UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | |----------------------------------------------------------------------------------------------------|----------------------------------- ...

Digimarc Corporation (NASDAQ:DMRC) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Bob Chamness - Chief Legal Officer Charles Beck - Chief Financial Officer Riley McCormack - Chief Executive Officer Tim Price - Chief Revenue Officer Conference Call Participants Aaron Spychalla - Craig-Hallum Capital Jeff Bernstein - Cowen Robin Knipp - Jamie Montgomery Operator Good afternoon and thank you for participating in today's conference call. Now I will turn the call over to Chief Le ...

Part I: Financial Information [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements, reporting a **$15.4 million** net loss for Q2 2021, an increase from **$7.5 million** in Q2 2020, with total assets decreasing to **$80.5 million** Consolidated Balance Sheet Highlights (In Thousands) | | June 30, 2021 ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | **Total Assets** | 80,548 | 97,028 | | **Total Liabilities** | 15,306 | 13,189 | | **Total Shareholders' Equity** | 65,242 | 83,839 | Consolidated Statements of Operations Highlights (In Thousands, Except Per Share Data) | | Three Months Ended June 30, 2021 ($) | Three Months Ended June 30, 2020 ($) | | :--- | :--- | :--- | | **Total Revenue** | 6,278 | 6,497 | | **Operating Loss** | (15,436) | (7,538) | | **Net Loss** | (15,422) | (7,461) | | **Loss Per Share — basic & diluted** | (0.94) | (0.62) | - Net cash used in operating activities increased to **$12.5 million** for the six months ended June 30, 2021, up from **$10.1 million** in the prior-year period[19](index=19&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, highlighting revenue reliance on Government contracts, increased stock-based compensation from a CEO separation, and a pending **$5.0 million** PPP loan forgiveness application - The company focuses on automatic media identification via its Digimarc Platform, encompassing Barcode, Discover, and Verify software and services[22](index=22&type=chunk) - Government contracts contributed **$7.7 million** (**59%**) to the **$13.0 million** total revenue for the six months ended June 30, 2021, with Central Banks and Walmart as major customers[32](index=32&type=chunk)[36](index=36&type=chunk) - A Separation Agreement with the former CEO in April 2021 led to accelerated stock award vesting and a modification charge, increasing stock-based compensation expense by **$4.0 million** for Q2 2021[43](index=43&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - The company's **$5.0 million** PPP loan forgiveness application, submitted in December 2020, is currently pending SBA review[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights a **3%** Q2 2021 revenue decrease to **$6.3 million** and a widened operating loss due to a **65%** increase in expenses, including **$7.5 million** in non-recurring costs, while affirming **$61.1 million** in cash is sufficient for 12 months - Q2 2021 revenue decreased **3%** year-over-year, while operating expenses surged **65%**, primarily due to **$7.5 million** in non-recurring CEO separation and severance costs[92](index=92&type=chunk) - The COVID-19 pandemic caused project delays with retail customers, and the company applied for forgiveness of its PPP loan obtained for liquidity[88](index=88&type=chunk) - Cash, cash equivalents, and marketable securities decreased to **$61.1 million** at June 30, 2021, from **$77.7 million** at year-end 2020, though management deems current cash sufficient for the next 12 months[120](index=120&type=chunk)[121](index=121&type=chunk)[126](index=126&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Operational performance analysis shows Q2 2021 total revenue decreased **3%** to **$6.3 million** due to a **5%** drop in Government revenue, while operating expenses surged **65%** from **$6.2 million** CEO separation costs and **$1.3 million** severance, widening the operating loss Revenue by Type (Q2 2021 vs Q2 2020) | Revenue Type | Amount ($M) | Change (%) | | :--- | :--- | :--- | | Service | 3.79 | (3)% | | Subscription | 2.49 | (5)% | | **Total** | **6.28** | **(3)%** | Operating Expenses (Q2 2021 vs Q2 2020) | Operating Expense | Amount ($M) | Change (%) | Key Driver | | :--- | :--- | :--- | :--- | | Sales & Marketing | 6.28 | +35% | $1.3M severance costs | | R&D | 4.21 | 0% | - | | General & Administrative | 9.18 | +198% | $6.2M CEO separation costs | | **Total** | **19.67** | **+65%** | Non-recurring costs | - Stock-based compensation expense increased **190%** in Q2 2021 to **$6.7 million**, driven by accelerated vesting of awards related to the former CEO's retirement and organizational changes[114](index=114&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity weakened as cash, equivalents, and marketable securities decreased by **$16.6 million** to **$61.1 million** due to increased cash used in operations (**$12.5 million**), stock repurchases, and capital expenditures, though current capital is deemed sufficient for 12 months with access to additional funds Liquidity Metrics | Metric | June 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Working Capital | $55.2 M | $74.1 M | | Current Ratio | 5.5:1 | 8.6:1 | | Cash, equivalents & marketable securities | $61.1 M | $77.7 M | - Net cash used in operating activities increased to **$12.5 million** for the six months ended June 30, 2021, up from **$10.1 million** in the prior-year period, driven by a higher net loss[125](index=125&type=chunk) - The company has an Equity Distribution Agreement with **$6.9 million** available for future issuance and a shelf registration statement with **$97.9 million** available as of June 30, 2021[130](index=130&type=chunk)[131](index=131&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[139](index=139&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[140](index=140&type=chunk) Part II: Other Information [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine legal proceedings but does not anticipate any current matters will materially adversely affect its financial position, results of operations, or cash flows - Management does not expect current legal matters from ordinary business to materially affect the company's financials[143](index=143&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2020 Annual Report on Form 10-K were reported as of June 30, 2021 - As of June 30, 2021, no material changes to risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K were reported[144](index=144&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **85,790** shares at an average price of **$33.85** per share during Q2 2021 to satisfy tax withholding obligations from employee restricted stock award vesting Share Repurchases (Q2 2021) | Period (2021) | Shares Purchased | Average Price Paid ($) | | :--- | :--- | :--- | | April | 53,356 | 35.00 | | May | 18,635 | 30.50 | | June | 13,799 | 33.89 | | **Total Q2** | **85,790** | **33.85** | - Shares were repurchased to satisfy tax withholding liabilities upon stock option exercises and restricted stock award vesting[145](index=145&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Filed exhibits include the Separation Agreement with the former CEO, the Employment Agreement with the new CEO, and CEO/CFO certifications required by Sarbanes-Oxley Act - Filed exhibits include the Separation Agreement with former CEO Bruce Davis, the Employment Agreement with new CEO Riley McCormack, and CEO/CFO certifications[149](index=149&type=chunk)

