Digimarc Corporation

Item 1A. Risk Factors

Our business, financial condition, results of operations and cash flows may be affected by a number of factors. Detailed information about risk factors that may affect Digimarcs actual results are set forth in Part I, Item 1A: Risk Factors of our 2024 Annual Report. The risks and uncertainties described in our 2024 Annual Report are those risks of which we are aware and that we consider to be material to our business. If any of those risks and uncertainties develop into actual events, our business, financial condition, results of operations or cash flows could be materially adversely affected. In that case, the trading price of our common stock could decline. As of June 30, 2025, except asIn addition to the other information set forth below,in there have been no material changes to the ris Quarterly Report on Form 10-Q and in Part I, Item 1A: Risk fFactors previously disclosed in oof our 2024 Annual Report, you should carefully consider the additional risk factor below.

Actions of activist shareholders and securities litigation couldan be costly and time-consuming, divert managements attention and resources, and continue to have an adverse effect on our business.

While we value open dialogue and input from our shareholders, activist shareholders have in the past and could tin the future take actions that could be costly and time-consuming for us, disrupt our operations, and divert the attention of our board of directors, management, and employees. TheseSuch actions could include public proposals and requests for potential nominations of candidates for election to our board of directors, requests to pursue a strategic combination or other transaction, or other special requests. As a result, we have retained, and may in the future retain, additional services of various professionals to advise us in these matters, including legal, financial and communications advisers, the costs of which have negatively impacted our quarterly financial results, and may negatively impact our financial results in the future. In addition, perceived uncertainties as to our future direction, strategy, or leadership created as a consequence of activist shareholder initiatives maycan result in the loss of potential business opportunities, harm our ability to attract new or retain existing investors, customers, directors, employees or other partners, and cause our stock price to experience periods of volatility or otherwise be adversely affected. VolWe are the subject of securities litigatilion, and volatility in our stock price may in the future cause us to become the target of additional securities litigation, which could result in substantial costs and divert managements attention and the attention and resources of our board of directors from our business.

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