TCM|Strategic Partners Invests $53.5 million in Digimarc

Provides Growth Capital as Market for Platform Expands

BEAVERTON, Oregon, Sept. 29, 2020 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), creator of the Digimarc Platform for digital identification and detection, today announced a $53.5 million investment from TCM|Strategic Partners led by long time shareholder Riley McCormack.

"We are very pleased by the vote of confidence evidenced in this investment from TCM|Strategic Partners and look forward to welcoming its principal investor, Riley McCormack, to our Board of Directors.  Riley is a long time shareholder, astute investor, and an extremely diligent student of the company and its strategy who will help guide the company through continuing expansion of the market for our platform, such as the massive sustainability initiative announced recently," said Bruce Davis, Chairman and CEO. "This investment gives us adequate working capital for the foreseeable future, allowing management to focus all its energy on growth of the business and continuing roll out of Digimarc Barcode as successor to traditional barcodes."

Mr. McCormack explained, "TCM|Strategic's decision to make this investment was the result of two conclusions:

• The Legacy Business and the Growth Business are each worth more today than the current enterprise value of the entire company.
   
• The Growth Business has not only the opportunity but also the high likelihood of being worth significantly more in the future."

TCM purchased approximately 2.5 million shares of common stock, representing 19.9% of the company's outstanding common stock, with the balance of the investment to be made through the purchase of convertible preferred shares, subject to the satisfaction of customary closing conditions.  The convertible preferred shares will convert automatically following shareholder approval required under Nasdaq Listing Rules 5635(b) and 5635(d).

A summary of the principal terms of the investment follow.  Please refer to the Form 8-K and documents filed with the SEC for additional information:

• Investment Amount:  $53.5 million
   
• Securities Purchased: 
• 2,542,079 shares of common stock (equal to 19.9% of common stock outstanding) for an aggregate purchase price of $36,529,675
• 16,970 shares of Series B Convertible Preferred Stock for an aggregate purchase price of $16,970,000, subject to the satisfaction of customary closing conditions