NOMURA CASE STUDY COMPETITION

Technology Case Study: Plexonix

Amit Rander Lokesh Bahety

DMS, IIT Delhi

Industry Landscape (Computer and Peripherals)

OVERVIEW
Computers and peripherals market has grown at a CAGR of 5.5% from 2005 to record $218.5bn in 2010 China is all set to outpace USA in the next couple of years with a high population using computers and a CAGR of 11.7% in the last five years as against 3.6% achieved by the US Emerging economies like India and Brazil set to be major players with 5 year CAGRs of 16.6% and 21.2% respectively The top five companies in this sector in US are HewlettPackard, Dell, Apple, Acer and Canon while those in China are Logitech (China), Microsoft (China), Dongguan Zhongyu Electronics, Lenovo and Hewlett-Packard Asia

GLOBAL COMPUTER AND PERIPHERALS MARKET

$bn 230 220 210 200 190 180 170 160 150

CAGR: 5.5%
210.2 197.4 179.5 167.1 194.3

218.5

2005

2006

2007

2008

2009

2010

FORECAST SALES IN DEVELOPED COUNTRIES

$bn 50.0
40.0 30.0 20.0 10.0 0.0 2011 2012 2013 2014 2015 USA Japan UK

FORECAST SALES IN DEVELOPING COUNTRIES

$bn 60.0
China Latin America India

CAGR: (2.4%) CAGR: 1.2%

CAGR: (0.8%)

50.0 40.0 30.0 20.0 10.0 0.0

CAGR: (2.4%) CAGR: 1.2%

CAGR: (0.8%)

2011

2012

2013

2014

2015

With the developed world struggling, the Emerging Economies are set to take Center-stage as evident from the sales forecast
Source: Euromonitor International Note: Computers and Peripherals include desktops, portable computers, laptops, netbooks, tablets, monitors, printers and otherperipherals

Amit Rander, Lokesh Bahety

2 DMS, IIT Delhi

Industry Landscape (Smart Phones)

OVERVIEW
For quarter ending March 11, smartphone sales accounted for 25% of all mobile sales, up 17% year on year For the same period, global smartphone sales were at 100 million, up 85% year on year Considerable sales increase in developing market, specially China and Brazil with CAGR in excess of 100% Top 5 vendors in the smartphone sector globally (by Q211 sales results) are Nokia, Samsung, LG, Apple and ZTE, whereas Android, Symbian, iOS, RIM and Bada dominate the OS market for smartphones

GLOBAL MOBILE PHONE SALES

$bn 220 200 180 160 140 120 100 2005 2006 2007 2008 2009 2010 111.0 126.8 153.3 197.0 170.7

CAGR: 12.2%
166.9

SHIFTING COMPETITIVE ADVANTAGE (SHIPMENTS:MM UNITS)

Vendor Nokia Samsung LG Electronics Apple ZTE Others Total 2Q'11 2Q'11 2Q'10 2Q'10 2Q'11/2Q'10 Shipments Mkt. Share Shipments Mkt. Share change 88.5 24.2% 111.1 33.8% (20.3%) 70.2 19.2% 63.8 19.4% 10.0% 24.8 20.3 16.6 145 365.4 6.8% 5.6% 4.5% 39.7% 100.0% 30.6 8.4 12.2 102.3 328.4 9.3% 2.6% 3.7% 31.2% 100.0% (19.0%) 141.7% 36.1% 41.7% 11.3%

SMARTPHONE SALES FORECAST (MM UNITS)

US 250,000 200,000 150,000 100,000 50,000 0 2010 2011 2012 2013 2014 2015 2016 China India Brazil

Smart phone market is poised to see some major upheavals as Wireless mobile access will continue to impact all aspects of consumer behaviour and high-speed connectivity becomes a requirement of both business and personal use Feature phones category is expected to continue to decline over the forecast period, as OS-based smartphones become the industry standard
Source: Euromonitor International

Amit Rander, Lokesh Bahety

3 DMS, IIT Delhi

The Acquirer: Plexonix

OVERVIEW
PC, mobile & digital music player manufacturer Sells software, 3rd party digital content and applications Online and retail stores (300). Online reach of more than 25 countries Target customers: retail , small & mid-sized businesses Market cap of $300 billion P O R T F O L I O Desktop & Laptop Software Music player
Changing technology Decreasing brand loyalty Aggressive price wars