Digimarc Corporation (NASDAQ:DMRC) Q1 2021 Earnings Conference Call April 28, 2021 5:00 PM ET Company Participants Riley McCormack - CEO Bruce Davis - Chairman & Chief Executive Officer Charles Beck - Chief Financial Officer Bob Chamness - Chief Legal Officer Conference Call Participants Robin Knipp - Janney Montgomery Operator Good afternoon and thank you for participating in today’s conference call. Now I would like to turn the call over to Chief Legal Officer, Mr. Bob Chamness. Sir, you may proceed. Bob ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the three months ended March 31, 2021, including Balance Sheets, Statements of Operations, Shareholders' Equity, Cash Flows, and Notes, with a reported net loss of **$8.2 million** [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets decreased to **$90.1 million** from **$97.0 million** at year-end 2020, primarily due to reduced cash, while total liabilities remained stable at **$13.4 million** Balance Sheet Items (In thousands) | Balance Sheet Items (In thousands) | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,705 | $19,696 | | Total current assets | $76,620 | $83,832 | | Total assets | $90,148 | $97,028 | | **Liabilities & Equity** | | | | Total current liabilities | $10,750 | $9,776 | | Total liabilities | $13,355 | $13,189 | | Total shareholders' equity | $76,793 | $83,839 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenue for the three months ended March 31, 2021, increased to **$6.7 million** from **$6.2 million** year-over-year, resulting in a net loss of **$8.2 million** or **($0.50)** per share, an improvement from **$8.9 million** or **($0.74)** per share in Q1 2020 Income Statement (In thousands, except EPS) | Income Statement (In thousands, except EPS) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total revenue | $6,700 | $6,189 | | Gross profit | $4,339 | $3,991 | | Operating loss | $(8,226) | $(9,055) | | Net loss | $(8,222) | $(8,908) | | Loss per common share — basic & diluted | $(0.50) | $(0.74) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$6.0 million**, investing activities **$8.1 million**, and financing activities **$0.9 million** for Q1 2021, leading to a **$15.0 million** net decrease in cash, ending the period with **$4.7 million** Cash Flow Activities (In thousands) | Cash Flow Activities (In thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,988) | $(5,749) | | Net cash provided by (used in) investing activities | $(8,133) | $4,815 | | Net cash used in financing activities | $(870) | $(29) | | Net decrease in cash and cash equivalents | $(14,991) | $(963) | | Cash and cash equivalents at end of period | $4,705 | $10,250 | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition, segment information, stock-based compensation, debt, and subsequent events, highlighting reliance on government contracts, a **$5.0 million** PPP loan, and the financial impact of the CEO's retirement - The company's business is centered on the Digimarc Platform, providing automatic identification software and services for various media like packaging, print, and digital content[23](index=23&type=chunk) Revenue by Market (In thousands) | Revenue by Market (In thousands) | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Total Government | $3,885 | $3,952 | | Total Commercial | $2,815 | $2,237 | | **Total** | **$6,700** | **$6,189** | - A consortium of central banks and Walmart Inc. were major customers, accounting for **58%** and **11%** of Q1 2021 revenue respectively[37](index=37&type=chunk)[38](index=38&type=chunk) - Subsequent to the quarter's end, on April 12, 2021, the President and CEO retired, with a separation agreement expected to result in approximately **$6.2 million** in expenses in Q2 2021, including **$4.0 million** in stock-based compensation[77](index=77&type=chunk)[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial results, noting an **8%** revenue increase to **$6.7 million** driven by **19%** subscription growth, a **4%** decrease in operating expenses to **$12.6 million**, and sufficient liquidity for the next 12 months [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Total revenue for Q1 2021 increased **8%** year-over-year to **$6.7 million**, driven by **19%** subscription revenue growth, with gross profit rising **9%** to **$4.3 million** and total operating expenses decreasing **4%** to **$12.6 million** Revenue Analysis (In thousands) | Revenue Analysis (In thousands) | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Service Revenue | $3,784 | $3,738 | 1% | | Subscription Revenue | $2,916 | $2,451 | 19% | | **Total Revenue** | **$6,700** | **$6,189** | **8%** | - The increase in subscription revenue was primarily due to a new commercial contract where most of the minimum value was recognized upfront upon software delivery[96](index=96&type=chunk) Operating