Immersion Corp 10-Q for FY2027 Q1
Immersion Corp (IMMR)
About this 10-Q
Immersion Corp filed this 10-Q on September 14, 2026, covering the quarter ended July 31, 2026 (FY2027 Q1).
Headline figures
Quarter ended July 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $294.4M
- up 0.8% from $292.03M a year earlier
- Net income
- $4.88M
- compared with a net loss of $930K a year earlier
- Diluted EPS
- $0.17
- compared with -$0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, zip code)
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
☒ |
|
Smaller reporting company |
||
|
|
|
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
Number of shares of common stock outstanding as of September 8, 2026, was
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2026, Immersion Corporation is referred to using terms such as the “Company,” “Immersion,” “we,” “us,” or “our.”
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside our control. Actual results could differ materially from those projected in the forward-looking statements, and therefore, we caution you not to place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the risk factors contained under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended April 30, 2026, filed with the Securities and Exchange Commission (the “SEC”) on July 24, 2026, Part I, Item 1A, “Risk Factors” in Barnes & Noble Education Inc.’s (“Barnes & Noble Education”) Annual Report on Form 10-K for the fiscal year ended May 2, 2026, filed with the SEC on July 9, 2026, and in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.
Any forward-looking statements made by us in this report speak only as of the date of this report, and we do not intend to update these forward-looking statements after the filing of this report, unless required to do so by applicable law or regulation. You are urged to review carefully and consider our various disclosures in this report and in our other reports publicly disclosed or filed with the SEC that attempt to advise you of the risks and factors that may affect our business.
IMMERSION CORPORATION
Fiscal Quarter Ended July 31, 2026
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
IMMERSION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
|
|
|
|
||
(In thousands) |
July 31, 2026 |
|
|
April 30, 2026 |
|
||
ASSETS |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Investments – current |
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
||
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
||
Merchandise inventories, net |
|
|
|
|
|
||
Textbook rental inventories, net |
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
||
|
|
|
|
|
|
||
Total Current Assets |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
||
Long-term deposits |
|
|
|
|
|
||
Other assets – noncurrent |
|
|
|
|
|
||
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
||
Other assets – noncurrent |
|
|
|
|
|
||
|
|
|
|
|
|
||
Total Assets |
$ |
|
|
$ |
|
||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
1
IMMERSION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
|
|
|
|
||
(In thousands, except share and per share data) |
July 31, 2026 |
|
|
April 30, 2026 |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Accounts payable |
$ |
|
|
$ |
|
||
Accrued compensation |
|
|
|
|
|
||
Deferred revenue – current |
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Accounts payable |
|
|
|
|
|
||
Accrued liabilities |
|
|
|
|
|
||
Deferred revenue – current |
|
|
|
|
|
||
Operating lease liabilities – current |
|
|
|
|
|
||
|
|
|
|
|
|
||
Total Current Liabilities |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Deferred revenue – noncurrent |
|
|
|
|
|
||
Deferred income taxes – noncurrent |
|
|
|
|
|
||
Other long-term liabilities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Deferred income taxes – noncurrent |
|
|
|
|
|
||
Operating lease liabilities – noncurrent |
|
|
|
|
|
||
Deferred revenue – noncurrent |
|
|
|
|
|
||
Other long-term liabilities |
|
|
|
|
|
||
Long-term borrowings |
|
|
|
|
|
||
|
|
|
|
|
|
||
Total Liabilities |
|
|
|
|
|
||
|
|
|
|
|
|||
Stockholders’ Equity: |
|
|
|
|
|
||
Common stock – $ |
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
||
Accumulated other comprehensive income |
|
|
|
|
|
||
Accumulated earnings |
|
|
|
|
|
||
Treasury stock: |
|
( |
) |
|
|
( |
) |
Total Stockholders’ Equity Attributable to Immersion Corporation Stockholders |
|
|
|
|
|
||
Noncontrolling interest in consolidated subsidiaries |
|
|
|
|
|
||
Total Stockholders’ Equity |
|
|
|
|
|
||
Total Liabilities and Stockholders’ Equity |
$ |
|
|
$ |
|
||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
2
IMMERSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
Three Months Ended July 31, |
|
|||||
(In thousands, except share and per share data) |
2026 |
|
|
2025 |
|
||
REVENUES |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Royalty and license |
$ |
|
|
$ |
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Product and other |
|
|
|
|
|
||
Rental income |
|
|
|
|
|
||
|
|
|
|
|
|
||
Total revenues |
|
|
|
|
|
||
|
|
|
|
|
|
||
COST OF SALES (excludes depreciation and amortization expense) |
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Product and other cost of sales |
|
|
|
|
|
||
Rental cost of sales |
|
|
|
|
|
||
Total cost of sales |
|
|
|
|
|
||
OPERATING EXPENSES |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Selling and administrative expenses |
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Selling and administrative expenses |
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
||
Other (income) expense |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
||
Operating Loss |
|
( |
) |
|
|
( |
) |
Interest income and other income (expense), net |
|
|
|
|
|
||
Interest expense, net |
|
|
|
|
|
||
Loss Before Income Taxes |
|
( |
) |
|
|
( |
) |
Income tax benefit |
|
|
|
|
|
||
Net Loss |
|
( |
) |
|
|
( |
) |
Less: Net loss attributable to noncontrolling interest |
|
( |
) |
|
|
( |
) |
Net Income (Loss) Attributable to Immersion Stockholders |
|
|
|
|
( |
) |
|
|
|
|
|
|
|
||
Earnings (Loss) Per Common Share Attributable to Immersion Stockholders |
|
|
|
|
|
||
Basic |
$ |
|
|
$ |
( |
) |
|
Diluted |
$ |
|
|
$ |
( |
) |
|
Weighted-Average Common Shares Outstanding |
|
|
|
|
|
||
Basic |
|
|
|
|
|
||
Diluted |
|
|
|
|
|
||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
3
IMMERSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
Three Months Ended July 31, |
|
|||||
(In thousands) |
2026 |
|
|
2025 |
|
||
Net Loss |
$ |
( |
) |
|
$ |
( |
) |
Change in unrealized losses on available-for-sale securities |
|
— |
|
|
|
( |
) |
Comprehensive Loss |
$ |
( |
) |
|
$ |
( |
) |
Comprehensive loss attributable to noncontrolling interests |
|
( |
) |
|
|
( |
) |
Comprehensive Income (Loss) Attributable to Immersion Stockholders |
$ |
|
|
$ |
( |
) |
|
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
4
IMMERSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
|
Three Months Ended July 31, 2026 |
|
||||||||||||||||||||||||||||
|
Common Stock |
|
|
|
|
|
|
|
Treasury Stock |
|
Total |
|
|
|
|
|
||||||||||||||
(In thousands, except number of shares) |
Shares |
|
Amount |
|
Additional |
|
Accumulated Other Comprehensive |
|
Accumulated |
|
Shares |
|
Amount |
|
Stockholders’ |
|
Noncontrolling |
|
Total |
|
||||||||||
Balances at April 30, 2026 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
|||||||||
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
( |
) |
||
Immersion Release of restricted stock units and awards, net of shares withheld |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
( |
) |
|
— |
|
|
( |
) |
||
BNED Release of restricted stock units and awards, net of shares withheld |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Shares issued to an employee in lieu of cash compensation |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||||
Immersion Dividends declared |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
BNED Dividends declared |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Stock-based compensation |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
||||
Rebalancing of controlling and noncontrolling interest |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
|
— |
|
|
Tax effects of changes in controlling and noncontrolling interest |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|||
Balances at July 31, 2026 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
|||||||||
|
Three Months Ended July 31, 2025 |
|
||||||||||||||||||||||||||||
|
Common Stock |
|
|
|
|
|
|
|
Treasury Stock |
|
Total |
|
|
|
|
|
||||||||||||||
(In thousands, except number of shares) |
Shares |
|
Amount |
|
Additional |
|
Accumulated Other Comprehensive |
|
Accumulated |
|
Shares |
|
Amount |
|
Stockholders' |
|
Noncontrolling |
|
Total |
|
||||||||||
Balances at April 30, 2025 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
|||||||||
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
( |
) |
Unrealized loss on available-for-sale securities, net of taxes |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Release of restricted stock units and awards, net of shares withheld |
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
|
|
|
( |
) |
|
( |
) |
|
— |
|
|
( |
) |
|||
Shares issued to an employee in lieu of cash compensation |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||||
Dividends declared |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Stock-based compensation |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
||||
Tax effects of changes in controlling and noncontrolling interest |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Balances at July 31, 2025 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
|||||||||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
5
IMMERSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
Three Months Ended July 31, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to cash flows from operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Loss on disposal of property and equipment |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Net gains on investment in marketable securities |
|
|
( |
) |
|
|
( |
) |
Net gains on derivative instruments |
|
|
( |
) |
|
|
( |
) |
Shares issued to an employee in lieu of cash compensation |
|
|
|
|
|
|
||
Other noncash |
|
|
|
|
|
( |
) |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Accounts and other receivables |
|
|
( |
) |
|
|
( |
) |
Merchandise inventories |
|
|
( |
) |
|
|
( |
) |
Textbook rental inventories |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Changes in lease right-of-use assets and liabilities |
|
|
( |
) |
|
|
|
|
Other assets |
|
|
|
|
|
|
||
Accounts payable and accrued liabilities |
|
|
|
|
|
|
||
Other current liabilities |
|
|
( |
) |
|
|
|
|
Deferred revenue |
|
|
( |
) |
|
|
|
|
Other long-term liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash flows used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities and other investments |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale or maturities of marketable securities and other investments |
|
|
|
|
|
|
||
Proceeds from sale of derivative instruments |
|
|
|
|
|
|
||
Payments for settlement of derivative instruments |
|
|
( |
) |
|
|
( |
) |
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash flows provided by investing activities |
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from borrowings |
|
|
|
|
|
|
||
Repayment of borrowing |
|
|
( |
) |
|
|
( |
) |
Payments of dividends to stockholders |
|
|
( |
) |
|
|
|
|
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
|
|
Shares withheld to cover payroll taxes |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
||
Beginning of period |
|
|
|
|
|
|
||
End of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental cash flows information: |
|
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Income taxes paid (net of refunds) |
|
$ |
|
|
$ |
|
||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
6
IMMERSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Reconciliation of cash, cash equivalents and restricted cash for Condensed Consolidated Balance Sheets:
|
|
Three Months Ended July 31, |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Immersion |
|
$ |
|
|
$ |
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Barnes & Noble Education restricted cash reported as: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Other assets - noncurrent |
|
|
|
|
|
|
||
Total restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
7
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
These unaudited Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026.
NOTE 1. ORGANIZATION
Description of Business
Immersion
Immersion Corporation (“Immersion”) was incorporated in 1993 in California and reincorporated in Delaware in 1999. Unless the context otherwise requires, references in these Notes to the Condensed Consolidated Financial Statements to the “Company”, “we”, “us,” and “our” refer to Immersion and our consolidated subsidiaries.
Immersion generates license and royalty revenues from a wide range of intellectual property (“IP”) that more fully engage users’ sense of touch when operating digital devices. We focus on the following target application areas: mobile devices, wearables, consumer, mobile entertainment and other content; console gaming; automotive; medical; and commercial.
On June 10, 2024 (the “Closing Date”), we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware corporation (“Barnes & Noble Education” or “BNED”). See Note 3. Business Combination in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026, for additional information. The financial results of Barnes & Noble Education have been included in our Condensed Consolidated Financial Statements since the Closing Date.
Barnes & Noble Education
Barnes & Noble Education is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. Barnes & Noble Education is also a textbook wholesaler, and bookstore management hardware and software provider. Barnes & Noble Education operates physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.
BNC First Day® Equitable and Inclusive Access Programs
Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its BNC First Day® affordable access course material programs, consisting of First Day Complete and First Day, which provide faculty-required course materials to students on or before the first day of class.
The Barnes & Noble brand (licensed from Barnes & Noble Education’s former parent) along with its subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing in the United States. Barnes & Noble Education’s large college footprint, reputation, and credibility in the marketplace not only support its marketing efforts to universities, students, and faculty, but are also important to its relationship with leading educational publishers who rely on us as one of their primary distribution channels.
8
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The results of operations reflected in the Company’s Condensed Consolidated Financial Statements include the accounts of Immersion and our wholly-owned subsidiaries, as well as the accounts of Barnes & Noble Education, a consolidated variable interest entity, since June 10, 2024. All significant intercompany accounts and transactions have been eliminated in consolidation.
The noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of earnings or loss attributable to the interest in Barnes & Noble Education held by other owners. The noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of Barnes & Noble Education’s net assets attributable to the other owners, based on the portion of the interest owned by such owners. As of July 31, 2026 and April 30, 2026, the noncontrolling interest was $
These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and the applicable articles of Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, and cash flows, in conformity with U.S. GAAP and should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2026. In the opinion of management, all adjustments consisting of only normal and recurring items necessary for the fair presentation of the financial position and results of operations for the interim periods presented have been included.
Due to their non-homogeneous operations, our Condensed Consolidated Balance Sheet as of July 31, 2026 and Consolidated Balance Sheet as of April 30, 2026 and Condensed Consolidated Statements of Operations for the three months ended July 31, 2026 and 2025, separately present the operating assets, liabilities, and operations of Immersion’s business from the operating assets, liabilities and operations of Barnes & Noble Education's business. All the assets of Barnes & Noble Education, reported on the Condensed Consolidated Balance Sheets, can be used only to settle obligations of Barnes & Noble Education. None of the liabilities of Barnes & Noble Education have recourse to the general credit of Immersion Corporation.
Seasonality
Barnes & Noble Education’s business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education’s quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in its fiscal calendar dates.
As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the digital content is made available to the customer compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period; and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of Barnes & Noble Education’s products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of Barnes & Noble Education’s products by its customers for products ordered through Barnes & Noble Education’s websites and virtual bookstores. See Revenue Recognition and Deferred Revenue discussion below.
These shifts in timing may affect the comparability of Barnes & Noble Education’s results across periods. Sales attributable to Barnes & Noble Education’s wholesale business are generally highest in Barnes & Noble Education’s first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.
9
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Summary of Significant Accounting Policies
There have been no material changes to our significant accounting policies from the information provided in “Note 2 – Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements set forth in Item 8 included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026, except as described below.
Use of Estimates
Goodwill and Indefinite-Lived Intangible Assets
We have goodwill and indefinite-lived intangible assets that have been recorded in connection with the acquisition of Barnes & Noble Education. Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment at least annually. We monitor these assets on a quarterly basis for potential indicators of impairment. Goodwill is required to be tested for impairment at the reporting unit level, which is an operating segment, or one level below the operating segment.
Impairment of Long-Lived Assets
The Company’s long-lived assets include property and equipment, operating lease right-of-use assets, and amortizable intangibles recorded in connection with our business acquisition of Barnes & Noble Education. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.
Restricted Cash
As of July 31, 2026 and April 30, 2026, the Company had restricted cash of $
Merchandise Inventories
During the three months ended July 31, 2026, no LIFO adjustment was required. The related LIFO reserve was $
Revenue Recognition and Deferred Revenue
Except for the accounting policy on revenue recognition related to Barnes & Noble Education’s gift-card program described below, there have been no material changes to the Company’s accounting policy on revenue recognition and deferred revenue which is described in Note 2 to the consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended April 30, 2026.
Barnes & Noble Education does not have a customer loyalty program. In fiscal 2027, Barnes & Noble Education launched its own gift card program. Proceeds from the sale of gift cards issued by Barnes & Noble Education are recorded as a contract liability and recognized as revenue upon redemption by the customer or when breakage is recognized in accordance with the Barnes & Noble Education's accounting policy. Barnes & Noble Education also accepts Barnes & Noble Booksellers ("B&N") gift cards and sells third-party gift cards, including B&N gift cards, in its stores. Barnes & Noble Education does not treat any promotional offers
10
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
as expenses. Sales tax collected from its customers is excluded from reported revenues. Barnes & Noble Education’s
Accounting Pronouncements
Recently Issued Accounting Pronouncements
There were no new accounting pronouncements issued during the three months ended July 31, 2026, that are expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 modernizes and simplifies the accounting for software development costs by establishing a single capitalization framework for all internally developed or acquired software, regardless of whether the software is intended for internal use, to be sold, or to be used in delivering products and services. The new guidance retains the concept of project stages but eliminates the historical distinction between internal-use software and software to be sold or marketed. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The guidance is required to be applied prospectively, with optional retrospective or modified retrospective transition methods. The Company is currently evaluating the impact of ASU 2025-06 on its condensed consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. This ASU is effective for annual and interim periods beginning after December 15, 2026 (our 2028 fiscal year), with early adoption permitted. We are currently assessing this guidance and determining the impact on its condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Adopted
In September 2025, Financial Accounting Standards Board (the “FASB”) issued ASU No. 2025-07 (“ASU 2025-07”) Derivatives and Hedging (Topic 815): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 related to share-based payments from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt ASU 2025-07 effective May 1, 2025, the first day of its fiscal 2026. The adoption did not have a material impact on the Company’s condensed consolidated financial statements accounting for its Participation Interest Purchase Agreement. See Note 9. Participation Interest Purchase Agreement for further discussion.
NOTE 3. SEGMENT REPORTING
The Company operates as
Due to the nonhomogeneous operations of Immersion and Barnes & Noble Education, the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Operations, separately present the operating assets, liabilities, and operations of Immersion’s business from the operating assets, liabilities, and operations of Barnes & Noble Education’s business. Our Condensed Consolidated Statements of Operations includes each segment’s significant segment expenses.
11
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
Three Months Ended July 31, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Revenues: |
|
|
|
|
|
|
||
Immersion |
|
$ |
|
|
$ |
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cost of sales (excludes depreciation and amortization expense): |
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
|
||
Immersion |
|
|
|
|
|
|
||
Selling and administrative expenses |
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
Selling and administrative expenses |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
|
||
Restructuring and other charges |
|
|
|
|
|
|
||
Other income |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
||
Operating Income (Loss): |
|
|
|
|
|
|
||
Immersion |
|
|
|
|
|
|
||
Barnes & Noble Education |
|
|
( |
) |
|
|
( |
) |
Operating Loss |
|
$ |
( |
) |
|
$ |
( |
) |
The reconciliation between segment Operating Income (Loss) and Income (Loss) Before Income Taxes is included within our Condensed Consolidated Statements of Operations.
