What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-08 compared with 2021-08-06 · 275 added, 325 removed, 846 unchanged (41% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Licensing, services and software

14 unchanged sentences

Loss before taxes

Benefit from income taxes

Net income (loss)

Provision for (benefit from) income taxes

net loss attributable to noncontrolling interest

Net income (loss) attributable to the Company

Income (loss) per share attributable to the Company:

Net loss attributable to the Company

Loss per share attributable to the Company:

Weighted average number of shares used in per share

4 unchanged sentences

XPERI HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Three Months Ended

Six Months Ended

Net income (loss)

Nine Months Ended

September 30,

Other comprehensive income (loss), net of tax:

Change in foreign currency translation adjustment

Net unrealized loss on available-for-sale

Net unrealized gain (loss) on available-for-sale

debt securities

Other comprehensive income (loss), net of tax

Comprehensive income (loss)

Comprehensive loss

comprehensive loss attributable to noncontrolling interest

Comprehensive income (loss) attributable to the Company

Comprehensive loss attributable to the Company

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except for par value)

September 30,

Current assets:

39 unchanged sentences

5,407 shares)

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Retained earnings

6 unchanged sentences

(in thousands)

Six Months Ended

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation of property and equipment

3 unchanged sentences

Loss on debt extinguishment

Patent assets received in lieu of cash

Changes in operating assets and liabilities:

17 unchanged sentences

Repayment of debt

Debt refinancing costs

Proceeds from debt, net of debt discount and issuance costs

16 unchanged sentences

Total Company Stockholders' Equity

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Treasury Stock

1 unchanged sentence

Noncontrolling

Balance at April 1, 2021

Income (Loss)

Balance at July 1, 2021

Issuance of subsidiary shares to noncontrolling interest

Other comprehensive income

Other comprehensive loss

Cash dividends paid on common stock ($ 0.05 per share)

Issuance of common stock in connection with exercise of stock options

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

2 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2021

Balance at September 30, 2021

Total Company Stockholders' Equity

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Treasury Stock

4 unchanged sentences

Issuance of subsidiary shares to noncontrolling interest

Net income (loss)

Other comprehensive loss

6 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2021

Balance at September 30, 2021

XPERI HOLDING CORPORATION

2 unchanged sentences

Total Company Stockholders' Equity

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Treasury Stock

1 unchanged sentence

Noncontrolling

Balance at April 1, 2020

Balance at July 1, 2020

Issuance of subsidiary shares to noncontrolling interest

1 unchanged sentence

Cash dividends paid on common stock ($ 0.05 per share)

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

1 unchanged sentence

Repurchases of common stock

Common stock issued in merger transaction

Retirement of treasury stock

Stock-based compensation expense

Balance at June 30, 2020

Balance at September 30, 2020

Total Company Stockholders' Equity

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Treasury Stock

13 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2020

Balance at September 30, 2020

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

21 unchanged sentences

These financial statements should be read in conjunction with the annual audited financial statements and notes thereto as of and for the year ended December 31, 2020, included in the Form 10-K.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any future period and the Company makes no representations related thereto.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any future period and the Company makes no representations related thereto.

In the fourth quarter of 2018, the Company funded a new subsidiary, Perceive Corporation (“Perceive”), which was created to focus on delivering edge inference solutions.

As of June 30, 2021, the Company’s ownership interest in Perceive was approximately 81 %.

As of September 30, 2021, the Company’s ownership interest in Perceive was approximately 80 %.

The operating results of Perceive have been consolidated in the Company’s condensed consolidated financial statements for all periods presented.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes in the Company’s significant accounting policies during the six months ended June 30, 2021, as compared to the significant accounting policies described in the Form 10-K.

There have been no significant changes in the Company’s significant accounting policies during the nine months ended September 30, 2021, as compared to the significant accounting policies described in the Form 10-K.

Use of Estimates

4 unchanged sentences

The COVID-19 pandemic has resulted in a global slowdown of economic activity which has reduced demand for a broad variety of goods and services, while disrupting sales channels, marketing activities and supply chains.

The Company’s business operations have been negatively impacted by the COVID-19 pandemic and related events, and the Company expects this disruption may continue to have a negative impact on its revenue and results of operations, even as governments ease restrictions and economic activities gradually resume.

The Company’s business operations have been negatively impacted by the COVID-19 pandemic and related events, and the Company expects this disruption may continue to have a negative impact on its revenue and results of operations, especially in light of the spread of the highly contagious Delta variant.

The full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic;

2 unchanged sentences

the continued or renewed imposition of protective public safety measures;

the continuing disruption of the global supply chain affecting the Company’s industry;

and the impact of the pandemic on the global economy and demand for consumer products.

22 unchanged sentences

In situations where foreign withholding taxes are withheld by the Company’s licensee, revenue is recognized gross of withholding taxes that are remitted directly by the licensee to a local tax authority.

Arrangements with Multiple Performance Obligations

Some of the Company’s contracts with customers contain multiple performance obligations.

4 unchanged sentences

The allocation of transaction price among performance obligations in a contract may impact the amount and timing of revenue recognized in the Consolidated Statements of Operations during a given period.

Contract Modifications

Contracts may be modified due to changes in contract specifications or customer requirements.

Contract modifications occur when the change in terms either creates new enforceable rights and obligations or changes existing enforceable rights and obligations.

The effect of a contract modification for goods and services that are not distinct in the context of the contract on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis.

Contract modifications that result in goods or services that are distinct from the existing goods or services are accounted for as separate contracts if they are sold at their stand-alone selling price, or otherwise prospectively.

Variable Consideration

When a contract with a customer includes a variable transaction price, an estimate of the consideration which the Company expects to be entitled to for transferring the promised goods or services is made at contract inception.

Depending on the terms of the contract, variable consideration is estimated using either the expected value approach or the most likely value approach.

Under either approach to estimating variable consideration, the estimate considers all information (historical, current and forecast) that is reasonably available at contract inception.

The amount of variable consideration is estimated at contract inception and updated as additional information becomes available.

The amount of variable consideration is estimated at contract inception by considering all available information (historical, current and forecast) at the time and updated as additional information becomes available.

The estimate of variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Subsequent changes in the transaction price resulting from changes in the estimate of variable consideration are allocated to the performance obligations in the contract on the same basis as at contract inception.

Certain payments to licensees, retailers and distributors, such as market development funds and revenue shares, are treated as a reduction of the transaction price, and therefore a reduction to revenue, unless the payment is in exchange for a distinct good or service that the licensee, retailer or distributor transfers to the Company.

When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of IP, or when a license of IP is the predominant item to which the variable consideration relates, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied.

Nature of Goods and Services

The following is a discussion of the principal activities from which the Company generates its revenue.

License Agreements

Description of Revenue-Generating Activities

The Company operates in two business segments.

In its Product segment, the Company licenses its audio, digital radio, imaging, edge-based machine learning and multi-channel video user experience (“UX”) solutions.

Within this segment, the Company groups its business into three categories based on the products delivered and customers served:

Consumer Experience, Connected Car, and Pay-TV.

In its IP Licensing segment, the Company licenses (i) its media patent portfolios (“Media IP licensing”) to multichannel video programming distributors, over-the-top video service providers, consumer electronics manufacturers, social media, and other new media companies and (ii) its semiconductor technologies and associated

patent portfolios (“Semiconductor IP licensing”) to memory, sensors, radio frequency (“RF”) component, and foundry companies.

The Company licenses its technologies and portfolios under three revenue models:

(i) fixed-fee Media IP licensing, (ii) fixed-fee or minimum guarantee Product or Semiconductor IP licensing, and (iii) per-unit or per-subscriber royalty licenses.

In its Product segment, the Company derives the majority of its revenue from licensing its technology to customers primarily through Technology License arrangements and Technology Solutions arrangements.

For Technology License arrangements, the customer obtains rights to the technology delivered at the commencement of the agreement.

For Technology Solutions arrangements, the customer receives access to a platform, media or data that includes frequent updates, where access to such updates is critical to the functionality of the technology.

