-- Provides Growth Capital as Market for Platform Expands

Digimarc ( 
https://c212.net/c/link/?t=0&l=en&o=2931920-1&h=947111924&u=http%3A%2F%2Fwww.digimarc.com%2F&a=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.

Logo - https://mma.prnewswire.com/media/319963/digimarc_Logo.jpg 

"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," ( 
https://c212.net/c/link/?t=0&l=en&o=2931920-1&h=832359714&u=https%3A%2F%2Fwww.digimarc.com%2Fabout%2Fnews-events%2Fpress-releases%2F2020%2F09%2F08%2Fdigimarc-at-center-of-pan-european-development-of-digital-watermarking-for-improved-plastic-sortation-and-recycling&a=sustainability+initiative+announced+recently%2C 
) 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:  
      o 2,542,079 shares of common stock (equal to 19.9% of common stock
        outstanding) for an aggregate purchase price of $36,529,675 
      o 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
  
   -- Purchase Price Per Share for Common Stock: $14.37/share, a 15% discount
      to the average closing price of Digimarc common stock for the trading
      days from August 24 – September 28, 2020
  
   -- Terms of Series B Convertible Preferred: 
      o Dividends:  7.5% per year, cumulative; payable in cash or, at the
        option of Digimarc, accumulated and added to the Liquidation Preference
        (described below). Also entitled to participate in dividends declared
        or paid on the common stock on an as-converted basis 
      o Conversion:  No conversion unless and until shareholder approval is
        obtained; the preferred will convert automatically into common stock
        following receipt of shareholder approval 
      o Conversion Price:  $14.37/share 
      o Liquidation Preference: Purchase price plus accumulated and accrued but
        unpaid dividends 
      o Payment upon change of control, liquidation or dissolution:  Greater of
        (i) Liquidation Preference, or (ii) amount holder is entitled to
        receive on an as-converted basis 
      o Repurchases or Exchanges: participate in offers to repurchase or
        exchange shares of common stock on an as-converted basis  
      o Voting Rights:  Vote with common on an as-converted basis (calculated
        on the basis of the voting conversion price), subject to 19.9% cap on
        combined voting power of common stock and preferred 
      o Protective Provisions:  A majority of the outstanding preferred will be
        required to approve specified company actions that could adversely
        affect the preferred stock ((i) creation or issuance of parity or
        senior securities, (ii) amendments or modifications to Articles of
        Incorporation that would adversely affect the rights, preferences or
        voting powers of the preferred stock, (iii) certain business
        combinations and transactions in which preferred stock is not cashed
        out, unless the rights, preferences or voting powers of Preferred Stock
        are not adversely affected, and (iv) certain transactions with
        affiliates)
  
   -- Restrictions on Transfer:  Subject to specified exceptions, for one year
      following the closing, TCM|Strategic may not transfer shares of common
      stock issued in connection with the investment.  The same restriction
      applies to the preferred shares for six months following the closing. 
  
   -- Standstill:  Subject to specified exceptions, for one year following the
      close of the transaction, TCM|Strategic is subject to restrictions on,
      among other things, acquiring securities, assets or indebtedness of
      Digimarc, or effecting a tender or exchange offer, merger or other
      business combination involving Digimarc or its assets.  TCM|Strategic and
      its affiliates may, during this time, make additional purchases that,
      aggregated with this investment, would not exceed 27.5% of the
      outstanding common stock.
  
   -- Board Representation:  Riley McCormack will be appointed to the board of
      directors of Digimarc Corporation.  

A special meeting of the shareholders to approve the conversion of the 
preferred shares into common will be scheduled shortly.

About Digimarc 
Digimarc Corporation (NASDAQ: DMRC) is a pioneer in the automatic 
identification of media, including packaging, other commercial print, digital 
images, audio and video. The Digimarc Platform provides innovative and 
comprehensive automatic identification software and services to simplify search 
and transform information discovery through unparalleled reliability, 
efficiency and security. The Digimarc Platform enables applications that 
benefit retailers and consumer brands, national and state government agencies, 
media and entertainment industries, and others. Digimarc is based in Beaverton, 
Oregon, with a growing supplier network around the world. Visit 
www.digimarc.com and follow us @digimarc ( 
https://c212.net/c/link/?t=0&l=en&o=2931920-1&h=282355507&u=https%3A%2F%2Ftwitter.com%2Fdigimarc%3Flang%3Den&a=%40digimarc 
) to learn more about The Barcode of Everything(R).

About TCM|Strategic 
TCM|Strategic is an investment fund managed by Riley McCormack.  Prior to 
founding TCM|Strategic, Mr. McCormack was the founder, CEO and PM of Tracer 
Capital Management, a $1.5 billion NY-based global Technology, Media and 
Telecommunication Hedge Fund.  Prior to Tracer, Mr. McCormack was a partner at 
Coatue Capital and a High Yield research analyst at Morgan Stanley.  Mr. 
McCormack graduated Summa Cum Laude from the Wharton School, University of 
Pennsylvania, where he was a Benjamin Franklin Scholar and a Joseph Wharton 
Scholar.

Forward-looking Statements and Additional Information 
This press release includes "forward-looking statements" within the meaning of 
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange 
Act"), and Section 27A of the Securities Act of 1933. These statements include, 
without limitation, statements regarding the investment by TCM|Strategic and 
participation of its principal investor, the current and future value of the 
Company and its businesses, the continued expansion of the market for our 
platform, various initiatives, the adequacy of our working capital and the 
increase in the value of our growth business.  Such forward-looking statements 
include all other statements that are not historical facts, as statements that 
are preceded by, followed by or that include words or phrases such as "may," 
"might," "plan," "should," "could," "expect," "anticipate," "intend," 
"believe," "project," "forecast," "estimate," "continue," and variations of 
such terms or similar expressions. These forward-looking statements are based 
on our expectations and beliefs concerning future events impacting us, and are 
subject to uncertainties and factors which are difficult to predict and, in 
many instances, are beyond our control. As a result, our actual results could 
differ materially from those expressed in or implied by any such 
forward-looking statements, including as a result of the size and growth of our 
markets; protection, development and enforcement of our intellectual property 
portfolio; adoption or endorsement of our technology by leading companies in 
the retail and consumer products industries or standard-setting bodies or 
institutions; our future profitability; competition from larger companies or 
alternative technologies; and acceptance in our markets of our revenue models 
and pricing structures.  Investors are cautioned not to place undue reliance on 
such statements, which reflect management's opinions only as of the date of 
this release. More detailed information about risk factors that may affect 
actual results are outlined in the company's Form 10-K for the year ended 
December 31, 2019, and in subsequent quarterly reports on Form 10-Q and current 
reports on Form 8-K filed with the SEC and available at www.sec.gov. 
Forward-looking statements speak only as of the dates on which they are made 
and except as required by law, Digimarc undertakes no obligation to publicly 
update or revise any forward-looking statements to reflect events or 
circumstances that may arise after the date of this release.

In addition to our forward-looking statements, we may reference or disclose 
from time to time statements or information provided to or about us by our 
investors, partners and actual or prospective customers. Such statements and 
information reflect the beliefs, expectations, views and opinions of the party 
making such statements, not of the Company.  The Company cannot verify or vouch 
for such information, and investors are cautioned not to place undue reliance 
on any such statements.

SOURCE: Digimarc Corporation

CONTACT: Charles Beck, CFO, charles.beck@digimarc.com, +1 503-469-4721