CHALLENGES
Under-penetration in emerging market . Seeks foray in Chinese and Indian markets Mired by patent infringement Dependence on third party IP and digital content Looking at geographical leaders in design and distribution

Revenue break up by geography

America
13% 20% 15% 27% 25%

EMEA Japan Asia Pacific Online Retail

Hardware Tablet

Smart phone

FINANCIAL METRICS (IN $ BILLION EXCEPT EPS)

Year Total revenue Total assets EBITDA Cash and near cash EPS
Source: Nomura Technology Case Study

Revenue break-up by product segment

15% 10% 10%
Software

2010 59.3 68.3 17.6 10.2 15.15

2009 39.0 43.1 11.4 4.8 9.08 Increased focus on R&D

6% 13%

Desktop Laptop Music Player Smart phone Tablet Other Hardware

32%

14%

Amit Rander, Lokesh Bahety

4 DMS, IIT Delhi

Target 1: InterDigital Inc.

COMPANY OVERVIEW
Provides advanced technologies that enable wireless communications Portfolio comprises of 1,300 US and 7,500 non US patents of technologies enabling wireless communications More than 90% of the revenue comes from patent licensing operations Offers licenses of their patents to equipment producers that manufacture, use and sell digital cellular products Products incorporating their patented inventions include: mobile devices, tablets, notebook, wireless PDA Works on technology including next-generation wireless air interfaces and technologies to enhance connectivity and mobility across networks

KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)

Year EPS (diluted) Total Assets Total revenue EBITDA Total debt P/E 2010 3.43 874 394 260 468 8.34 2009 1.97 908 297 135 1,052 12.45

REVENUE BREAKUP BY GEOGRAPHY (2010)

SHARE PRICE MOVEMENT

80 70 60 50 40 30 20 10 0
Volume Share price 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
1/4/2010 3/4/2010 5/4/2010 7/4/2010 9/4/2010 1/4/2011 3/4/2011 5/4/2011 7/4/2011 11/4/2009 11/4/2010 9/4/2011 11/4/2011

10% 15%

Korea

44%

Japan North America

31%

Other Asia

Total revenue: $394 mn

Source: Company Annual Filing, yahoo finance

Amit Rander, Lokesh Bahety

5 DMS, IIT Delhi

'000

16,000

Target 2: ARM Holdings

COMPANY OVERVIEW
Chip designer of mobiles, digital music players, and other digital devices Builds processor designs for consumer electronics and embedded devices, such as computing, digital TV, microcontrollers, networking and smartcard Worlds leading semiconductor intellectual property supplier Cheaper for semiconductor companies to license ARM technology than reproduce it in-house 75% of global devices use 32-bit processors use ARM tech More than 800 processor licenses On an average, there are 2.5 ARM processor-based chips in every mobile phone handset

KEY FINANCIAL METRICS (MN EXCEPT PER SHARE DATA)

Year EPS(diluted) Total assets Total revenue EBITDA Total debt P/E 2010 9.34 1,084 406 184 Nil 31.90 2009 5.45 844 305 120 Nil 22.56

REVENUE BREAKUP BY GEOGRAPHY (2010)

SHARE PRICE MOVEMENT

Share price Volume 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
1/2/2009 3/2/2009 5/2/2009 7/2/2009 9/2/2009 11/2/2009 1/2/2010 3/2/2010 5/2/2010 7/2/2010 9/2/2010 11/2/2010 1/2/2011 3/2/2011 5/2/2011 7/2/2011 9/2/2011 11/2/2011

24%

32%

Taiwan South Korea Japan China Others

600 500 400 300 200 100 0

8% 11% 12% Total revenue: 406 mn

Source: Company Annual Filing, yahoo finance

13%

Amit Rander, Lokesh Bahety

6 DMS, IIT Delhi

Millions

United States

700

Target 3: A8 Music
COMPANY OVERVIEW
Digital music service provider Focus on music business which consists of music content, distribution channel and music service rendered to users Based on research data from Ovium, global market size of digital music will reach $20bn by 2015 Mobile internet market in China, with a market size of RMB20.25 billion which represents a YoY growth of 31.1% Holds original music contest and positions A8.com as an online theme collection platform to gather music contents Provides B2B and B2C content platform Strategy to focus on various end user devices focusing on cloud computing Plans to expand cooperation with domestic handset manufacturer

KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)*

Year EPS Total assets Total revenue EBITDA Total debt P/E 2010 0.01 94 100 7 Nil 6.20 2009 0.03 88 103 18 Nil 2.26