In its IP Licensing segment, the Company licenses its innovations to leading companies in the media and semiconductor industries.

IP Licensing arrangements include access to one or more of the Company’s foundational patent portfolios and may also include access to some of its industry-leading technologies and proven know-how.

Technology License Arrangements

The Company licenses its audio, digital radio and imaging technology to consumer electronics (“CE”) manufacturers, automotive manufacturers or their supply chain partners.

The Company generally recognizes royalty revenue from licenses based on units shipped or manufactured.

Revenue is recognized in the period in which the customer’s sales or production are estimated to have occurred.

This may result in an adjustment to revenue when actual sales or production are subsequently reported by the customer, generally in the month or quarter following sales or production.

Estimating customers’ quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis.

Certain customers enter into fixed fee or minimum guarantee agreements, whereby customers pay a fixed fee for the right to incorporate the Company’s technology in the customer’s products over the license term.

In arrangements with a minimum guarantee, the fixed fee component corresponds to a minimum number of units or dollars that the customer must produce or pay, with additional per-unit fees for any units or dollars exceeding the minimum.

The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the technology and begins to benefit from the licens e , net of the effect of any significant financing components calculated using customer-specific, risk-adjusted lending rates, with the related interest income being recognized over time on an effective rate basis.

For minimum guarantee agreements where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer will exceed the minimum and adjusts the revenue based on actual usage once that is reported by the customer.

Technology Solutions Arrangements

Technology Solutions customers are primarily multi-channel video service providers, CE manufacturers, and end consumers.

Technology Solutions revenue is primarily derived from licensing the Company’s pay-TV solutions, Personalized Content Discovery, enriched Metadata, and viewership data;

selling TiVo-enabled devices like the Stream 4K;

and advertising.

For Technology Solutions, the Company provides on-going media or data delivery, hosting and access to its platform, and software updates.

For these solutions, the Company generally receives fees on a per-subscriber per-month basis or as a fixed fee, and revenue is recognized during the month in which the solutions are provided to the customer.

For most of the Technology Solutions offerings, substantially all functionality is obtained through the Company’s continuous hosting and/or updating of the data and content.

In these instances, the Company typically has a single performance obligation related to these ongoing activities in the underlying arrangement.

For those arrangements that include multiple performance obligations, the Company allocates the consideration as described above and recognizes revenue for each distinct performance obligation when control of the promised goods or services is transferred to the customer.

IP License Arrangements

The Company licenses its IP portfolios under three revenue models:

(i) fixed-fee Media IP licensing, (ii) fixed-fee or minimum guarantee Semiconductor IP licensing, and (iii) per-unit or per-subscriber IP licenses.

Fixed-fee Media IP licensing

5 unchanged sentences

As the release from past patent infringement claims is generally satisfied at execution of the agreement, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the agreement is executed and the amount of transaction price allocated to the future license is recognized ratably over the future license term.

Fixed-fee or minimum guarantee Semiconductor IP or Product licensing

The Company enters into Semiconductor IP or Product licenses that have fixed fee or minimum guarantee arrangements, whereby licensees pay a fixed fee for the right to incorporate the Company’s technology in the licensee's products over the license term.

Fixed-fee or minimum guarantee Semiconductor IP licensing

The Company enters into Semiconductor IP licenses that have fixed fee or minimum guarantee arrangements, whereby licensees pay a fixed fee for the right to incorporate the Company’s IP technologies in the licensee’s products over the license term.

In most cases, the customer pays the fixed license fee in specified installments over the license term.

For both fixed fee and minimum guarantee agreements for Semiconductor IP or Product licensing, the Company recognizes the full fixed fee as revenue at the beginning of the license term, when the licensee has the right to use the IP and begins to benefit from the license.

If the contract term of a fixed fee or minimum guarantee arrangement is longer than one year, the Company also considers the scheduled payment arrangements to determine whether a significant financing component exists.

In general, if the payment arrangements extend beyond the initial twelve months of the contract, the Company treats a portion of the payments as a significant financing component.

The discount rate used for each arrangement reflects the rate that would be used in a separate financing transaction between the Company and the licensee at contract inception and takes into account the credit characteristics of the licensee and market interest rates as of the date of the agreement.

As such, the amount of fixed fee revenue recognized at the beginning of the license term will be reduced by the calculated financing component.

As payments are received from the licensee, the Company recognizes a portion of the financing component as interest income, reported as other income and expense in the Consolidated Statements of Operations.

Per-unit or per-subscriber royalty licenses

The Company recognizes revenue from per-unit or per-subscriber royalty licenses in the period in which the licensee's sales or production are estimated to have occurred, which results in an adjustment to revenue when actual sales or production are subsequently reported by the licensee, which is generally in the month or quarter following usage or shipment.

The Company generally recognizes revenue from royalty licenses on a per-subscriber per-month model for licenses with service providers and a per-unit shipped or manufactured model for licenses with CE manufacturers and memory, sensors, RF component, and foundry companies.

Compliance Audits

The Company actively monitors and enforces its IP, including seeking appropriate compensation from customers that have under-reported royalties owed under a license agreement and from third parties that utilize the Company’s intellectual property without a license.

As a result of these activities, the Company may, from time to time, recognize revenue from payments resulting from periodic compliance audits of licensees for underreporting royalties incurred in prior periods, as part of a

settlement of a patent infringement dispute, or from legal judgments in a license dispute.

These recoveries and settlements may cause revenue to be higher than expected during a particular reporting period and such recoveries may not occur in subsequent periods.

The Company recognizes revenue from recoveries when a binding agreement has been executed and the Company concludes collection under that agreement is likely .

Arrangements with Multiple System Operators for the TiVo Service

The Company's arrangements with multiple system operators (“MSOs”) typically include software customization and set-up services, associated maintenance and support, limited training, post-contract support, TiVo-enabled DVRs, non-DVR Set-Top Boxes (“STBs”), and the TiVo service.

The Company has two types of arrangements with MSOs that include technology deployment and engineering services.

In instances where the Company hosts the TiVo service, non-refundable payments received for customization and set-up services are deferred and recognized as revenue ratably over the hosting term.

The related cost of such services is capitalized to the extent it is deemed recoverable and amortized to cost of revenue over the same period as the related TiVo service revenue is recognized.

The Company estimates the stand-alone selling prices for training, DVRs, non-DVR STBs and maintenance and support based on the price charged in stand-alone sales of the promised good or service.

The stand-alone selling price for the TiVo service is determined by considering the size of the MSO and expected volume of deployment, market conditions, competitive landscape, internal costs and total gross margin objectives.

For a term license to the TiVo service, the Company receives license fees for the hosted TiVo service on either a per-subscriber per-month basis or a fixed fee.

The Company recognizes revenue from per-subscriber per-month licenses during the month the TiVo service is provided to the customer and recognizes revenue from fixed fee licenses ratably over the license period.

In arrangements where the Company does not host the TiVo service, which includes engineering services that are essential to the functionality of the licensed technology or involve significant customization or modification of the software, the Company recognizes revenue as progress toward completion is made using an input method based on the ratio of costs incurred to date to total estimated costs of the project.

Project costs are primarily labor related to specific activities required for the project.

Costs related to general infrastructure or uncommitted platform development are not included in the project cost estimates and are expensed as incurred.

Estimating project costs requires forecasting costs, tracking progress toward completion and projecting the remaining effort to complete the project.

These estimates are reassessed throughout the term of the arrangement, and revisions to estimates are recognized on a cumulative catch-up basis when the changed conditions become known.

Provisions for losses are recorded when estimates indicate it is probable that a loss will be incurred for the contract.

The Company generally recognizes revenue from license fees for the TiVo service that the Company does not host on a per-subscriber per-month basis due to the recognition constraint on intellectual property usage-based royalties.

Subscription Services

Subscription services revenue primarily consists of fees to provide customers with access to one or more of the Company's hosted products such as its iGuide interactive program guide (“IPG”), advanced search and recommendations, metadata and analytics products, including routine customer support.