Geographically, Immersion’s revenues have historically been concentrated in Asia, primarily in Japan and Korea. The geographic distribution of revenues for Asia, North America, Europe and Africa for the three months ended July 31, 2026, represented
The following table is a summary of Property and Equipment Additions and Total Assets by reportable segment (in thousands):
(in thousands) |
|
July 31, |
|
|
April 30, |
|
||
Property and Equipment Additions |
|
|
|
|
|
|
||
Immersion |
|
$ |
|
|
$ |
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
Total property and equipment additions |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Total Assets |
|
|
|
|
|
|
||
Immersion |
|
$ |
|
|
$ |
|
||
Barnes & Noble Education |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
As of July 31, 2026 and April 30, 2026,
NOTE 4. REVENUE RECOGNITION
Immersion
Disaggregated Revenue
The following table presents the disaggregation of Immersion’s revenue for the three months ended July 31, 2026 and 2025 (in thousands):
12
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Fixed fee license revenue |
|
$ |
|
|
$ |
|
||
Per-unit royalty revenue |
|
|
|
|
|
|
||
Total royalty and license revenue |
|
$ |
|
|
$ |
|
||
Contract Assets
As of July 31, 2026, we had contract assets of $
Deferred Revenue
The following table presents changes in deferred revenue associated with our contract liabilities (in thousands):
|
|
July 31, |
|
|
April 30, |
|
||
Deferred revenue beginning of the period |
|
$ |
|
|
$ |
|
||
Additions to deferred revenue during the period |
|
|
|
|
|
|
||
Reductions to deferred revenue for revenue recognized during the period |
|
|
( |
) |
|
|
( |
) |
Deferred revenue balance end of the period |
|
$ |
|
|
$ |
|
||
Based on contracts signed and payments received as of July 31, 2026, we expect to recognize $
Revenue recognized during the three months ended July 31, 2026 and 2025 that was included in the deferred revenue balance at the beginning of the period was $
Barnes & Noble Education
Disaggregated Revenue
The following table presents disaggregated revenue associated with Barnes & Noble Education’s major products and service offerings (in thousands):
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Course material product sales |
|
$ |
|
|
$ |
|
||
General merchandise product sales (a) |
|
|
|
|
|
|
||
Services and other revenue (b) |
|
|
|
|
|
|
||
Total product and other revenue |
|
|
|
|
|
|
||
Course material rental income |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
Contract Assets
Contract assets represent the sale of goods or services to a customer before Barnes & Noble Education has the right to obtain consideration from the customer. Contract assets consist of unbilled amounts at the reporting date and are transferred to accounts
13
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
receivable when the rights become unconditional. Contract assets (unbilled receivables) were $
Deferred Revenue
Contract liabilities represent an obligation to transfer goods or services to a customer for which Barnes & Noble Education has received consideration and consists of its deferred revenue liability (deferred revenue). Deferred revenue consists of the following:
The following table presents changes in deferred revenue associated with Barnes & Noble Education's contract liabilities (in thousands):
|
|
July 31, |
|
|
April 30, |
|
||
Deferred revenue as of the beginning of the period |
|
$ |
|
|
$ |
|
||
Additions to deferred revenue during the period |
|
|
|
|
|
|
||
Reductions to deferred revenue for revenue recognized during the period |
|
|
( |
) |
|
|
( |
) |
Deferred revenue balance at the end of period |
|
$ |
|
|
$ |
|
||
NOTE 5. INVESTMENTS AND FAIR VALUE MEASUREMENTS
Immersion invests surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal. The following summarizes our investments in marketable-equity securities as of July 31, 2026 and April 30, 2026 (in thousands):
Investments - current |
|
July 31, 2026 |
|
|
April 30, 2026 |
|
||
Marketable equity securities |
|
$ |
|
|
$ |
|
||
Total Investments – current |
|
$ |
|
|
$ |
|
||
Marketable Securities
Marketable securities as of July 31, 2026 and April 30, 2026 consisted of the following (in thousands):
|
|
July 31, 2026 |
|
|||||||||||||
|
|
Cost or |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair Value |
|
||||
Marketable equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
14
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
April 30, 2026 |
|
|||||||||||||
|
|
Cost or |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair Value |
|
||||
Marketable equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Derivative Financial Instruments
Immersion’s derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on the Company’s Condensed Consolidated Balance Sheets as of July 31, 2026 and April 30, 2026 (in thousands):
|
|
July 31, 2026 |
|
|||||||||
|
|
Cost |
|
|
Unrealized |
|
|
Fair Value |
|
|||
Derivative instruments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
April 30, 2026 |
|
|||||||||
|
|
Cost |
|
|
Unrealized |
|
|
Fair Value |
|
|||
Derivative instruments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following summarizes the realized and unrealized gains and losses from Immersion’s equity securities and derivative instruments and realized gains and losses from our marketable-debt securities for the following periods (in thousands):
|
Three Months Ended July 31, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Net unrealized gains recognized on marketable equity securities |
$ |
|
|
$ |
|
||
Net realized gains recognized on marketable equity securities |
|
|
|
|
|
||
Net unrealized gains (losses) recognized on derivative instruments |
|
( |
) |
|
|
|
|
Net realized gains recognized on derivative instruments |
|
|
|
|
|
||
Total net gains recognized in interest income and other income (expense), net |
$ |
|
|
$ |
|
||
15
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Fair Value Measurements
The fair value of certain financial instruments including Cash and cash equivalents; Accounts receivable, net; Accounts payable; and Accrued liabilities approximate their carrying value due to their short-term nature and are classified within Level 1. The fair value of our Long-term borrowings approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments.
Our financial instruments measured at fair value on a recurring basis consisted of U.S. treasury securities, equity securities, corporate bonds, and derivatives. Equity securities and certain derivative instruments are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. U.S. treasury securities, corporate bonds, and certain derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.
Financial instruments valued based on unobservable inputs, which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument, are generally classified within Level 3 of the fair value hierarchy.
Non-Financial Assets and Liabilities Fair Value Measurements
Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies for additional information.
Barnes & Noble Education granted phantom share units as long-term incentive awards that are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. At July 31, 2026 and April 30, 2026 a liability was recorded, which is not material to the balance sheet (Level 2 input) and is reflected in Accrued liabilities on the Condensed Consolidated Balance Sheets. See Note 10. Stock-Based Compensation for additional information.
Financial instruments measured at fair value on a recurring basis as of July 31, 2026 and April 30, 2026 are classified based on the valuation technique in the table below (in thousands):
|
|
July 31, 2026 |
|
|
|
|
||||||||||
|
|
Fair Value Measurements Using |
|
|
|
|
||||||||||
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money Market funds (within cash and cash equivalents) |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative instruments |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
||||
Total liabilities at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
April 30, 2026 |
|
|
|
|
||||||||||
|
|
Fair Value Measurements Using |
|
|
|
|
||||||||||
|
|
Quoted Prices |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money Market funds (within cash and cash equivalents) |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative instruments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total liabilities at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
NOTE 6. LEASES
Immersion
For the three months ended July 31, 2026 and 2025, Immersion’s leases and related activity were not material.
Barnes & Noble Education
The following table summarizes additional information related to Barnes & Noble Education’s operating leases (in thousands, except for lease term and discount rate):
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating lease cost |
|
$ |
|
|
$ |
|
||
Variable lease payments |
|
|
|
|
|
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
|
|
July 31, 2026 |
|
|
July 31, 2025 |
|
||
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
|
|
$ |
|
||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
|
|
$ |
|
||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
% |
|
|
% |
||
NOTE 7. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The Company recognized $
17
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Intangible Assets, net
The following is a summary of intangible assets, excluding goodwill, recorded as Intangible assets, net on the Company’s Condensed Consolidated Balance Sheets as of July 31, 2026 and April 30, 2026 (in thousands):
|
July 31, 2026 |
|
||||||||||
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
|
Weighted-Average |
|
||||
Trade name |
$ |
|
N/A |
|
$ |
|
Indefinite |
|
||||
Customer relationships |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
|
April 30, 2026 |
|
||||||||||
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
|
Weighted-Average |
|
||||
Trade name |
$ |
|
N/A |
|
$ |
|
Indefinite |
|
||||
Customer relationships |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Amortization of finite-lived intangible assets is computed using the
Amortization expense was $
Estimated amortization expense of the intangible assets to be recognized by the Company is as follows (in thousands):
Year ended April 30, |
|
Amount |
|
|
Remainder of 2027 |
|
$ |
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
2031 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
NOTE 8. DEBT
The following is a summary of Barnes & Noble Education’s outstanding borrowing as of July 31, 2026 and April 30, 2026 (in thousands):
|
|
|
|
As of |
|
|||||
|
|
Maturity Date |
|
July 31, 2026 |
|
|
April 30, 2026 |
|
||
Total debt - Barnes & Noble Education credit facility |
|
|
$ |
|
|
$ |
|
|||
Balance sheet classification: |
|
|
|
|
|
|
|
|
||
Long-term borrowings |
|
|
|
$ |
|
|
$ |
|
||
In connection with the delayed filing of Barnes & Noble Education Annual Report on Form 10-K for fiscal 2025 and the Quarterly Reports on Form 10-Q for the first and second quarters of fiscal 2026, Barnes & Noble Education entered into a series of limited consent and waiver agreements with the lenders under its asset-based revolving credit facility (the “Credit Facility”) to extend certain financial reporting deadlines. These waivers related solely to the timing of the Barnes & Noble Education’s filings and did not arise from noncompliance with any financial covenants.
