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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~January~~July 31, 2025


☐	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 001-38334

Immersion Corporation

(Exact name of registrant as specified in its charter)

     Delaware 

     94-3180138

     (State or other jurisdiction of 
incorporation or organization) 

     (I.R.S. Employer 
Identification No.)

2999 N.E. 191st Street, Suite 610, Aventura, FL, 33180

(Address of principal executive offices, zip code)

(408) 467-1900

(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
Common Stock, $0.001 par value	IMMR	Nasdaq Global Market
Series B Junior Participating Preferred Stock Purchase Rights	IMMR	Nasdaq Global Market
Series C Junior Participating Preferred Stock Purchase Rights

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. Yes ☒ ☐ No ☐☒

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). Yes ☒ ☐ No ☐☒

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	☐
Non-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 at March 620, ~~2025~~ 2026 was 32,~~396~~921,~~432~~888.

FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2025, 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 of 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, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2026, as amended on March 13, 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, 2025, filed with the SEC on December 23, 2025, 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

TABLE OF CONTENTS

PART I		1
FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Unaudited Condensed Consolidated Balance Sheets as of January 31, 2025 and April 30, 2024	1
	Condensed Consolidated Balance Sheets as of July 31, 2025 and April 30, 2025	1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 31, 2025 and September 30, 2023	3
	Condensed Consolidated Statements of Operations for the Three Months Ended July 31, 2025 and 2024	3
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended January 31, 2025 and September 30, 2023	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended July 31, 2025 and 2024	4
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended January 31, 2025 and September 30, 2023	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended July 31, 2025 and 2024	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 31, 2025 and September 30, 2023	9
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2025 and 2024	6
	Unaudited Notes to Condensed Consolidated Financial Statements	11
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4236
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5743
Item 4.	Controls and Procedures	5743
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	5845
Item 1A.	Risk Factors	6045
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6245
Item 6	Exhibits	63
Item 6.	Exhibits	46
Signatures		64
SIGNATURES		47

~~Table~~PART ofI ~~Contents~~- FINANCIAL INFORMATION

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

IMMERSION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for share and per share data)



(In thousands except share data)	July 31, 2025		April 30, 2025
ASSETS
Immersion
Cash and cash equivalents	$	82,800	$	63,550
Investments – current		77,351		88,789
Accounts receivable, net		2,638		2,767
Prepaid expenses and other current assets		12,720		11,331
		175,509		166,437
Barnes & Noble Education
Cash and cash equivalents		7,340		9,058
Accounts receivable, net		161,974		98,075
Merchandise inventories, net		400,565		299,564
Textbook rental inventories, net		8,890		26,439
Prepaid expenses and other current assets		42,595		32,250
		621,364		465,386
Total Current Assets		796,873		631,823
Immersion
Property and equipment, net		104		113
Investments – noncurrent		13,876		13,880
Long-term deposits		6,223		6,188
Other assets – noncurrent		20,489		27,362
		40,692		47,543
Barnes & Noble Education
Property and equipment, net		88,075		95,702
Intangible assets, net		90,619		91,581
Goodwill		69,162		69,162
Operating lease right-of-use assets		165,551		155,281
Other assets – noncurrent		10,737		11,181
		424,144		422,907
Total Assets	$	1,261,709	$	1,102,273

(See accompanying Notes to the Unaudited) Condensed Consolidated Financial Statements.

		January 31, 2025		April 30, 2024
ASSETS
Current assets:
Immersion
Cash and cash equivalents	$	68,505	$	85,521
Investments – current		76,221		92,848
Accounts receivable, net		3,117		3,138
Prepaid expenses and other current assets		19,299		9,101
		167,142		190,608
Barnes & Noble Education
Cash and cash equivalents		9,185		—
Accounts receivables, net		354,241		—
Merchandise inventories, net		326,825		—
Textbook rental inventories, net		41,033		—
Prepaid expenses and other current assets		27,549		—
		758,833		—
Total current assets		925,975		190,608
Immersion
Property and equipment, net		127		164
Investments – noncurrent		44,118		46,545
Long-term deposits		6,149		6,324
Deferred tax assets		865		2,793
Other assets – noncurrent		27,774		87
		79,033		55,913
Barnes & Noble Education
Property and equipment, net		100,752		—
Intangible assets, net		92,542		—
Goodwill		10,116		—
Operating lease right-of-use assets		150,403		—
Other assets - noncurrent		11,722		—
		365,535		—
Total assets	$	1,370,543	$	246,521

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for share and per share data)



(In thousands except share data)	July 31, 2025			April 30, 2025
LIABILITIES AND STOCKHOLDERS’ EQUITY
Immersion
Accounts payable	$	20		$	13
Accrued compensation		490			343
Deferred revenue – current		2,934			2,938
Other current liabilities		9,677			10,240
		13,121			13,534
Barnes & Noble Education
Accounts payable		236,520			148,848
Accrued liabilities		49,507			44,295
Deferred revenue – current		12,402			10,411
Operating lease liabilities – current		46,439			48,796
		344,868			252,350
Total Current Liabilities		357,989			265,884
Immersion
Deferred revenue – noncurrent		5,058			5,790
Deferred income taxes – noncurrent		11,403			11,034
Other long-term liabilities		12,372			13,344
		28,833			30,168
Barnes & Noble Education
Deferred income taxes – noncurrent		3,963			4,193
Operating lease liabilities – noncurrent		135,912			121,093
Deferred revenue – noncurrent		3,060			3,155
Other long-term liabilities		15,867			15,987
Long-term borrowings		170,000			103,098
		328,802			247,526
Total Liabilities		715,624			543,578
Commitments and contingencies (Note 18)
Stockholders’ Equity:
Common stock – $0.001 par value; 100,000,000 shares authorized; 49,942,199 and 32,817,199 shares issued and outstanding at July 31, 2025, respectively; 49,433,320 and 32,502,969 shares issued and outstanding at April 30, 2025, respectively		50			49
Additional paid-in capital		376,179			374,327
Accumulated other comprehensive income (loss)		354			535
Accumulated earnings (deficit)		32,256			34,691
Treasury stock: 17,125,000 and 16,930,351 shares as of July 31, 2025 and April 30, 2025, respectively, at cost		(113,019	)		(111,477	)
Total Stockholders' Equity Attributable to Immersion Corporation Stockholders		295,820			298,125
Noncontrolling interest in consolidated subsidiaries		250,265			260,570
Total Stockholders' Equity		546,085			558,695
Total Liabilities and Stockholders’ Equity	$	1,261,709		$	1,102,273

(See accompanying Notes to the Unaudited) Condensed Consolidated Financial Statements.

		January 31, 2025			April 30, 2024
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Immersion
Accounts payable	$	16		$	55
Accrued compensation		190			4,003
Deferred revenue – current		2,942			12,494
Other current liabilities		30,427			13,654
		33,575			30,206
Barnes & Noble Education
Accounts payable		303,577			—
Accrued liabilities		77,272			—
Deferred revenue – current		49,708			—
Operating lease liabilities – current		74,474			—
		505,031			—
Total current liabilities		538,606			30,206
Immersion
Deferred revenue – noncurrent		6,522			7,978
Other long-term liabilities		4,933			7,107
		11,455			15,085
Barnes & Noble Education
Operating lease liabilities – noncurrent		106,468			—
Deferred revenue – noncurrent		3,260			—
Other noncurrent liabilities		3,261			—
Long-term borrowings		141,200			—
		254,189			—
Total liabilities		804,250			45,291
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock – $0.001 par value; 100,000,000 shares authorized; 49,020,309 and 32,396,432 shares issued and outstanding at January 31, 2025, respectively; 48,047,329 and 31,854,837 shares issued and outstanding at April 30, 2024, respectively		49			48
Additional paid-in capital		384,749			322,786
Accumulated other comprehensive income (loss)		1,911			2,019
Accumulated earnings (deficit)		41,710			(18,263	)
Treasury stock at cost: 16,623,877 and 16,192,492 shares, respectively, at cost		(109,253	)		(105,360	)
Total stockholders' equity attributable to Immersion Corporation stockholders		319,166			201,230
Noncontrolling interest in consolidated subsidiaries		247,127			—
Total stockholders' equity		566,293			201,230
Total liabilities and stockholders’ equity	$	1,370,543		$	246,521

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share amounts)


	Three Months Ended July 31,
(In thousands except per-share data)	2025			2024
REVENUES
Immersion
Royalty and license	$	3,872		$	48,425
Barnes & Noble Education
Product and other		274,179			130,118
Rental income		13,981			4,946
		288,160			135,064
Total revenues		292,032			183,489

COST OF SALES (excludes depreciation and amortization expense)
Barnes & Noble Education
Product and other cost of sales		226,174			106,865
Rental cost of sales		7,420			3,045
Total cost of sales		233,594			109,910
OPERATING EXPENSES
Immersion
Selling and administrative expenses		3,695			13,411
Barnes & Noble Education
Selling and administrative expenses		67,805			36,330
Depreciation and amortization expense		10,397			5,275
Restructuring and other charges		2,896			5,005
		81,098			46,610
Total operating expenses		84,793			60,021
Operating Income (Loss)		(26,355	)		13,558
Interest and other income (expense), net		7,741			10,696
Interest expense		2,829			2,367
Income (Loss) Before Income Taxes		(21,443	)		21,887
Income tax benefit (expense)		7,727			(9,687	)
Net Income (Loss)		(13,716	)		12,200
Less: Net income (loss) attributable to noncontrolling interest		(12,786	)		(14,877	)
Net Income (Loss) Attributable to Immersion Stockholders	$	(930	)	$	27,077

Earnings (Loss) Per Common Share Attributable to Immersion Stockholders
Basic	$	(0.03	)	$	0.85
Diluted	$	(0.03	)	$	0.83
Weighted-Average Common Shares Outstanding
Basic		32,615			31,970
Diluted		32,615			32,700

(See accompanying Notes to the Unaudited) Condensed Consolidated Financial Statements.