The Company generally receives per-subscriber per-month fees for its iGuide IPG and search and recommendations service and revenue is recorded in the month the customer uses the service.

The Company generally receives a monthly or quarterly fee from its metadata or analytics licenses for the right to use the metadata or access its analytics platform and to receive regular updates.

Revenue from the Company's metadata and analytics service is recognized ratably over the subscription period.

TiVo-enabled DVRs and non-DVRs, including TiVo Stream 4K, and related TiVo Service

The Company sells TiVo-enabled DVRs and non-DVRs and the related service directly to customers through sales programs via the TiVo.com website and licenses the sale of TiVo-enabled DVRs and non-DVRs through a limited number of retailers.

All customers have the right to cancel their subscription to the TiVo service within 30 days of subscription activation for a full refund.

After the initial subscription period for a DVR, all customers have various pricing options when they renew their subscription.

The transaction price allocated to the DVR and non-DVR is recognized as revenue upon shipment to the customer and the transaction price allocated to the TiVo service is recognized as revenue ratably over the service period.

Subscription revenue from lifetime subscriptions are recognized ratably over the estimated useful life of the DVR or non-DVR associated with the subscription.

The estimated useful life for a DVR and non-DVR depends on a number of assumptions, including but not limited to, customer retention rates, the timing of new product introductions and historical experience.

The Company periodically reassesses the estimated useful life of DVRs and non-DVRs.

When the actual useful life of a DVR or a non-DVR materially differs from the Company's estimate, the estimated useful life of the DVR or non-DVR is adjusted, which could result in the recognition of revenue over a longer or shorter period of time.

Significant Judgments

Determining whether promises to transfer multiple goods and services in contracts with customers are considered distinct performance obligations that should be accounted for separately requires significant judgment, including related to the level of integration and interdependency between the performance obligations.

In addition, judgment is necessary to allocate the transaction price to the distinct performance obligations, including whether there is a discount or significant financing component to be allocated based on the relative stand-alone selling price of the various performance obligations.

Significant judgment is required to determine the stand-alone selling price for each distinct performance obligation when an observable price is not available.

In instances where stand-alone selling price is not directly observable, such as when the Company does not sell the good or service separately, the stand-alone selling price is determined using a range of inputs that includes market conditions and other observable inputs.

More than one stand-alone selling price may exist for individual goods and services due to the stratification of those goods and services, considering attributes such as the size of the customer and geographic region.

Due to the nature of the work required to be performed on some performance obligations, significant judgment may be required to determine the transaction price.

It is common for the Company's license agreements to contain provisions that can either increase or decrease the transaction price.

These variable amounts are generally estimated based on usage.

In addition to estimating variable consideration, significant judgment is necessary to identify forms of variable consideration, determine whether the variable consideration relates to a sales-based or usage-based royalty of intellectual property and determine whether, and when to include estimates of variable consideration in the transaction price.

For certain licensees, royalty revenue is generated based on a licensee’s production or shipment of licensed products incorporating the Company’s intellectual property, technologies or software.

Licensees with a per-unit or per-subscriber arrangement pay a per-unit royalty for each product manufactured or sold, or for each subscriber, as set forth in its license agreement.

Licensees generally report manufacturing, sales or subscriber information in the month or quarter subsequent to when the production, shipment or subscription activity takes place.

The Company estimates the royalties earned each quarter based on its forecast of manufacturing and sales activity by its licensees in that quarter.

Any differences between actual royalties owed by a licensee and the Company’s estimate are recognized when the licensee’s royalty report is received.

Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities manufactured, shipped or subscribed by licensees, which could have a material impact on the amount of revenue recognized.

Some hardware products are sold with a right of return and, in certain circumstances, credits or incentives may be provided to customers or resellers at the time of sale.

Such credits and incentives are accounted for as variable consideration and recognized as a reduction to revenue.

Estimates of returns, credits and incentives are made at contract inception and updated each reporting period.

In contracts where the Company does not host the TiVo service and that include engineering services that are essential to the functionality of the licensed technology or involve significant customization or modification of software, or where the Company provides non-recurring engineering (“NRE”) services, the Company recognizes revenue as progress toward completion occurs using an input method based on the ratio of costs incurred to date to total estimated costs of the project.

Significant judgment is required to estimate the remaining effort to complete the project.

These estimates are reassessed throughout the term of the arrangement.

Management evaluates its estimates, inputs and assumptions related to revenue recognition on an ongoing basis.

The use of different estimates, inputs or assumptions may materially affect the reported amounts of assets and liabilities as of the date of the financial statements and the results of operations for the reporting period.

The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the IP and begins to benefit from the license, net of the effect of any significant financing components calculated using customer-specific, risk-adjusted lending rates, with the related interest income being recognized over time on an effective rate basis.

Per-unit or per-subscriber IP royalty licenses

The Company recognizes revenue from per-unit or per-subscriber IP royalty licenses in the period in which the licensee's sales or production are estimated to have occurred, which results in an adjustment to revenue when actual sales or production are subsequently reported by the licensee, which is generally in the month or quarter following usage or shipment.

Estimating customers’ monthly or quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis.

The Company also generates revenue from non-recurring engineering (“NRE”) services, advertising, and hardware products, each of which was less than 5% of total revenue for all periods presented.

Practical Expedients and Exemptions

2 unchanged sentences

The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of less than one year ;

contracts for which revenue is recognized based on the amount which the Company has the right to invoice for services performed and amounts attributable to

variable consideration arising from (i) a sales-based or usage-based royalty of an intellectual property license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation;

amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of a technology license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation;

or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.

1 unchanged sentence

The following information depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors by disaggregating revenue by product category/end market and geographic location (presented in “Note 16 - Segment and Geographic Information ”).

This information includes revenue recognized from contracts with customers and revenue from other sources, including past royalty revenues.

Revenue disaggregated by product category/end market was as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Product revenue

Consumer Experience

Connected Car

Product revenue

IP Licensing revenue

2 unchanged sentences

Contracts Assets

Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where the revenue recognized to date (or cumulative adjustments to retained earnings in the initial period of adopting Topic 606) exceeds the amount billed.

Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed.

The amount of unbilled contracts receivable may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date.

Contract assets also include the incremental costs of obtaining a contract with a customer, principally sales commissions when the renewal commission is not commensurate with the initial commission, and deferred engineering costs for significant software customization or modification and set-up services to the extent deemed recoverable.

engineering costs for significant software customization or modification and set-up services to the extent deemed recoverable.

Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands ):

June 30, 2021

September 30, 2021

December 31, 2020

11 unchanged sentences

The Company’s lifetime expected credit losses are determined using relevant information about past events (including historical experience), current conditions, and reasonable and supportable forecasts that affect collectability.

The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended

when deemed necessary.

The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary.

In addition, the Company performs routine credit management activities such as timely account reconciliations, dispute resolution, and payment confirmations.

2 unchanged sentences

It is generally considered to be of high credit quality due to past collection history and the nature of the customers.

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30, 2021

Six Months Ended June 30, 2021

The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Accounts Receivable

6 unchanged sentences

Balance at end of period

(1) The charge off of accounts receivable in the three months ended March 31, 2021 was primarily related to a customer whose account had been substantially reserved for credit losses in 2020 due to deteriorating financial condition and delinquent payment history.

Three Months Ended June 30, 2020

Six Months Ended June 30, 2020

(1) The charge-off of accounts receivable in the nine months ended September 30, 2021 was primarily related to a customer whose account had been substantially reserved for credit losses in 2020 due to its deteriorating financial condition and delinquent payment history.

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Accounts Receivable

6 unchanged sentences

Balance at end of period

(2) The increase in provision for credit losses was based on assessment of then current conditions including the COVID-19 pandemic and anticipation of delayed or delinquent payments on existing accounts receivable as a result of declining financial health and liquidity positions of certain of the Company’s customers.

