Acacia Research (ACTG) 2026年第三季度业绩电话会：基准增长与3.463亿美元资金池

核心要点

• Acacia Research Corporation（NASDAQ: ACTG）公布2026年第三季度营收为5440万美元，低于上年同期的5940万美元。扣除知识产权业务后的营收为5420万美元，实现连续第三个季度增长。
• 公司调整后EBITDA总额为390万美元。扣除知识产权业务后的运营分部实现调整后EBITDA 1160万美元。
• 归属于Acacia的GAAP净亏损为560万美元，即稀释后每股亏损0.06美元。调整后净利润为430万美元，即稀释后每股收益0.04美元。
• Benchmark实现调整后EBITDA 910万美元，自由现金流270万美元。管理层预计资产层面的EBITDA增长将延续至2027年。
• 截至季度末，Acacia持有的现金、权益证券及应收贷款共计3.463亿美元，环比增加约1170万美元，且母公司无负债。
• 一项公开市场证券投资带来了820万美元的已实现收益。管理层表示，该头寸持有时间不足六个月，获得了约2.5倍的回报。

关键财务数据

业务与运营表现

Benchmark

Benchmark录得营收1950万美元、调整后EBITDA 910万美元以及自由现金流270万美元。其首口Cherokee油井的表现持续超出管理层预期。第二口Cherokee油井Moon Tower在季度结束后投产，且在早期返排阶段的产量表现优于第一口井。

Benchmark拥有约五个自营Cherokee作业单元，管理层认为每个单元可支持两口井。该公司正在评估更多作业单元和区块面积，但尚未确定进一步开展Cherokee钻探的时间表。

10月2日，Benchmark设立了一家全资拥有的破产隔离子公司，并与Cibolo Energy Partners达成了一笔基于储量的高级担保信贷额度。该额度最高达4750万美元，初始可用额度为2750万美元。其中，1850万美元在交易完成时到位，同时到位的还有Benchmark注入的600万美元股权资金。

该融资初步用于支持一个包含四口井的Cleveland开发项目。该融资对Acacia及Benchmark的其他资产不具追索权，且不会改变Acacia在Benchmark中的持股比例。

预期原油产量的约70%已完成对冲。Benchmark还对未来12个月预期天然气产量的约70%进行了对冲，未来6个月的保底价格在每百万英热单位（MMBtu）4美元以上。

Deflecto

Deflecto实现营收2720万美元，上年同期为3080万美元。调整后EBITDA从260万美元降至100万美元。

该下滑反映了加拿大和美国住房市场配风产品需求的疲软以及投入成本的上升。办公用品业务营收也有所下降，主要是由于Acacia在2025年11月出售了地垫业务。交通安全产品业务营收同比保持稳定。

管理层表示，得益于制造布局优化、交付周期缩短、组织架构精简、成本控制收紧以及采取定价举措，9月份盈利能力显著改善。

Printronix

Printronix公布营收为750万美元，调整后EBITDA为150万美元。该业务持续扩大打印机安装基数，并提升高利润率耗材及互补产品的销售，同时持续产生稳定的自由现金流。

知识产权业务

知识产权平台产生约30万美元的许可及相关营收，调整后EBITDA为负250万美元。Acacia在削减经常性开支的同时，继续推进其Wi-Fi 6和R2专利组合的商业化变现。

管理层表示许可业务具有偶发性，目前正继续评估一次性付清许可和经常性特许权使用费安排，包括能够带来增量专利组合收益的机会。

公开市场证券投资组合

本季度所投资的一家上市公司同意被收购，为Acacia带来了820万美元的已实现收益。管理层表示，在Acacia评估潜在交易期间，公开市场持仓可以发挥战略作用，而不仅仅是作为一个交易型投资组合。

管理层展望

在Cherokee和Cleveland油气开发的支撑下，管理层预计Benchmark资产层面的EBITDA增长将延续至2027年。随着调整后EBITDA的增长以及大宗商品价格走高带来机遇，公司还计划在未来12个月内增加对冲头寸。

对于Deflecto，管理层表示业务重组提升了其盈利潜力，若销量回升，有望支撑更高的增量利润率。在问答环节中，管理层表示，若市场环境配合，该业务仍有望迈向分析师所指的800万至1000万美元EBITDA区间，甚至表现更佳。

Acacia继续评估非公开收购机会，并更加积极地布局小微盘上市公司。管理层表示，根据各项投资机会的风险特征，其目标回报率通常在十几个百分点中高段或更高。

风险与关注事项

• Deflecto仍面临美国和加拿大住房需求疲软、投入成本上升以及关税政策不确定性的风险。
• Benchmark本季度录得510万美元未实现对冲亏损，今年迄今累计达970万美元。管理层强调，这些按市值计价的费用属于非现金性质，不会影响当期现金流或利润率。
• 知识产权许可营收仍具有偶发性，导致该分部的季度业绩产生波动。
• 管理层称私募市场融资环境震荡起伏，并表示Acacia在某些收购机会中因出价不及竞争对手而错失标的。
• Benchmark新钻探储量的潜在未来价值在初期并未反映在GAAP账面价值中。Acacia预计将于2027年第一季度随2026年10-K表格一同提交的2026年年终储量报告，将提供关于已证实储量的更多细节。

分析师问答要点

• 收购项目储备：Acacia已提交多项报价，在部分竞标中落选，并继续推进其他机会。管理层认为私募市场前景正在改善，因为一些卖方更愿意向有限合伙人（LP）返还资本。
• 公开市场活动：管理层预计将继续积极参与公开市场证券投资，因为即便Acacia最终未收购标的公司，相关持仓仍能创造回报。
• 资本配置与股票回购：当被问及鉴于股价低于账面价值是否会进行回购时，管理层并未宣布回购计划，而是强调了资产负债表的灵活性以及公开和私募市场投资带来的预期回报。
• Cibolo融资：Acacia持有该破产隔离载体100%的股权。Cibolo提供的高级信贷仅以注入的股权和Cleveland油井井位作为担保，不涉及Cherokee井位或Benchmark的其他资产。
• AMO Pharma：Acacia持有AMO Pharma约18.5%的股份。管理层表示，其目标是将该投资变现，而非在长期的药物研发过程中一直持有。
• Deflecto重组：管理层预计，重组效益将在需求和销量回升时支撑利润率提升。管理层还表示，关税的任何调降都可能构成利好，但同时提醒目前断定政策结果仍为时过早。

财报电话会议完整实录

---

完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, everyone, and welcome to the Acacia Research Corporation Third Quarter 2026 Earnings Conference Call. My name is Vincent, and I'll be your conference facilitator today. [Operator Instructions] Please note that today's call is being recorded and is also being webcast through the Investor Relations section of Acacia Research's website.

I would now like to turn the conference over to Cody Slach of Gateway Group. Cody, please go ahead.

Cody Slach

Thanks, Vincent. Joining today's call are MJ McNulty, Acacia's Chief Executive Officer, and Michael Zambito, Acacia's Chief Financial Officer. Before management begins its prepared remarks, I'd like to remind everyone that certain statements made during today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements reflect management's current expectations, estimates, and projections regarding future events and operating performance and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Please refer to Acacia's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q for a discussion of these risks.

Earlier this morning, Acacia issued a press release announcing its third quarter 2026 financial results. That release, together with our earnings presentation, is available in the Investor Relations section of our website. During today's call, management will discuss certain non-GAAP financial measures. Reconciliations are included in this morning's earnings release.

With that, I'll turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

Martin McNulty

Thanks, Cody, and good morning, everyone. Thank you for joining us today and for your continued support for what we're building here at Acacia. We're pleased with our performance in the third quarter. Our results reflected continued strength at Benchmark, consistent cash generation at Printronix, and strong performance in our public securities portfolio, partially offset by soft end-market conditions at Deflecto, where we continue to make operational progress.

Together, these results underscore the benefits of our diversified business model. During the quarter, we generated total revenue of $54.4 million. Our total revenue, excluding our intellectual property operations of $54.2 million, increased for the third consecutive quarter and was at a near record. We ended the quarter with $346.3 million in cash, securities, and loans receivable, and no parent company debt, providing us with significant financial flexibility.