Expenses (In thousands) | Operating Expenses (In thousands) | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Sales and marketing | $4,941 | $5,246 | (6)% | | Research, development and engineering | $4,131 | $4,433 | (7)% | | General and administrative | $3,493 | $3,367 | 4% | | **Total operating expenses** | **$12,565** | **$13,046** | **(4)%** | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, total cash, cash equivalents, and marketable securities decreased by **$7.1 million** to **$70.7 million**, primarily due to operations and stock repurchases, though current resources are deemed sufficient for the next 12 months Liquidity Metrics (In thousands) | Liquidity Metrics (In thousands) | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Working capital | $65,870 | $74,056 | | Total cash, cash equivalents and marketable securities | $70,660 | $77,728 | - Cash used in operating activities increased slightly to **$6.0 million** in Q1 2021 from **$5.7 million** in Q1 2020, attributed to the timing of customer receipts and vendor payments[121](index=121&type=chunk) - The company received a **$5.0 million** PPP loan in April 2020 and applied for **100%** forgiveness in September 2020, with a decision from the SBA pending[126](index=126&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[136](index=136&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[137](index=137&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings and claims, but does not anticipate any material adverse effect on its financial position or results of operations - The company does not expect any current legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flows[140](index=140&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - As of March 31, 2021, there were no material changes to the risk factors disclosed in the company's 2020 Annual Report[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company repurchased **19,644** shares of common stock at an average price of **$44.36** per share to satisfy tax withholding liabilities related to restricted stock vesting Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | February 1, 2021 to February 28, 2021 | 19,644 | $44.36 | | **Total Q1 2021** | **19,644** | **$44.36** | - The share purchases were conducted to satisfy required withholding tax liability upon the vesting of restricted stock and were not part of a publicly announced repurchase plan[142](index=142&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Separation Agreement for the retiring CEO and the Employment Agreement for the new CEO, along with required certifications and XBRL data - Key exhibits filed include the Separation Agreement for retiring CEO Bruce Davis and the Employment Agreement for new CEO Riley McCormack, both effective April 12, 2021[144](index=144&type=chunk) Signatures [Signatures](index=34&type=section&id=Signatures) The quarterly report was duly authorized and signed on April 29, 2021, by Charles Beck, Chief Financial Officer and Principal Financial and Accounting Officer of Digimarc Corporation - The report was signed on April 29, 2021, by Charles Beck, Chief Financial Officer[146](index=146&type=chunk)[148](index=148&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2020 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 001-34108 DIGIMARC CORPORATION (Exact name of registrant as specified in its charter) Oregon 26-2828185 (State or other jurisdiction of i ...

Digimarc Corporation (NASDAQ:DMRC) Q4 2020 Earnings Conference Call February 24, 2021 5:00 PM ET Company Participants Bruce Davis - Chairman & Chief Executive Officer Charles Beck - Chief Financial Officer Bob Chamness - Executive Vice President, Sustainability Conference Call Participants Jim Ricchiuti - Needham & Company Rudy Kessinger - Craig-Hallum Capital Robin Knipp - Janney Montgomery Operator Good afternoon and thank you for participating in today’s conference call. Now I will turn the call over to ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | |---------------------------------------------------|------------------------------------------------------------------------------ ...

Digimarc Corporation (NASDAQ:DMRC) Q3 2020 Earnings Conference Call October 28, 2020 5:00 PM ET Company Participants Bruce Davis - Chairman and Chief Executive Officer Charles Beck - Chief Financial Officer Bob Chamness - Executive Vice President, Sustainability Conference Call Participants Jeff Van Rhee - Craig-Hallum Capital Jeff Bernstein - Cowen Steve Tomkins - Oppenheimer & Company Operator Good afternoon and thank you for participating in today’s conference call. Now I will turn the call over to Chair ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | |-------------------------------------------------------------------------------------|------------------------------------------------------- ...