(2) The increase in provision for credit losses was based on assessment of then current conditions, including the impact of the COVID-19 pandemic and anticipation of delayed or delinquent payments on existing accounts receivable as a result of declining financial health and liquidity positions of certain of the Company’s customers.

Additional Disclosures

The following table presents additional revenue and contract disclosures (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Revenue recognized in the period from:

5 unchanged sentences

Settlements represent resolutions of litigation during the period for past royalties owed pursuant to expired or terminated IP license agreements.

Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under the Company’s fixed-fee IP, software-as-a-service agreements and engineering services contracts.

Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee arrangements and engineering services contracts.

The Company's remaining revenue under contracts with performance obligations was as follows (in thousands) :

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Other current assets consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Prepaid expenses

*The income tax receivable change relates to the application of a projected negative tax rate to year-to-date income.

The balance is subject to change as year-to-date income changes.

*All inventory is finished goods.

Property and equipment, net, consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

Other long-term assets consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

2 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Accrued expenses

Accrued income taxes

Current portion of operating lease liabilities

2 unchanged sentences

Other long-term liabilities consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Accumulated other comprehensive income consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

5 unchanged sentences

Under ASU 2016-01 (Topic 321), equity securities are measured at fair value with unrealized gains and losses recognized in other income and expense, net, on the Condensed Consolidated Statements of Operations.

The following is a summary of marketable securities at June 30, 2021 and December 31, 2020 (in thousands):

June 30, 2021

The following is a summary of marketable securities at September 30, 2021 and December 31, 2020 (in thousands):

September 30, 2021

Allowance for Credit Losses

22 unchanged sentences

Total marketable securities

At June 30, 2021 and December 31, 2020, the Company had $ 199.2 million and $ 257.1 million, respectively, in cash, cash equivalents and short-term investments.

A significant portion of these amounts was held in marketable securities, as shown above.

The remaining balance of $ 121.8 million and $ 135.0 million at June 30, 2021 and December 31, 2020, respectively, was cash held in operating accounts not included in the tables above.

At September 30, 2021 and December 31, 2020, the Company had $ 237.3 million and $ 257.1 million, respectively, in cash, cash equivalents and short-term investments.

A significant portion of these amounts was held in marketable securities, as

The remaining balance of $ 159.9 million and $ 135.0 million at September 30 , 2021 and December 31, 2020, respectively, was cash held in operating accounts not included in the tables above .

Debt Securities

The gross realized gains and losses on sales of marketable debt securities were not material during the three and six months ended June 30, 2021 and 2020, respectively.

Unrealized losses on AFS debt securities were $ 0.1 million and $ 0.1 million, net of tax, as of June 30, 2021 and December 31, 2020, respectively.

The gross realized gains and losses on sales of marketable debt securities were not material during the three and nine months ended September 30, 2021 and 2020, respectively.

Unrealized losses on AFS debt securities were $ 0.1 million and $ 0.1 million, net of tax, as of September 30, 2021 and December 31, 2020, respectively.

The Company evaluated whether the decline in fair value has resulted from credit losses or other factors and concluded these amounts were related to temporary fluctuations in value of AFS securities and were due primarily to changes in interest rates and market conditions of the underlying securities.

1 unchanged sentence

The Company does not intend to sell the debt securities and it is more-likely-than-not that it will not be required to sell the investments before recovery of their amortized cost bases.

The Company did no t recognize a provision for credit losses related to its AFS debt securities for the three and six months ended June 30, 2021 and 2020, respectively.

The following table summarizes the fair value and gross unrealized losses related to individual AFS debt securities at June 30, 2021 and December 31, 2020, which have been in a continuous unrealized loss position, aggregated by investment category and length of time (in thousands):

The Company did no t recognize a provision for credit losses related to its AFS debt securities for the three and nine months ended September 30, 2021 and 2020, respectively.

The following table summarizes the fair value and gross unrealized losses related to individual AFS debt securities at September 30, 2021 and December 31, 2020, which have been in a continuous unrealized loss position, aggregated by investment category and length of time (in thousands):

Less Than 12 Months

12 Months or More

June 30, 2021

September 30, 2021

Corporate bonds and notes

5 unchanged sentences

Commercial paper

The estimated fair value of marketable debt securities by contractual maturity at June 30, 2021 is shown below (in thousands).

The estimated fair value of marketable debt securities by contractual maturity at September 30, 2021 is shown below (in thousands).

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties.

2 unchanged sentences

Non-marketable Equity Securities

Investments in non-marketable equity securities are accounted for using either the equity method or the cost method.

Investments in entities over which the Company has the ability to exercise significant influence, but does not hold a controlling interest, are accounted for using the equity method.

Under the equity method, the Company records its proportionate share of income or loss in other income and expense, net, in the Condensed Consolidated Statements of Operations.

Investments in entities over which the Company does not have the ability to exercise significant influence are accounted for using the cost method.

Investments in entities over which the Company does not have the ability to exercise significant influence and which do not have readily determinable fair values, are initially recognized at cost and remeasured through earnings when there is an observable transaction involving the same or similar investment of the same issuer, or due to an impairment (referred to as the “measurement alternative”).

The fair value of non-marketable equity investments is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

The Company monitors its non-marketable securities portfolio for potential impairment.

When the carrying amount of an investment in a non-marketable security exceeds its fair value and the decline in fair value is determined to be other-than-temporary, the loss is recorded in other income and expense, net, in the Condensed Consolidated Statements of Operations.

When there is evidence that the expected fair value of the investment has declined to below the recorded cost, the impairment loss is recorded in other income and expense, net, in the Condensed Consolidated Statements of Operations.

Upon merging with TiVo on June 1, 2020, the Company assumed certain investments in non-marketable equity securities.

As of June 30, 2021 and December 31, 2020, other long-term assets included equity securities accounted for under the equity method with a carrying amount of $ 4.6 million and $ 4.2 million, respectively, and equity securities without a readily determinable fair value with a carrying amount of $ 0.1 million and $ 0.1 million, respectively.

No impairments or adjustments to the carrying amount of the Company's equity securities without a readily determinable fair value were recognized in the three and six months ended June 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, other long-term assets included equity securities accounted for under the equity method with a carrying amount of $ 4.8 million and $ 4.2 million, respectively, and equity securities without a readily determinable fair value with a carrying amount of $ 0.1 million and $ 0.1 million, respectively.

No impairments or adjustments to the carrying amount of the Company's equity securities without a readily determinable fair value were recognized in the three and nine months ended September 30, 2021 and 2020, respectively.

NOTE 6 – FAIR VALUE

9 unchanged sentences

The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs.

There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2020 and June 30, 2021.

The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of June 30, 2021 (in thousands):

There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2020 and September 30, 2021.

The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of September 30, 2021 (in thousands):

Active Markets

6 unchanged sentences

Reported as AFS debt securities in the Condensed Consolidated Balance Sheets.

(3) Reported as cash and cash equivalents if purchased with an original maturity of three months or less at the date of purchase;

otherwise reported as AFS debt securities in the Condensed Consolidated Balance Sheets.

The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of December 31, 2020 (in thousands):

13 unchanged sentences

The carrying amounts and estimated fair values are as follows (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Total long-term debt, net

Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 26.6 million and $ 34.4 million as of June 30, 2021 and December 31, 2020, respectively.

Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 25.4 million and $ 34.4 million as of September 30, 2021 and December 31, 2020, respectively.

See “Note 9 – Debt ” for additional information.

2 unchanged sentences

Non-recurring Fair Value Measurements

For purchase accounting related fair value measurements, see “Note 7 – Business Combinations.”

The following table represents the activity in intangible assets that are measured at fair value on a non-recurring basis (in thousands):

Balance at December 31, 2020

Assets acquired (1)

Balance at September 30, 2021

(1)This amount represents the value of the patents that were acquired by the Company during the third quarter of 2021.