Our objective has never been to maximize short-term earnings. Instead, we focus on compounding long-term intrinsic value per share through disciplined capital allocation, acquiring businesses at attractive valuations, improving our operations through active ownership, and deploying capital where we believe it can generate attractive long-term returns. The third quarter and the weeks since have offered several examples of that approach in action.

At Benchmark, during the quarter, our initial Cherokee well continued to outperform our expectations. And subsequent to quarter end, we completed drilling our second Cherokee well, and we closed a dedicated financing of up to $47.5 million to accelerate development of Benchmark's Cleveland drilling inventory, all of which we will discuss shortly. In our public securities portfolio, similar to last quarter, another one of our holdings announced an agreement to be acquired, ultimately generating realized gains for Acacia.

Looking ahead, our pipeline remains robust. We continue to actively evaluate attractive opportunities in the private markets, and we're increasingly more active and seeing more compelling opportunities in the public markets, specifically in small and micro-cap businesses that fit our acquisition criteria. We remain patient and disciplined, pursuing only opportunities where we believe our operational expertise and investment approach can create value beyond the purchase price. With that overview, let me turn to our operating businesses, beginning with Benchmark.

Benchmark continues to perform well, with operating performance and cash flow exceeding our expectations. Asset-level EBITDA is up substantially year-over-year, and we expect to continue that growth into 2027, while operating expenses have remained in line. As we continue growing adjusted EBITDA, we will also be able to layer in hedges at higher commodity prices and lock those in over time. Our second Cherokee well, Moon Tower, has been online for about a week. While it is early in flowback, results are encouraging and are tracking ahead of our first Cherokee well.

In total, Benchmark has approximately 5 operated Cherokee units, each of which we believe can support 2 wells. We'll continue to develop these units methodically, bringing cash flow forward where returns support it. As we continue to successfully develop our Cherokee asset, we'll take advantage of opportunities to bolt on additional units and acreage.

Subsequent to the quarter end, on October 2, Benchmark created a wholly owned bankruptcy-remote subsidiary within which it closed a senior secured reserve-based lending facility with Cibolo Energy Partners. This senior secured facility provides up to $47.5 million of borrowing capacity with initial availability of $27.5 million, of which $18.5 million was funded at closing. The initial draw was complemented by $6 million of equity capital from Benchmark.

The proceeds used to fund the new subsidiary are dedicated to an operated multi-well development program targeting Benchmark's Cleveland drilling inventory in the Western Anadarko Basin. The program is initially 4 wells with the potential to expand the program over time. The financing is held in a separate special purpose vehicle and is nonrecourse to Benchmark's other assets and to Acacia. The structure allows us to accelerate development of attractive locations while isolating the program's risk and preserving balance sheet flexibility.

As we've seen in the Cherokee formation, we're seeing a meaningful increase in Cleveland formation drilling activity across the Western Anadarko with excellent results. Well results today are substantially better than they were a decade ago, driven by a focus on top-tier rock, disciplined spacing, and modern completion techniques. We believe our Cherokee and Cleveland drilling programs offer an attractive risk-adjusted return profile for Acacia.

Our core strategy at Benchmark has been to acquire proved reserves at a discount to their intrinsic value. Most of that value has come through producing reserves, but every acquisition Benchmark has made since its formation in 2023 has also included proved undeveloped locations. Today's market presents an opportunity to begin harvesting some of those locations, which is exactly what our strategy was built to do: take advantage of opportunities as the market presents them.

It's worth highlighting how this value creation is reflected in our financial statements. Over the past several quarters, Benchmark has invested meaningful capital in its drilling program. Under GAAP, that capital is recorded at cost. So our book value reflects what we've invested rather than the potential future value of those new reserves. When wells perform as our Cherokee well has, the difference between the underlying future value of these newly added reserves and the GAAP book value of those wells is at its greatest at the beginning of a drilling program.