	Three Months Ended						Nine Months Ended
	January 31, 2025			September 30, 2023			January 31, 2025			September 30, 2023
Revenues:
Immersion
Royalty and license	$	8,437		$	9,482		$	70,989		$	23,539
Barnes & Noble Education
Product and other		423,163			—			1,112,955			—
Rental income		43,162			—			90,556			—
		466,325			—			1,203,511			—
Total revenues		474,762			9,482			1,274,500			23,539
Cost of sales (excludes depreciation and amortization expenses):
Barnes & Noble Education
Product and other cost of sales		343,613			—			897,617			—
Rental cost of sales		25,330			—			50,513			—
		368,943			—			948,130			—
Operating expenses:
Immersion
Selling and administrative expenses		5,010			2,963			22,586			10,648
Barnes & Noble Education
Selling and administrative expenses		71,498			—			178,822			—
Depreciation and amortization expense		9,979			—			24,630			—
Impairment		604			—			604			—
Restructuring and other charges		(7,478	)		—			(2,414	)		—
		74,603			—			201,642			—
Total operating expenses		79,613			2,963			224,228			10,648
Operating income (loss)		26,206			6,519			102,142			12,891
Interest and other income (expense), net		14,803			(2,554	)		29,039			10,731
Interest expense		(4,167	)		—			(11,081	)		—
Income (loss) before provision for income taxes		36,842			3,965			120,100			23,622
Provision for income taxes		(17,417	)		(1,285	)		(32,521	)		(5,636	)
Net income (loss)	$	19,425		$	2,680		$	87,579		$	17,986
Net income (loss) attributable to noncontrolling interest		3,953			—			17,790			—
Net income (loss) attributable to Immersion stockholders	$	15,472		$	2,680		$	69,789		$	17,986
Earnings per common share attributable to Immersion stockholders
Basic	$	0.48		$	0.08		$	2.17		$	0.56
Diluted	$	0.47		$	0.08		$	2.12		$	0.55
Weighted Average Common Stock Outstanding
Basic		32,294			32,523			32,159			32,254
Diluted		33,055			32,750			32,959			32,586

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (InLOSS) ~~thousands~~(UNAUDITED)

(Unaudited)


	Three Months Ended July 31,
(In thousands)	2025			2024
Net Income (Loss)	$	(13,716	)	$	12,200
Change in unrealized gains (losses) on available-for-sale securities		(181	)		(218	)
Comprehensive Income (Loss)		(13,897	)		11,982
Comprehensive income (loss) attributable to noncontrolling interests		(12,786	)		(14,877	)
Comprehensive Income (Loss) Attributable to Immersion Stockholders	$	(1,111	)	$	26,859

	Three Months Ended				Nine Months Ended
	January 31, 2025		September 30, 2023		January 31, 2025			September 30, 2023
Net income (loss)	$	19,425	$	2,680	$	87,579		$	17,986
Change in unrealized gains (losses) on available-for-sale securities		380		320		(108	)		993
Comprehensive income (loss)	$	19,805	$	3,000	$	87,471		$	18,979
Comprehensive income (loss) attributable to noncontrolling interests		3,953		—		17,790			—
Comprehensive income (loss) attributable to Immersion stockholders	$	15,852	$	3,000	$	69,681		$	18,979

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In thousands, except number of shares)


	Three Months Ended July 31, 2025
	Common Stock					Treasury Stock		Total
(In thousands, except number of shares)	Shares	Amount	Additional Paid In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Earnings (Deficit)	Shares	Amount	Stockholders' Equity Attributable to Immersion Stockholder	Noncontrolling Interest	Total Stockholders’ Equity
Balances at April 30, 2025	49,433,320	$49	$374,327	$535	$34,691	16,930,351	(111,477)	$298,125	$260,570	$558,695
Net income (loss)	—	—	—	—	(930)	—	—	(930)	(12,786)	(13,716)
Unrealized gain (loss) on available-for-sale securities, net of taxes	—	—	—	(181)	—	—	—	(181)	—	(181)
Release of restricted stock units and awards, net of shares withheld	491,500	1	(1)	—	—	194,649	(1,542)	(1,542)	—	(1,542)
Shares issued to an employee in lieu of cash compensation	17,379	—	126	—	—	—	—	126	—	126
Dividends declared	—	—	—	—	(1,505)	—	—	(1,505)	—	(1,505)
Stock-based compensation	—	—	1,907	—	—	—	—	1,907	2,481	4,388
Tax effects of changes in controlling and noncontrolling interest	—	—	(180)	—	—	—	—	(180)	—	(180)
Balances at July 31, 2025	49,942,199	$50	$376,179	$354	$32,256	17,125,000	$(113,019)	$295,820	$250,265	$546,085

(Unaudited)


	Three Months Ended July 31, 2024
	Common Stock													Treasury Stock
	Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings (Deficit)			Shares		Amount			Total Stockholders' Equity Attributable to Immersion Stockholder			Noncontrolling Interest			Total Stockholders' Equity
Balances at April 30, 2024		48,047,329	$	48	$	322,786		$	2,019		$	(18,263	)		16,192,492	$	(105,360	)	$	201,230		$	—		$	201,230
Barnes & Noble Education acquisition		—		—		—			—			—			—		—			—			203,657			203,657
Net income (loss)		—		—		—			—			27,077			—		—			27,077			(14,877	)		12,200
Unrealized gain (loss) on available-for-sale securities, net of taxes		—		—		—			(218	)		—			—		—			(218	)		—			(218	)
Rebalancing of controlling and noncontrolling interest		—		—		55,520			—			—			—		—			55,520			(55,520	)		—
Tax effects of changes in controlling and noncontrolling interests		—		—		(11,451	)		—			—			—		—			(11,451	)		—			(11,451	)
Release of restricted stock units and awards, net of shares withheld for payroll taxes		300,000		—		—			—			—			119,307		(1,129	)		(1,129	)		—			(1,129	)
Shares issued to an employee in lieu of cash compensation		89,243		—		762			—			—			—		—			762			—			762
Principal stockholder expense reimbursement		—		—		1,500			—			—			—		—			1,500			—			1,500
Dividends declared		—		—		(1,524	)		—			(1	)		—		—			(1,525	)		—			(1,525	)
Stock-based compensation		—		—		1,531			—			—			—		—			1,531			84			1,615
Balances at July 31, 2024		48,436,572	$	48	$	369,124		$	1,801		$	8,813			16,311,799	$	(106,489	)	$	273,297		$	133,344		$	406,641

	Three Months Ended January 31, 2025
	Common Stock							Accumulated Other Comprehensive Income (Loss)		Accumulated Earnings (Deficit)		Treasury Stock					Total Stockholders' Equity Attributable to Immersion Stockholder			Noncontrolling Interest			Total Stockholders’ Equity
	Shares		Amount		Additional Paid In Capital							Shares		Amount
Balances at October 31, 2024	48,685,577	$	49	$	382,174		$	1,531	$	34,535		16,409,872	$	(107,408	)	$	310,881		$	171,606		$	482,487
Net income (loss)	—		—		—			—		15,472		—		—			15,472			3,953			19,425
Unrealized gain (loss) on available-for-sale securities, net of taxes	—		—		—			380		—		—		—			380			—			380
Sale of Barnes & Noble Education's common stock, net of commissions	—		—		(1,506	)		—		—		—		—			(1,506	)		70,345			68,839
Release of restricted stock units and awards, net of shares withheld	247,833		—		—			—		—		77,337		(675	)		(675	)		—			(675	)
Shares issued to an employee in lieu of cash compensation	86,899		—		727			—		—		—		—			727			—			727
Dividends declared	—		—		—			—		(8,297	)	—		—			(8,297	)		—			(8,297	)
Stock repurchases	—		—		—			—		—		136,668		(1,170	)		(1,170	)		—			(1,170	)
Rebalancing of controlling and noncontrolling interest	—		—		1,274			—		—		—		—			1,274			(1,274	)		—
Stock-based compensation	—		—		2,080			—		—		—		—			2,080			2,497			4,577
Balances at January 31, 2025	49,020,309	$	49	$	384,749		$	1,911	$	41,710		16,623,877	$	(109,253	)	$	319,166		$	247,127		$	566,293

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~CASH ~~EQUITY~~FLOWS (UNAUDITED)

(In thousands, except number of shares)


	Three Months Ended July 31,
(in thousands)	2025			2024
Cash flows from operating activities:
Net income (loss)	$	(13,716	)	$	12,200
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization expense		10,423			5,300
Stock-based compensation		4,388			1,615
Loss on disposal of property and equipment		1,929			2,884
Deferred income taxes		(1,010	)		(2,672	)
Net (gains) losses on investment in marketable securities		(2,203	)		(6,011	)
Net (gains) losses on derivative instruments		(3,782	)		(2,071	)
Shares issued to an employee in lieu of cash compensation		126			762
Other noncash		(38	)		1,327
Changes in operating assets and liabilities, net of acquisitions:
Accounts and other receivables		(63,696	)		(46,505	)
Merchandise inventories		(101,003	)		(58,533	)
Textbook rental inventories		17,549			(484	)
Prepaid expenses and other current assets		(16,380	)		3,357
Changes in lease right-of-use assets and liabilities		2,192			30,379
Other assets		7,343			(28,976	)
Accounts payable and accrued liabilities		93,039			(45,982	)
Other current liabilities		2,147			17,145
Deferred revenue		1,160			2,089
Other long-term liabilities		(121	)		(197	)
Net cash flows provided by (used in) operating activities		(61,653	)		(114,373	)
Cash flows from investing activities:
Purchases of marketable securities and other investments		(28,012	)		(31,045	)
Proceeds from sale or maturities of marketable securities and other investments		41,447			43,688
Proceeds from sale of derivative instruments		416			1,369
Payments for settlement of derivative instruments		(909	)		(239	)
Acquisition of business net of cash acquired		—			(29,647	)
Purchase of property and equipment		(3,736	)		(2,808	)
Proceeds from disposition of property and equipment		—			223
Net cash flows provided by (used in) investing activities		9,206			(18,459	)
Cash flows from financing activities:
Proceeds from borrowings		163,300			166,744
Repayment of borrowing		(96,400	)		(46,063	)
Dividend payments to stockholders		—			(1,524	)
Shares withheld to cover payroll taxes		(1,542	)		(1,130	)
Net cash provided by (used in) financing activities		65,358			118,027
Net increase (decrease) in cash, cash equivalents and restricted cash		12,911			(14,805	)
Cash, cash equivalents, and restricted cash:
Beginning of period		92,273			85,521
End of period	$	105,184		$	70,716

(See accompanying Notes to the Unaudited) Condensed Consolidated Financial Statements.

	Three Months Ended September 30, 2023
	Common Stock							Accumulated Other Comprehensive Income (Loss)		Accumulated Earnings (Deficit)		Treasury Stock					Total Stockholders' Equity Attributable to Immersion Stockholder			Noncontrolling Interest		Total Stockholders’ Equity
	Shares		Amount		Additional Paid In Capital							Shares		Amount
Balances at June 30, 2023	47,519,064	$	48	$	322,822		$	875	$	(54,710	)	15,260,452	$	(98,999	)	$	170,036		$	—	$	170,036
Net income (loss)	—		—		—			—		2,680		—		—			2,680			—		2,680
Unrealized gain (loss) on available-for-sale securities, net of taxes	—		—		—			320		—		—		—			320			—		320
Release of restricted stock units and awards, net of shares withheld	51,875		—		—			—		—		21,527		(152	)		(152	)		—		(152	)
Proceeds from stock option exercises	—		—		—			—		—		—		—			—			—		—
Shares issued to an employee in lieu of cash compensation	7,326		—		48			—		—		—		—			48			—		48
Stock repurchases	—		—		—			—		—		485,061		(3,328	)		(3,328	)		—		(3,328	)
Dividends declared	—		—		(991	)		—		—		—		—			(991	)		—		(991	)
Stock-based compensation	—		—		820			—		—		—		—			820			—		820
Balances at September 30, 2023	47,578,265	$	48	$	322,699		$	1,195	$	(52,030	)	15,767,040	$	(102,479	)	$	169,433		$	—	$	169,433

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~CASH ~~EQUITY~~FLOWS (UNAUDITED)

~~(In~~Reconciliation ~~thousands~~of cash, ~~except~~cash ~~number~~equivalents ofand ~~shares)~~restricted cash for Condensed Consolidated Balance Sheets:

(Unaudited)