The fair value of these assets was measured using both the market approach – estimating the value of the acquired assets by way of comparison with other comparable transactions, and the cost approach – estimating the value of the acquired assets based on the cost it would take for the Company to create a comparable set of assets through its own research and development (“R&D”) and patent prosecution efforts.

NOTE 7 – BUSINESS COMBINATIONS

7 unchanged sentences

The Company is currently contemplating and may pursue, subject to any required regulatory approvals, a separation of the Company’s product business and IP licensing business through a tax-efficient transaction, resulting in two independent, publicly traded companies.

The Company is evaluating the optimal timing of the contemplated business separation and currently anticipates that such separation will not be completed earlier than the first half of 2022.

The Company continues to evaluate the optimal timing of the contemplated business separation and currently anticipates that such separation will not be completed earlier than the first half of 2022.

Merger Consideration

12 unchanged sentences

Inputs were generally determined by taking into account historical data (supplemented by current and anticipated market conditions) and growth rates.

The preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as the Company obtained additional information during the measurement period.

During the three months ended June 30, 2021, the Company completed its accounting for the Mergers with no further adjustments made to the fair value.

The preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as

the Company obtained additional information during the measurement period.

During the three months ended June 30, 2021, t he Company completed its accounting for the Merger s with no further adjustments made to the fair value .

The following table sets forth the purchase price allocation , as well as adjustments made during the measurement period ($ in thousands ):

3 unchanged sentences

Adjustments (2)

Fair Value (3)

Cash and cash equivalents

27 unchanged sentences

All measurement period adjustments were offset against goodwill.

(3) As of June 30, 2021.

Transaction and Severance Costs

In connection with the Mergers, the Company has incurred significant one-time expenses such as transaction and integration related costs (e.g.

bankers fees, legal fees, consultant fees, etc.), lease impairment charges due to facilities consolidation, severance and retention costs (including stock-based compensation expense resulting from the contractually-required acceleration of equity instruments for departing executives).

Total transaction and integration related costs were $ 0.1 million and $ 0.4 million for the three and six months ended June 30, 2021, respectively, and $ 24.4 million and $ 27.5 million for the three and six months ended June 30, 2020, respectively.

Post-merger severance and retention costs amounted to $ 1.8 million and $ 6.4 million for the three and six months ended June 30, 2021, respectively, and $ 8.2 million and $ 8.2 million for the three and six months ended June 30, 2020, respectively.

Supplemental Pro Forma Information

The following unaudited pro forma financial information assumes the companies were combined as of January 1, 2019.

The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and

assumptions that have been made solely for purposes of developing such pro forma information.

The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information.

This is not necessarily indicative of the results of operations that would have been achieved if the Mergers had taken place on January 1, 2019, nor is it necessarily indicative of future results.

2 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2020

Net income (loss) attributable to Xperi Holding Corporation

Nine Months Ended

September 30, 2020

Net loss attributable to Xperi Holding Corporation

On May 31, 2021, the Company completed its acquisition of certain assets and assumption of certain liabilities of MobiTV, Inc.

20 unchanged sentences

The results of operations and cash flows relating to the business acquired pursuant to the MobiTV Acquisition have been included in the Company’s condensed consolidated financial statements for periods subsequent to May 31, 2021, and the related assets and liabilities were recorded at their estimated fair values in the Company’s Condensed Consolidated Balance Sheet as of May 31, 2021.

For the three and six months ended June 30, 2021, the acquired MobiTV business contributed $ 0.6 million of revenue and $ 1.1 million of operating loss, respectively, to the operating results of the Company.

For the three and nine months ended September 30, 2021, the acquired MobiTV business contributed $ 3.4 million and $ 4.0 million in revenue, respectively, and $ 1.4 million and $ 2.5 million in operating losses, respectively, to the operating results of the Company.

The operations acquired in the MobiTV Acquisition are included in the Company’s Product segment.

Supplemental Pro Forma Information

Supplemental Pro Form Information

The following unaudited pro forma financial information assumes the MobiTV Acquisition was completed as of January 1, 2020.

4 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net loss attributable to Xperi Holding Corporation

3 unchanged sentences

NOTE 8 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS

The changes to the carrying value of goodwill from January 1, 2021 through June 30, 2021 are reflected below (in thousands):

The changes to the carrying value of goodwill from January 1, 2021 through September 30, 2021 are reflected below (in thousands):

December 31, 2020

Goodwill acquired through a business acquisition (1)

June 30, 2021

September 30, 2021

(1) Related to the MobiTV Acquisition completed in June 2021.

1 unchanged sentence

(2) The Company’s reporting units include the Product segment and the IP Licensing segment (defined further in “Note 16 - Segment and Geographic Information ”).

Of the carrying value of goodwill, approximately $ 527.8 million was allocated to the Product segment and approximately $ 323.3 million was allocated to the IP Licensing segment as of June 30, 2021.

Of the carrying value of goodwill, approximately $ 527.8 million was allocated to the Product segment and approximately $ 323.3 million was allocated to the IP Licensing segment as of September 30, 2021.

Goodwill at each reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable.

As part of its annual goodwill impairment test, the Company elected to proceed with a quantitative interim goodwill impairment test as of September 30, 2021.

Based on the quantitative assessment, the Company concluded that the fair value of the reporting units exceeded the carrying amount for both the Product and IP Licensing reporting units.

As a result, no goodwill impairment charges were recognized in the three months ended September 30, 2021.

Identified Intangible Assets

Identified intangible assets consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

9 unchanged sentences

Total intangible assets

In June 2021, patents were acquired through the MobiTV Acquisition with a purchase price value equal to $ 5.0 million.

In May 2021, patents were acquired through the MobiTV Acquisition with a purchase price value equal to $ 5.0 million.

See “Note 7 – Business Combinations.”

In June 2021, existing technology was acquired through the MobiTV Acquisition with a purchase price value equal to $ 3.3 million.

In May 2021, existing technology was acquired through the MobiTV Acquisition with a purchase price value equal to $ 3.3 million.

See “Note 7 – Business Combinations.”

As of June 30, 2021, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):

In September 2021, patents were acquired by the Company with a fair value measured at $ 8.8 million.

See “Note 6 – Fair Value” for additional information.

As of September 30, 2021, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):

2021 (remaining 3 months)

1 unchanged sentence

The outstanding amounts of debt were as follows (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

9 unchanged sentences

The interest rate applicable to loans outstanding under the 2020 Term B Loan Facility was equal to, at the Company’s option, either (i) a base rate plus a margin of 3.00 % per annum or (ii) LIBOR plus a margin of 4.00 % per annum.

Commencing on September 30, 2020, the 2020

Term B Loan Facility was amortize d in aggregate quarterly amounts equal to (i) with respect to repayments occurring on or prior to June 1, 2023, 1.25 % of the original principal amount of the 2020 Term B Loan Facility and (ii) with respect to repayments occurring after June 1, 2023 and prior to June 1, 2025, 1.875 % of the original principal amount of the 2020 Term B Loan Facility, with the balance payable on the maturity date of the 2020 Term B Loan Facility (in each case subject to adjustment for prepayments).

Commencing on September 30, 2020, the 2020 Term B Loan Facility was amortized in aggregate quarterly amounts equal to (i) with respect to repayments occurring on or prior to June 1, 2023, 1.25 % of the original principal amount of the 2020 Term B Loan Facility and (ii) with respect to repayments occurring after June 1, 2023 and prior to June 1, 2025, 1.875 % of the original principal amount of the 2020 Term B Loan Facility, with the balance payable on the maturity date of the 2020 Term B Loan Facility (in each case subject to adjustment for prepayments).

The 2020 Term B Loan Facility was scheduled to mature on June 1, 2025 .

1 unchanged sentence

Net proceeds were used on June 1, 2020, together with cash and cash equivalents, to refinance the existing indebtedness of the combined Company, including paydown of the TiVo 2019 Term Loan of $ 734.6 million.

See “Note 7 – Business Combination s ” for additional information relating to the Mergers.

See “Note 7 – Business Combinations” for additional information relating to the Mergers.