This gap will narrow over time as we generate positive income from that production and the value of the underlying reserves is converted into net income. We're pleased with the initial results from our drilling and believe this program has and will continue to meaningfully increase the intrinsic value of Benchmark's oil and gas assets. Investors should just be aware that this value is not yet reflected in our book value.

For a more complete view of this, you'll be able to see the change in reserves when we release our year-end 2026 reserve report, which will be filed with our 10-K in the first quarter of 2027. Those proved reserves will provide more granularity on the total value of the assets. It's also worth noting that Benchmark holds significant resource potential that is not included in the proved reserves.

Finally, we continue to actively manage our commodity hedging program. Our objective is to generate strong free cash flow, reduce earnings volatility, and protect against downside risk. We do not speculate on commodity prices. Approximately 70% of our expected oil production is currently hedged, and we will continue adding volumes over the next 12 months. In addition, approximately 70% of our expected natural gas production over the next 12 months is hedged with floors above $4 per MMBtu over the next 6 months, providing meaningful protection in a relatively soft near-term gas market.

Because these hedges are mark-to-market each quarter, reported results will include noncash gains and losses such as the $5.1 million unrealized loss this quarter, which should not be viewed as indicative of the underlying economics of the business.

Turning to Deflecto. Revenue for the third quarter was $27.2 million compared to $30.8 million in the prior year period, and adjusted EBITDA was $1 million compared to $2.6 million in the prior year period. Results were driven primarily by softer demand in our air distribution end markets, specifically in the Canadian and U.S. housing markets, coupled with increased input costs. While our office products end market showed a revenue decline, this was primarily driven by the decline in revenues associated with the sale of our floor mat business, which we sold in November of 2025.

Our transportation safety revenues have held steady year-over-year, and we're optimistic about the positive trends we're seeing in the underlying Class 8 market. We were encouraged, however, that performance improved as the quarter progressed, with September showing a meaningful step-up in profitability. We believe that improvement reflects the actions we've taken over the past several quarters, optimizing our manufacturing footprint, reducing product lead times, streamlining the organization, tightening cost discipline, and executing on pricing.

These initiatives have fundamentally and structurally enhanced Deflecto's earnings potential. We are optimistic about the opportunities in the transportation market and remain focused on what we can control. We're encouraged that the actions we've taken to simplify operations and reduce our cost base position Deflecto to benefit from improved profitability in a recovering demand environment.

Turning to Printronix. Printronix continued to perform well and generate consistent free cash flow. We continue to leverage the strength of its installed base and global distribution network to expand sales of higher-margin consumables and complementary products. Through the quarter, we continued to grow the installed printer base and operated the business with disciplined cost management. During the quarter, Printronix generated revenue of $7.5 million and adjusted EBITDA of $1.5 million. While small to the overall portfolio, we've been pleased with the operational and commercial turnaround of the business.

Turning to our intellectual property platform. During the quarter, we continued to pursue monetization of our Wi-Fi 6 and other portfolios and generated licensing revenue of approximately $300,000. As a reminder, licensing activity is inherently episodic and is best evaluated over longer periods. We have a positive view of the value that remains in the portfolio, both in Wi-Fi 6 as well as in our R2 patents.

We have also further reduced the platform's overhead to better align its cost structure with the timing and nature of licensing opportunities, which we believe should enhance the platform's go-forward earnings profile as future licensing opportunities are realized.

Lastly, turning to our public securities portfolio, which continued to perform well during the quarter. During the third quarter, another one of our public company investments announced an agreement to be acquired, generating realized gains of $8.2 million for Acacia. Similar to last quarter, this demonstrates our ability to identify undervalued businesses, build strategic positions with discipline, and monetize those investments when the risk-reward becomes compelling.

Our public markets investments are an extension of our broader capital allocation strategy. When we identify a business that may fit our platform, we can establish an initial position while conducting additional due diligence in evaluating a potential strategic transaction. We also remain disciplined in managing existing positions, monetizing investments when they approach our assessment of intrinsic value, and redeploying capital where we see more attractive opportunities.

With that, I'll hand the call over to Mike to review our financial results in greater detail.