	Three Months Ended July 31,
(In thousands)	2025		2024
Cash and cash equivalents
Immersion	$	82,800	$	49,440
Barnes & Noble Education		7,340		8,213
		90,140		57,653
Barnes & Noble Education restricted cash reported as:
Prepaid expenses and other current assets		12,688		10,704
Other assets - noncurrent		2,356		2,359
Total restricted cash		15,044		13,063
Total cash, cash equivalents and restricted cash	$	105,184	$	70,716

	Nine Months Ended January 31, 2025
	Common Stock							Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings (Deficit)		Treasury Stock					Total Stockholders' Equity Attributable to Immersion Stockholder			Noncontrolling Interest			Total Stockholders’ Equity
	Shares		Amount		Additional Paid In Capital								Shares		Amount
Balances at April 30, 2024	48,047,329	$	48	$	322,786		$	2,019		$	(18,263	)	16,192,492	$	(105,360	)	$	201,230		$	—		$	201,230
Net income (loss)	—		—		—			—			69,789		—		—			69,789			17,790			87,579
Unrealized gain (loss) on available-for-sale securities, net of taxes	—		—		—			(108	)		—		—		—			(108	)					(108	)
Barnes & Noble Education acquisition	—		—		—			—			—		—		—			—			203,657			203,657
Sale of Barnes & Noble Education's common stock, net of commissions	—		—		(2,336)			—			—		—		—			(2,336	)		80,587			78,251
Release of restricted stock units and awards, net of shares withheld for payroll taxes	790,166		1		—			—			—		294,717		(2,723	)		(2,722	)		—			(2,722	)
Shares issued to an employee in lieu of cash compensation	182,814		—		1,545			—			—		—		—			1,545			—			1,545
Dividends declared	—		—		(1,524	)		—			(9,816	)	—		—			(11,340	)		—			(11,340	)
Stock repurchases	—		—		—			—			—		136,668		(1,170	)		(1,170	)		—			(1,170	)
Rebalancing of controlling and noncontrolling interest	—		—		58,514			—			—		—		—			58,514			(58,514	)		—
Stock-based compensation	—		—		5,764			—			—		—		—			5,764			3,607			9,371
Balances at January 31, 2025	49,020,309	$	49	$	384,749		$	1,911		$	41,710		16,623,877	$	(109,253	)	$	319,166		$	247,127		$	566,293

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~OF STOCKHOLDERS’ EQUITY~~(UNAUDITED)

~~(In thousands, except number of shares)~~1. ORGANIZATION

(Unaudited)

	Nine Months Ended September 30, 2023
	Common Stock							AccumulatedOtherComprehensiveIncome (Loss)		AccumulatedEarnings (Deficit)		Treasury Stock					Total Stockholders' Equity Attributable to Immersion Stockholder			Noncontrolling Interest		TotalStockholders’Equity
	Shares		Amount		Additional Paid In Capital							Shares		Amount
Balances at December 31, 2022	46,974,598	$	47	$	322,667		$	202	$	(70,016	)	14,727,582	$	(95,200	)	$	157,700		$	—	$	157,700
Net income (loss)	—		—		—			—		17,986		—		—			17,986			—		17,986
Unrealized gain (loss) on available-for-sale securities, net of taxes	—		—		—			993		—		—		—			993			—		993
Stock repurchases	—		—		—			—		—		898,757		(6,180	)		(6,180	)		—		(6,180	)
Release of restricted stock units and awards, net of shares withheld	508,344		1		—			—		—		140,701		(1,099	)		(1,098	)		—		(1,098	)
Proceeds from Stock option exercises	21,222		—		160			—		—		—		—			160			—		160
Issuance of stock for ESPP purchase	1,298		—		6			—		—		—		—			6			—		6
Shares issued to an employee in lieu of cash compensation	72,803		—		538			—		—		—		—			538			—		538
Dividends declared	—		—		(3,198	)		—		—		—		—			(3,198	)		—		(3,198	)
Stock-based compensation	—		—		2,526			—		—		—		—			2,526			—		2,526
Balances at September 30, 2023	47,578,265	$	48	$	322,699		$	1,195	$	(52,030	)	15,767,040	$	(102,479	)	$	169,433		$	—	$	169,433

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	January 31, 2025			September 30, 2023
Cash flows from operating activities:
Net income (loss)	$	87,579		$	17,986
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization expense		24,704			56
Stock-based compensation		9,380			2,526
Loss on disposal of property and equipment		3,227			—
Deferred income taxes		(1,908	)		—
Net (gains) losses on investment in marketable securities		(15,596	)		(4,330	)
Net (gains) losses on derivative instruments		(5,586	)		(341	)
Shares issued to an employee in lieu of cash compensation		1,545			538
Other noncash		(137	)		(18	)
Changes in operating assets and liabilities:
Accounts and other receivables		(240,477	)		(1,323	)
Merchandise inventories		9,916			—
Textbook rental inventories		(31,198	)		—
Prepaid expenses and other current assets		(10,362	)		1,024
Changes in lease right-of-use assets and liabilities		(1,460)			277
Long-term deposits		48			(1,967	)
Other assets		(24,628	)		337
Accounts payable and accrued liabilities		49,767			(1,457	)
Other current liabilities		15,747			3,080
Deferred revenue		30,916			(3,576	)
Other long-term liabilities		(9,151	)		(33	)
Net cash flows provided by (used in) operating activities		(107,674	)		12,779
Cash flows from investing activities:
Purchases of marketable securities and other investments		(80,951	)		(158,347	)
Proceeds from sale or maturities of marketable securities and other investments		115,710			130,602
Proceeds from sale of derivative instruments		11,491			17,888
Payments for settlement of derivative instruments		(4,856	)		(9,508	)
Acquisition of business net of cash acquired		(29,647	)		—
Purchase of property and equipment		(8,134	)		(1	)
Proceeds from disposal of property and equipment		792			—
Net cash flows provided by (used in) investing activities		4,405			(19,366	)
Cash flows from financing activities:
Proceeds from borrowings		616,455			—
Repayment of borrowing		(576,491	)		—
Proceeds from sale of Barnes & Noble Education common stock		78,251			—
Dividend payments to stockholders		(11,340	)		(6,419	)
Proceeds from stock options exercises		—			160
Shares withheld to cover payroll taxes		(2,725	)		(1,099	)
Other financing activities		(1,170	)		(6,174	)
Net cash provided by (used in) financing activities		102,980			(13,532	)
Net increase (decrease) in cash, cash equivalents and restricted cash		(289	)		(20,119	)
Cash, cash equivalents, and restricted cash:
Beginning of period		85,521			48,820
End of period	$	85,232		$	28,701

See accompanying Notes to Condensed Consolidated Financial Statements.

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IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Reconciliation of cash, cash equivalents and restricted cash for Condensed Consolidated Balance Sheets:

		January 31, 2025		September 30, 2023
Cash and cash equivalents
Immersion	$	68,505	$	28,701
Barnes & Noble Education		9,185		—
		77,690		28,701
Barnes & Noble Education restricted cash reported as:
Prepaid expenses and other current assets		5,199		—
Other assets - noncurrent		2,343		—
Total restricted cash		7,542		—
Total cash, cash equivalents and restricted cash	$	85,232	$	28,701

See accompanying Notes to Condensed Consolidated Financial Statements.

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IMMERSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Immersion Corporation (“Immersion”) was incorporated in 1993 in California and reincorporated in Delaware in 1999. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company”, “we”, “us” and “our” refer to Immersion and our consolidated subsidiaries.

Immersion ~~generates~~Corporation ~~license~~(“Immersion”) ~~and~~was ~~royalty~~incorporated ~~revenues~~in ~~from~~1993 ain ~~wide~~California ~~range~~and ofreincorporated ~~intellectual~~in ~~property~~Delaware ~~(“IP”)~~in ~~that~~1999. ~~more~~Unless ~~fully~~the ~~engage~~context ~~users’~~otherwise ~~sense~~requires, ofreferences ~~touch~~in ~~when~~these ~~operating~~Notes ~~digital~~to ~~devices. We focus on~~ the ~~following~~Condensed ~~target~~Consolidated ~~application~~Financial ~~areas:~~Statements ~~mobile~~to ~~devices,~~the ~~wearables~~“Company”, ~~consumer~~“we”, ~~mobile~~“us” ~~entertainment~~ and ~~other~~“our” ~~content;~~refer ~~console~~to ~~gaming;~~Immersion ~~automotive;~~and ~~medical;~~our ~~and~~consolidated ~~commercial~~subsidiaries.

OnImmersion ~~June~~generates ~~10,~~license ~~2024,~~and weroyalty ~~acquired~~revenues from a ~~controlling~~wide ~~interest~~range inof ~~Barnes~~intellectual &property ~~Noble Education, Inc., a Delaware corporation~~ (“~~Barnes & Noble Education~~IP” ~~or “BNED”~~). ~~Please~~that ~~refer~~more tofully ~~Note~~engage 2.users’ ~~Business~~sense ~~Combination for additional information. The financial results~~ of ~~Barnes~~touch &when ~~Noble~~operating ~~Education~~digital ~~have~~devices. ~~been~~We ~~included~~focus inon ~~our~~the ~~condensed~~following ~~consolidated~~target ~~financial~~application ~~statements~~areas: ~~from~~mobile ~~the~~devices, ~~acquisition~~wearables, ~~date~~mobile ofentertainment; ~~June~~console ~~10,~~gaming; ~~2024~~and automotive.

On June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware corporation (“Barnes & Noble Education” or “BNED”). See Note 4. Business Combination 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.

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.

•

• First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students with both physical and digital materials. In addition to providing numerous benefits to students, faculty and administrators, the First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.

•

• First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system (“LMS”).

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.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The results of operations reflected in our ~~condensed~~Condensed ~~consolidated~~Consolidated ~~financial~~Financial ~~statements~~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 our net assets attributable to the other owners, based on the portion of the interest owned by such owners. As of January 31, 2025, the noncontrolling interest was $247.1 million. At the end of each reporting period, equity related to Barnes & Noble Education that is attributable to Immersion and the other owners is rebalanced to reflect Immersion’s and the other owners’ ownership in Barnes & Noble Education.8

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~~The condensed~~IMMERSION 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 year ended December 31, 2023. 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. Certain prior year amounts have been reclassified to conform with the current year presentation.CORPORATION

~~Due~~NOTES toTO ~~their~~THE ~~nonhomogeneous~~CONDENSED ~~operations,~~CONSOLIDATED ~~our Condensed~~FINANCIAL ~~Consolidated~~STATEMENTS Balance Sheets as of January 31, 2025 and April 30, 2024 and Condensed Consolidated Statement of Operations for the three and nine months ended January 31, 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 of the assets of Barnes & Noble Education, reported on the Condensed Consolidated Balance Sheet, 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.(UNAUDITED)

~~Use~~The noncontrolling interest on the Condensed Consolidated Statements of ~~Estimates~~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, 2025, the noncontrolling interest was $250.3 million. At the end of each reporting period, equity related to Barnes & Noble Education that is attributable to Immersion and the other owners is rebalanced to reflect Immersion’s and the other owners’ ownership in Barnes & Noble Education.

