Company: IDCC
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001405495-25-000063
Chunk: 71

Company: InterDigital, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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 a defined period.  Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our condensed consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of September 30, 2025 and December 31, 2024 is disclosed within Note 3, "Cash, Concentration of Credit Risk and Fair Value of Financial Instruments." Our repayment obligations are contingent upon future royalty revenue generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement.Under ASC 470, amounts recorded as debt are amortized under the interest method. At each reporting period, we will review the discounted expected future cash flows over the life of the obligation. The Company made an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as interest expense within “Interest Expense” in the condensed consolidated statements of income. The effective interest rate as of the acquisition date was approximately 14.5%. This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams. During the three and nine months ended September 30, 2025, we recognized $0.6 million and $1.4 million, respectively, of interest expense related to this debt, compared to $0.6 million and $2.2 million during the three and nine months ended September 30, 2024, respectively. This was included within “Interest Expense” in the condensed consolidated statements of income. Any future payments made to CPPIB Credit, or additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance accordingly. We made $1.3 million and $12.9 million in payments to CPPIB Credit during the nine months ended September 30, 2025 and 2024, respectively.

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Technicolor Contingent ConsiderationAs part of the Technicolor Patent Acquisition, we entered into a revenue-sharing arrangement