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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 2025 Annual Report. The risks and uncertainties described in our 2025 Annual Report are those risks of which we are aware and that we consider to be material to our business, and s, except as disclosed below, such risk factors have not changed materially. If any of thoese 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.
Our financial condition raises substantial doubt about our ability to continue as a going concern.
As of June 30, 2026, we had $8.8 million in cash, cash equivalents, and marketable securities. For the six months ended June 30, 2026, we used cash in operations of $2.6 million. Our financial statements for the six months ended June 30, 2026 have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have a history of incurring negative cash flows and depending on future results we may continue to incur negative cash flows in the future.
These conditions raise substantial doubt about our ability to continue as a going concern. While it is difficult to estimate our future liquidity requirements, we believe our $8.8 million in cash, cash equivalents, and marketable securities at June 30, 2026, will not be sufficient to fund our operations, as currently planned, for at least 12 months from the filing of this Form 10-Q, unless we are able to grow revenues, raise additional capital, and/or reduce planned operating costs. We plan, as necessary, to secure additional capital in the future through increased revenue, partnerships, financing activities, and/or other sources to carry out our planned business activities. If additional capital is not available on acceptable terms, or at all, when required, we may need to take steps to contain costs until such funding is received, which could have a material adverse effect on our business.