REVENUE BREAKUP BY BUSINESS (2010)

SHARE PRICE MOVEMENT

Share price 7 6 Volume 30 25 20 15 10 5 0
1/4/2010 3/4/2010 5/4/2010 7/4/2010 9/4/2010 1/4/2011 3/4/2011 5/4/2011 7/4/2011 11/4/2009 11/4/2010 9/4/2011 11/4/2011

7% 23%

23%

Ringtone Ringback tone IVR Music

5 4 3 2 1 0

47%

Other

Total revenue: $100 mn

Source: Company Annual Filing, yahoo finance *Note: All figures converted from RMB to USD using average of yearly RMB/USD quotes

Amit Rander, Lokesh Bahety

7 DMS, IIT Delhi

Millions

Target 4: TiVo
COMPANY OVERVIEW
Live television, Internet video, and Video of Demand services under one package Generates revenues through consumer service (direct subscribers), developing technology for television service providers and media services Advertisement solutions including interactive advertisement and audience measurement services Detailed anonymous aggregated reporting on actual viewing and screen by screen interaction by consumers Owns around 200 patents, 370 patents pending Big spender in R&D ($81.6 mn), and wants to continue the spend despite losses ($84.5 mn) in the last quarter Outsource manufacturing of their products to third-parties

KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)

Year EPS(diluted) Total assets Total revenue EBITDA Total debt P/E 2010($) (0.22) 310 238 (16) Nil NA 2009($) 1.01 266 250 97 Nil 10.14

REVENUE BREAKUP BY BUSINESS (2010)

SHARE PRICE MOVEMENT

Share price 20 18 16 14 12 10 8 6 4 2 0
1/4/2010 3/4/2010 5/4/2010 7/4/2010 9/4/2010 1/4/2011 3/4/2011 5/4/2011 7/4/2011 11/4/2009 11/4/2010 9/4/2011 11/4/2011

Volume 80 70 60 50 40 30 20 10 0

24% Service 12% 64% Technology Hardware

Total revenue: $238 mn

Source: Company Annual Filing, yahoo finance Note: All figures have been converted from RMB to $ using average of yearly RMB/$ quotes

Amit Rander, Lokesh Bahety

8 DMS, IIT Delhi

Millions

Zeroing Down on InterDigital

PLEXONIX REVENUE ALL ABOUT PATENTS/IPR
IDCC owns patents in mobile, tablets and notebooks 19000 (patents + patents pending) One of the largest LTE/4G patent portfolios LTE/4G technology expected to be the dominant technology by the second half of this decade

Smart phones

Tablet

42%

ASSUMPTION

Plexonix licenses some or most of its patents from IDCC

BENEFITS
Plexonix will save on licensing fees (based on assumption) Offset patent assertions by competitors Better chances of winning litigations License to competitors with favorable terms for Plexonix

Most major smart phone and tablet players license patents from IDCC List includes: HTC, Samsung, RIM, Apple IDCCs top 3 customers by revenue: Samsung: 34% RIM: 15% HTC: 15%

R&D IDCC continues high quality invention

187

Number of engineers

Number of patents produced in 2011

500
9 DMS, IIT Delhi

IDCC has stated publicly (Sep/Oct) that it is open for bids

Source: IDCC Investor presentation, Annual filing, Equity Research

Amit Rander, Lokesh Bahety

Many players fight the IPR battle

250.00 200.00 150.00 100.00 50.00 0.00 79.8% 68.4% 45.2% 24.6% 19.0% (10.2%) (32.7%) (53.0%) (63.1%) IDCC QCOM ACTG TSRA RMBS DLB MIPS ARMH MSD

I P R

Has emerged as an asset class Large chunk of revenues from licensing Patent acquisitions changing landscape Large corporate consortiums hunting patents IPR lawsuits proliferating The more the patents, stronger the fight Wireless IPR Market very competitive Many players to eat from the pie

Diversified Technology Leaders

Leading Wireless Companies

Financial and IP-Focused Entities

Amit Rander, Lokesh Bahety

Source: IDCC Investor Presentation, Yahoo finance

10 DMS, IIT Delhi

And recent activities suggest further consolidation

15th Aug, 2011 Googles acquisition of Motorola Mobility for $12.5bn New patents (14,600) acquired thwart anti-competitive threats from Microsoft, Apple etc.