InThese ~~preparing~~Condensed ~~financial~~Consolidated ~~statements~~Financial Statements have been prepared in ~~conformity~~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, wethese ~~are~~condensed ~~required~~consolidated tofinancial ~~make~~statements ~~estimates~~do not include all information and ~~assumptions~~footnotes ~~that~~necessary ~~affect~~for a complete presentation of the ~~reported~~financial ~~amounts~~position, results of operations, and cash flows, in ~~the condensed~~conformity with U.S. GAAP and should be read in conjunction with our audited consolidated financial statements ~~and~~included ~~accompanying~~in ~~notes~~our Annual Report on Form 10-K for the year ended April 30, 2025, as amended. ~~Actual~~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 ~~could~~of ~~differ~~operations ~~from~~for ~~those~~the ~~estimates~~interim periods presented have been included.

Due to their non-homogeneous operations, our Condensed Consolidated Balance Sheet as of July 31, 2025 and Consolidated Balance Sheet as of April 30, 2025 and Condensed Consolidated Statements of Operations for the three months ended July 31, 2025 and 2024, 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 of 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.

Reporting Periods

~~Immersion~~On ~~previously~~September ~~reported~~27, ~~our~~2024, ~~financial~~following ~~results~~the ~~based~~issuance onof athe ~~calendar-year~~Company’s ~~basis.~~Condensed ~~For~~Consolidated ~~interim~~Financial ~~period~~Statements ~~reporting,~~as weof ~~reported~~June ~~our~~30, ~~quarterly~~2024 ~~financial~~and ~~results~~for asthe ofthree ~~March~~months ~~31,~~ended June 30, ~~September~~2024 30and 2023, ~~and~~the ~~December~~Board ~~31 in~~of ~~each~~Directors ~~calendar~~of ~~year. Barnes~~Immersion &approved ~~Noble~~a ~~Education's~~change in our fiscal year isfor ~~comprised~~the ~~of 52 or 53 weeks,~~period beginning on January 1 and ending on December 31 to the ~~Saturday~~period ~~closest~~beginning on May 1 and ending on April 30. The Company has recast the historical financial statements presented herein for the three months ended July 31, 2024 to align with the ~~last day of~~Company’s ~~April~~new fiscal year.

InSummary ~~order to more closely align with Barnes & Noble Education’s fiscal year end, on September 27, 2024, the Board~~ of ~~Directors~~Significant ofAccounting Immersion (the “Board”) approved a change of our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on May 1 and ending on April 30. As a result of the change in fiscal year end, we filed a Transition Report on Form 10-QT for the transition period from January 1, 2024, through April 30, 2024, on November 8, 2024.Policies

~~Our~~Use ~~new fiscal year begins on May 1 and ends on April 30. Our new fiscal quarters end on July 31, October 31, January 31, and April 30. Therefore, the financial results~~ of certain fiscal quarters may not be comparable to prior fiscal quarters. References throughout this Quarterly Report on Form 10-Q to fiscal 2025 with respect to Immersion refer to the fiscal year ending April 30, 2025.Estimates

~~The~~In ~~financial~~preparing ~~information~~these ~~presented~~financial statements in ~~this~~conformity ~~Quarterly~~with ~~Report~~U.S. onGAAP, ~~Form~~we ~~10-Q~~are ~~includes~~required ~~the~~to ~~financial~~make ~~information~~estimates ofand ~~Barnes~~assumptions &that ~~Noble~~affect ~~Education~~the ~~for~~reported amounts in the ~~13 weeks~~ Condensed Consolidated Financial Statements and ~~39 weeks~~ ~~ended~~accompanying ~~January~~notes. ~~25,~~Actual ~~2025~~results could differ from those estimates.

WeEarnings ~~did~~(Losses) ~~not~~Per recast the condensed consolidated financial statements for the three and nine months ended January 31, 2024 because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical and would not have been cost-justified. Prior to the completion of the Transactions, our business was not highly seasonal and seasonal differences do not generally affect the comparability of prior fiscal quarters. As a result, the condensed consolidated financial statements for the three and nine months ended September 30, 2023, are presented as the most comparable periods of the prior year.Share

12We present both basic and diluted earnings (losses) per share (“EPS”) using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to Immersion stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

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~~Segment~~IMMERSION ~~Information~~CORPORATION

~~Following~~NOTES ~~the~~TO ~~closing~~THE ofCONDENSED ~~the~~CONSOLIDATED ~~Transaction~~FINANCIAL ~~(as~~STATEMENTS ~~defined below~~(UNAUDITED) ~~with Barnes & Noble Education, we operate as two reportable segments, Immersion and Barnes & Noble Education.~~

Earnings per Share of the Company

We present both basic and diluted earnings per share (“EPS”) using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to Immersion stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

Business Combinations

The determination of the fair value of net assets acquired in a business combination requires estimates and judgments of future cash flow expectations for the acquired business and the related identifiable tangible and intangible assets. Fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques. For current assets and current liabilities, book value is generally assumed to approximate fair value. Goodwill is the amount by which consideration paid for an acquired entity exceeds the fair value of its acquired net assets. Acquisition costs are expensed as incurred and are included within general and administrative expenses in the consolidated statements of operations.

Due to the time required to gather and analyze the necessary data for each acquisition, U.S. GAAP provides a “measurement period” of up to one year from the date of acquisition in which to finalize these fair value determinations. During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existing as of the date of acquisition or based on the final net assets and working capital of the acquired business, as prescribed in the applicable purchase agreement. Such adjustments may result in the recognition of, or an adjustment to the fair values of, acquisition-related assets and liabilities and/or consideration paid, and are referred to as “measurement period” adjustments. Measurement period adjustments are recorded to goodwill. Other revisions to fair value estimates, including those relating to facts and circumstances that occur subsequent to the date of acquisition, are reflected as income or expense, as appropriate.

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

Our 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.

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Significant Accounting Policies Related to Barnes & Noble Education

A summary of the new significant accounting policies as a result of our acquisition of Barnes & Noble Education is as follows:

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 ~~customer~~digital ~~accesses~~content ~~the~~is ~~digital~~made ~~content~~available to the customer compared to: (i) the rental of physical ~~textbook~~textbooks where revenue is recognized over the rental period;, and (ii) ~~ala~~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.

Restricted Cash

AsAt ofJuly ~~January~~ 31, 2025, ~~Barnes~~and &April ~~Noble~~30, ~~Education~~2025, ~~had~~ restricted cash was comprised of $712.57 million, ~~comprised~~and of $517.23 million, respectively, in Prepaid expenses and other current assets in the Condensed Consolidated Balance ~~Sheet~~ Sheets related to segregated funds for commission due to Fanatics Lids College, Inc. D/B/A “Lids” (“Lids”) for logo merchandise sales as per the Lids service provider merchandising agreement, and for both respective dates, $2.34 million in Other assets - noncurrent in the Condensed Consolidated Balance ~~Sheet~~Sheets related to amounts held in trust for future distributions related to employee benefit plans. ~~The~~ ~~restricted cash was part of net assets acquired as part of the Transactions (defined below).~~

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. ~~The~~Market ~~market~~ value of Barnes & Noble Education's inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory represent write downs that reduce the cost basis of the asset. These write-downs are based on ~~our~~Barnes & Noble Education’s history of liquidating non-returnable inventory, which includes certain ~~significant~~ assumptions, including markdowns, ~~sales~~and ~~below cost,~~ inventory aging~~, and expected demand~~.

Cost is determined primarily by the retail inventory method for Barnes & Noble Education's physical bookstore inventory. Barnes & Noble Education's fulfillment and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of the inventories. There were no LIFO adjustments during the period from June 10~~, 2024, to January 31, 2025.~~

For the physical bookstores, Barnes & Noble Education also estimates and accrues shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

On June 10, 2024, Immersion acquired $336.7 million in the merchandise inventory, measured at fair value, as part of the Transactions (defined below).

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cost is determined primarily by the retail inventory method for Barnes & Noble Education's retail business. Textbook and trade book inventories for retail and wholesale are valued using the LIFO method. The related LIFO reserve was $6.4 million to Barnes & Noble Education’s inventory balance as of July 31, 2025 and April 30, 2025, respectively.

For Barnes & Noble Education’s physical bookstores, Barnes & Noble Education estimates and accrues inventory shortage for the period between the last physical count and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

The physical bookstores fulfillment order is directed first to Barnes & Noble Education’s wholesale operations before other sources of inventory are utilized. The products that Barnes & Noble Education sells originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.

Textbook Rental Inventories

Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. ~~The~~with ~~related~~the amortization expense isrecognized ~~included~~ in cost of ~~sales~~goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.

On June 10, 2024, Immersion acquired $9.8 million in rental textbook inventory, measured at fair value, as part of the Transactions (defined below).

Leases

Barnes & Noble Education recognizes lease assets and lease liabilities on the Condensed Consolidated Balance ~~Sheet~~ Sheets for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification (“ASC”) Topic 842, Leases. Barnes & Noble Education does not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). Barnes & Noble Education recognizes lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. Barnes & Noble Education recognizes lease expense related to college and university contracts, inclusive of the amortization of the unfavorable lease terms determined at the acquisition date of June 10, 2024, as cost of sales in the Condensed Consolidated Statements of Operations and Barnes & Noble Education recognizes lease expense related to its various office spaces as selling and administrative expenses in the Condensed Consolidated Statements of Operations.

For leases entered into after June 10, 2024, Barnes & Noble Education uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the commencement date, as the rate implicit in the lease is not readily determinable. Barnes & Noble Education utilizes an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later. See Note 8. Leases for additional information.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of Barnes & Noble Education'’s revenue is derived from the sale of products through its bookstore locations, including virtual bookstores, and its bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of products is recognized at the point in time when control of the products is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for the products. For additional information, see Note 6. Revenue Recognition for additional information.

Product ~~sales~~revenue is recognized when the customer takes physical possession of its products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by its customers for products ordered through websites and virtual bookstores. Product sales from Barnes & Noble Education'’s wholesale operations are recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of sales.

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~~Revenue~~IMMERSION from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product sales in Barnes & Noble Education's condensed consolidated financial statements. A software feature is embedded within the content of Barnes & Noble Education's digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, Barnes & Noble Education's performance obligation is complete.CORPORATION

NOTES ~~Revenue~~TO ~~from~~THE ~~the~~CONDENSED ~~rental~~CONSOLIDATED ofFINANCIAL ~~physical~~STATEMENTS 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 Barnes & Noble Education's condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. Barnes & Noble Education offers a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. Barnes & Noble Education records the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, Barnes & Noble Education accelerates any remaining deferred rental revenue at the point of sale.(UNAUDITED)

Revenue ~~recognized~~from ~~for~~ the ~~BNC~~ ~~First~~sale ~~Day~~of ~~offerings~~digital istextbooks, ~~consistent~~which ~~with~~contains ~~Barnes~~a &single ~~Noble~~performance ~~Education's~~obligation, ~~policies~~is ~~outlined~~recognized ~~above~~upon ~~for~~delivery ~~product,~~of the digital ~~and~~content ~~rental~~as product sales, ~~net~~in ofBarnes an& ~~anticipated~~Noble ~~opt-out~~Education’s orcondensed ~~return~~consolidated ~~provision~~financial statements. ~~Given~~A ~~the~~software ~~growth~~feature ofis ~~BNC~~embedded ~~First~~within ~~Day programs,~~ the ~~timing~~content of ~~cash collection from~~ Barnes & Noble Education'’s ~~school~~digital ~~partners~~textbooks, ~~may~~such ~~shift~~that toupon ~~periods~~expiration ~~subsequent~~of tothe ~~when~~term the ~~revenue~~customer is ~~recognized.~~no ~~When~~longer aable ~~school~~to ~~adopts~~access the ~~BNC~~ ~~First~~content. ~~Day affordable~~While ~~access course material offerings, cash collection from~~ the ~~school~~sale ~~generally~~of ~~occurs after~~ the ~~institution's~~digital ~~drop/add~~textbook ~~dates,~~allows ~~which is later in~~ the ~~working~~customer ~~capital~~to ~~cycle,~~access ~~particularly~~digital incontent ~~Barnes~~for &a ~~Noble~~fixed ~~Education's~~period ~~third quarter given the timing~~ of ~~the Spring Term and its quarterly reporting period~~time, asonce ~~compared~~the todigital ~~direct-to-student~~content ~~point-of-sale transactions where cash~~ is ~~generally~~delivered ~~collected~~to ~~during~~ the ~~point-of-sale~~customer, ~~transaction~~Barnes or& ~~within~~Noble aEducation’s ~~few~~performance ~~days~~obligation ~~from~~is ~~the credit card processor~~complete.

