Company: DMRC
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034816
Chunk: 27

Company: Digimarc CORP
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 27
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 new Internal Revenue Code ("IRC") Section 174A. Under Section 174A, commencing with tax years beginning after  December 31, 2024, domestic research or experimental expenditures  may be deducted in the current period rather than capitalized and amortized over multiple years, as previously required under IRC Section 174. As a result of this legislation, the Company intends to deduct its domestic Section 174A expenditures beginning in its 2025 taxable year. The Company does not expect the OBBBA to have a material impact on its effective tax rate, financial condition, or results of operations in 2025.

   17. Commitments and Contingencies
    
   Certain of the Company’s product and services agreements include an indemnification provision for claims from third parties relating to the Company’s intellectual property. Such indemnification provisions are accounted for in accordance with ASC No. 450 “Contingencies.” To date, there have been no claims made under such indemnification provisions.
    
   On  May 8, 2025, a class action lawsuit captioned Ullom v. Digimarc Corp., et al., No: 3:25-cv-00779-JR (the “Ullom Action”) was filed against the Company in the United States District Court for the District of Oregon. The complaint purports to assert claims against the Company and its Chief Executive Officer and Chief Financial Officer pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, on behalf of a putative class of investors who purchased or otherwise acquired the Company’s shares between  May 2, 2024 and  February 26, 2025 (the “class period”). The Ullom Action seeks to recover damages allegedly caused by purported misstatements and omissions regarding the renewal status of a commercial contract, claiming that these alleged misstatements and omissions artificially inflated the price paid for our common stock during the class period.
    
   Subsequently, four derivative lawsuits were filed nominally on the Company’s behalf, including three in the United States District Court for the District of Oregon on  August 29, 2025 (as amended  September 2, 2025) (Franchi v. McCormack et al., No. 3:25-cv-01543-AN),  October 7, 202