30th Jun, 2011 Bankrupt Nortels patent bid war Patents on 3G, wireless networking, semiconductor Winning bid ($4.5bn) from a consortium including Apple, Microsoft and RIM

Samsungs license renewal $100mn per annum 3G renewal with IDCC in 2012 Renewal more damaging if rivals (Apple, Google) take over IDCC

Apples license renewal Apple 3G renewals in 2014. Competitive acquisition might lead to punitive renewal

OTHER ACQUISITIONS
8th April, 2011: Novell Provides network operating system, system management solutions and collaboration solutions Acquired by a software holding company, The Attachment Group for $2.2bn 882 patents to be sold to CTPN holdings (a consortium of Microsoft, EMC, Apple and Oracle) 27th Oct, 2011: Mosaid A patent licenser in semiconductor and communication technology Mosaid turned down a$500.6mn bid ($42 per share) hostile takeover bid by rival patent house Wi-Lan Acquired by Sterling Partners for $590mn
Source: Company press release

Amit Rander, Lokesh Bahety

11 DMS, IIT Delhi

3G Patents give IDCC an Edge

SOLID 3G LICENSE BASE
Global 3G Handset Market Share
Others
3% 3% 4% 5% 23% 5% 10% 8% 6% 13%

20%

As of December 31, 2010, 49% of the global 3G handset market (Samsung, Apple, LG, RIM, HTC) was under license by IDCC 13% of the market which belongs to regional and local players contains companies under the 3G license base of IDCC The company targets to license 100% of 3G market The 3G/4G market would present a 1.2 bn unit , hence licensing opportunity by 2015 for which IDCC is in a good position to handle.

STRONG POSITION IN LTE GIVES IDCC THE EDGE OVER OTHER COMPETITORS
400 300 200 100 0 2007 2008 2009 2010

"No of IDCC Patents and applicationsdeclared to ETSI for E-UMTS (LTE)"

1000 800 600 400 200 0

Cumulative No of LTE Patents Cumulative No of UMTS (WCDMA) Patents

2007

2008

2009

2010

Significantly bigger opportunity in LTE as more devices available (tablets, e-readers, etc.)
Source: IDCC Investor Presentation Note: UMTS and E-UMTS stand for Universal Mobile Telecommunications System and Evolved Universal Mobile Telecommunications System, respectively. Some patents and applications have been declared to ETSI by InterDigital for both UMTS and E-UMTS and therefore are included in both the UMTS and the E-UMTS data above. The data above has been adjusted to reflect withdrawals of, and corrections made to, declarations of patents and applicationsasof October 27, 2010.

Amit Rander, Lokesh Bahety

12 DMS, IIT Delhi

Financial Considerations
CAPITAL STRUCTURE
Senior Convertible Notes Market Value of Equity
1

OVERVIEW
Net revenues 450 400 350 300 39% 29% Net Margins 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 9% 11% 15.0% 10.0% 5.0% 2007 2008 2009 2010

$mn 2500

2000

250 200 150 100 50 0

1500

91.3%
1000

LIQUIDITY ANALYSIS
500 The company has cash and cash equivalents worth $409.7mn as of September 30, 2011. In addition, it also had $280.9mn in short term investments The senior convertible notes ($190.6mn) which were issued in April 2011 would mature in March 2016 Licensing Contracts give rise to a predictable revenue stream and hence the cash flows to accrue in future years

8.7% Total = $2,191mn

Source: IDCC 10Q 30/09/2011 1 Market value of equity as of 08/11/11 Note: Net Margins represent net income applicable to common shareholders divided by revenues

Amit Rander, Lokesh Bahety

13 DMS, IIT Delhi

Brokers are bullish on IDCC

INDUSTRY
Company Mosaid Acacia Research Tessera Technologies Qualcomm Rambus Dolby MIPS ARM Holdings Average (all companies) IDCC FY1 IDCC FY2 P/E 21.5 26.1 22.4 15.5 NM 11.0 30.5 53.3 25.7 24.8 14.9 EV/EBITDA 9.7 16.1 21.7 10.4 NA 5.4 17.4 47.2 18.3 13.2 8.5 Market Cap/ Sales 5.0 5.5 NA 5.1 6.2 3.4 4.0 17.6 6.7 6.8 5.0

BROKER RECOMMENDATION* 60% 50% 40% 30% 20% 10% 0% Buy Hold Sell
TARGET PRICE Mean 64.6 Median 66 High 118 Low 26