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 Barnes & Noble Education’s condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. Barnes & Noble Education offers a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. Barnes & Noble Education records the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, Barnes & Noble Education accelerates any remaining deferred rental revenue at the point of sale.

Revenue recognized for the BNC First Day offerings is consistent with Barnes & Noble Education’s policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from Barnes & Noble Education’s 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 dates, which is later in the working capital cycle, particularly in Barnes & Noble Education's third quarter given the timing of the Spring Term and its 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.

Barnes & Noble Education estimates returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded.

For sales and rentals involving third-party products, Barnes & Noble Education evaluates whether it is acting as a principal or an agent. This determination is based on Barnes & Noble Education'’s evaluation of whether it controls the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether Barnes & Noble Education controls the specified goods or services prior to transferring them to the customer, including whether weBarnes ~~have~~& Noble Education has the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where Barnes & Noble Education is the principal, it records revenue on a gross basis, and for those transactions where Barnes & Noble Education is an agent to a third-party, it records revenue on a net basis.

As the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics Retail Group Fulfillment, LLC (“Fanatics”, collectively, F/L Relationship), Barnes & Noble Education recognizes commission revenue earned for these sales on a net basis in its condensed consolidated financial statements.

Barnes & Noble Education does not have gift cards or customer loyalty programs. Barnes & Noble Education does not treat any promotional offers as expenses. Sales tax collected from Barnes & Noble Education'’s customers is excluded from reported revenues. Barnes & Noble Education'’s payment terms are generally 30 days and do not extend beyond one year.

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Service and other revenue

Service and other revenue is primarily derived from brand marketing services which include promotional activities and advertisements within Barnes & Noble Education'’s physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.

Brand marketing agreements often include multiple performance obligations which are individually negotiated with Barnes & Noble Education's customers. For these arrangements that contain distinct performance obligations, Barnes & Noble Education allocates the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand marketing service and over time for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cost of Sales

Cost of sales primarily includes costs such as merchandise costs;, textbook rental amortization;, ~~content development cost amortization;~~ warehouse costs related to inventory management and order fulfillment;, insurance;, certain payroll costs;, and management service agreement costs, including rent expense, related to ~~our~~Barnes & Noble Education’s college and university contracts and other facility related expenses. ~~Rent expense is inclusive of the amortization of unfavorable lease terms that was recognized at the Closing Date.~~

~~Except~~Selling asand ~~set~~Administrative forth herein, there are no other changes in our significant accounting policies. Please refer to Note 1. Significant Accounting Policies contained in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 11, 2024, for a complete discussion of our significant accounting policies.Expenses

~~Recent~~The ~~Accounting~~Company’s ~~Pronouncements Not~~selling ~~Yet~~and ~~Adopted~~administrative expenses primarily consisted of employee compensation and benefits including stock-based compensation, legal and other professional fees, external legal costs for patents, office expense, travel, and facilities costs.

InBarnes ~~November~~& ~~2024,~~Noble ~~the~~Education’s ~~Financial~~selling ~~Accounting~~and ~~Standards~~administrative ~~Board~~expenses ~~(“FASB”)~~consist ~~issued~~primarily ~~Accounting~~of ~~Standards~~employee ~~Update~~payroll ~~(ASU)~~and ~~2024-03, Income~~store ~~Statement~~operating ~~– Reporting Comprehensive Income – Expense Disaggregation Disclosures~~expenses. ~~The~~Selling ~~ASU~~and ~~requires~~administrative ~~a public business entity to provide disaggregated disclosures of certain categories of~~ expenses onalso aninclude ~~annual~~long-term ~~and~~incentive ~~interim~~plan ~~basis including purchases of inventory, employee~~ compensation, ~~depreciation,~~expense and ~~intangible~~general ~~asset~~office ~~amortization for each income statement line item that contains those~~ expenses., ~~This~~such ~~ASU~~as ismerchandising, ~~effective~~procurement, ~~for~~field ~~annual and interim periods beginning after December 15~~support, ~~2026 (our 2028 fiscal year)~~finance, ~~with early adoption permitted. We are currently assessing this guidance~~ and ~~determining the impact on our condensed consolidated financial statements~~accounting.

InAccounting December 2023, the FASB issued ASU No. 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance will be effective for the fiscal year beginning May 1, 2025. The guidance does not affect recognition or measurement in our consolidated financial statements. We are evaluating the impact of this amendment on our consolidated financial statements.Pronouncements

InRecently ~~November 2023, the FASB~~ issued ~~ASU~~accounting 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for us for the annual report for the fiscal year ending April 30, 2025, and subsequent interim periods. Early adoption is permitted, and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our consolidated financial statements.pronouncements

17There were no new accounting pronouncements issued during the quarter ended July 31, 2025, that are expected to have a material impact on the Company’s 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 fiscal 2026. The adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. See Note 11. Participation Interest Purchase Agreement for additional information.

3. RESTATEMENT OF PREVIOUSLY-ISSUED FINANCIAL STATEMENTS

As previously disclosed in Note 20 of the Company’s consolidated financial statements for the fiscal year ended April 30, 2025, the Company restated the unaudited quarterly Condensed Consolidated Financial Statements for the quarterly and year-to-date periods ended January 31, 2025 and October 31, 2024, calendar quarter and year-to-date ended June 30, 2024, and the one month period ended July 31, 2024 (the “restated periods”) in connection with the identification of material errors related to the accounting for digital cost of sales, leases and other items. While some of these restated periods were used to derive the Company’s results for the three months ended July 31, 2024, such restated periods are not presented herein because the Company has recast its historical financial statements for the three months ended July 31, 2024 to align with its new fiscal year. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies.

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~~2. BUSINESS~~IMMERSION ~~COMBINATION~~CORPORATION

OnNOTES ~~June~~TO ~~10,~~THE ~~2024~~CONDENSED ~~(“Closing~~CONSOLIDATED ~~Date”),~~FINANCIAL ~~the~~STATEMENTS ~~Transactions~~ (~~defined below~~UNAUDITED) were consummated pursuant to the terms of the Purchase Agreement among Barnes & Noble Education and the Purchasers (as defined in the Purchase agreement), following Barnes & Noble Education’s receipt of the requisite approval of its stockholders at a special meeting of its stockholders held on June 5, 2024. The following is presented on a post-reverse stock split basis, which is defined as a reverse stock split of Barnes & Noble Education’s outstanding shares of common stock at a ratio of 1-for-100, effective as of June 11, 2024.

Pursuant to the terms of the Purchase Agreement, Barnes & Noble Education conducted a rights offering (the “Rights Offering”), whereby Barnes & Noble Education distributed at no charge to the holders of its common stock (“BNED Common Stock”) non-transferable subscription rights (“Rights”) to purchase up to an aggregate of 9,000,000 new shares of BNED Common Stock (the “Offered Shares”) at a subscription price of $54.00 BUSINESS per share (the “Subscription Price”). On the Closing Date, Barnes & Noble Education issued the Offered Shares, which generated $45 million in gross proceeds, including approximately $10 million of Offered Shares purchased by Toro 18 Holdings LLC, a wholly-owned subsidiary of Immersion, (“Investor”) pursuant to the Backstop Commitment (as defined in the Purchase Agreement). Pursuant to the Backstop Commitment, Immersion through Investor, purchased 2,006,701 shares of BNED Common Stock. Barnes & Noble Education reimbursed Immersion, through Investor, for reasonable legal and other expenses in connection with the Transactions in the amount of $2.5 million. Barnes & Noble Education also paid an amount equal to $2.5 million to Immersion, through Investor, as payment in consideration for its Backstop Commitment.COMBINATION

InOn ~~addition~~June to10, ~~the~~2024 ~~Rights~~(“Closing ~~Offering~~Date”), ~~Immersion~~we acquired 42% of all outstanding common shares of Barnes & Noble Education, as well as control over Barnes & Noble Education through ~~Investor,~~five ~~purchased~~Immersion-appointed ~~from~~board seats. The total cash consideration transferred was approximately $50.1 million after the $2.5 million Backstop Commitment (as defined in the purchase agreement between Barnes & Noble Education anand ~~aggregate~~the ofCompany) 9and $2.5 million in transaction costs,~~000,000~~ ~~new~~incurred ~~shares~~by ofImmersion ~~BNED~~but ~~Common~~reimbursed ~~Stock~~by atBarnes & Noble Education. For the ~~Subscription~~fiscal ~~Price~~year ~~for~~ended aApril ~~purchase~~30, ~~price~~2025, Immersion incurred costs related to this acquisition of $451.2 million, (inclusive of the ~~“PIPE~~expenses ~~Transaction”~~reimbursed by Barnes & Noble Education, that were expensed as incurred and ~~together~~recorded ~~with~~in Selling and administrative expenses in the ~~Rights~~accompanying ~~Offering~~Condensed Consolidated Statement of Operations. The acquisition aims to expand Immersion's offerings, increase its customer reach, and diversify into the ~~“Transactions”)~~education sector.

AsThe acquisition was accounted for as a ~~result~~business ofcombination and the ~~Transactions~~total purchase price was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date with the excess recorded as goodwill. The purchase price allocation was finalized during the measurement period and the amounts presented below reflect final measurement period adjustments recorded during the fiscal year ended April 30, ~~Barnes~~2025. &See ~~Noble~~Note ~~Education~~9. ~~received~~Goodwill aand ~~total~~Intangible Assets for additional information. The results of ~~$95~~the ~~million~~purchase inprice ~~gross~~allocation ~~proceeds~~below are presented, inclusive of ~~which~~the ~~$80~~restatement adjustments.7 ~~million~~For ~~was~~the ~~used~~impacts toof ~~reduce~~the ~~its~~restatement ~~outstanding~~on ~~debt~~the preliminary purchase price allocation, see, Note 20. Restatement of Quarterly Financial Information (Unaudited) as previously disclosed in the Company’s consolidated financial statements for the fiscal year ended April 30, 2025.

