Company: IDCC
Filing Date: 2025-02-06
Form Type: 10-K
Source: 0001405495-25-000011
Chunk: 89

Company: InterDigital, Inc.
Filing Date: 2025-02-06
Form: 10-K
Item: Item 7
Chunk 89
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 of our technology.

Notes, Hedge, and Warrant Transactions

Refer to Note 10, "Obligations" within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of capitalized terms used below.

2024 Notes and Related Note Hedge and Warrant Transactions

On June 1, 2024, the 2024 Notes matured and we repaid $126.2 million in aggregate principal in cash and issued 0.3 million common shares to settle the remaining obligation. This issuance was effectively offset by our receipt of 0.3 million shares from the settlement of the 2024 Note Hedge Transactions. Additionally, the 2024 Warrant Transactions settled, on a net-share basis during September through December 2024 resulting in the issuance of 0.5 million shares.

2027 Notes and Related Note Hedge and Warrant Transactions

During 2024, the 2027 Notes had a dilutive impact of 2.2 million shares, which are offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental shares being issued upon conversion. However, under GAAP, we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted average diluted shares outstanding. 

As of December 31, 2024, 5.9 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted average strike price of $106.22 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028. Assuming a share price of $175, we would issue 2.3 million of common shares related to the 2027 Warrant Transactions. Refer to "Financial Position, Liquidity, and Capital Resources — Convertible Notes" for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions.

Intellectual Property Rights Enforcement

If we believe a party is required to license our patents in order to manufacture, use and/or sell certain products or services and such party refuses to do so, we typically offer such party to have royalties, or other terms, set by third party adjudicators (such as arbitrators).  If the party refuses that offer and we believe they are unwilling to agree to a patent license on a fair, reasonable and non-discrimin