Brokers

ANALYST COMMENTARY
M Partners, Nov 9, 2011: We reiterate our BUY recommendation and our takeout share price target of $118.0 The outlook for IDCCs patent is positive as the report goes on to say, Essential patent royalties are long lasting, consistent and guaranteed revenue streams that can benefit a patent holder in one of two ways for many years. First it can be used to offset patent assertion made by competitors. Secondly, FRAND royalties can be used to bleed Competitors of gross margin, while at the same time enriching earnings. Barclays Capital Equity Research, 27 Oct, 2011: We believe that the companys asymmetric licensing model supported by its rigorous internal R&D processes is well positioned to capitalize on the mass adoption of 3G devices, the transition to 4G and the broader adoption of wireless technologies by Non-traditional devices. It has been given a stock rating of overweight which implies the stock is expected to outperform the un-weighted expected total return of the sector coverage universe over a 12 month investment horizon.
Source: Equity Research, Thomson First Call *Total no. of brokers: 5

Amit Rander, Lokesh Bahety

14 DMS, IIT Delhi

IDCC Valuation Discounted Cash Flow analysis

2011E Free Cash Flow EBIT Tax on EBIT Profit After Tax Depreciation and Amortization (Inc) Dec in Operating Working Capital (Inc) Dec in Deferred tax assets (net) (Inc) Dec in Other Long Term Assets (net) Inc (Dec) in Long Term Deferred Revenue Inc (Dec) in Other Long Term Liabilities (Inc)/Dec in Short Term Investments Capital Expenditures on Patents Free Cash Flow Weighted Average Capital Cost Risk Free rate Market Risk Premium Levered Beta Equity Cost 127 (39) 88 23 (21) 20 (0) (152) 4 45 (30) (23) 2012E 208 (65) 142 24 4 (54) (40) 76 2013E 237 (75) 162 27 (13) (6) (46) 123 2014E 270 (86) 184 30 (12) (6) (62) 133 2015E 304 (97) 207 35 (11) (6) (28) (70) 127 2016E 392 (129) 263 41 (10) (5) (98) 190 2017E 431 (142) 289 50 (9) (5) (107) 217 2018E 474 (157) 318 60 (8) (5) (158) 207 2019E 512 (169) 343 76 (7) (5) (31) (170) 206 2020E 553 (183) 371 91 (7) (4) (184) 267

3.1% 5.7% 0.90 8.2%

Effective tax rate Credit Spread Debt Cost Pre Tax Debt Cost Post Tax

33.0% 0.52% 3.6% 2.4%

Share Price Shares Outstanding (Diluted) Market Capitalization Total Debt Total Capital EV Capital Structure (% Equity) Capital Structure (% Debt)

43.97 45 2,000 191 2,191 1,976 91.3% 8.7%

WACC Terminal Growth rate Discounting Model Year Count PV of FCF Terminal Value NPV Intrinsic Value

7.7% 1.75%

0.5 (22) 4,584.92 3,236 71.12

1.5 68

2.5 103

3.5 103

4.5 91

5.5 127

6.5 134

7.5 119

8.5 110

9.5 132

Source: Company reports, Note: The data is just a sample of one pair of values of Beta and Terminal growth rate. Please refer to the excel sheet for the entire valuation

15 DMS, IIT Delhi

Sensitivity Analysis
Terminal growth rate 0.65 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 78.6 81.3 84.1 87.3 90.8 94.6 0.75 71.1 73.2 75.5 78.0 80.8 83.8 Beta 0.85 64.7 66.5 68.3 70.4 72.6 74.9 0.95 59.3 60.7 62.3 63.9 65.7 67.6 1.05 54.6 55.8 57.1 58.4 59.9 61.5 1.15 50.5 51.5 52.6 53.7 55.0 56.3

The values denote the intrinsic share price of the company. FINANCIAL METRICS @ ACQUISITION PRICE Low Share Price Market Value Enterprise Value P/E EV/EBITDA 62.3 2,791.4 2,625.4 21.0 11.3 High 70.4 3,154.0 2,988.0 23.8 12.9 DEAL DYNAMICS With $10.2bn of cash and cash equivalents and another $13.1bn in short-term marketable securities, the deal should be an All-Cash deal with Plexonix buying out the entire stake the projected share price represents a premium of 9% 23% to the average price of Interdigital over the last 3 months The premium reflects the inherent value of the patents of IDCC. The premium also reflects the tug of war between various technology companies for acquiring IPR assets

Source: Company reports, Capitaline Note: The P/E and EV/EBITDA are forward multiples. They represent the FY12 ie December12 multiples

