Content analysis
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Legalese | ||
Litigous | ||
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H.S. junior Avg
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New words:
absence, accomplish, aforementioned, AFS, aggressive, Aid, America, attending, award, aware, book, bookrunner, captioned, Chamber, coincide, commencement, commitment, committed, complementary, comprised, copied, counsel, criteria, deducted, deduction, delinquent, disable, disabled, discovery, discretionary, disease, disinvesting, disparate, dissemination, distancing, diverse, diversion, divest, dynamic, earliest, economy, edge, energy, enjoin, environment, epidemic, equal, Ergo, essential, EU, everyday, extensive, fact, fit, focused, forma, goal, graduated, half, health, HoldCo, implicit, inference, instrument, intelligently, inter, intraperiod, isolate, jeopardized, jointly, Jordan, Korea, Korean, lapse, largest, lawsuit, led, lender, lien, lifetime, longstanding, lost, macroeconomic, Mar, meaningful, misleading, misrepresented, mitigate, monetization, monetizing, neural, nonpayment, OECD, outbreak, outlook, owner, pace, pandemic, pendency, pertaining, petition, plaintiff, platform, PLC, prejudice, preliminary, pro, proactive, promulgated, PTAB, purportedly, purpose, rationalize, reallocated, receipt, recession, recoup, registration, reimbursement, reliant, relocation, Reorganization, Request, rescission, rescissory, residence, restraining, Rosenblatt, routine, safety, satisfaction, scale, school, slowdown, smarter, social, solution, spinoff, spread, submitted, subsided, surfaced, surpassed, surviving, timeframe, TiVo, translate, TWOLF, unfamiliar, unified, Union, unknown, unprecedented, untrue, venue, vigorously, vision, wholly, withheld, Wuhan, XRAY
Removed:
Amkor, analyze, argument, ASC, bringing, calculating, classifying, comparative, concluding, debit, detailed, deterioration, documentation, existed, hedging, initially, legacy, maximum, noncredit, noncurrent, nonemployee, opening, opted, oral, origination, outlining, participating, periodically, permitted, pioneered, plant, Powertech, qualify, qualifying, recommended, residual, restate, retrospectively, ROU, Samsung, servicing, simplified, subcontract, subscription, supplemental, Ziptronix
Financial report summary
?Risks
- Risks Relating to the Mergers
- We may not be able to consummate our merger with TiVo, the consummation of such transaction may be delayed, or the parties may elect to terminate the Merger Agreement, which may disable or delay the business plans relating to the Mergers.
- We expect to incur substantial transaction-related costs in connection with the Mergers.
- The Mergers could expose the combined company to liabilities and claims that we or TiVo have not previously experienced.
- The effects of health epidemics, including the recent global coronavirus pandemic, have led to periods of significant volatility in various markets and industries and has adversely impacted, and could continue to adversely affect, our business, results of operations, and financial condition.
- Our revenue and billings have been concentrated and we anticipate that our revenue and billings will continue to be concentrated in a limited number of customers. If we lose any of these customers, or these customers do not pay us, our revenue and billings could decrease substantially.
- We enter into license agreements that have fixed expiration dates and if, upon expiration or termination, we are unable to renew or replace such license agreements on terms favorable to us, our results of operations could be harmed.
- The success of our patent licensing business is dependent on the quality of our patent assets and our ability to create and implement new technologies or expand our licensable technology through acquisitions.
- Our use of cash and substantial long-term borrowing to finance the DTS acquisition, and the refinancing of our indebtedness and that of TiVo’s in connection with the Mergers, could limit future opportunities for our business, and could materially adversely affect our financial condition if we are unable to pay principal or interest on, or to refinance, such indebtedness.
- Our variable rate indebtedness may expose us to interest rate risk, which could cause our debt costs to increase significantly.
- The timing of billings under our license and settlement agreements may cause fluctuations in our quarterly or annual financial results.
- We expect to continue to be involved in material legal proceedings to enforce or protect our intellectual property and contract rights, including material litigation with existing licensees or strategic partners, that could harm our business.
- The cost of litigation is typically very high and can be difficult to predict, and such high costs and unpredictability may negatively impact our financial results.
- Recent and proposed changes to U.S. patent laws, rules, and regulations may adversely impact our business.
- Some of our license agreements may convert to fully paid-up licenses at the expiration of their terms, or upon certain milestones, and we may not receive royalties after that time.
- A significant amount of our royalty revenue and billings comes from a few end markets and products, and our business could be harmed if demand for these market segments or products declines.
- The long-term success of our business is dependent on a royalty-based business model, which is inherently risky.
- It is difficult for us to verify royalty amounts owed to us under our licensing agreements, and this may cause us to lose revenue and billings.
- The markets for semiconductors and related products are highly concentrated, and we may have limited opportunities to license our technologies or sell our products.
