Company: DMRC
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001437749-25-014773
Chunk: 16

Company: Digimarc CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 16
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. During the three months ended  March 31, 2025, the Company incurred cash severance costs totaling $3,229, reported as Cash compensation in Note 4 Segment Information, including $1,638 related to Research, development and engineering, $937 related to Sales and marketing, $654 related to General and administration. 
    
   The following table provides the details of costs and liabilities associated with the reorganization announced on  February 26, 2025:

        Balance at December 31, 2024 
        
       $
       —

        Costs incurred 

       3,229

        Cash paid 

       (2,132
       )

        Balance at March 31, 2025 
        
       $
       1,097

   14. Other Income
    
   The following table provides activity in other income, net:

        Three Months Ended March 31, 

        2025 

        2024 

        Interest income 
        
       $
       254

       $
       374

        Refundable tax credit 

       87

       125

        Foreign currency gains (losses) 

       28

       29

        Total other income, net 
        
       $
       369

       $
       528

       18

   15. Income Taxes
    
   The provision for income taxes reflects current taxes and deferred taxes. The effective tax rate for each of the three months ended  March 31, 2025 and 2024 was 0%.
    
   The valuation allowance against net deferred tax assets as of  March 31, 2025, was $107,722, an increase of $3,361 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.
    
   An excess tax deficiency of $131 and an excess tax benefit of $1,730 were recognized in the provision for income taxes for the three months ended  March 31, 2025 and 2024, respectively, which were offset by $131 and $1,730 of valuation allowance, respectively. 

   16. Commitments and Contingencies
    
   Certain of the Company’s product and services agreements