InterDigital Inc (IDCC)

[The Count]

Prepaid revenues

Prepaid revenue means that the payments received are not earned yet from an accounting perspective. However it does not mean that IDCC has any future obligation under the contract, other than not to sue for infringement. A portion of the amount received is deferred and recorded as revenue over time to account for the revenue in the period earned in accordance with accounting principals that recognize revenue over the life of a contract. This is what I know as a CPA.

The money was paid for a license to use IDCC's IP. IMO, that license obligation will continue regardless of whether or not IDCC is purchased. Since there are no further services or other obligations to perform on IDCC, there would be no basis for repaying any part of the prepaid revenues. IDCC or its successor will have to live up to it's contractual obligation, which is allowing the use of the IP and they will keep the money received. This is a legal issue and is defined by the contract. From my understanding, there is no contractual obligation to repay anything. That is a legal issue, so I have no expertise, but I have no reason to believe otherwise.