Additionally, debt discount and issuance costs of approximately $ 39.7 million were incurred and capitalized in connection with the 2020 Term B Loan Facility in June 2020.

4 unchanged sentences

In connection with the Amendment, the Company made a voluntary prepayment of $ 50.6 million of the term loan outstanding under the 2020 Credit Agreement using cash on hand.

The Amendment provided for, among other things, (i) a replacement of the outstanding term loans with a new tranche of term loans (the “Refinanced Term B Loans”) in an aggregate principal amount of $ 810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50 % per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50 % per annum, (iii) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the Refinanced Term B Loans within six months of the closing date of the Amendment, (iv) an extension of the maturity to June 8, 2028 , and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments.

The Amendment provided for, among other things, (i) a replacement of the outstanding term loans with a new tranche of term loans (the “Refinanced Term B Loans”) in an aggregate

principal amount of $ 810.0 million , (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50 % per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50 % per annum , (iii) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the Refinanced Term B Loans within six months of the closing date of the Amendment, (iv) an extension of the maturity to June 8, 2028 , and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments .

The Company commenced repaying quarterly installments under the Refinanced Term B Loans in the third quarter of 202 1.

The obligations under the 2020 Credit Agreement, inclusive of any changes by the Amendment, continue to be guaranteed by Xperi, TiVo and certain other of the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all of the assets of the Company and the Guarantors.

1 unchanged sentence

The 2020 Credit Agreement, as amended, also contains customary representations and warranties and affirmative and negative covenants that, among other things and subject to certain exceptions, restrict the ability of the Company and its subsidiaries to create or incur certain liens, incur or guarantee additional indebtedness, merge or consolidate with other companies, transfer or sell assets and make restricted payments.

The Company was in compliance with all requirements as of June 30, 2021.

The Company was in compliance with all requirements as of September 30, 2021.

The 2020 Credit Agreement, as amended, also requires the Company to make additional cash payments on an annual basis beginning in March 2023 based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year.

19 unchanged sentences

Under the 2019 Term Loan Facility Agreement, TiVo was required to pay a 3.0 % prepayment premium if the loan was prepaid on or prior to November 22, 2020.

Further, under the same Loan Facility Agreement, the Mergers triggered certain change of control conditions that constituted an event of default, thus requiring the debt to be repaid immediately following the consummation of the Mergers.

Further , u nder the same Loan Facility Agreement, the Mergers triggered certain change of control conditions that constitute d an event of default, thus requiring the debt to be re paid immediately following the consummation of the Mergers .

Using the proceeds from the aforementioned 2020 Term B Loan Facility, the Company, on June 1, 2020, made a full repayment of the 2019 Term Loan along with the prepayment penalty for a total payoff amount of $ 734.6 million.

1 unchanged sentence

Upon consummation of the TiVo Merger on June 1, 2020, the Company assumed $ 48.0 thousand of Convertible Senior Notes that were issued by TiVo Solutions Inc.

in September 2014 and mature October 1, 2021 (the “2021 Convertible Notes”).

The 2021 Convertible Notes bear interest at an annual rate of 2.0 %, payable semi-annually in arrears on April 1 and October 1 of each year.

in September 2014 and matured on October 1, 2021 (the “2021 Convertible Notes”).

The 2021 Convertible Notes bore interest at an annual rate of 2.0 %, payable semi-annually in arrears on April 1 and October 1 of each year.

On September 24, 2021, the entire balance of $ 48.0 thousand was paid off.

Interest Expense and Expected Principal Payments

At June 30, 2021, $ 810.0 million in total debt was outstanding with an interest rate, including the amortization of debt discount and issuance costs, of 5.0 %.

At September 30, 2021, $ 799.9 million in total debt was outstanding.

There were also $ 25.4 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt.

Interest is payable monthly on the Refinanced Term B Loans.

Interest expense was $ 10.6 million and $ 21.9 million for the three and six months ended June 30, 2021, respectively.

Interest expense was $ 7.0 million and $ 11.2 million for the three and six months ended June 30, 2020, respectively.

Amortized debt discount and issuance costs, which were included in interest expense, amounted to $ 1.9 million and $ 4.1 million for the three and six months ended June 30, 2021, respectively, and $ 1.2 million and $ 1.8 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, future minimum principal payments for long-term debt are summarized as follows (in thousands):

Interest rate on the Refinanced Term B Loans, including the amortization of debt discount and issuance costs, was 4.2 % and interest is payable monthly.

Interest expense was $ 8.5 million and $ 30.4 million for the three and nine months ended September 30, 2021, respectively.

Interest expense was $ 13.4 million and $ 24.6 million for the three and nine months ended September 30, 2020, respectively.

Amortized debt discount and issuance costs, which were included in interest expense, amounted to $ 1.2 million and $ 5.3 million for the three and nine months ended September 30, 2021, respectively, and $ 2.3 million and $ 4.0 million for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021, future minimum principal payments for long-term debt are summarized as follows (in thousands):

2021 (remaining 3 months)

NOTE 10 – NET INCOME (LOSS) PER SHARE

NOTE 10 – NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted shares (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Weighted average shares of common stock outstanding

4 unchanged sentences

Total common shares-diluted

Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period, excluding any unvested restricted stock awards that are subject to repurchase.

Basic net loss per share is computed using the weighted average number of shares of common stock outstanding during the period, excluding any unvested restricted stock awards that are subject to repurchase.

Diluted net income per share is computed using the treasury stock method to calculate the weighted average number of shares of common stock and, if dilutive, potential common shares outstanding during the period.

Potentially dilutive common shares include unvested restricted stock awards and units and incremental common shares issuable upon the exercise of stock options, less shares repurchased from assumed proceeds.

Potentially dilutive common shares include unvested restricted stock awards and units and incremental common shares issuable upon the exercise of stock options, less shares repurchased from assumed

The assumed proceeds calculation includes actual proceeds to be received from the employee upon exercise and the average unrecognized stock compensation cost during the period.

For the three months ended June 30, 2021, there was no difference in the weighted average number of common shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

A total of 5.8 million shares, subject to stock options and restricted stock awards and units, were excluded from the computation of diluted net loss per share for the three months ended June 30, 2021, because including them would have been anti-dilutive.

For the six months ended June 30, 2021, in the calculation of net income per share, 2.1 million shares, subject to stock options and restricted stock awards and units, were excluded from the computation of diluted net income per share as they were anti-dilutive.

For the three and six months ended June 30, 2020, there was no difference in the weighted average number of common shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

A total of 4.7 million and 3.8 million shares, subject to stock options and restricted stock awards and units, were excluded from the computation of diluted net loss per share for the three and six months ended June 30, 2020, respectively, because including them would have been anti-dilutive.

For the three and nine months ended September 30, 2021, there was no difference in the weighted average number of common shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

A total of 5.5 million and 5.3 million shares, subject to stock options and restricted stock awards and units, were excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2021, respectively, because including them would have been anti-dilutive.

For the three and nine months ended September 30, 2020, there was no difference in the weighted average number of common shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

A total of 5.6 million and 4.0 million shares, subject to stock options and restricted stock awards and units, were excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2020, respectively, because including them would have been anti-dilutive.

NOTE 11 – STOCKHOLDERS’ EQUITY

19 unchanged sentences

Shares reserved under the Assumed Plans will be available for future grants.

As of June 30, 2021, there were 5.3 million shares reserved for future grants under both the 2020 EIP and the Assumed Plans.

As of September 30, 2021, there were 4.8 million shares reserved for future grants under both the 2020 EIP and the Assumed Plans.

A summary of the stock option activity is presented below (in thousands, except per share amounts):

4 unchanged sentences

Options canceled / forfeited / expired

Balance at June 30, 2021

Balance at September 30, 2021

Restricted Stock Awards and Units

Information with respect to outstanding restricted stock awards and units as of June 30, 2021 is as follows (in thousands, except per share amounts):

Information with respect to outstanding restricted stock awards and units as of September 30, 2021 is as follows (in thousands, except per share amounts):

Restricted Stock and Restricted Stock Units

5 unchanged sentences

Awards and units canceled / forfeited

Balance at June 30, 2021

Balance at September 30, 2021

Performance Awards and Units

Performance awards and units may be granted to employees or consultants based upon, among other things, the contributions, responsibilities and other compensation of the particular employee or consultant.

