and 1 that we watch quite a bit because we're pretty plugged into what's going on in private Equity. Um, I would say

There, there, there are, there are multiple answers, depending upon asset quality.

So, in the call it, B and C, cortile assets, um, where we like to play, because we like the ability to go in and, and have a reason to be a buyer. Uh, usually around operational Improvement, margin Improvement, uh, sales motion, so on and so forth. We're seeing a reasonable number of opportunities, uh, in that space, uh, for the a quartile.

MJ McNulty: We are starting to see the bid-ask spread close a little bit, and we are starting to see price discovery create some opportunities. But, you know, private equity funds have a long time horizon, and until their LPs really push on them for liquidity, they are not inclined to reduce their fee-paying base of assets. But we are seeing more opportunities in that space.

Assets, they're the private Equity Funds are just going to hold those or they'll put them into a continuation vehicle, um, or find another way to continue to manage those assets. Um, we are starting to see the, the bid ass spread, uh, close a little bit, and we're starting to see price Discovery, create some opportunities. Um, but, but, you know, private equity.

Funds have a long time Horizon and until their LPS really push on them for liquidity. Uh, they're not inclined to reduce their fee paying base of assets. Um, but we are seeing more opportunities in that space.

Brett Reiss: Okay. On the legacy patent business, I think we're both in agreement the market really doesn't give us any value for that business, which has been under your stewardship quite good. Is there any kind of information disclosure that you can give the market so that they'd feel comfortable on putting a valuation on that business, without compromising your negotiating positions with defendants on the other side?

Okay, on the uh, Legacy uh, patent business.

You know, I think we're both in agreement. The market really doesn't give us any value for that business. Which you know, has been under your stewardship quite good.

Is there any kind of information disclosure that you can give the market so that, you know, they'd feel comfortable on putting a valuation on that business, you know, without compromising your negotiating, uh, positions with, you know, defendants on the other side.

MJ McNulty: This is a question I ask myself a lot, Brett. I think, you know, there are public cases out there, but we also have a lot of private discussions going on in, you know, kind of bilateral negotiations. It is difficult for us to disclose what all those discussions are and what the potential outcome of those might be because it just tips our hand to those counterparties. We want to keep those private. So, aside from what you can see in the market, and unfortunately having to extrapolate the value of, say, TP Link, for example, and applying it to other potential parties out there in similarly situated situations, it is difficult for us to give a lot of information around what we believe the value of Wi-Fi 6 patents is.

Uh, this is a question, I asked myself a lot bread. Um, I think you know, we we there are public cases out there, uh, but we also have a lot of private discussions going on in, you know, kind of bilateral.

Negotiations, it's difficult for us to disclose what all those discussions are and what the potential outcome of those might be because it just tips our hand to those counterparties. Um, and and um,

we want to keep those private and so I, I

I I aside from what you can see in the market and unfortunately, having to extrapolate the value of say TP, link, for example, and applying it to other potential parties out there and similarly situated situations. It's difficult for us to give a lot of information around what we believe the value of

our patent cyst.

Brett Reiss: Okay. I thank you for answering my questions. I am going to drop back in queue. Thank you. You are welcome.

MJ McNulty: Good to talk to you, Brent.

Brett Reiss: Michael. Okay.

Anthony Stoss: Thanks a lot, Brett. Appreciate it.

Okay. I think uh, thank you for answering my questions. I'm going to drop back in queue. Thank you. And welcome. Yeah, good to talk to you. Okay.

Thanks a lot, Brett. I appreciate it.

Jenny: Thank you very much. Just a reminder, if there are any remaining questions, you can join the queue now by pressing star one on your phone keypad. Our next question is coming from Adam Eagleston from Formidable. Adam, your line is live.

Thank you very much.

Just a reminder if there are any remaining questions, you can join the queue. Now by pressing star 1 on your phone keypad,

Our next question is coming from Adam eagleston, from formidable, Adam, your line is live.

MJ McNulty: Hey, MJ.

Hey, I'm Jay.

Anthony Stoss: Hey, Adam. How are you?

MJ McNulty: Good. Doing well. Michael, welcome. Kirsten, thanks for all of your work over the years. Quick question. Congrats on the Build Unchained deal. With building out your in-house capabilities around hedging that, et cetera, does that increase the likelihood that we may see Acacia Research adopt some type of Bitcoin treasury strategy? We are not currently considering a Bitcoin treasury strategy. It does not mean that we would not do that in the future, but it is not something that we are actively considering, Adam.

Hey Adam. How are you?

Good doing well. Uh, Michael welcome Kirsten. Thanks for all of your work over the years. Um, quick question. Congrats on the, uh, uh, build Unchained deal. Um, with building out your in-house capabilities around hedging that Etc, does that increase the likelihood that we may see, Acacia adopt some type of Bitcoin treasury strategy.

Um, we are not currently considering a Bitcoin treasury strategy.

Um, it doesn't mean that we wouldn't do that in the future, but it's not something that we're actively considering out of

Anthony Stoss: Okay. Fair enough.

Okay, fair enough.

Jenny: Thank you very much. We appear to have reached the end of our question and answer session. I will now hand the call back over to MJ for any closing remarks.

Thank you very much.

Well, we appear to have reached the end of our question and answer session. I will now hand the call back over to MJ for any closing remarks.

MJ McNulty: Thanks, everyone. As usual, for joining the call, it's good to talk to everybody. We look forward to talking to you after the end of the third quarter.

All right, thanks everyone. Um, as usual for joining the call, it's good to talk to everybody and, uh, we look forward to talking to you. After the end of the third quarter,

Jenny: Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.