TCM|Strategic announced today it has agreed to acquire $53.5 million of common and convertible preferred equity in Digimarc Corporation (NASDAQ: DMRC). For more details on the transaction, please see today's press release from Digimarc.

TCM|Strategic's decision to make this investment was the result of two conclusions:

• The Legacy Business and the Growth Business are each worth more today than the current enterprise value of the entire company.

• The Growth Business has not only the opportunity but also the high likelihood of being worth significantly more in the future.

For those interested, this deck contains detailed work in support of these points.

This financing provides Digimarc with enough capital to ensure the continued acceleration of growth in the Barcode business. Furthermore, it should be sufficient to fund the company through profitability, even assuming the most conservative macro and micro scenarios.

Therefore, we believe that the next time Digimarc accesses the equity market, it will be to reduce – rather than increase – shares outstanding.