18
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
On August 8, 2025, Barnes & Noble Education and the administrative agent entered into a limited consent and waiver providing a
During the applicable extension periods, Barnes & Noble Education was subject to certain customary conditions, including enhanced reporting requirements, periodic update calls with lenders, and a minimum excess availability requirement of $
The Credit Facility provides for aggregate revolving commitments of up to $
As of July 31, 2026, Barnes & Noble Education remained in compliance with all covenants under the A&R Credit Agreement.
Interest
The following table disaggregates interest expense, net (in thousands):
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Interest Incurred |
|
|
|
|
|
|
||
Credit Facility |
|
$ |
|
|
$ |
|
||
Total Interest Incurred |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Interest income |
|
$ |
( |
) |
|
$ |
( |
) |
Total Interest Expense, net |
|
$ |
|
|
$ |
|
||
NOTE 9. PARTICIPATION INTEREST PURCHASE AGREEMENT
During fiscal year 2026, Barnes & Noble Education was party to a Participation Interest Purchase Agreement (the “Participation Agreement”) with Jefferies Leveraged Credit Products LLC (“Jefferies”), under which Jefferies had paid Barnes & Noble Education $
In February 2026, the Interchange Litigation was resolved through settlement, and all proceeds attributable to the Barnes & Noble Education's claims were distributed directly to Jefferies and its assignees. Barnes & Noble Education received no cash proceeds. The related deferred income balance of $
19
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10. STOCK-BASED COMPENSATION
Immersion
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
RSUs, RSAs and PSUs |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Selling and administrative expenses |
|
$ |
|
|
$ |
|
||
Total |
|
$ |
|
|
$ |
|
||
The total unrecognized compensation cost related to unvested awards as of July 31, 2026, was $
Barnes & Noble Education
The following summarizes the total stock-based compensation expense for options, RSAs, RSUs, and PSUs for the three months ended July 31, 2026 and 2025 (in thousands):
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Stock options |
|
$ |
|
|
$ |
|
||
RSUs, RSAs and PSUs |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Selling and administrative expenses |
|
$ |
|
|
$ |
|
||
Total |
|
$ |
|
|
$ |
|
||
The total unrecognized compensation cost related to unvested awards as of July 31, 2026 was $
NOTE 11. EMPLOYEE BENEFIT PLAN
Barnes & Noble Education sponsors a defined contribution plan for the benefit of substantially all of the employees. Barnes & Noble Education is responsible for funding the employer contributions directly. The 401(k) retirement savings plan provides an annual end of plan year discretionary match, in lieu of the current pay period match. Total employee benefit expense for these plans was $
NOTE 12. STOCKHOLDERS’ EQUITY
Immersion Stock Repurchase Program
During the three months ended July 31, 2026, the Company did
Barnes & Noble Education Stock Repurchase Program
During the three months ended July 31, 2026, Barnes & Noble Education did
20
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Immersion Dividends Declared and Dividend Payments
Announcement |
|
Dividend |
|
Amount |
|
|
Record |
|
Payment |
|
|
Quarterly |
|
$ |
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Special |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Quarterly (increased) |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
|
Quarterly |
|
|
|
|
|
||||
During the three months ended July 31, 2026, the Company paid $
NOTE 13. NONCONTROLLING INTEREST
Immersion is the primary beneficiary of Barnes & Noble Education and as a result, consolidates the financial results of Barnes & Noble Education and reports a noncontrolling interest representing BNED Common Stock held by other Barnes & Noble Education’s stockholders. Changes in Immersion’s ownership interest in Barnes & Noble Education while Immersion retains its controlling interest in Barnes & Noble Education are accounted for as equity transactions.
The following table summarizes the ownership interest in Barnes & Noble Education:
|
|
July 31, 2026 |
|
|||||
|
|
Shares |
|
|
% of |
|
||
Immersion |
|
|
|
|
|
% |
||
Noncontrolling Interest |
|
|
|
|
|
% |
||
Total BNED Common Stock outstanding |
|
|
|
|
|
% |
||
The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to the non-controlling interest holders and were as follows:
|
|
Three Months Ended July 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Noncontrolling interest's weighted-average ownership percentage |
|
|
% |
|
|
% |
||
21
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the effect of changes in ownership of Barnes & Noble Education on the Company’s equity for the periods presented (in thousands):
|
Three Months Ended July 31, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Net Income (loss) attributable to Immersion stockholders |
$ |
|
|
$ |
( |
) |
|
Transfers from (to) noncontrolling interest: |
|
|
|
|
|
||
Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, and sales of common stock |
|
( |
) |
|
|
— |
|
Total effect of changes in ownership interest on equity attributable to Immersion stockholders |
$ |
|
|
$ |
( |
) |
|
NOTE 14. INCOME TAXES
Income tax benefit (expense) for the three months ended July 31, 2026 and 2025, consisted of the following (in thousands):
|
Three Months Ended July 31, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Loss Before Income Taxes |
$ |
( |
) |
|
$ |
( |
) |
Income tax benefit |
|
|
|
|
|
||
Effective tax rate |
|
% |
|
|
% |
||
Immersion
Immersion recorded an income tax benefit of $
Barnes & Noble Education
Barnes & Noble Education recorded an income tax benefit of $
In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of July 31, 2026, Barnes & Noble Education determined that it was more likely than not that it would not realize all deferred tax assets and its tax rate for the current fiscal year reflects this determination. Barnes & Noble Education will continue to evaluate this position.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change” (generally defined as a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period), Barnes & Noble Education’s ability to use its pre-change net operating losses and certain other pre-change tax attributes to offset its post-change income and taxes may be limited. Similar rules may apply under state tax laws. As a result of the Rights Offering, Backstop Commitment, Private Investment, and Term Loan Debt Conversion completed on June 10, 2024 (as defined in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2026), Barnes & Noble Education may have experienced an ownership change as defined by Sections 382 and 383. Barnes & Noble Education conducted a study to determine if an ownership change occurred. It was determined that an ownership change occurred under Section 382 and 383 of the Code, and the corresponding annual limitations materially impact the utilization of Barnes & Noble Education’s tax attributes including its $
22
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
$
NOTE 15. EARNINGS PER SHARE
We use the
The following are reconciliations of the denominators used in computing basic and diluted net income per share (in thousands):
|
Three Months Ended July 31, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Basic |
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
||
Net income (loss) attributable to Immersion Stockholders |
$ |
|
|
$ |
( |
) |
|
Adjustment for Immersion's portion of Barnes & Noble Education's EPS to be included in the numerator for Immersion's basic EPS calculation (a) |
|
|
|
|
— |
|
|
Net income (loss) attributable to Immersion Stockholders, basic |
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Denominator: |
|
|
|
|
|
||
Weighted-average shares outstanding, basic |
|
|
|
|
|
||
Net income (loss) attributable to Immersion stockholders per share, basic |
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Diluted |
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
||
Net income (loss) attributable to Immersion Stockholders |
$ |
|
|
$ |
( |
) |
|
Adjustment for Immersion's portion of Barnes & Noble Education’s EPS to be included in the numerator for Immersion's diluted EPS calculation (a) |
|
|
|
|
— |
|
|
Net income (loss) attributable to Immersion stockholders, diluted |
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Denominator: |
|
|
|
|
|
||
Weighted-average shares outstanding, basic |
|
|
|
|
|
||
Shares related to outstanding options, unvested RSUs, RSAs, and PSUs |
|
|
|
|
— |
|
|
Weighted average shares outstanding, diluted |
|
|
|
|
|
||
Net income (loss) attributable to Immersion stockholders per share, diluted |
$ |
|
|
$ |
( |
) |
|
We include PSUs in the calculation of diluted earnings per share if the applicable performance conditions have been satisfied as of the end of the reporting period and exclude stock equity awards if the performance condition has not been met.
For the three months ended July 31, 2025, the Company had outstanding RSU awards of
NOTE 16. COMMITMENTS AND CONTINGENCIES
We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries
23
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our consolidated financial position, results of operations, or cash flows.
In the normal course of business, we provide indemnification of varying scope to customers, most commonly to licensees in connection with licensing arrangements that include our IP, although these provisions can cover additional matters. Historically, costs related to these guarantees have not been significant, and we are unable to estimate the maximum potential impact of these guarantees on our future results of operations.
Korean Withholding Tax Assessment – Samsung License
Immersion licenses certain of its patented technologies to Samsung and its affiliates under a license agreement that provides Samsung with the right to manufacture and sell Samsung products worldwide. Under the terms of this agreement, Immersion is obligated to indemnify Samsung for any Korean withholding taxes that may be imposed on royalty payments made by Samsung to Immersion.
In prior years, the Korean tax authorities, through the Suwon Regional Tax Office (“SRTO”), issued assessments to Samsung asserting that royalties paid to Immersion constituted Korean‑source royalty income subject to Korean withholding tax. Samsung contested these assessments, and the most recent matters were the subject of an administrative appeal before the Regional Tax Office Appeal (“RATI”).
On November 19, 2025, RATI issued a decision in favor of the SRTO, upholding the withholding tax assessments on royalties paid to Immersion. As a result of this decision, Samsung was required to remit the assessed withholding taxes to the Korean tax authorities by the end of December 2025. In accordance with its indemnification obligation under the license agreement, Immersion reimbursed Samsung in December 2025 for the full amount of the withholding taxes paid.
The total amount reimbursed by Immersion, including related surcharges and local withholding components, was approximately $
See Note 14. Income Taxes for additional information.
LGE Korean Withholding Tax Matter
On October 16, 2017, we received a letter from LGE requesting that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE's royalty payments to Immersion Software Ireland Limited, a subsidiary of the Company, from 2012 to 2014. Pursuant to an agreement reached with LGE, on April 8, 2020, we provided a provisional deposit to LGE in the amount of KRW
On November 3, 2017, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding its findings with respect to the withholding taxes related to the 2012 to 2017 period. The Korea Tax Tribunal hearing took place on March 5, 2019. On March 19, 2019, the Korea Tax Tribunal issued its ruling in which it decided not to accept our arguments with respect to the Korean tax authorities' assessment of withholding tax and penalties imposed on LGE. On behalf of LGE, we filed an appeal with the Korea Administrative Court on June 10, 2019. We had numerous hearings before the Korea Administrative Court in the years 2019 through 2022. We had a hearing on April 27, 2023, and the Korea Administrative Court rendered a decision on this matter on June 8, 2023, in which it ruled that the withholding taxes and penalties which were imposed by the Korean tax authorities on LGE should be cancelled with litigation costs to be borne by the Korean tax authorities.
In connection with the Korea Administrative Court's decision, the Korean tax authorities filed an appeal on June 28, 2023, with the Seoul High Court to seek the cancellation of the lower court's decision. The appellate case is in progress at the Seoul High Court and the first and second hearings took place on November 30, 2023, and February 1, 2024, respectively. As of the date of this filing, the next hearing date had not yet been set. The Seoul Administrative Court also issued an additional judgment on July 27, 2022, clarifying the ratio of software versus patent usage, and, as of the date of this filing, the Seoul High Court appeal remains pending.
24
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
On April 25, 2023, we received notice from LGE requesting us to reimburse LGE with respect to its withholding tax imposed on LGE by the Korean tax authorities following a recent tax audit of LGE for the years 2018 through 2022. Pursuant to an agreement reached with LGE, on June 2, 2023, we provided a provisional deposit to LGE in the amount of KRW
On June 29, 2023, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2018 to 2022 period. On August 7, 2023, the Korean tax authority submitted its answer against the tax appeal. On September 8, 2023, on behalf of LGE, we submitted our rebuttal brief in response thereto. On September 25, 2023, the Korean tax authority submitted an additional response brief, and on November 23, 2023, the Korea Tax Tribunal rendered a decision against LGE, dismissing our claims on the grounds that they are without merit. In response thereto, on behalf of LGE, we filed an appeal with the Korea Administrative Court on December 29, 2023.
On July 25, 2024, the Korea Tax Tribunal rendered a decision against LGE on the related local income tax assessment, and the deadline for the court appeal of the local income tax claim was October 21, 2024. On October 18, 2024, we filed a complaint and a brief with the Korea Administrative Court for the local income tax appeal. This case has been reassigned due to its significance, and the Korean tax authority filed its answer on November 27, 2024. The first hearing date, which was originally scheduled for March 21, 2025, has been set at a later date, as the counsel for the plaintiff submitted an application for hearing date to be set at a later date by obtaining the defendant’s consent.
During the fiscal year ended April 30, 2026, the Company determined that it would discontinue litigation related to certain Korean withholding tax matters involving LGE. Because the recoverability of provisional deposits previously made in connection with those matters depended on successful resolution of the related proceedings, the Company concluded that the remaining carrying amount of such deposits was not recoverable. Accordingly, the Company recorded additional income tax expense of approximately $
See Note 14. Income Taxes for additional information.
Immersion Corporation vs. Valve Corporation (“Valve”)
On May 15, 2023, the Company filed a complaint against Valve in the United States District Court for the Western District of Washington. The complaint alleges that Valve's AR/VR systems, including the Valve Index, and handheld Steam Deck, infringe seven of our patents that cover various uses of haptic effects in connection with such AR/VR systems and other video game systems. The Company is seeking to enjoin Valve from further infringement and to recover a reasonable royalty for such infringement.
The complaint against Valve asserts infringement of the following patents:
Valve responded to the complaint on July 24, 2023, with a motion to dismiss. Valve re‑noted its motion, which changed Immersion's response deadline from August 14, 2023, to August 21, 2023. Immersion timely filed its response, and Valve filed its reply on August 25, 2023. The Court heard arguments on Valve’s motion on February 8, 2024. The Court entered a case schedule on November 21, 2023. The case schedule did not include a trial date but set the pretrial conference for May 30, 2025.
25
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
On March 14, 2024, Valve filed a motion to stay the district court case pending the PTAB’s decisions on Valve's inter partes review (“IPR”) petitions. Immersion opposed the motion on March 25, 2024, and Valve filed its reply brief on March 29, 2024. The Court granted Valve's motion to stay on April 4, 2024. In connection with that order, the Court struck Valve's motion to dismiss with leave to refile at a later date. The case remains stayed pending resolution of the IPR proceedings.
Valve filed multiple IPRs with the PTAB challenging the validity of the patents asserted in the district court litigation. As of the date of this filing, the status of these proceedings is as follows:
26
Table of Contents
IMMERSION CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The parties submitted their joint claim construction statement and respective positions on March 29, 2024. The district court case is currently stayed pending the outcome of the IPR proceedings.
We are unable at this time to predict the ultimate outcome of the district court litigation or the related IPR proceedings, the impact of any PTAB decisions and any appeals therefrom, or to reasonably estimate the amount or range of any possible loss or recovery associated with these matters. Accordingly, we have not recorded a liability related to the Valve litigation or the associated IPRs as of July 31, 2026.
Other Matters
From time to time, we receive claims from third parties asserting that our technologies or those of our licensees infringe the other parties' intellectual property rights, and we are also periodically involved in other routine legal matters and contractual disputes incidental to our normal operations. In management's opinion, unless we disclose otherwise, the resolution of such matters will not have a material adverse effect on our consolidated financial condition, results of operations, or liquidity.
NOTE 17. SUBSEQUENT EVENTS
On
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements involve risks and uncertainties. Forward-looking statements are frequently identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “plans,” “estimates,” and other similar expressions. However, these words are not the only way we identify forward-looking statements. Examples of forward-looking statements include among other things, any expectations, projections, or other characterizations of future events, or circumstances, and include statements regarding: our strategy and our ability to execute our business plan; our competition and the market in which we operate; our customers and suppliers; our revenue and trends related thereto, and the recognition and components thereof; our costs and expenses, including capital expenditures; our investment of surplus funds and sales of marketable securities seasonality and demand; our investment in research and technology development; changes to general and administrative expenses; our foreign operations and the reinvestment of our earnings related thereto; our investment in and protection of our intellectual property (“IP”); our employees; capital expenditures and the sufficiency of our capital resources; unrecognized tax benefit and tax liabilities; the impact of changes in interest rates and foreign exchange rates, as well as our plans with respect to foreign currency hedging in general; changes in laws and regulations, including with respect to taxes; our plans and estimates related to and the impact of current and future litigation and arbitration and our dividend, stock repurchase and equity distribution programs.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside our control. Actual results could differ materially from those projected in the forward-looking statements, and therefore, we caution you not to place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the risk factors contained under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended April 30, 2026, filed with the Securities and Exchange Commission (the “SEC”) on July 24, 2026, Part I, Item 1A, “Risk Factors” in Barnes & Noble Education's Annual Report on Form 10-K for the fiscal year ended May 2, 2026, filed with the SEC on July 9, 2026, and in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.
Any forward-looking statements made by us in this report speak only as of the date of this report, and we do not intend to update these forward-looking statements after the filing of this report, unless required to do so by applicable law or regulation. You are urged to review carefully and consider our various disclosures in this report and in our other reports publicly disclosed or filed with the SEC that attempt to advise you of the risks and factors that may affect our business.
COMPANY OVERVIEW
Description of Business
Immersion Corporation (“Immersion”) was incorporated in 1993 in California and reincorporated in Delaware in 1999. In this Management’s Discussion and Analysis of Financial Condition and Results of Operations the terms “Company,” “us,” “we,” or “our” refer to Immersion and its consolidated subsidiaries. Immersion generates license and royalty revenues from a wide range of IP that more fully engage users’ sense of touch when operating digital devices. We focus on the following target application areas: mobile devices, wearables, consumer, mobile entertainment and other content, console gaming, automotive, medical, and commercial.
On June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware corporation (“Barnes & Noble Education”). Please refer to Note 3. Business Combination in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026, for additional information. The financial results of Barnes & Noble Education have been included in our Condensed Consolidated Financial Statements from the acquisition date of June 10, 2024.
Following June 10, 2024, we operate our business in two operating segments: Immersion and Barnes & Noble Education.
The condensed consolidated financial statements reflect the consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). The results of operations reflected in the condensed consolidated financial statements are presented on a consolidated basis. All material intercompany accounts and transactions have been eliminated in consolidation.
28
The financial information presented in this Quarterly Report on Form 10-Q includes the financial information of Barnes & Noble Education for the 13 weeks ended August 1, 2026 and August 2, 2025.
RESULTS OF OPERATIONS
|
Three Months Ended July 31, |
|
|||||
(in thousands) |
2026 |
|
|
2025 |
|
||
Revenues |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Royalty and license |
$ |
3,804 |
|
|
$ |
3,872 |
|
Barnes & Noble Education |
|
|
|
|
|
||
Product and other |
|
276,859 |
|
|
|
274,179 |
|
Rental income |
|
13,736 |
|
|
|
13,981 |
|
|
|
290,595 |
|
|
|
288,160 |
|
Total revenues |
|
294,399 |
|
|
|
292,032 |
|
Cost of sales (excludes depreciation and amortization expense) |
|
|
|
|
|
||
Barnes & Noble Education |
|
|
|
|
|
||
Product and other cost of sales |
|
227,250 |
|
|
|
226,174 |
|
Rental cost of sales |
|
6,765 |
|
|
|
7,420 |
|
|
|
234,015 |
|
|
|
233,594 |
|
Operating expenses: |
|
|
|
|
|
||
Immersion |
|
|
|
|
|
||
Selling and administrative expenses |
|
3,498 |
|
|
|
3,695 |
|
Barnes & Noble Education |
|
|
|
|
|
||
Selling and administrative expenses |
|
67,316 |
|
|
|
67,805 |
|
Depreciation and amortization expense |
|
10,204 |
|
|
|
10,397 |
|
Other (income) expense |
|
(652 |
) |
|
|
2,896 |
|
|
|
76,868 |
|
|
|
81,098 |
|
Total operating expenses |
|
80,366 |
|
|
|
84,793 |
|
Operating Loss |
|
(19,982 |
) |
|
|
(26,355 |
) |
Interest income and other income (expense), net |
|
15,099 |
|
|
|
7,741 |
|
Interest expense, net |
|
1,802 |
|
|
|
2,829 |
|
Loss Before Income Taxes |
|
(6,685 |
) |
|
|
(21,443 |
) |
Income tax benefit |
|
2,130 |
|
|
|
7,727 |
|
Net Loss |
$ |
(4,555 |
) |
|
$ |
(13,716 |
) |
Immersion
Immersion generates license and royalty revenue from a broad portfolio of intellectual property designed to enhance users’ sense of touch when interacting with digital devices. The Company focuses on the following target application areas: mobile devices, wearables, consumer, mobile entertainment and other content, console gaming, automotive, medical, and commercial. The Company licenses its patented technology to customers that integrate the technology into their products to enhance functionality. These licenses allow customers to offer haptic-enabled devices, content, and other products, which they typically market under their own brand names.
29
As of July 31, 2026, the Company and its wholly-owned subsidiaries held approximately 300 issued or pending patents worldwide. These patents cover a broad range of digital technologies and methods for incorporating touch-related technology across hardware products and components, systems software, application software, and digital content.
The following is a summary of our results of operation for the three months ended July 31, 2026 and 2025 (in thousands, except for percentages):
|
|
|
Three Months Ended July 31, |
|
|||||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed fee license revenue |
|
|
$ |
832 |
|
|
$ |
736 |
|
|
$ |
96 |
|
|
|
13 |
% |
Per-unit royalty revenue |
|
|
|
2,972 |
|
|
|
3,136 |
|
|
|
(164 |
) |
|
|
(5 |
%) |
|
|
|
|
3,804 |
|
|
|
3,872 |
|
|
|
(68 |
) |
|
|
(2 |
%) |
Selling and administrative expenses |
|
|
|
3,498 |
|
|
|
3,695 |
|
|
|
(197 |
) |
|
|
(5 |
%) |
Operating Income |
|
|
$ |
306 |
|
|
$ |
177 |
|
|
$ |
129 |
|
|
|
73 |
% |
Revenues
Immersion generates revenue primarily from fixed-fee license agreements and per-unit royalty arrangements. Royalty and license revenue includes per-unit royalties based on licensees’ usage or net sales, as well as fixed license fees for the Company’s intellectual property and software.
For the three months ended July 31, 2026, fixed-fee license revenue increased by $0.1 million or largely flat when compared with the same period in the prior year.
Per-unit royalty revenue was relatively flat for the three months ended July 31, 2026, decreasing $0.2 million compared with the same period in the prior year.
For the three months ended July 31, 2026, revenue generated in Asia, North America, Europe and Africa, represented 67%, 29%, 1% and 3% of total revenue, respectively, compared with 68%, 5%, 27%, and 0%, respectively, in the prior-year period. Revenue may vary significantly from period to period based on the timing of agreements and the geographic location of the contracting entity.
Operating Expenses
The following is a summary of operating expenses for the three months ended July 31, 2026 and 2025 (in thousands, except for percentages):
|
|
|
Three Months Ended July 31, |
|
|||||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Selling and administrative expenses |
|
|
$ |
3,498 |
|
|
$ |
3,695 |
|
|
$ |
(197 |
) |
|
|
(5 |
%) |
Selling and administrative expenses primarily consist of employee compensation and benefits (including stock‑based compensation), legal and other professional fees, external patent related legal costs, office expenses, travel, and facilities costs.
For the three months ended July 31, 2026, selling and administrative expenses decreased by $0.2 million compared with the same prior year period primarily due to lower stock-based and variable compensation.
Barnes & Noble Education
Description of Business
Barnes & Noble Education is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. Barnes & Noble Education is also one of the largest textbook wholesalers, and inventory management hardware and software providers. Barnes & Noble Education operates 1,062 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.
30
The strengths of its business include the ability to compete by developing new products and solutions to meet market needs, its large operating footprint with direct access to students and faculty, and well-established, deep relationships with academic partners and stable long-term contracts and well-recognized brands. Barnes & Noble Education provides product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers the BNC First Day® affordable access course material programs, consisting of First Day Complete and First Day, which provide faculty-required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition. These programs have allowed Barnes & Noble Education to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of future results. Barnes & Noble Education continues to see strong institutional interest in First Day Complete® and First Day® programs, reflecting an ongoing shift by colleges and universities toward affordable access course material models that increase student participation and improve access to required course materials.
Barnes & Noble Education expects to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand the e-commerce capabilities and accelerate such capabilities through service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc. D/B/A “Lids” (“Lids”) (and together with Fanatics, referred to herein as the “F/L Relationship”), win new accounts, and expand the revenue opportunities through strategic relationships. Barnes & Noble Education expects gross comparable store general merchandise sales to increase over the long term, as the product assortments continue to emphasize and reflect changing consumer trends, and evolve the presentation concepts and merchandising of products in stores and online, which will be further enhanced and accelerated through the F/L Relationship. Fanatics and Lids, acting as the service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of the logo general merchandise business.
The Barnes & Noble brand (licensed from the former parent corporation) along with the subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. The large college footprint, reputation, and credibility in the marketplace not only support the marketing efforts to universities, students, and faculty, but are also important to the relationship with leading publishers who rely on Barnes & Noble Education as one of their primary distribution channels.
For additional information related to the business of Barnes & Noble Education, see Part I - Item 1. Business in the Annual Report on Form 10-K for the fiscal year ended May 2, 2026, filed with the SEC on July 9, 2026.
Seasonality
Barnes & Noble Education’s business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education’s quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in Barnes & Noble Education’s fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.
Product sales are recognized when the customer takes physical possession of the products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of the products by the customers for products ordered through Barnes & Noble Education’s websites and virtual bookstores. Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized upon delivery of the digital content as product revenue in the condensed consolidated financial statements. Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in the condensed consolidated financial statements. Depending on the product mix offered under the BNC First Day® offerings, revenue recognized is consistent with our policies for product, digital and rental sales, net of an anticipated opt-out or return provision.
BNC First Day® Affordable Access Course Material Programs
Given the growth of the BNC First Day® affordable access course material programs, the timing of cash collection from the school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts the BNC First Day® affordable access course material offerings, cash collection from the school generally occurs after the institution's drop/add
31
dates, which is later in the working capital cycle, particularly in the third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of the sales shift to BNC First Day® affordable access course material program offerings, Barnes & Noble Education is focused on efforts to better align the timing of the cash outflows to course material vendors and cash inflows from collections from schools. As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the digital content is made available to the customer compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period; and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of Barnes & Noble Education’s products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by the customers for products ordered through Barnes & Noble Education’s websites and virtual bookstores.
Elements of Results of Operations
The sales are primarily derived from the sale of course materials, which include new, used, rental and digital textbooks and general merchandise, including emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and cafe items and graduation products. The rental income is primarily derived from the rental of physical textbooks. Barnes & Noble Education also derives revenue from other sources, such as sales of inventory management, hardware and point-of-sale software, and other services.
The cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, warehouse costs related to inventory management and order fulfillment, certain payroll costs, and management service agreement costs, including rent expense, related to college and university contracts and other facility related expenses.
The selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense, insurance, and general office expenses, such as merchandising, procurement, field support, and professional services.
The following is a summary of Barnes & Noble Education’s results of operations for the three months ended July 31, 2026 and 2025 (in thousands):
|
Three Months Ended July 31, |
|
|||||||||||||
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
||||
Product and other |
$ |
276,859 |
|
|
$ |
274,179 |
|
|
$ |
2,680 |
|
|
|
1 |
% |
Rental income |
|
13,736 |
|
|
|
13,981 |
|
|
|
(245 |
) |
|
|
(2 |
%) |
Total revenue |
|
290,595 |
|
|
|
288,160 |
|
|
|
2,435 |
|
|
|
1 |
% |
Cost of sales (excluding depreciation and amortization expense) |
|
|
|
|
|
|
|
|
|
|
|
||||
Product and other costs of sales |
|
227,250 |
|
|
|
226,174 |
|
|
|
1,076 |
|
|
|
0 |
% |
Rental cost of sales |
|
6,765 |
|
|
|
7,420 |
|
|
|
(655 |
) |
|
|
(9 |
%) |
Total cost of sales |
|
234,015 |
|
|
|
233,594 |
|
|
|
421 |
|
|
|
0 |
% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and administrative expenses |
|
67,316 |
|
|
|
67,805 |
|
|
|
(489 |
) |
|
|
(1 |
%) |
Depreciation and amortization expense |
|
10,204 |
|
|
|
10,397 |
|
|
|
(193 |
) |
|
|
(2 |
%) |
Other (income) expense |
|
(652 |
) |
|
|
2,896 |
|
|
|
(3,548 |
) |
|
|
(123 |
%) |
Total operating expenses |
|
76,868 |
|
|
|
81,098 |
|
|
|
(4,230 |
) |
|
|
(5 |
%) |
Operating Loss |
$ |
(20,288 |
) |
|
$ |
(26,532 |
) |
|
$ |
6,244 |
|
|
|
(24 |
%) |
32
Revenues
Total revenue was $290.6 million for the three months ended July 31, 2026, consisting of $276.9 million of product and other sales and $13.7 million of rental sales. Total revenue for the comparable prior year period was $288.2 million, including $274.2 million of product and other sales and $14.0 million of rental sales. The $2.4 million increase in revenue is primarily due to higher comparable store sales of $11.8 million and new store sales of $11.5 million, largely driven by a $10.3 million increase from BNC First Day® programs, partially offset by lower sales from closed stores of $18.0 million and $2.9 million of other sales declines.
Cost of sales
Cost of sales was 81% of total revenue for the three months ended July 31, 2026, has remained flat as a percent of revenue compared to 81% for the three months ended July 31, 2025. The flat current year quarter percentage of cost compared to the comparable period of the prior year was primarily due to higher lease amortization expenses due to unfavorable lease adjustments offset by lower contract costs as a percentage of sales related to university contracts as a result of the shift to digital and First Day models and lower performing school contracts not renewed.
Selling and administrative expenses
Selling and administrative expenses were $67.3 million for the three months ended July 31, 2026, a decrease of $0.5 million compared to the three months ended July 31, 2025. This decrease was primarily due to lower operating expenses, including lower technology expenses, service charges, partially offset by incremental bad debt expense.
Depreciation and amortization expense
Barnes & Noble Education's depreciation and amortization expense consists primarily of depreciation of property and equipment and amortization of intangible assets.
Depreciation and amortization expense was $10.2 million for the three months ended July 31, 2026, a decrease of $0.2 million, or relatively flat compared to the three months ended July 31, 2025.
Other (income) expense
During the three months ended July 31, 2026, Barnes & Noble Education recognized other income of $0.7 million, comprised primarily of a $1.7 million cash receipt from the release of funds previously held in escrow offset by $0.5 million of legal and professional fees.
During the three months ended July 31, 2025, Barnes & Noble Education recognized other (income) expense totaling $2.9 million, primarily comprised of restructuring and investigation-related costs.
Interest income and other income (expense), net; Interest expense, net; and Income tax benefit (expense)
A summary of consolidated interest income and other income (expense), net, interest expense, and income taxes for the three months ended July 31, 2026 and 2025 are as follows (in thousands, except for percentages):
|
|
Three Months Ended July 31, |
||||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|||
Operating Loss |
|
$ |
(19,982 |
) |
|
$ |
(26,355 |
) |
|
$ |
6,373 |
|
|
(24%) |
Interest income and other income (expense), net |
|
|
15,099 |
|
|
|
7,741 |
|
|
|
7,358 |
|
|
95% |
Interest expense, net |
|
|
1,802 |
|
|
|
2,829 |
|
|
|
(1,027 |
) |
|
(36%) |
Loss Before Income Taxes |
|
|
(6,685 |
) |
|
|
(21,443 |
) |
|
|
14,758 |
|
|
(69%) |
Income tax benefit |
|
|
2,130 |
|
|
|
7,727 |
|
|
|
(5,597 |
) |
|
(72%) |
Net Loss |
|
$ |
(4,555 |
) |
|
$ |
(13,716 |
) |
|
$ |
9,161 |
|
|
(67%) |
Interest income and other income (expense), net
Immersion's interest income and other income (expense), net consists primarily of interest and dividend income earned on cash and cash equivalents and marketable debt and equity securities; realized and unrealized gains and losses on marketable equity securities and derivative instruments.
33
Interest income and other income (expense), net increased by $7.4 million for the three months ended July 31, 2026, compared with the corresponding period in the prior year. This increase was driven primarily by a $7.8 million favorable period-over-period change in realized and unrealized gains and losses on marketable equity securities and derivative instruments, from a $6.0 million net gain in the prior-year quarter to a $13.8 million net gain in the current quarter. The increase was partially offset by reduction in interest income by $0.2 million, primarily due to lower invested balances in fixed-income securities and lower interest rates.
Interest expense, net
Barnes & Noble Education's interest expense, net decreased by $1.0 million to $1.8 million during the three months ended July 31, 2026, from $2.8 million during the three months ended July 31, 2025. The decrease was primarily due to lower borrowings.
Income tax benefit (expense)
Immersion
Income tax benefit (expense) for the three months ended July 31, 2026, resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate. We maintain no valuation allowance against our U.S. federal deferred tax assets and maintain valuation allowance against certain U.S. state and Canadian federal deferred tax assets. The change in the estimated effective tax rate was mainly driven by higher U.S. taxable income which was a result of higher U.S. passive income.
The year-over-year change in Income tax benefit (expense) resulted primarily from the change in income from continuing operations across various tax jurisdictions.
In the event that we determine the deferred tax assets are realizable based on an assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made. The valuation allowance does not impact our ability to utilize the underlying net operating loss carryforwards.
We also maintain liabilities for uncertain tax positions. As of July 31, 2026, we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $9.0 million, all of the $9.0 million could be payable in cash. In addition, interest and penalties of $1.9 million could also be payable in cash in relation to unrecognized tax benefits. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $10.9 million. We account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.
Barnes & Noble Education
Barnes & Noble Education recorded an income tax benefit of $8.2 million on pre-tax loss of $22.1 million during the three months ended July 31, 2026, which represented an effective income tax rate of 36.9% and an income tax benefit of $8.6 million on pre-tax loss of $26.9 million during the three months ended July 31, 2025, which represented an effective income tax rate of 32.1%.
In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of July 31, 2026, Barnes & Noble Education determined that it was more likely than not that it would not realize all deferred tax assets and its tax rate for the current fiscal year reflects this determination. Barnes & Noble Education will continue to evaluate this position.
LIQUIDITY AND CAPITAL RESOURCES
Our cash equivalents, investments – current, and investments – noncurrent consist primarily of money-market funds, investments in marketable equity securities, and investments in U.S. treasury securities. All marketable securities are stated at fair value. Realized gains and losses on marketable equity securities are recorded in Interest income and other income (expense), net on the Condensed Consolidated Statements of Operations. Unrealized gains and losses on marketable equity securities are reported as Interest income and other income (expense), net on our Condensed Consolidated Statement of Operations. Unrealized gains and losses on marketable debt securities reported as a component of Accumulated other comprehensive income (loss) on our Condensed Consolidated Balance Sheets.
Cash, cash equivalents, and investments – current
34
As of July 31, 2026, our cash, cash equivalents, and investments – current totaled $209.5 million, a $29.0 million increase from $180.5 million on April 30, 2026. As of July 31, 2026, approximately 3.4% or $7.1 million, was held by foreign subsidiaries and may be subject to repatriation tax effects. In addition, as of July 31, 2026 and April 30, 2026, we had restricted cash of $13.7 million and $19.8 million, respectively.
The following is select cash flow information for the three months ended July 31, 2026 and 2025 (in thousands):
|
Three Months Ended July 31, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities |
$ |
(43,596 |
) |
|
$ |
(61,653 |
) |
Net cash provided by investing activities |
|
26,164 |
|
|
|
9,206 |
|
Net cash provided by financing activities |
|
47,892 |
|
|
|
65,358 |
|
Cash used in operating activities
Our operating activities primarily consist of net income adjusted for certain non-cash items including depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, deferred income taxes, net (gains) losses on investments in marketable securities, and the effect of changes in operating assets and liabilities.
Net cash used in operating activities was $43.6 million for the three months ended July 31, 2026, a decrease of $18.1 million compared to the three months ended July 31, 2025. The decrease was primarily driven by a reduction in the increase in accounts receivables and inventories from the prior year period amount and partially offset by a reduction in the increase of accounts payable and accrued liabilities from the prior year period amount.
Cash provided by investing activities
Investing activities primarily include purchases and sales of marketable securities and other investments, proceeds from and settlements of derivative instruments, and purchases of property and equipment.
Net cash provided by investing activities was $26.2 million for the three months ended July 31, 2026, an increase of $17.0 million compared to the three months ended July 31, 2025. The increase was primarily driven by higher proceeds from sales or maturities of marketable securities, derivative instruments and other investments, partially offset by higher purchases of marketable and other investments.
Cash provided by financing activities
Financing activities primarily include dividend payments, borrowings and repayments under our credit facility, and repurchases of our common stock.
Net cash provided by financing activities was $47.9 million for the three months ended July 31, 2026, a decrease of $17.5 million compared to the three months ended July 31, 2025. The decrease was primarily driven by lower proceeds from borrowings and higher dividend payments to stockholders.
Immersion Dividends Declared and Dividend Payments
Announcement |
|
Dividend |
|
Amount |
|
|
Record |
|
Payment |
|
May 8, 2024 |
|
Quarterly |
|
$ |
0.045 |
|
|
July 8, 2024 |
|
July 26, 2024 |
August 20, 2024 |
|
Quarterly |
|
|
0.045 |
|
|
October 4, 2024 |
|
October 18, 2024 |
November 8, 2024 |
|
Special |
|
|
0.245 |
|
|
January 10, 2025 |
|
January 24, 2025 |
March 10, 2025 |
|
Quarterly |
|
|
0.045 |
|
|
April 14, 2025 |
|
April 25, 2025 |
July 8, 2025 |
|
Quarterly |
|
|
0.045 |
|
|
July 23, 2025 |
|
August 8, 2025 |
October 8, 2025 |
|
Quarterly |
|
|
0.045 |
|
|
October 20, 2025 |
|
October 31, 2025 |
December 8, 2025 |
|
Quarterly (increased) |
|
|
0.075 |
|
|
January 19, 2026 |
|
January 30, 2026 |
March 27, 2026 |
|
Quarterly |
|
|
0.075 |
|
|
April 20, 2026 |
|
May 1, 2026 |
July 2, 2026 |
|
Quarterly |
|
|
0.075 |
|
|
July 20, 2026 |
|
July 31, 2026 |
September 11, 2026 |
|
Quarterly |
|
|
0.075 |
|
|
October 16, 2026 |
|
October 30, 2026 |
35
We may continue to invest in, protect, and defend our extensive IP portfolio, which can result in the use of cash in the event of litigation.
Immersion Stock Repurchase Program
On December 29, 2022, the Board approved a stock repurchase program of up to $50.0 million of our common stock for a period of up to twelve months (the “December 2022 Stock Repurchase Program”), which terminated and superseded the stock repurchase program that had been approved by the Board on February 23, 2022. Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act. Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the foregoing transactions. The December 2022 Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time. The December 2022 Stock Repurchase Program has been amended various times and the most recent amendment extended the expiration date to December 29, 2026.
During the three months ended July 31, 2026, the Company did not purchase shares under the December 2022 Stock Repurchase Program. As of July 31, 2026, the Company had $39.3 million available for repurchase under the December 2022 Stock Repurchase Program.
Barnes & Noble Education Stock Repurchase Program
On December 14, 2015, the Board of Directors authorized a stock repurchase program of up to $50 million in the aggregate outstanding Barnes & Noble Education’s common stock. The stock repurchase program is carried out at the direction of Barnes & Noble Education’s management (which may include a plan under Rule 10b5-1 of the Exchange Act. The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the three months ended July 31, 2026, Barnes & Noble Education did not purchase shares under the stock repurchase program. As of July 31, 2026, approximately $26.7 million remains available under the Barnes & Noble Education stock repurchase program.
As of the date of this Quarterly Report on Form 10-Q, we believe we have sufficient capital resources to meet our working capital needs for the next twelve months and beyond.
CRITICAL ACCOUNTING ESTIMATES
Our policies regarding the use of estimates and other critical accounting policies are consistent with the disclosures in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the fiscal year ended April 30, 2026.
Recent Accounting Pronouncements
See Note 2. Basis of Presentation and Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements for information regarding the effect of new accounting pronouncements on our financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Exchange Act) was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s
36
periodic reports. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were ineffective at the reasonable assurance level as of July 31, 2026 due to the material weaknesses in internal control over financial reporting related to Barnes & Noble Education’s control environment, risk assessment, information and communication, monitoring, and multiple control activities and a material weakness in our internal control over financial reporting related to our business combination and consolidation accounting as previously disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2026, and continue to exist as of July 31, 2026.
Notwithstanding the identified material weaknesses, management, including our Chief Executive Officer and Chief Financial Officer have determined, that the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects the financial condition, results of operations and cash flows of the Company as of, and for the periods presented in accordance with U.S. generally accepted accounting principles.
Remediation Update
As previously described in Item 9A. Controls and Procedures of our Annual Report on Form 10-K for the fiscal year ended April 30, 2026, Barnes & Noble Education began implementing a remediation plan to address the material weaknesses mentioned above including enhancing its manual journal entry process and the IT user access review controls, identifying IPE and key reports and ensuring their accuracy and completeness, executing enhanced procedures for the review of non-routine transactions, and reinforcing the importance of the account reconciliation process and defining the related success criteria. In addition, Barnes & Noble Education continues to focus on ensuring clear roles and responsibilities over financial oversight are communicated and documented, accounting policies and procedures are compiled and stored centrally, and training on accounting controls and ethics are deployed.
With respect to implementing a remediation plan to address the material weakness related to our accounting for the Barnes & Noble Education business combination and consolidation accounting, we have taken and are continuing to take steps to enhance the design of our controls over business combination and consolidation accounting, including more detailed and documented management review of the inputs, assumptions, and methods used by third‑party specialists, formalizing procedures for the review and documentation of information and reports received from acquired businesses and from third‑party specialists that are used in significant estimates and judgments for business combinations and consolidation accounting, and increasing the level of technical accounting review for complex or nonroutine transactions, including establishing more formal documentation of accounting positions and involving internal and, when appropriate, external technical accounting resources.
Changes in Internal Control Over Financial Reporting
Other than with respect to the remediation efforts described above, management has not identified any changes in the Company’s internal control over financial reporting that occurred during the three months ended July 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
37
PART II
Item 1. Legal Proceedings
See Note 16. Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.
Item 1A. Risk Factors
There have been no material changes from the risk factors included under Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026. You should also carefully consider the risk factors described in Barnes & Noble Education, Inc.’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are filed with the SEC and are available at www.sec.gov.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Stock Repurchase Program
On December 29, 2022, the Board approved a stock repurchase program of up to $50.0 million of our common stock for a period of up to twelve months (the “December 2022 Stock Repurchase Program”), which terminated and superseded the stock repurchase program that had been approved by the Board on February 23, 2022. Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act. Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the foregoing transactions. The timing, pricing and sizes of any repurchases will depend on a number of factors, including the market price of our common stock and general market and economic conditions. The December 2022 Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time. The December 2022 Stock Repurchase Program has been amended various times and the most recent amendment extended the expiration date to December 29, 2026.
During the three months ended July 31, 2026, the Company did not purchase shares under the December 2022 Stock Repurchase Program. As of July 31, 2026, the Company had $39.3 million available for repurchase under the December 2022 Stock Repurchase Program.
38
ITEM 6. EXHIBITS
The exhibits listed in the accompanying “Exhibit Index” are filed or incorporated by reference as part of this Form 10-Q.
Exhibit Number |
|
Exhibit Description |
|
Incorporated by Reference |
||||||
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
||||
|
Amended and Restated Bylaws of Immersion Corporation, effective as of August 12, 2022 |
|
8-K |
|
000-38334 |
|
3.1 |
|
August 15, 2022 |
|
|
Amended and Restated Certificate of Incorporation of Immersion Corporation |
|
8-K |
|
000-27969 |
|
3.1 |
|
June 7, 2017 |
|
|
|
8-K |
|
000-27969 |
|
3.1 |
|
July 29, 2003 |
||
|
|
8-K |
|
000-27969 |
|
3.1 |
|
November 17, 2021 |
||
|
Certificate of Designation of Series C Junior Participating Preferred Stock of Immersion Corporation |
|
8-K/A |
|
000-27969 |
|
3.1 |
|
December 8, 2025 |
|
|
|
8-K/A |
|
000-27969 |
|
4.1 |
|
December 8, 2025 |
||
* |
|
|
|
|
|
|
|
|
||
* |
|
|
|
|
|
|
|
|
||
+ |
|
|
|
|
|
|
|
|
||
+ |
|
|
|
|
|
|
|
|
||
101.INS |
* |
Inline XBRL Report Instance Document |
|
|
|
|
|
|
|
|
101.SCH |
* |
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
101.CAL |
* |
Inline XBRL Taxonomy Calculation Linkbase Document |
|
|
|
|
|
|
|
|
101.DEF |
* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
101.LAB |
* |
Inline XBRL Taxonomy Label Linkbase Document |
|
|
|
|
|
|
|
|
101.PRE |
* |
Inline XBRL Presentation Linkbase Document |
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
* Filed herewith
+ This certification is deemed not filed for purposes of section 18 of the Exchange Act, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, as amended, or the Exchange Act, as amended.
39
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: September 14, 2026
IMMERSION CORPORATION |
|
|
||
|
|
|
|
|
By |
|
/S/ J. MICHAEL DODSON |
|
|
|
|
J. Michael Dodson |
|
|
|
|
Chief Financial Officer |
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer) |
|
|
40
Exhibit 31.1
CERTIFICATIONS PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Eric Singer, certify that:
I have reviewed this quarterly report on Form 10-Q of Immersion Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: September 14, 2026
/s/ ERIC SINGER |
Eric Singer |
Chief Executive Officer |
Exhibit 31.2
CERTIFICATIONS PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, J. Michael Dodson, certify that:
I have reviewed this quarterly report on Form 10-Q of Immersion Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: September 14, 2026
/s/ J. MICHAEL DODSON |
J. Michael Dodson |
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Immersion Corporation (the “Company”) on Form 10-Q for the three months ended July 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric Singer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
/s/ ERIC SINGER |
Eric Singer |
Chief Executive Officer |
September 14, 2026
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Immersion Corporation (the “Company”) on Form 10-Q for the three months ended July 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Michael Dodson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
/s/ J. MICHAEL DODSON |
J. Michael Dodson |
Chief Financial Officer |
September 14, 2026
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.