Company: DMRC
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001437749-25-005471
Chunk: 117

Company: Digimarc CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 117
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 carrying amount or fair value less costs to sell.

   Research and Development   Research and development costs are expensed as incurred in accordance with ASC 730 “Research and Development.”

   Software Development Costs   Under ASC 985 “Software,” software development costs are to be capitalized beginning when a product’s technological feasibility has been established and ending when a product is made available for general release to customers. To date, the establishment of technological feasibility of the Company’s products has occurred shortly before general release and, therefore, software development costs qualifying for capitalization have been immaterial. Accordingly, the Company has not capitalized any software development costs and has charged all such costs to research and development expense.

   Patent Costs   Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at award date, which varies depending on the pendency period of the application. Capitalized patent costs, also referred to as patent prosecution costs, include internal legal labor, professional legal fees, government filing fees and translation fees related to expanding the Company’s patent portfolio.   Costs associated with the maintenance and annuity fees of patents are accounted for as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent.

   Revenue Recognition   See Note 3 for detailed disclosures of the Company’s revenue recognition policy.

   Stock-Based Compensation   The Company accounts for stock-based compensation in accordance with ASC 718 “Compensation—Stock Compensation,” which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including restricted stock awards, restricted stock units and performance stock units based on estimated fair values. The estimated fair value of stock-based awards is recognized over the vesting period of the award using the straight-line method.

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        DIGIMARC CORPORATION

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

        (In thousands, except per share data)

   Income Taxes   The Company accounts for income taxes in accordance with ASC 740 “Income Taxes” utilizing the asset and liability method. Under the asset and liability method, deferred income taxes reflect the future tax consequences of differences between the tax basis of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities