Company: DMRC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026996
Chunk: 48

Company: Digimarc CORP
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 48
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 $3.1 million commercial contract, which will most likely result in a reduction of up to $3.0 million in annual revenue.

We expect government service revenue in fiscal 2025 to be $1.7 million to $1.9 million lower than fiscal 2024 due to a smaller approved budget from the Central Banks for program work in 2025. 

We expect our expenses in fiscal 2025 to be significantly lower than fiscal 2024 due to the reorganization we announced on February 26, 2025, which is expected to reduce our cash expenses by approximately $16.5 million on an annualized basis. We have also identified approximately $5.5 million of other annualized cash cost savings that have been implemented or are being implemented later this year. 

Registered Direct Offering

On February 24, 2024, we entered into purchase agreements with certain investors providing for the issuance and sale by us of 929 thousand shares of our common stock in a registered direct stock offering. The common shares were offered at a price of $35.00 per share, and the gross cash proceeds to us were $32.5 million. We incurred $0.3 million of legal costs related to the offering. The closing of the registered direct offering occurred on February 27, 2024.

Employee Stock Purchase Plan

On February 25, 2025, the Company’s Board of Directors adopted the 2025 Employee Stock Purchase Plan (“ESPP”). The Company reserved a total of 250 thousand shares and as of June 30, 2025, there were 250 thousand shares authorized and available for future issuance under the ESPP. Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to 15% of their salary for the purchase of the Company’s common stock at a discounted price per share. The Company’s current offering period began on June 16, 2025, with the first purchase period ending on December 15, 2025. The stock-based compensation expense and payroll withholding for the ESPP during the three and six months ended June 30, 2025 were not material. 

Incentive Plan Amendment

On May 7, 2025, the Company’s shareholders approved an amendment to the Digimarc Corporation 2018 Stock Incentive Plan (as amended, the “2018 Plan”) to, among other things, increase