Digimarc Corporation (NASDAQ:DMRC) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 05:00 pm ET

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Digimarc Corporation (NASDAQ:DMRC) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Charles Beck

expect cash usage in the third quarter to be between $6.5 million and $7.5 million, including $400,000 of nonrecurring cash-based severance.

We will continue to closely monitor our product and financial markets and our sales pipeline in relation to our working capital on hand in managing our rate of investment and allocation of resources.

Net loss for Q2 was lower than last year at $7.5 million or $0.62 per diluted share versus a net loss of $7.9 million or $0.68 per diluted share in the second quarter last year.

We used $100,000 of cash and investments during Q2, well below the low end of the range of $1 million to $2 million we provided on our last earnings call. Our cash usage was lower than anticipated as we reduced and deferred spending where we could as well as restructured some vendor contracts.

As noted on our Q1 earnings call, we received a $5 million Paycheck Protection Program loan in April. We spent the entire amount on qualified expenses as defined by the Paycheck Protection Program and plan to file for forgiveness of the entire $5 million loan once the portal to apply for forgiveness is available. Once we file, the bank has 60 days to review our application and then the Small Business Administration has 90 days to approve our application for forgiveness.

We ended the quarter with $30.5 million in cash and investments. We did not raise any capital under the ATM program during the second quarter. We filed a new Form S-3 Registration Statement with the SEC in June for $100 million as our prior Registration Statement was expiring. The old Registration Statement had $49 million remaining for future issuance that has now expired. We continue to believe having a Registration Statement on file with the SEC is prudent to allow us maximum financial flexibility.

We plan to file a Prospectus Supplement to our Form S-3 Registration Statement soon that will allow us to continue to utilize the ATM program, which has $9 million available for future issuance. This filing is purely an administrative requirement as the ATM program was initiated on what is now an expired Registration Statement. We will exercise customary care in determining the best course of action regarding the remainder of the ATM authorization. We have also re-engaged on strategic financing in parallel.

For further discussion of our financial results and risks and prospects for our business, please see our Form 10-Q that we expect to file shortly.

Bruce will now provide his comments on significant business developments, market conditions and execution strategy.

Executive
Bruce Davis

Thanks, Charles. We had a great start to the year and then came COVID-19. The pandemic continues to cast a shadow on our economy and society. Our company has responded as well as it can to the pandemic crisis so far. The first stage of response focused on health and safety of our employees. The next stage focused on productivity of an entirely remote workforce, providing tools, training and support to