InThe ~~connection~~following ~~with~~table ~~the~~presents ~~closing, Barnes & Noble Education appointed Eric Singer, William C. Martin, Emily S. Hoffman, and Elias Nader to serve as members of~~ the ~~board~~results of ~~directors of Barnes & Noble Education (~~the ~~“BNED~~final ~~Board”)~~purchase ~~following~~price ~~the Closing. Messrs. Singer~~allocation, ~~Martin~~inclusive ~~and Nader and Ms. Hoffman are current members~~ of ~~our Board. In addition, at~~ the ~~closing,~~restatement ~~Sean~~adjustments ~~Madnani~~(in ~~was~~thousands): ~~appointed to the Barnes & Noble Education Board along with two existing directors, Kathryn Eberle Walker and Denise Warren who will each continue to serve on the BNED Board following the Closing.~~

As part of the Transactions, we acquired 42% of all outstanding common shares of Barnes & Noble Education, as well as control over Barnes & Noble Education through the five Immersion-appointed board seats. The total consideration transferred was approximately $50.1 million, consisting of $52.2 million in cash consideration paid to Barnes & Noble Education less $2.1 million in transaction costs incurred by Immersion but reimbursed by Barnes & Noble Education. For the nine months ended January 31, 2025, Immersion incurred costs related to this acquisition of $1.2 million, inclusive of the expenses reimbursed by Barnes & Noble Education, that were expensed as incurred and recorded in general and administrative expenses in the accompanying consolidated statement of operations. The acquisition aims to expand Immersion's offerings, increase its customer reach, and diversify into the education sector.


	Final Purchase Price Allocation
Assets acquired
Cash and cash equivalents		$	14,736
Accounts receivable			115,320
Merchandise inventories			336,741
Textbook rental inventories			5,158
Prepaid expenses and other current assets (including $4.8 million in restricted cash)			26,969
Property and equipment			118,818
Operating lease right-of-use assets			186,180
Intangible assets			95,000
Other assets noncurrent (including $1.0 million in restricted cash)			11,796
Total assets acquired		$	910,718
Liabilities assumed
Accounts payable			279,456
Accrued liabilities			98,974
Deferred revenue – current			7,651
Operating lease liabilities – current			76,677
Deferred income taxes – noncurrent			4,790
Operating lease liabilities – noncurrent			141,501
Deferred revenue – noncurrent			3,393
Other long-term liabilities			12,413
Long-term borrowings			101,235
Total liabilities assumed			726,090
Net assets acquired		$	184,628

Total consideration transferred		$	50,133
Less: Net assets acquired			(184,628	)
Plus: Noncontrolling interest			203,657
Goodwill		$	69,162

The acquisition was accounted for as a business combination and the total purchase price was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date with the excess recorded as goodwill. We expect to continue to obtain information to assist in determining the fair value of the net assets acquired as of the Closing Date while the measurement period remains open, which will not exceed one year from the acquisition date. Measurement period adjustments were recorded during the quarter ended January 31, 2025. Refer to Note 7. Goodwill and Intangible Assets for additional information.

The fair value of the noncontrolling interest of $203.7 million on the Closing Date was calculated using the acquisition-date fair value of $13.40 per share multiplied by the number of noncontrolling interest shares.

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The following table presents the preliminary purchase price allocation for the acquisition. Measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date:

(in thousands)		Preliminary Purchase Price Allocation			Measurement Period Adjustments			Preliminary Purchase Price Allocation (As Adjusted)
Assets acquired
Cash and cash equivalents	$	14,736		$	-		$	14,736
Accounts receivable		113,743			-			113,743
Merchandise inventories		336,741			-			336,741
Textbook rental inventories		9,835			-			9,835
Prepaid expenses and other current assets (including $4.8 million in restricted cash)		26,969			-			26,969
Property and equipment		118,818			-			118,818
Operating lease right-of-use assets		155,664			-			155,664
Intangible assets		95,000			-			95,000
Other assets noncurrent (including $1.0 million in restricted cash)		11,634			751			12,385
Total assets acquired	$	883,140		$	751		$	883,891
Liabilities assumed
Accounts payable	$	279,456		$	-			279,456
Accrued liabilities		51,123			(3,353	)		47,770
Deferred revenue – current		7,651			-			7,651
Operating lease liabilities – current		80,263			-			80,263
Deferred tax liabilities – noncurrent		636			-			636
Operating lease liabilities – noncurrent		107,400			-			107,400
Deferred revenue – noncurrent		3,393			-			3,393
Other long-term liabilities		12,413			-			12,413
Long-term borrowings		101,235			-			101,235
Total liabilities assumed	$	643,570		$	(3,353	)	$	640,217
Net assets acquired		239,570			4,104			243,674
Total consideration transferred	$	50,133		$	-		$	50,133
Less: Net assets acquired		(239,570	)		(4,104	)		(243,674	)
Plus: Noncontrolling interest		203,657			-			203,657
Goodwill		14,220			(4,104	)		10,116

Identifiable intangible assets acquired were comprised of the following (in thousands except for estimated useful life):

		Amount		Estimated Life
(in thousands)		Amount			Estimated Life
Trade name	$	~~45,000~~$	45,000	~~Indefinite~~	Indefinite
Customer relationships		~~50,000~~	50,000	~~13 years~~	13 years
Total intangible assets	$	~~95,000~~$	95,000

Trade name represents Barnes & Noble Education’s right to its trade name on a perpetual, royalty-free basis as it existed on the acquisition Closing Date. Customer relationships consist of distinct values associated with Barnes & Noble Education’s large operating footprint with direct access to students and faculty across a diverse customer base.14

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WeIMMERSION used the assistance of a third-party firm to estimate the fair value of the intangible assets acquired. We used an income approach to estimate the fair values of the trade names and customer relationships. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used to estimate the values of identifiable intangible assets include management’s estimates of future revenue, adjusted for growth, and attrition based on historical data and management's forward-looking expectations. These cash flows were discounted at a rate of 21%, which reflects our cost of equity. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flow.CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

We used the assistance of a third-party firm to estimate the fair value of the intangible assets acquired. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The key assumptions used to estimate the values of identifiable intangible assets include management’s estimates of future revenue, adjusted for growth, EBITDA margins, royalty rate attrition based on historical data and management's forward-looking expectations. These cash flows were discounted at a rate of 21%, which reflects our cost of equity. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flow.

Goodwill generated from this acquisition is primarily attributed to the value of Barnes & Noble Education’s assembled workforce. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our entire goodwill balance is associated with the Barnes & Noble Education reporting unit. Goodwill is not deductible for tax purposes.

We acquired a deferred tax ~~asset of $0.7 million, recorded and a deferred tax~~ liability of $14.38 million, recorded under Deferred ~~tax~~income ~~liabilities,~~taxes ~~net~~ – noncurrent, as part of this business combination. ~~Subsequent measurement period adjustments resulted in an increase of $0.7 million to our deferred tax asset.~~

We also used the assistance of a third-party valuation firm to estimate the fair value of the property and equipment, and inventory acquired. The fair value as of the Closing Date reflects a step-up in basis due to the highly depreciable nature of the property and equipment. No material fair value adjustments for inventory were identified, as there are minimal costs associated with procurement.

Most of the net tangible assets were valued at their respective carrying amounts as of the acquisition date, as we believe that these amounts approximate their current fair values. The leases acquired were recorded at their respective fair values as of the acquisition date.

The acquired entity’s results of operations were included in our condensed consolidated financial statements from the date of acquisition, June 10, 2024, as adjusted for specific fair value adjustments discussed above. For the three and nine months ended January 31, 2025, Barnes & Noble Education contributed net operating revenue of $466.3 million and $1,203.5 million, respectively, and net income (loss) of $6.2 million and $29.5 million, respectively, which are both reflected in the accompanying Condensed Consolidated Statement of Operations. 15

The following unaudited pro forma condensed combined financial information gives effect to the acquisition of Barnes & Noble Education as if it was consummated on January 1, 2023 (the beginning of the comparable prior reporting period), and includes pro forma adjustments related to the amortization of acquired intangible assets, stock-based compensation expense, and direct and incremental transaction costs reflected in the historical financial statements. Specifically, the following nonrecurring adjustments were made:

•	For the nine months ended January 31, 2025, our direct and incremental acquisition-related expenses of $1.2 million and one-time severance payment of $1.5 million are excluded from the pro forma condensed combined net income.
•	For the nine months ended September 30, 2023, our direct and incremental acquisition-related expenses of $1.2 million and one-time severance payment of $1.5 million are included in the pro forma condensed combined net loss.

This unaudited data is presented for informational purposes only and is not intended to represent or be indicative of the results of operations that would have been reported had the acquisition occurred on January 1, 2023. It should not be taken as representative of future results of operations of the combined company.

The following table presents the unaudited pro forma condensed combined financial information (in thousands):

	Three Months Ended				Nine Months Ended
	January 31, 2025		September 30, 2023		January 31, 2025		September 30, 2023
Revenues	$	474,763	$	273,643	$	1,402,868	$	967,601
Net income (loss)		25,188		(45,356)		26,756		(99,390)

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~~3. SEGMENT~~IMMERSION ~~REPORTING~~CORPORATION

WeNOTES ~~operate~~TO ~~two operating~~THE ~~and~~CONDENSED ~~reportable~~CONSOLIDATED ~~segments,~~FINANCIAL ~~Immersion~~STATEMENTS ~~and Barnes & Noble Education. Summarized financial information for our reportable segments is reported below~~ (~~in thousands~~UNAUDITED):

	Three Months Ended				Nine Months Ended
	January 31, 2025		September 30, 2023		January 31, 2025		September 30, 2023
Revenues:
Immersion	$	8,437	$	9,482	$	70,989	$	23,539
Barnes & Noble Education		466,325		—		1,203,511		—
Total revenues		474,762		9,482		1,274,500		23,539
Cost of sales (excludes depreciation and amortization expense):
Barnes & Noble Education		368,943		—		948,130		—
Operating expenses:
Immersion		5,010		2,963		22,586		10,648
Barnes & Noble Education		74,603		—		201,642		—
Total operating expenses		79,613		2,963		224,228		10,648
Operating income (loss)
Immersion		3,427		6,519		48,403		12,891
Barnes & Noble Education		22,779		—		53,739		—
Operating income (loss)	$	26,206	$	6,519	$	102,142	$	12,891

5. SEGMENT REPORTING

4We operate as two operating and reportable segments, Immersion and Barnes & Noble Education. ~~REVENUE~~Our ~~RECOGNITION~~Chief Executive Officer, as the Company’s Chief Operating Decision Maker, uses Operating income (loss) as the profitability metric for the purposes of making decisions related to the allocation of resources to each segment and assessing performance of each segment, Summarized financial information for our reportable segments is reported below (in thousands):


	Three Months Ended
(in thousands)	July 31, 2025			July 31, 2024
Revenues:
Immersion	$	3,872		$	48,425
Barnes & Noble Education		288,160			135,064
Total revenues		292,032			183,489

Cost of sales (excludes depreciation and amortization expense):
Barnes & Noble Education		233,594			109,910
Operating expenses:
Immersion
Selling and administrative expenses		3,695			13,411
Barnes & Noble Education
Selling and administrative expenses		67,805			36,330
Depreciation and amortization expense		10,397			5,275
Restructuring and professional fees		2,896			5,005
		81,098			46,610
Total operating expenses		84,793			60,021
Operating Income (Loss):
Immersion		177			35,014
Barnes & Noble Education		(26,532	)		(21,456	)
Operating Income (Loss)	$	(26,355	)	$	13,558

The reconciliation between segment operating income (loss) and income (loss) before income taxes is included within our Condensed Consolidated Statements of Operations.