Michael Zambito

Thank you, MJ. As MJ discussed, the third quarter reflected continued execution across our operating businesses and the benefits of Acacia's diversified business model. Before reviewing the financial statements in more detail, I'd like to highlight a few key financial takeaways. Total company revenue was $54.4 million for the quarter. Total operated segment revenue, excluding intellectual property, was $54.2 million. Total company adjusted EBITDA was $3.9 million, while operated segment adjusted EBITDA, excluding IP, totaled $11.6 million. We ended the quarter with $346.3 million of cash, equity securities, and loans receivable while continuing to maintain no parent company debt.

Turning to our income statement. Total revenue for the quarter was $54.4 million compared to $59.4 million in the prior year period. Energy operations generated revenue of $19.5 million. Manufacturing operations generated revenue of $27.2 million. Industrial operations generated revenue of $7.5 million, while our intellectual property business generated licensing and related revenue of $300,000.

Turning to expenses. Consolidated G&A expense for the quarter totaled $15.4 million versus $16 million in the third quarter last year. Across our businesses, we continue to emphasize disciplined cost management, including the further reduction of overhead in our IP business. GAAP operating loss for the quarter was $3.6 million, and total company adjusted EBITDA was $3.9 million. We believe adjusted EBITDA remains a useful supplemental measure of operating performance because it helps investors evaluate the underlying earnings power of our businesses by excluding certain noncash and nonrecurring items.

Turning to our operating segments. Benchmark generated adjusted EBITDA of $9.1 million and free cash flow of $2.7 million for the quarter, while continuing to invest in attractive development opportunities consistent with our disciplined capital allocation framework. Deflecto generated adjusted EBITDA of $1 million while continuing to focus on operational improvement. Printronix generated adjusted EBITDA of $1.5 million and continued to produce strong free cash flow.

Within our IP segment, adjusted EBITDA totaled negative $2.5 million. We didn't generate any paid-up licensing revenue in the quarter, and as a reminder, this revenue stream is episodic. In the meantime, we've continued to lower our cost base in the segment, which you will start to see reflected in the coming quarters, and align expenses more closely with the timing and nature of licensing opportunities.

Turning to earnings. GAAP net loss attributable to Acacia Research Corporation was a $5.6 million loss or negative $0.06 per diluted share. Adjusted net income attributable to Acacia Research Corporation was $4.3 million or $0.04 per diluted share. A reconciliation of GAAP and non-GAAP results is included in this morning's earnings release.

Turning to the balance sheet. At quarter end, cash, cash equivalents, equity securities measured at fair value, and loans receivable totaled $346.3 million, an increase of approximately $11.7 million during the quarter. We continue to maintain no parent company debt. On a consolidated basis at quarter end, total gross indebtedness was $90.4 million, consisting of $59.5 million of nonrecourse debt at Benchmark and $30.9 million of nonrecourse debt at Deflecto.

Subsequent to quarter end, Benchmark closed its senior secured development facility of up to $47.5 million, which is nonrecourse to Acacia. Book value at quarter end was $551.6 million or $5.65 per common share, compared to $557 million or $5.71 per share at prior quarter end. Changes to book value were primarily driven by $2.6 million in operating income from our operated segments, including IP, and $2.3 million in gains from our public equity portfolio, offset by parent expenses of $6.3 million and realized and unrealized energy hedge losses at Benchmark of $6.1 million.

The unrealized loss associated with our oil hedging program, which was $5.1 million in the quarter and $9.7 million year-to-date, reflects mark-to-market accounting on derivative positions that extend over a multiyear horizon and does not correspond to realized economic outcomes within the quarter. The charge is driven by changes in future price expectations and does not impact current period cash flows or margins.

Overall, we believe our balance sheet remains one of Acacia's key competitive advantages. Our liquidity, conservative capital structure, and strong cash generation provide meaningful flexibility to continue investing in our existing businesses while evaluating new investment opportunities.

I'll now turn the call back to MJ.