- We make significant investments in new products and services that may not achieve technological feasibility or profitability or that may limit our growth.
- Our substantial research and development investments may not translate into product market success, and could be jeopardized by our lack of relevant product experience, competition from other innovators with greater resources, dependence on third-party suppliers, and other factors.
- We may not be able to evolve our audio and imaging technologies, products, and services, or develop new technologies, products, and services, that are acceptable to our customers or the evolving markets, and our customers may use technologies offered at lower cost by others.
- Competing technologies may harm our business.
- If we do not successfully further develop and commercialize the technologies we acquire, or cultivate strategic relationships that expand our licensable portfolio, our competitive position could be harmed and our operating results adversely affected.
- The way we integrate internally developed and acquired technologies into our products and licensing programs may not be accepted by customers.
- Our business may suffer if third parties assert that we violate their intellectual property rights.
- Our licensing cycle is lengthy and costly, and our marketing, legal and sales efforts may be unsuccessful.
- Failure by the semiconductor industry to adopt our technology for the next generation high performance chips used in consumer electronics would significantly harm our business.
- The investment of our cash, cash equivalents and investments in marketable debt and equity securities is subject to risks which may cause losses and affect the liquidity of these investments.
- If we are unable to maintain a sufficient amount of content released in the DTS audio format, demand for the technologies, products, and services that we offer to consumer electronics product manufacturers may significantly decline, which would adversely impact our business and prospects.
- Demand for our HD Radio technology may be insufficient to sustain projected growth.
- If we are unable to further penetrate the streaming and downloadable content delivery markets and adapt our technologies for those markets, our royalties and ability to grow our audio business could be adversely impacted.
- Changes in financial accounting or taxation standards, rules, practices or interpretations may cause adverse unexpected revenue and expense fluctuations which may impact our reported results of operations.
- In order to measure our financial performance, we place greater emphasis on billings and operating cash flows rather than revenue and net operating results, and this emphasis may be misunderstood by investors or create a conflict with the financial measures typically used by investors.
- Our effective tax rate depends on our ability to secure the tax benefits of our international corporate structure, on the application of the tax laws of various jurisdictions and on how we operate our business.
- We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, and the recording and release of such allowances may have a material impact on our results of operations.
- Deteriorating trade relations between the United States and China, other trade conflicts and barriers, economic sanctions, and national security protection policies could limit or prevent us from licensing our technology to certain existing or potential customers, or prevent such customers from doing business with us.
- Disputes regarding our intellectual property may require us to defend or indemnify certain customers or licensees, the cost of which could adversely affect our business operations and financial condition.
- If we lose any of our key personnel or are unable to attract, train and retain qualified personnel, we may not be able to execute our business strategy effectively.
- Decreased effectiveness of share-based compensation could adversely affect our ability to attract and retain employees.
- Failure to comply with environmental regulations could harm our business.
- We have business operations located in places that are subject to natural disasters.
- We have made and may continue to make or to pursue acquisitions and other business combinations which could divert management’s attention, cause ownership dilution to our stockholders, or be difficult to integrate, which may adversely affect our financial results.
- There are numerous risks associated with our acquisitions or mergers of businesses, technologies and patents.
- If our amortizable intangible assets (such as acquired patents) become impaired, we may be required to record a significant charge to earnings.
- Current and future governmental and industry standards may significantly limit our business opportunities.
- Changes in or failure to comply with FCC requirements could adversely impact our HD Radio revenue and royalties.
- Our licensing of industry standard technologies can be subject to limitations that could adversely affect our business and prospects.
- Our financial and operating results may vary, which may cause the price of our common stock to decline.
- We may not continue to pay dividends at the same rate we are currently paying them, or at all, and any decrease in or suspension of the dividend could cause our stock price to decline.
- Our stock repurchase program could increase the volatility of the price of our common stock, and the program may be suspended or terminated at any time, which may cause the trading price of our common stock to decline.
Management Discussion
- We adopted the new accounting standard, ASU No. 2014-09 (Topic 606) "Revenue from Contracts with Customers" effective January 1, 2018, which had a material impact on the financial reporting of our operating results. The adoption of Topic 606 does not, however, impact billings or the cash flow from our contracts with customers. We expect to experience greater variability in quarterly revenue as a result of Topic 606 being applied to minimum guarantee and fixed fee licensing contracts. We place greater emphasis on billings and operating cash flows rather than revenue and net operating results to internally evaluate our financial performance.
- Our revenue is generated primarily from royalty and license fees. Revenue is recognized upon transfer of control of promised products, services or intellectual property and technologies (“IP”) rights to customers in an amount that reflects the consideration that we expect to receive in exchange for those products, services or licensing of the IP rights.
- Certain licensees have entered into fixed fee or minimum guarantee arrangements, whereby licensees pay a fixed fee for the right to incorporate our technology in the licensee'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. For these agreements, we recognize 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.