The value and the vesting of such performance awards and units are generally linked to one or more performance goals or certain market conditions determined by the Company, in each case on a specified date or dates or over any period or periods determined by the Company, and may

range from zero to 200 percent of the gran t.

For performance awards subject to a market vesting condition (“market-based PSUs”), the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition.

8 unchanged sentences

An eligible employee’s right to buy the Company’s common stock under the 2020 ESPP may not accrue at a rate in excess of $ 25,000 of the fair market value of such shares per calendar year for each calendar year of an offering period.

If the fair market value per share of the Company’s common stock on any purchase date during an offering period is less than the fair market value per share on the start date of the 24 -month offering period, then that offering period will automatically terminate and a new 24 -month offering period will begin on the next business day.

new 24 -month offering period will begin on the next business day.

All participants in the terminated offering will be transferred to the new offering period.

As of June 30, 2021 , there were 1.4 million shares reserved for grant under the Company’s 2020 ESPP.

As of September 30, 2021 , there were 0.8 million shares reserved for grant under the Company’s 2020 ESPP.

Stock Repurchase Programs

1 unchanged sentence

On April 22, 2021, the Board authorized an additional $ 100.0 million of purchases under the existing stock repurchase plan.

As of June 30, 2021, the Company has repurchased a total of approximately 6.4 million shares of common stock, since inception of the plan, at an average price of $ 16.30 per share for a total cost of $ 105.1 million.

As of September 30, 2021, the Company has repurchased a total of approximately 7.7 million shares of common stock, since inception of the plan, at an average price of $ 16.93 per share for a total cost of $ 129.9 million.

As of December 31, 2020, the Company had repurchased a total of approximately 4.9 million shares of common stock, since inception of the plan, at an average price of $ 14.25 per share for a total cost of $ 70.1 million.

1 unchanged sentence

No expiration date has been specified for this plan.

As of June 30, 2021, the total remaining amount available for repurchase under this plan was $ 144.9 million.

As of September 30, 2021, the total remaining amount available for repurchase under this plan was $ 120.1 million.

The Company expects to continue to execute authorized repurchases from time to time under the plan.

3 unchanged sentences

However, these withheld shares are not included in common stock repurchases under the Company's authorized share repurchase plan.

During the three months ended June 30, 2021 and 2020, the Company withheld 0.1 million and 0.2 million shares of common stock to satisfy $ 1.0 million and $ 2.8 million of required withholding taxes, respectively.

During the six months ended June 30, 2021 and 2020, the Company withheld 0.4 million and 0.4 million shares of common stock to satisfy $ 8.3 million and $ 5.9 million of required withholding taxes, respectively.

During the three months ended September 30, 2021 and 2020, the Company withheld 0.3 million and 0.2 million shares of common stock to satisfy $ 7.1 million and $ 3.3 million of required withholding taxes, respectively.

During the nine months ended September 30, 2021 and 2020, the Company withheld 0.7 million and 0.6 million shares of common stock to satisfy $ 15.4 million and $ 9.2 million of required withholding taxes, respectively.

NOTE 12 – STOCK-BASED COMPENSATION EXPENSE

The effect of recording stock-based compensation (“SBC”) expense for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):

The effect of recording stock-based compensation (“SBC”) expense for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Cost of licensing, services and software revenue

3 unchanged sentences

Tax effect on stock-based compensation expense

Net effect on net income (loss)

SBC expense categorized by various equity components for the three and six months ended June 30, 2021 and 2020 is summarized in the table below (in thousands):

Net effect on net loss

SBC expense categorized by various equity components for the three and nine months ended September 30, 2021 and 2020 is summarized in the table below (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Restricted stock awards and units

2 unchanged sentences

Total stock-based compensation expense

There were no options granted in the three and six months ended June 30, 2021 and 2020.

There were no options granted in the three and nine months ended September 30, 2021 and 2020.

The following assumptions were used to value the restricted stock units subject to market conditions granted during the period:

8 unchanged sentences

September 2021

September 2020

February 2020

4 unchanged sentences

NOTE 13 – INCOME TAXES

For the three months ended June 30, 2021, the Company recorded an income tax benefit of $ 2.9 million on pretax loss of $ 4.7 million and for the six months ended June 30, 2021, the Company recorded an income tax benefit of $ 6.9 million on a pretax loss of $ 4.2 million, which resulted in an effective tax rate of 162.6 % for the six months ended June 30, 2021.

The income tax benefit for the three and six months ended June 30, 2021 was primarily related to foreign withholding taxes, U.S.

federal base erosion and anti-abuse tax (“BEAT”) and unrealized foreign exchange loss from the prior year South Korea refund claims.

The Company’s effective tax rate was based on the projected 2021 GAAP U.S.

pretax loss and is significantly higher than the 21 %

For the three months ended September 30, 2021, the Company recorded an income tax expense of $ 42.7 million on pretax loss of $ 3.7 million.

For the nine months ended September 30, 2021, the Company recorded an income tax expense of $ 35.8 million on a pretax loss of $ 7.9 million, which resulted in a year-to-date effective tax rate of ( 452.3 )%.

The income tax expense for the three and nine months ended September 30, 2021 was primarily related to foreign withholding taxes, base erosion and anti-abuse tax (“BEAT”) and unrealized foreign exchange loss from the prior year South Korea refund claims, which have remained relatively fixed on a forecast basis quarter over quarter.

The negative tax rate is the result of the relatively fixed tax expense recorded against a small pre-tax loss.

The Company’s effective tax rate was based on a projected 2021 U.S.

GAAP pretax loss and varies significantly from the 21 % U.S.

federal tax rate.

The Company’s effective tax rate is the result of the most significant components of income tax expense, primarily driven by foreign withholding and BEAT .

For the three months ended June 30, 2020, the Company recorded an income tax benefit of $ 9.3 million on a pretax loss of $ 32.4 million and for the six months ended June 30, 2020, the Company recorded an income tax benefit of $ 7.2 million on a pretax loss of $ 11.6 million, which resulted in an effective tax rate of 62.7 % for the six months ended June 30, 2020.

The tax benefit of $7.2 million is comprised of a $ 10.5 million tax benefit related to the five month pre-merger period and a tax expense of $ 3.3 million related to the one month post-merger period.

The five month pre-merger income tax benefit of $10.5 million was primarily related to a net decrease in valuation allowance as a result of the Mergers, deduction from foreign-derived intangible income, releases of unrecognized tax benefits due to the lapse of applicable statutes of limitation offset by tax expense from operating income, shortfalls from stock-based compensation, certain non-deductible expenses, and unrealized foreign exchange losses from the prior period South Korea refund claim.

The one month post-merger income tax expense of $3.3 million was primarily related to income tax expense from foreign operations, foreign withholding taxes and U.S.

federal minimum tax.

As of June 30, 2021, gross unrecognized tax benefits increased $ 1.6 million to $ 228.7 million compared to $ 227.2 million as of December 31, 2020.

For the three months ended September 30, 2020, the Company recorded an income tax expense of $ 0.5 million on a pretax loss of $ 30.1 million and for the nine months ended September 30, 2020, the Company recorded an income tax benefit of $ 6.8 million on a pretax loss of $ 41.6 million, which resulted in an effective tax rate of 16.3 % for the nine months ended September 30, 2020.

The tax benefit of $6.8 million is comprised of a $ 12.2 million tax benefit related to the five month pre-merger period and a tax expense of $ 5.4 million related to the four month post-merger period.