6. REVENUE RECOGNITION

Immersion

Disaggregated Revenue

The following table presents the disaggregation of ~~our~~Immersion’s revenue ~~of Immersion~~ for the three ~~and nine~~ months ended ~~January~~July 31, 2025 and ~~September~~2024 ~~30, 2023~~ (in thousands):

~~Three Months Ended~~

Three Months Ended

~~Nine Months Ended~~

January 31, 2025

September 30, 2023

January 31, 2025

September 30, 2023

July 31,2025

July 31,2024

Fixed fee license revenue

~~5,754~~$

736

~~1,199~~$

45,326

~~61,756~~

~~3,732~~

Per-unit royalty revenue

~~2,683~~

3,136

~~8,283~~

3,099

~~9,233~~

~~19,807~~

Total royalty and license revenue

~~8,437~~$

3,872

~~9,482~~$

48,425

~~70,989~~

~~23,539~~

As a result of accruing per-unit royalty revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true up revenue to the actual amounts reported by our licensees. In the three months ended January 31, 2025, we recorded no adjustments to royalty revenue recognized in the previous quarter. We recorded adjustments of $0.5 million to increase royalty revenue during the three months ended September 30, 2023.16

Contract Assets

As of January 31, 2025, we had contract assets of $7.7 million included within Prepaid expenses and other current assets and $27.7 million within Other assets -noncurrent on the unaudited Condensed Consolidated Balance Sheets. As of April 30, 2024, we had contract assets of $6.6 million included within Prepaid expenses and other current assets and no contract assets within Other assets - noncurrent on the unaudited Condensed Consolidated Balance Sheets.

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~~Contract~~IMMERSION assets increased by $28.8 million from May 1, 2024 to January 31, 2025, primarily due to an increase in unbilled revenue related to the new contracts we entered into during the nine months ended January 31, 2025.CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Contract Assets

As of July 31, 2025, we had contract assets of $8.1 million included within Prepaid expenses and other current assets and $20.5 million within Other assets – noncurrent on the Condensed Consolidated Balance Sheet. As of April 30, 2025, we had contract assets of $7.8 million included within Prepaid expenses and other current assets and $27.4 million within Other assets - noncurrent on the Condensed Consolidated Balance Sheet.

Deferred Revenue

The following table presents changes in deferred revenue associated with ~~Immersion’s~~our contract liabilities (in thousands):

		January 31, 2025				September 30, 2023
		July 31,2025				April 30,2025
Deferred revenue beginning of the period	$	~~20,470~~$	8,728		$	~~17,395~~$	20,472
Additions to deferred revenue during the period		~~882~~	-			—	882
Reductions to deferred revenue for revenue recognized during the period		~~(11,888)~~	(736	)		~~(3,576~~	)(12,626	)
Deferred revenue balance end of the period	$	~~9,464~~$	7,992		$	~~13,819~~$	8,728

Based on contracts signed and payments received as of ~~January~~ July 31, 2025, we expect to recognize $98.5 0 million in revenue under our fixed fee license agreements, which are satisfied over time, including $67.6 5 million over one to three years and $20.9 5 million over more than three years.

Barnes & Noble Education

Disaggregated Revenue

The following table presents disaggregated the revenue associated with ~~our~~Barnes & Noble Education’s major products and service offerings (in thousands):

		Three Months Ended January 31, 2025			From June 10, 2024 to January 31, 2025
		Three Months Ended July 31, 2025		From June 10, 2024 to July 31, 2024
Course material sale	$	328,073		$	851,889
Course material product sales		$	157,598	$	68,153
General merchandise sale		71,608			202,419
General merchandise product sales (a)			97,710		50,838
Services and other revenue		23,482			58,647
Services and other revenue (b)			18,871		11,127
Total product and other revenue		~~423,163~~	274,179		1130,~~112,955~~118
Course material rental income		~~43,162~~	13,981		904,~~556~~946
Total revenue	$	~~466,325~~$	288,160	$	1135,~~203,511~~064

Logo general merchandise sales are recognized on a net basis as commission revenue in the condensed consolidated financial statements.

Service and other revenue primarily relates to brand partnership marketing and other service revenues.

Deferred Revenue

~~The~~Contract ~~following~~Assets ~~table~~and ~~presents~~Contract ~~changes in deferred revenue associated with Barnes & Noble Education's contract liabilities (in thousands):~~ Liabilities

		January 31, 2025
Deferred revenue as of the acquisition date	$	11,044
Additions to deferred revenue during the period		155,662
Reductions to deferred revenue for revenue recognized during the period		(113,738)
Deferred revenue balance at the end of period	$	52,968

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 receivable when the rights become unconditional. Contract assets (unbilled receivables) were $0.3 million and $0.6 million for July 31, 2025 and April 30, 2025, respectively, on the Condensed Consolidated Balance Sheets.

2217

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~~5. INVESTMENTS~~IMMERSION ~~AND FAIR VALUE MEASUREMENTS~~CORPORATION

WeNOTES ~~invest~~TO ~~surplus~~THE ~~funds~~CONDENSED inCONSOLIDATED ~~excess~~FINANCIAL ofSTATEMENTS 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. A summary of our investments in marketable equity and debt securities as of January 31, 2025, is as follows:(UNAUDITED)

~~Investments~~Contract -liabilities ~~current~~represent ~~were~~an asobligation ~~follows~~to transfer goods or services to a customer for which Barnes & Noble Education has received consideration and consists of its deferred revenue liability (indeferred ~~thousands~~revenue). Deferred revenue consists of the following:

•

		January 31, 2025		April 30, 2024
Marketable equity securities	$	56,334	$	50,496
U.S. treasury securities		19,887		42,352
Short-term investments	$	76,221	$	92,848

advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;

•

~~Investments-~~unsatisfied ~~noncurrent~~performance ~~were~~obligations asassociated ~~follows~~with ~~(in~~partnership ~~thousands):~~marketing services, which are recognized when the contracted services are provided to Barnes & Noble Education’s partnership marketing customers; and

•

		January 31, 2025		April 30, 2024
U.S. treasury securities	$	16,078	$	19,747
Corporate bonds		28,039		26,798
Investments- noncurrent	$	44,117	$	46,545

unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the merchandising contracts for Fanatics and Lids.

The following table presents changes in deferred revenue associated with Barnes & Noble Education's contract liabilities (in thousands):


	July 31, 2025			April 30, 2025
Deferred revenue as of the beginning of the period	$	13,566		$	11,044
Additions to deferred revenue during the period		20,720			173,969
Reductions to deferred revenue for revenue recognized during the period		(18,824	)		(171,447	)
Deferred revenue balance at the end of period	$	15,462		$	13,566

7. 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 and debt securities as of July 31, 2025 and April 30, 2025 (in thousands):


Investments - current	July 31, 2025		April 30, 2025
Marketable equity securities	$	61,305	$	55,784
U.S. treasury securities		16,046		33,005
Total Investments – current	$	77,351	$	88,789


Investments - noncurrent	July 31, 2025		April 30, 2025
Corporate bonds	$	13,876	$	13,880
Total Investments – noncurrent	$	13,876	$	13,880

Marketable Securities

Marketable securities as of ~~January~~July 31, 2025 and April 30, ~~2024~~ 2025 consisted of the following (in thousands):

		January 31, 2025
		July 31, 2025
		Cost or Amortized Cost			Unrealized Gains			Unrealized Losses				Fair Value
		Cost orAmortizedCost			UnrealizedGains			UnrealizedLosses				Fair Value
Marketable equity securities
Equity securities	$	~~48,232~~$	67,956	$	~~11,794~~$	6,659	$	~~(3,692~~$	)(13,310	)	$	~~56,334~~$	61,305
Marketable debt securities
U.S. treasury securities		~~35,636~~	15,907		~~329~~	139		—	—			~~35,965~~	16,046
Corporate bonds		~~26,583~~	13,787		~~1,508~~	162		~~(52~~	)(73	)		~~28,039~~	13,876
Total marketable debt securities		~~62,219~~	29,694		~~1,837~~	301		~~(52~~	)(73	)		~~64,004~~	29,922
	$	~~110,451~~$	97,650	$	~~13,631~~$	6,960	$	~~(3,744~~$	)(13,383	)	$	~~120,338~~$	91,227

		April 30, 2024
		Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	50,645	$	5,656	$	(5,805	)	$	50,496
Marketable debt securities
U.S. treasury securities		61,306		825		(32	)		62,099
Corporate bonds		25,695		1,151		(48	)		26,798
Total marketable debt securities		87,001		1,976		(80	)		88,897
	$	137,646	$	7,632	$	(5,885	)	$	139,393

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~~The~~IMMERSION ~~amortized costs and fair value of our marketable debt securities, by contractual maturity, as of January 31, 2025 (in thousands) are as follows:~~ CORPORATION

		January 31, 2025
		Amortized Cost		Fair Value
Less than 1 year	$	19,729	$	19,887
1 to 5 years		36,536		37,260
More than 5 years		5,954		6,857
Total	$	62,219	$	64,004

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of January 31, 2025, the fair value of corporate bonds with unrealized loss positions was $10.7 million, with an aggregated loss of $0.1 million. There were no U.S. treasury securities with an unrealized loss position at January 31, 2025. As of April 30, 2024, the fair value of available-for-sale debt securities in unrealized loss positions for corporate bonds and U.S. treasury securities were $5.6 million and $25.2 million, respectively, with an aggregated loss of $0.1 million. For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. We had no credit-related impairment loss as of January 31, 2025 and April 30, 2024.


	April 30, 2025
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	63,677	$	6,892	$	(14,785	)	$	55,784
Marketable debt securities
U.S. treasury securities		32,674		331		—			33,005
Corporate bonds		13,802		147		(69	)		13,880
Total marketable debt securities		46,476		478		(69	)		46,885
	$	110,153	$	7,370	$	(14,854	)	$	102,669

The following summarizes Immersion’s amortized costs and fair value of our marketable securities, by contractual maturity, as of July 31, 2025 (in thousands):


	July 31, 2025
	Amortized Cost		Fair Value
Less than 1 year	$	15,907	$	16,046
1 to 5 years		13,787		13,876
More than 5 years		—		—
Total	$	29,694	$	29,922

As of July 31, 2025, the fair value of corporate bonds with unrealized loss positions was $10.6 million, with an aggregated loss of $0.1 million. There were no U.S. treasury securities with an unrealized loss position at July 31, 2025. As of April 30, 2025, the fair value of available-for-sale debt securities in unrealized loss positions for corporate bonds were $10.6 million , with an aggregated loss of $0.1 million. There were no U.S. treasury securities with an unrealized loss position at April 30, 2025. For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. We had no credit-related impairment loss as of July 31, 2025 and April 30, 2025.