(#)

16 DMS, IIT Delhi

Past patent transactions render IDCC still undervalued

RECENT TRANSACTIONS IN THE IPR DOMAIN IN NORTH AMERICA
Target
Mosaid Motorola Nortel Novell

Acquiror
Sterling Partners Google Apple, Microsoft, RIM, Sony, EMC, Ericcson CPTN Holdings

Date
October, 2011 August, 2011 July, 2011 April, 2011

Acquisition Price ($mn) No of Patents Price/Patent

594 12,500 4,500 450 3,489 24,500 6,000 882 170,249 510,204 750,000 510,204

DEMAND SCENARIO IN THE IPR MARKET

Essential patents, although encumbered by FRAND (Fair Reasonable and Non-Discriminatory pricing) bring consistent and long term patent royalties. They can be used to Offset patent assertions by competitors Shrink Gross Margins of competitors while enhancing earnings. (By 2015, 1% GM would be worth ~ $3-4bn per annum in the wireless industry) Since the closing of the Nortel transaction, the last few months have seen elevated patent litigation amongst the global device manufacturers With 19,000 patents (~90% in the wireless domain), IDCC is the most significant IP portfolio currently available

INTERDIGITAL PATENT PORTFOLIO VALUATION

No of patents held (as of 3Q11)
Current EV1 ($mn) Price per Patent

19,000 1,781.4 93,757 High Low 2,988.0 157,261

Acquisition Price ($mn) Price per patent

2,625.4 138,177

Source: Company filings for the respective transaction, Equity Research for the Demand Scenario Note: The acquisition price range is the mean Enterprise value calculated using DCF method keeping Beta at 0.85 and 0.95 and terminal growth rate at 1.00% and 1.25% respectively 1TCurrent EV is as of 08/11/2011

(#)

17 DMS, IIT Delhi

Other Key Considerations

TOP INSTITUTIONAL SHAREHOLDERS
Institutional Holding
BlackRock Institutional Trust Company, N.A. Vanguard Group, Inc. The Roosevelt Investment Group, Inc. State Street Global Advisors (US) Opus Capital Management, Inc. Emerald Advisers, Inc. C.S. McKee, L.P. Cardinal Capital Management, L.L.C. Mellon Capital Management Corporation Wells Capital Management Inc. Hussman Econometrics Advisors, Inc. JP Morgan Asset Management Managed Account Advisors LLC Wentworth, Hauser & Violich, Inc. Dimensional Fund Advisors, LP Top 15 shareholders

IDCC TOP MANAGEMENT

5.00 4.86 3.07 2.13 1.52 1.46 1.40 1.38 1.13 1.11 1.10 1.01 0.97 0.96 0.92 28.02 93.0 102.9 57.1 45.1 32.3 31.0 26.1 25.6 24.0 20.6 23.3 18.8 18.0 17.9 17.0 552.59

Shares % Outstanding Value ($mn)

2,275,769 2,210,001 1,396,491 968,269 692,835 666,476 638,700 626,098 515,623 503,902 500,000 460,430 439,733 436,860 417,114 12,748,301

Name Steven Clontz William Merritt Scott McQuilkin

James Nolan Lawrence Shay Richard Brezski Naresh Soni Gary Isaacs Steven (Steve) Sprecher

Age Designation 60 Chairman of the Board 52 President & CEO 56 Chief Financial Officer
50 EVP - Research and Development EVP - Intellectual Property & Chief IP 52 Counsel; President of InterDigital Patent Holding Sub 38 VP, Chief Accounting Officer, Controller VP, Strategic Engineering, Chief 52 Technology Officer 51 Chief Administrative Officer 55 General Counsel, Secretary

RISK FACTORS
Challenges related to the companys ability to enter into new license agreements could cause the revenue and cash flow to decline Revenue may be impacted by the deployment of 4G or other technologies in place of 2g and 3g technologies or by the need to extend or modify certain existing license agreements to cover additional later patents Royalty rates could decrease for future license agreements Revenues are derived primarily from a limited number of customers. Delays in renewing or an inability to renew existing license agreements and challenges in defending and enforcing patent rights could cause the revenue and cash flow to decline The wireless IPR industry is subject to rapid technological change, uncertainty and shifting market opportunities. The technologies created by the company may not be adopted by the market or widely deployed
Source: Company Filings, proxy

Amit Rander, Lokesh Bahety

18 DMS, IIT Delhi