Company: DMRC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026996
Chunk: 25

Company: Digimarc CORP
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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   16 
 Total other income, net  $210  $723  $579  $1,251 

       18

   16. Income Taxes
    
   The provision for income taxes reflects current taxes and deferred taxes. The effective tax rate for each of the six months ended  June 30, 2025 and 2024 was 0%.
    
   The valuation allowance against net deferred tax assets as of  June 30, 2025, was $111,023, an increase of $6,662 from $104,361 as of  December 31, 2024. The Company continues to provide for a valuation allowance to offset its net deferred tax assets until such time it is more likely than not the tax assets or portions thereof will be realized.
    
   Excess tax deficiencies of $748 and $218 were recognized in the provision for income taxes for the three months ended  June 30, 2025 and 2024, respectively, which were offset by $748 and $218 of valuation allowance, respectively. 
    
   An excess tax deficiency of $879 and an excess tax benefit of $1,512 were recognized in the provision for income taxes for the six months ended  June 30, 2025 and 2024, respectively, which were offset by $879 and $1,512 of valuation allowance, respectively.
    
   On  July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions, was signed into law in the United States. The Company is currently evaluating the impact the new tax law will have on its financial condition and results of operations, but does not expect the OBBBA to have a material impact on its effective tax rate 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.
    
   The Company is subject from time to time to other legal proceedings and claims arising in the ordinary course of business. At this time, the Company does not believe that the resolution of