Martin McNulty

Thanks, Mike. As you've heard today, Acacia delivered another quarter of solid execution. Benchmark continues to perform well and has secured dedicated capital to accelerate its development program. Deflecto is making the operational progress that we believe will drive future performance. Printronix continues to generate consistent cash flow, and our public securities portfolio again generated attractive realized gains.

Our strategy remains straightforward and unchanged. We seek to acquire businesses at discounts to what we believe is intrinsic value, fundamentally improve them through active ownership, and build them into leaders in their niches. With $346.3 million of cash, securities, and loans receivable, no parent company debt, and operating businesses that continue to generate attractive cash flow, we believe Acacia is well positioned to capitalize on the opportunities we see in both the private and public markets.

Vincent, we'd now be happy to take any questions.

Operator

[Operator Instructions] Our first question comes from Anthony Stoss of Craig-Hallum.

分析师问答

Anthony Stoss

MJ, I'm hoping maybe not to put you too much on the spot, but on the acquisition side of things, can you maybe just give us a little bit more color on activity levels? Have you made bids for things, you been outbid? Or just any kind of additional color would be helpful. Then I had a follow-up.

Martin McNulty

Yes. No, nice to talk to you, Tony, not putting me on the spot at all. We've been pretty active. We have been bidding on things. We have been outbid on things, and we are progressing other things. As you know, the 2 public names that we mentioned, we were involved in. We're not buying stakes in public companies purely to build a book of public names and trade around them. We're doing that for a strategic reason as evidenced by their sale.

There were processes there. And so we've been pretty active on the public side. On the private side, we've continued to see some interesting things. The market there from a financing standpoint, depending on the type of asset, has been a little choppy. We think that finally, a lot of the private equity sellers are starting to get a little bit of religion around where their assets sit and returning capital to their limited partners. So we're pretty encouraged by the pipeline of opportunities that we've got.

Anthony Stoss

Perfect. And then on the Cherokee side of things, I just wanted to make sure I heard it correctly. You drilled a second well and you have higher expectations for more output from that second well. And then, I guess, when would the third well be drilled since you seemingly can have, what, 10 wells, I think you mentioned, 5 areas, 2 wells each.

Martin McNulty

Yes. So that's exactly right. We have 5 units. We continue to look at -- so a unit can hold 2 wells, as you mentioned. We continue to look at attractive incremental units where they make sense relative to acreage that we hold from the Revolution acquisition, as the commodity price environment and the drilling environment right now is attractive. So we're not going to commit to when we're going to drill incremental Cherokee wells, but putting the Moon Tower down was very attractive capital opportunity.

And then this Cibolo partnership we have with the reserve-based lending facility on a nonrecourse basis in the Cleveland is also pretty attractive. If you recall from the Cherokee acquisition, we kind of priced it on a PDP basis. The discount rates on those PDPs have come in. And so as we see new opportunities to acquire businesses in Benchmark, they're at higher prices than where we acquired Revolution. But Revolution had a very large inventory of Cleveland drilling locations that we can take advantage of, and the Cibolo partnership allows us to do it on a nonrecourse basis with very favorable terms associated with it.

Operator

The next question comes from Brett Reiss of Janney.

Brett Reiss

First question or 2 is on the IP portfolio. Is Atlas in the Wi-Fi 6 portfolio? Are you participating in some sort of consortium called Avanci?

Martin McNulty

We're consistently looking at ways to monetize that portfolio and participate with other people that have programs to go out and monetize IP. And we think that there's a good amount of value in continuing to do that as well as to pursue the direct communication and process that we have historically pursued that you all have seen.

Brett Reiss

All right. But to the extent you're participating in this consortium of Avanci, does that give us the opportunity to have a royalty or recurring revenue stream from the patent portfolios we own with respect to Wi-Fi 6?

Martin McNulty

Yes. I mean, that's a strategic question, which is, do we do fully paid-up licenses, which we've done in the past? Or do we create ongoing royalty streams? What we've seen at least historically in our pursuit of monetizing these patents is that the fully paid up tends to be more attractive relative to the ongoing royalty stream. But to the extent that we have an opportunity to participate in an ongoing royalty stream that may not -- where the opportunity may not otherwise be available to us, that's attractive as well. It's incremental earnings from our portfolio.