The five month pre-merger income tax benefit of $12.2 million was primarily related to a net decrease in valuation allowance as a result of the Mergers, deduction from foreign-derived intangible income, releases of unrecognized tax benefits due to the lapse of applicable statutes of limitation, and deduction from transaction expenses, offset by tax expense from operating income, shortfalls from stock-based compensation, certain non-deductible expenses, and unrealized foreign exchange losses from the prior period South Korea refund claim.

The four-month post-merger income tax expense of $5.4 million was primarily related to income tax expense from foreign operations, foreign withholding taxes and U.S.

federal minimum tax offset by unrealized foreign exchange gains from the current period South Korean refund claim.

As of September 30, 2021, gross unrecognized tax benefits increased $ 1.9 million to $ 229.1 million compared to $ 227.2 million as of December 31, 2020.

This was included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheets.

Of this amount, $ 96.3 million would affect the effective tax rate if recognized.

As of June 30, 2020, gross unrecognized tax benefits of $ 184.0 million were included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheets.

As of September 30, 2020, gross unrecognized tax benefits of $ 181.7 million were included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheets.

Of this amount, $ 97.3 million would affect the effective tax rate if recognized.

1 unchanged sentence

It is the Company’s policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.

The Company recognized interest and penalties related to unrecognized tax benefits of $ 0.8 million and an insignificant amount for the six months ended June 30, 2021 and 2020, respectively.

Accrued interest and penalties were $ 3.4 million and $ 2.5 million as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, 2021, the Company’s 2016 through 2020 tax years are generally open and subject to potential examination in one or more jurisdictions.

Earlier tax years for the Company and its subsidiaries are also open in certain jurisdictions which are currently subject to examination.

The Company recognized interest and penalties related to unrecognized tax benefits of $ 1.1 million and an insignificant amount for the nine months ended September 30, 2021 and 2020, respectively.

Accrued interest and penalties were $ 3.6 million and $ 2.5 million as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, the Company’s 2016 through 2020 tax years are generally open and subject to potential examination in one or more jurisdictions.

Earlier tax years for the Company and its subsidiaries are also open in certain jurisdictions which

are currently subject to examination.

In addition, in the U.S., any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination.

The Company has submitted withholding tax refund claims with the South Korean authorities, and the final outcome is not anticipated to be settled within the next twelve months.

The Company has submitted withholding tax refund claims with the South Korean authorities, and the final outcome is not anticipated to be settled within the next twelve m onths .

NOTE 14 – LEASES

14 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Fixed lease cost (1)

5 unchanged sentences

Three Months Ended,

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Operating leases

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Operating leases

Future minimum lease payments and related lease liabilities as of June 30, 2021 were as follows (in thousands):

Future minimum lease payments and related lease liabilities as of September 30, 2021 were as follows (in thousands):

Operating Lease Payments (1)

21 unchanged sentences

These arrangements primarily include unconditional purchase obligations to service providers.

As of June 30, 2021, the Company’s total future unconditional purchase obligations were approximately $ 137.3 million.

Additionally, under certain other contractual arrangements, the Company may be obligated to pay up to $ 2.3 million, a majority of which is expected to be paid by 2022, if certain milestones are achieved.

On December 31, 2019, TiVo entered into a contract requiring the Company to generate a minimum number of Qualified Referred Subscribers (as defined in the contract) over a 30 month period.

In the event that the aggregate number of Qualified Referred Subscribers generated by the Company within the specified time period is less than the minimum guaranteed subscribers, the Company was required to pay an amount equal to the shortfall between the number of Qualified Referred Subscribers generated by the Company and the required minimum multiplied by a per Qualified Referred Subscribers fee, up to a maximum of $ 5.0 million.

During the second quarter of 2021, the Company renegotiated the contract and agreed to the revised terms by removing the commitment to pay a shortfall in the number of Qualified Referred Subscribers as previously defined.

As part of the contract revision, the Company agreed to, on or before June 30, 2022, promote the other party’s TV services by purchasing and displaying a certain number of video ad impressions over the course of three or more campaigns.

The cost of the impressions is estimated at $ 0.8 million and was accrued in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2021.

As of September 30, 2021, the Company’s total future unconditional purchase obligations were approximately $ 127.2 million.

Inventory Purchase Commitment

2 unchanged sentences

A significant portion of the Company’s purchase commitments arising from these agreements consist of firm, non-cancelable and unconditional purchase commitments.

In certain instances, these agreements allow the Company the option to cancel, reschedule or adjust the Company’s requirements based on its business needs prior to firm orders being placed.

As of June 30, 2021, the Company had total purchase commitments for inventory of $ 11.8 million, of which $ 1.1 million was accrued in the Condensed Consolidated Balance Sheet.

In certain instances, these agreements allow the Company the option to cancel, reschedule or adjust the Company’s requirements based on its

business needs prior to firm orders being placed.

As of September 30 , 202 1 , the Company had total purchase commitments for inventory of $ 10.8 million, of which $ 1.3 million was accrued in the Condensed Consolidated Balance Sheet.

Indemnifications

In the normal course of business, the Company provides indemnifications of varying scopes and amounts to certain of its licensees, customers, and business partners against claims made by third parties arising from the use of the Company's

products, intellectual property, services or technologies.

The Company cannot reasonably estimate the possible range of losses that may be incurred pursuant to its indemnification obligations, if any.

10 unchanged sentences

however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial.

In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments, should they occur.

Contingencies

19 unchanged sentences

The Product segment consists primarily of licensing Company-developed audio, digital radio, imaging, edge-based machine learning and multi-channel video user experience (“UX”) solutions.

Audio, digital radio, imaging solutions and edge-based

machine learning include the delivery of software and/or hardware-based solutions to the Company’s consumer electronics (“CE”) customers, automotive manufacturers or their supply chain partners.

Audio, digital radio, imaging solutions and edge-based machine learning include the delivery of software and/or hardware-based solutions to the Company’s consumer electronics (“CE”) customers, automotive manufacturers or their supply chain partners.

UX products and services revenue is primarily derived from multi-channel video service providers and CE manufacturers, licensing the TiVo service and selling TiVo-enabled devices like the Stream 4K, Personalized Content Discovery, enriched Metadata, viewership data and advertising.

7 unchanged sentences

Although the CODM uses operating income to evaluate reportable segments, operating costs included in one segment may benefit other segments.

The following table sets forth the Company’s segment revenue, operating expenses and operating income (loss) for the three and six months ended June 30, 2021 and 2020 (in thousands):

The following table sets forth the Company’s segment revenue, operating expenses and operating income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Product segment

13 unchanged sentences

These expenses are not allocated because these amounts are not considered in evaluating the operating performance of the Company’s business segments.

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asia, and it is expected that this revenue will continue to account for a significant portion of total revenue in future periods.

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., and it is expected that this revenue will continue to account for a significant portion of total revenue in future periods.

The table below lists the geographic revenue for the periods indicated (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Europe and Middle East

For the three months ended June 30, 2021 and 2020, there were no customers and one customer, respectively, that each accounted for 10 % or more of total revenue.

For the six months ended June 30, 2021 and 2020, there were no customers and

two customers, respectively, that each accounted for 10 % or more of total revenue.

A s of June 30 , 2021 and December 31, 20 20 , there were one customer and two customers , respectively, that each accounted for 10 % or more of total accounts receivable.

For both the three months ended September 30, 2021 and 2020, there were no customers that individually accounted for 10% or more of total revenue.

For the nine months ended September 30, 2021 and 2020, there were no customers and one customer, respectively, that each accounted for 10% or more of total revenue.

As of September 30, 2021 and December 31, 2020, there were no customers and two customers, respectively, that each accounted for 10% or more of total accounts receivable.

NOTE 17 - SUBSEQUENT EVENTS

On July 26, 2021 , the Board declared a cash dividend of $ 0.05 per share of common stock, payable on September 14, 2021 to the stockholders of record at the close of business on August 24, 2021 .

On October 29, 2021 , the Board declared a cash dividend of $ 0.05 per share of common stock, payable on December 20, 2021 to the stockholders of record at the close of business on November 29, 2021 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements