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Management Discussion

• Revenues for the three months ended September 30, 2020 were approximately $3,405,000, an increase of approximately $2,765,000, or 432%, from the comparable period of 2019, which were approximately $640,000. Revenues for the nine months ended September 30, 2020 were approximately $5,488,000, an increase of approximately $3,486,000, or 174%, from the comparable period of 2019, which was approximately $2,002,000. We generated revenue from patent fees of approximately $3,405,000 and $5,488,000 for the three and nine months ended September 30, 2020, respectively, from licenses to the CXT, M-RED and power management portfolios. Our revenue, in the near future if not longer, is likely to be affected by factors relating to the COVID-19 pandemic as described under “Overview”. We generated revenue from patent fees of approximately $640,000 and approximately $2,002,000 for the three and nine months ended September 30, 2019, respectively, from settlements in the CXT portfolio actions, anchor structure portfolio actions, power management/bus controller portfolio actions and CMOS portfolio actions. The total settlement recovery is included in revenue and the associated costs are deducted as cost of revenue. As discussed above, the timing and amount of our revenue is dependent upon the results of litigation seeking to enforce our intellectual property rights, and we cannot predict when or whether we will have a recovery and how much of the recovery will be received by us after payments to legal counsel, to our funding sources, or to inventors/former patent owners who have an interest in our share of the recovery from certain patent portfolios after deducting payments due to counsel and the litigation funding source. Since our revenue is dependent upon our success in litigation, the timing of revenue is dependent upon the timing of litigation and our success in the litigation as well as the ability of defendants to make any agreed-upon payments. As a result, we expect that our revenue will continue to be subject to significant changes from quarter to quarter.