Brett Reiss

Right, right. Now I see in your news release, you added or purchased additional patents with respect to Wi-Fi 7. So are you already positioning yourself if the industry migrates from Wi-Fi 6 to Wi-Fi 7, whatever economic benefits you have with Wi-Fi 6, you'll just roll it up as the world migrates to Wi-Fi 7?

Martin McNulty

Yes. No, we definitely think that, that's attractive. And Brett, similar to the way we approach all of our acquisitions, when we acquire things, we acquire them because we think that there's a big discount to intrinsic value. And so that's how we approach anything in the IP portfolio as well.

Brett Reiss

Okay. Pivoting to Benchmark. Even after the special purpose acquisition vehicle with Cibolo, we still own 73% of Benchmark. Nothing changes there?

Martin McNulty

So that's a good question. There is no ownership change in Benchmark associated with this partnership with Cibolo. The partnership with Cibolo is purely a senior credit facility on very attractive terms to augment $6 million of our Benchmark equity that went into that vehicle. So there is no ownership change associated with Benchmark.

Brett Reiss

Okay. So this vehicle, Cibolo owns x amount of it and we own x amount of it. Is that correct?

Martin McNulty

We own 100% of it, Brett.

Brett Reiss

Okay. All right. And their loan is collateralized by only those assets that are in that special purpose acquisition vehicle and not our other oil and natural gas assets. Is that correct?

Martin McNulty

That is correct. It's a 100% bankruptcy-remote vehicle. It has only the -- so the way -- just to expand on that a little bit, sorry -- the only collateral in that vehicle is the equity that we contributed to it and the well locations that we contribute to it. And those well locations are not -- just to be clear, and I think I said this, those well locations are not Cherokee well locations. They're Cleveland well locations, of which we have many, many.

Brett Reiss

Okay. There'll be an 8-K filed eventually or maybe it's existing now where the all-in costs of this financing to Cibolo will be something that shareholders can review?

Martin McNulty

We are not 8-K yet. It is not material. But there will be some information in the 10-K that will give a little bit more detail around it next quarter. The reason it's not 8-K is it would -- because it happened post quarter, it's not in the Q, but it will be in the K.

Brett Reiss

Okay. AMO Pharma, any update on how things are moving along there in terms of potential strategic partners, the timing of the registrational study? Any sense of how much contribution we may have to fork up to monetize the asset?

Martin McNulty

There are a lot of questions there. Let me take them from the top. So we feel pretty -- we're pretty enthusiastic about AMO's potential. As you know, we have a partner in that investment. So we're, call it, 18.5% or something in the total ownership cap table. And our partner is, by and large, the rest of that. We and they have been working very closely with the company on registrational studies and related work as well as making sure that the market commercially and from an M&A standpoint, understands the story and where the company sits.

As we've said, these assets are bought, not sold, and we've been actively making sure that the market understands where AMO is and what the value proposition is. And as we've said in the past, our goal here is to monetize this, not to hold it and continue to develop the drug.

Brett Reiss

Okay. Great. Deflecto, there was like a $700,000 restructuring charge. Do you think the restructuring charges are coming to an end and that your aspiration, I think, to make Deflecto an $8 million to $10 million EBITDA business eventually, are we shooting for that? And will we see that in the next 2 years or so?

Martin McNulty

I mean, look, we continue to do restructuring. There's -- I look at the restructuring in 2 ways. One, the market has been a little softer than what we would have liked it to be. We are seeing improvement in the market, and we're encouraged by that improvement. Two, there are a lot of opportunities to restructure the business. As I mentioned in the script, we've fundamentally and structurally improved the earnings power of the business. So as volumes go up, we believe margins on those new volumes or those rebounding volumes is going to be a lot higher.

And in terms of the numbers you threw out, I mean, that is the track we're on is to generate that or better if the market cooperates in earnings potential. We still like the business. We feel we're very enthusiastic about the business.

Brett Reiss

Now the idea that came from the Trump tariffs now that it's possible some of these will be rolled back, will that become a tailwind rather than a headwind for Deflecto?

