Company: DMRC
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034816
Chunk: 8

Company: Digimarc CORP
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 8
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 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments  may be applied prospectively, retrospectively, or through a modified transition approach. The Company is currently evaluating the effect of adopting this ASU on the Company’s consolidated financial statements and disclosures.

   2. Fair Value of Financial Instruments
    
   The estimated fair values of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable and other accrued liabilities, approximate their carrying values due to the short-term nature of these instruments. The Company’s marketable securities are classified as available-for-sale and are reported at fair value. Unrealized holding gains and losses are excluded from earnings and are reported net of tax in “accumulated other comprehensive loss” in the Consolidated Balance Sheets until realized. Realized gains and losses are included in “other income, net” in the Consolidated Statements of Operations and Comprehensive Loss and are derived using the specific identification method for determining the cost of marketable securities sold.
    
   In accordance with Accounting Standards Codification (“ASC”) No. 820 “Fair Value Measurements and Disclosures”, the Company defines its fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that  may be used to measure fair value, in the following:
    
     •  Level 1 Pricing inputs are quoted prices available in active markets for identical investments as of the reporting date. 
  
     •  Level 2 Pricing inputs are quoted for similar investments, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. 

     •  Level 3 Pricing inputs are unobservable for the investment; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. 

   The Company’s fair value hierarchy for its cash equivalents and marketable securities was as follows:

     September 30, 2025   Level 1    Level 2    Level 3    Total  
 Money market securities  $1,604  $—  $—  $1,604 
 Commercial paper   —   4,390   —   4,390 
 Federal agency notes   —