Ocho Publishes Letter to the Shareholders of Digimarc Corporation

Calls to "WITHHOLD" Votes on CEO and Chair; "VOTE NO" on Say-on-Pay

AUSTIN, Texas, April 17, 2025 /PRNewswire/ -- Ocho Investments LLC ("Ocho"), which owns 5.2% of the stock of Digimarc Corporation (Nasdaq: DMRC) ("Digimarc" or the "Company"), today published a letter to the shareholders of Digimarc.

The letter informs shareholders that, at Digimarc's Annual Meeting scheduled for May 7, 2025, Ocho will vote "WITHHOLD" on CEO Riley McCormack and Chair Kathleen Kool. Also, Ocho will "VOTE NO" on the Company's say-on-pay proposal. Ocho strongly urges all Digimarc shareholders to vote in the same manner.

The letter outlines why Ocho believes these votes are in the best interests of the shareholders of Digimarc, including:

• WITHHOLD on Mr. McCormack because his four-year tenure has been marked by a 60% decline in the stock price, no growth in revenue per share and declining net ARR, continued operating losses and the need to curtail investments in employees and the business, and lost credibility with investors due to a lack of transparent communication.
• VOTE NO on say-on-pay because Digimarc's incentive plan misaligns the interests of management versus shareholders. The change of a key compensation metric, from total ARR to "Gross New ARR Growth", occurred just months before the expiration (and eventual loss) of the Company's largest commercial contract. This curious revision meant, even in the event Digimarc had lost all of its existing customers, there would be no effect on the largest weighting (65%) of management's cash bonuses. As a result, Digimarc's executives were paid nearly four times as much on their Annual Incentive Plan for 2024 (96% payout) than they would have under the prior (more sensible) plan (25% payout).
• WITHHOLD on Ms. Kool because she was Chair of the Compensation Committee when the aforementioned changes to the incentive plan occurred to the detriment of shareholders, she appears to have taken no action to address the Company's dramatic loss in shareholder value and CEO's poor performance, she has not been willing to meet with large shareholders unless they communicate publicly, and she has cast a vote of "no confidence" as the lone director to choose to receive none of her annual retainer in stock (opting for cash only).

Digimarc's shareholders deserve 1) an experienced CEO who can deliver tangible results and communicate transparently, 2) fair compensation practices to reward performance that is aligned with shareholder value, and 3) a strong and capable Chair who can effectively oversee the Board. All of the above are imminently possible; right now, we have none.

The full letter is available via this link: https://www.ochocapital.com/s/DMRC-04172025.pdf

About Ocho

Ocho is a family office that invests in public and private companies across a wide variety of industries. Our level of involvement can vary from passive investments to active engagement with management and board service.

Disclaimer

The views expressed in this letter represent the opinions of Ocho Investments LLC ("Ocho"), and are based on publicly available information with respect to the Company. Ocho reserves the right to change any of its opinions expressed herein at any time as it deems appropriate and disclaims any obligation to notify the market or any other party of such change. Ocho disclaims any obligation to update the information or opinions contained in this letter.

This letter is provided merely as information and is not intended to be, nor should it be construed as investment advice, or as an offer to sell or a solicitation of an offer to buy any security. This letter does not recommend the purchase or sale of any security, Ocho currently beneficially owns shares of the Company. Ocho is in the business of trading – buying and selling– securities and intend to continue trading in the securities of the Company. You should assume Ocho will from time to time sell all or a portion of its holdings of the Company in open market transactions or otherwise, buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to such shares.

Media Contacts

Ocho can be reached at: [email protected]

SOURCE Ocho Investments LLC