Martin McNulty

If the tariffs are rolled back, I would expect a tariff rollback to be a tailwind for Deflecto. I would caution that it's Thursday and the elections were 2 days ago. So it's far too premature to have a view on what may or could happen.

Brett Reiss

Okay. And last one, are you at liberty to say which public equity investment you made where you generated that $8.2 million gain, which I thank you for.

Martin McNulty

I wish we could take a victory lap, but we can't. I'm sorry.

Brett Reiss

Okay. I appreciate your patience in answering all my questions and continue the good interesting work. This is not boring.

Martin McNulty

Yes. Thanks, definitely not boring.

Operator

[Operator Instructions] Your next question comes from Adam Eagleston from Formidable Asset Management.

Adam Eagleston

So Brett stole part of my question, which you couldn't answer about the name of the company. Can you give us an idea of what type of ROIC that was at least?

Martin McNulty

I mean the overall ROIC. So we held the position for probably inside 6 months. And it was -- don't hold me to this number, but it was probably a 2.5x or something like that.

Adam Eagleston

Okay. That's great work. At least that gives you a little bit of a victory lap there, I hope.

Martin McNulty

Thanks for asking the question, Adam.

Adam Eagleston

Yes, of course. So with that being said, you still have a large cash pile on the books. You're getting some bids out there on the private side, but getting outbid. Are you maybe going to do a little bit more of this on the public equity side? Or kind of how are you thinking about the cash at this point because we're just not getting a lot of credit for it if you look at the discount between the book value and the current share price?

Martin McNulty

Yes. It's a good question. We are seeing attractive things on the private side. We have been outbid on things. There has been a couple of the things we looked at that we really like that were very irrational private equity buyers out there. We are seeing a lot of interesting things on the public side, and we've been much more active there. As you can see, having spent my career or a good part of my career in private equity, you spend a lot of time on a deal, somebody else buys it, you kind of get a stick in the eye and told to walk away.

On the public side, it tends to be potentially a little more interesting in that even if you don't end up owning the business, if it transacts, then you have the potential to make some money on the public position that you hold. And so we are more active on the public side.

Adam Eagleston

Got it. Okay. That's helpful. Again, we're just not getting a ton of credit there. And then, of course, my last question. So given the discount to book value currently, and it sounds like if I heard you correctly, as we get to the end of the year, there's some accounting machinations that might actually increase that book value ceteris paribus, how are you thinking about cost of capital and capital allocation and specifically a buyback?

Martin McNulty

Yes. I mean when we look at cost of capital, we look at flexibility and opportunity. We do have a lot of cash. And I would say, when you look at the cash number, it's cash, securities, and loans receivables. So it's not all pure cash. The ability to put that cash to work in the public markets as we evaluate bids in the private markets, the return on that capital is pretty attractive. And so when we look at underwriting returns, we're looking at kind of mid- to high teens plus depending upon how we view the risk adjustment associated with any particular opportunity. So the return when we put that money to work is -- we expect to be very attractive.

Adam Eagleston

Got it. So it's mid- to high teens plus, given the current discounts like 20-ish percent, again, I just think that's a lever we should consider pulling.

Martin McNulty

Yes, I understand that. And then I just want to make sure I understand your comment about year-end book value. I just want to make sure I'm answering that question or addressing it appropriately.

Adam Eagleston

Yes. I thought you said there was something with regard to some of the Benchmark accounting that was going to have a -- it sounds like a positive effect on book value. Maybe I misheard.

Martin McNulty

Yes. Sorry, I just want to clarify that. So when we drill a well, there's obviously or hopefully significant future value associated with that well, so a net asset value of that well. When we put it on the books, that potential future value doesn't show up anywhere. It just goes on the book at cost. And then as we produce, there's depreciation and depletion associated with that well and net income. And so the net income is what feeds the book value. At year-end, we'll publish our reserve report, and that is what -- not book value, but that reserve report is what gives investors a view into the actual value of the reserves that we own.

Operator

There are no further questions at this time. This now concludes today's conference call. Thank you for participating. You may now disconnect.