Derivative Financial Instruments

~~Our~~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 our Condensed Consolidated Balance Sheets as of ~~January~~July 31, 2025 and April 30, ~~2024~~2025 (in thousands):

		January 31, 2025
		July 31, 2025
		Cost			Unrealized (Gains) Losses			Fair Value
Derivative instruments	$	~~6,038~~$	4,406	$	~~451~~$	1,133	$	~~6,489~~$	5,539
	$	~~6,038~~$	4,406	$	~~451~~$	1,133	$	~~6,489~~$	5,539

		April 30, 2024
		April 30, 2025
		Cost			Unrealized (Gains) Losses			Fair Value
Derivative instruments	$	~~7,935~~$	6,045	$	~~(2,495~~$	)3,709	$	~~5,440~~$	9,754
	$	~~7,935~~$	6,045	$	~~(2,495~~$	)3,709	$	~~5,440~~$	9,754

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AIMMERSION summary of realized and unrealized gains and losses from our equity securities and derivative instruments and realized gains and losses from our marketable debt securities are as follows (in thousands):CORPORATION

	Three Months Ended						Nine Months Ended
	January 31, 2025			September 30, 2023			January 31, 2025			September 30, 2023
Net unrealized gains (losses) recognized on marketable equity securities	$	9,028		$	(287	)	$	8,252		$	472
Net realized gains recognized on marketable equity securities		2,095			(2,588	)		6,037			3,643
Net unrealized gains (losses) recognized on derivative instruments		(3,702	)		(1,631	)		(2,945	)		(1,825	)
Net realized gains recognized on derivative instruments		5,070			(72	)		8,532			2,165
Net realized gains recognized on marketable debt securities		—			—			1,308			217
Total net gains recognized in interest and other income (loss), net	$	12,491		$	(4,578	)	$	21,184		$	4,672

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following summarizes the realized and unrealized gains and losses from Immersion’s equity securities and derivative instruments and realized gains and losses from Immersion’s marketable debt securities are as follows (in thousands):


	Three Months Ended July 31,
	2025		2024
Net unrealized gains (losses) recognized on marketable equity securities	$	1,243	$	1,630
Net realized gains recognized on marketable equity securities		960		3,108
Net unrealized gains (losses) recognized on derivative instruments		2,577		(525	)
Net realized gains recognized on derivative instruments		1,205		2,596
Net realized gains recognized on marketable debt securities		—		1,273
Total net gains recognized in interest and other income (loss), net	$	5,985	$	8,082

Fair Value Measurements

~~Our~~The fair value of certain financial instruments ~~include~~including ~~cash~~Cash and cash equivalents,; ~~receivables~~Accounts receivable, ~~accrued~~net; ~~liabilities~~Accounts ~~and accounts~~ payable.; ~~The fair value of cash~~ and ~~cash~~Accrued ~~equivalents, receivables, accrued~~ liabilities ~~and~~approximate ~~accounts payable approximates~~ their carrying ~~values~~value ~~because~~due ofto ~~the~~their short-term nature ofand ~~these instruments, which~~ are ~~all~~classified ~~considered~~within Level 1. The fair value of ~~long~~our Long-term ~~debt~~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. ~~We did not hold Level 3 financial instruments as of January 31, 2025, and April 30, 2024.~~

~~Financial~~See ~~instruments~~Note ~~measured~~11. atParticipation Interest Purchase Agreement for fair value oninformation aabout ~~recurring~~Barnes ~~basis~~& Noble Education’s derivative instrument held as of ~~January~~July 31, 2025 and April 30, ~~2024~~2025, ~~are~~that ~~classified~~is ~~based~~fair onvalued ~~the~~using ~~valuation~~Level ~~technique~~3 ~~in the table below (in thousands):~~inputs.

		January 31, 2025
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. treasury securities	$	—	$	35,965	$	—	$	35,965
Equity securities		56,334		—		—		56,334
Corporate bonds		—		28,039		—		28,039
Total assets at fair value	$	56,334	$	64,004	$	—	$	120,338
Liabilities
Derivative instruments	$	—	$	6,489	$	—	$	6,489
Total liabilities at fair value	$	—	$	6,489	$	—	$	6,489

Financial instruments measured at fair value on a recurring basis as of July 31, 2025 and April 30, 2025 are classified based on the valuation technique in the table below (in thousands):


	July 31, 2025
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money Market funds (within cash and cash equivalents)	$	68,635	$	—	$	—	$	68,635
U.S. treasury securities		—		16,046		—		16,046
Equity securities		61,305		—		—		61,305
Corporate bonds		—		13,876		—		13,876
Total assets at fair value	$	129,940	$	29,922	$	—	$	159,862

Liabilities
Derivative instruments	$	3,697	$	1,842	$	—	$	5,539
Total liabilities at fair value	$	3,697	$	1,842	$	—	$	5,539

Table of Contents

		April 30, 2024
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. treasury securities	$	—	$	62,099	$	—	$	62,099
Equity securities		50,496		—		—		50,496
Corporate bonds		8,220		18,578		—		26,798
Total assets at fair value	$	58,716	$	80,677	$	—	$	139,393
Liabilities
Derivative instruments	$	—	$	5,440	$	—	$	5,440
Total liabilities at fair value	$	—	$	5,440	$	—	$	5,440

IMMERSION CORPORATION

~~6. LEASES~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


	April 30, 2025
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money Market funds (within cash and cash equivalents)	$	59,747	$	—	$	—	$	59,747
U.S. treasury securities		-		33,005		—		33,005
Equity securities		55,784		—		—		55,784
Corporate bonds		3,272		10,608		—		13,880
Total assets at fair value	$	118,803	$	43,613	$	—	$	162,416

Liabilities
Derivative instruments	$	6,456	$	3,298	$	—	$	9,754
Total liabilities at fair value	$	6,456	$	3,298	$	—	$	9,754

8. LEASES

Immersion

~~Immersion~~For ~~leases office space, which is accounted for as an operating lease in accordance with~~ the ~~provisions~~three ofmonths ~~ASC~~ended ~~Topic~~July ~~842~~31, ~~with~~2025 ~~expiration~~and ~~dates on or before March 31~~2024, ~~2026.~~ Immersion’s recognizes lease expense on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets. Immersion combines lease and non-lease components for new and reassessed leases, and ~~applies~~related ~~discount~~activity ~~rates~~was tonot ~~operating leases under a portfolio approach~~material.

The following table summarizes additional information related to Immersion’s operating leases:

	January 31, 2025		September 30, 2023
Weighted average remaining lease terms (in years)	1.25		0.45
Weighted average discount rate	4.7	%	N/A

Barnes & Noble Education

Barnes & Noble Education ~~leases~~recognizes ~~the~~lease ~~right~~assets toand ~~operate~~lease liabilities on~~-campus~~ ~~bookstores~~the atCondensed ~~colleges~~Consolidated ~~and~~Balance ~~universities,~~Sheets ~~office~~for ~~space~~substantially ~~and~~all ~~vehicles~~lease ~~under~~arrangements ~~operating~~based ~~leases~~on ~~in accordance with~~ the ~~provisions~~present value of ~~ASC~~future ~~Topic~~lease ~~842,~~payments ~~with~~as ~~expiration~~required ~~dates~~by onASC orTopic ~~before June 30~~842, ~~2033~~Leases. Barnes & Noble Education’s ~~recognizes~~portfolio ~~lease~~of ~~expense~~leases onconsists aof ~~straight-line~~operating ~~basis~~leases ~~over~~comprised ~~the~~of ~~lease~~operating ~~term~~agreements, orwhich ~~over~~grant us the ~~contract~~right ~~year in order~~ to ~~best~~operate ~~reflect~~on-campus ~~the~~bookstores ~~pattern~~at ofcolleges ~~the~~and ~~underlying~~universities; ~~leased~~real ~~asset.~~estate ~~Leases~~leases ~~with~~for anoffice ~~initial~~and ~~term~~warehouse ofoperations; ~~twelve~~and ~~months~~vehicle ~~or less are not recorded on the Condensed Consolidated Balance Sheets~~leases. Barnes & Noble Education ~~combines~~has ~~lease~~one ~~and~~immaterial ~~non-~~finance lease ~~components for new~~ and ~~reassessed~~no short-term leases (i.e., ~~and~~those ~~applies~~with ~~discount~~a ~~rates~~term toof ~~operating~~twelve ~~leases~~months ~~under~~or ~~a portfolio approach~~less).

Barnes & Noble Education ~~used~~recognizes ~~its~~a ~~incremental~~right ~~borrowing rates to determine the present value~~ of ~~fixed~~use ~~lease payments based on the information available on June 10, 2024~~ (“~~Closing Date~~ROU”~~, as discussed in Note 2. Business Combination~~), asasset ~~the~~and ~~rate~~lease ~~implicit~~liability in the ~~lease~~Condensed isConsolidated ~~not~~Balance ~~readily~~Sheets ~~determinable.~~for Itleases ~~utilized~~with ana ~~estimated~~term ~~collateralized~~greater ~~incremental~~than ~~borrowing~~twelve ~~rate as of the Closing Date~~months. ~~The~~Options ~~Company~~to ~~also~~extend ~~evaluated~~or ~~the~~terminate ~~leases~~a ~~for~~lease ~~unfavorable~~are ~~terms~~included ~~and~~in ~~recorded~~the andetermination ~~adjustment for unfavorable market terms~~ of ~~$32.0~~the ~~million.~~ROU ~~Unfavorable~~asset and lease ~~liabilities~~liability ~~are~~when ~~presented~~it ~~net~~is ofreasonably ~~the~~certain ~~corresponding~~that ~~right~~such ofoptions ~~use~~will ~~asset~~be exercised.

26Barnes & Noble Education’s lease terms generally range from one year to fifteen years, and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: (i) a percentage of revenues or sales arising at the relevant premises (“variable commissions”), and/or (ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, Barnes & Noble Education recognizes lease expense on a straight-line basis over the lease term. For variable commissions, Barnes & Noble Education recognizes lease expense as incurred. Barnes & Noble Education’s lease agreements do not contain any material residual value guarantees, material restrictions, or covenants.

Barnes & Noble Education uses an estimated incremental borrowing rate to determine the present value of fixed lease payments based on the information available at the lease commencement date, if the rate implicit in the lease is not readily determinable. Barnes & Noble Education utilizes an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes additional information related to Barnes & Noble Education’s operating leases:

		Three Months Ended January 31, 2025			From June 10, 2024 to January 31, 2025
		Three Months Ended July 31, 2025			From June 10, 2024 to July 31, 2024
Operating lease cost	$	~~26,063~~$	17,579	$	~~65,099~~$	10,879
Variable lease payments		~~15,715~~	20,912		~~47,541~~	3,981
Short-term lease cost		~~10,078~~	—		~~29,477~~	2,771
Total lease cost	$	~~51,856~~$	38,491	$	~~142,117~~$	17,631

	For the period June 10, 2024 to January 31, 2025
	July 31, 2025			July 31, 2024
Cash paid for amounts included in the measurement of lease liabilities	~~57,492~~	14,199			18,868
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	~~53,775~~	24,884			13,234
Weighted-average remaining lease term (in years)	~~4.6~~	4.7			4.6
Weighted-average discount rate	~~7.1~~	%6.7	%		5.5	%

279. GOODWILL AND INTANGIBLE ASSETS

~~Table~~The Company recognized $69.2 million in goodwill as the result of ~~Contents~~the business combination with Barnes & Noble Education on June 10, 2024. See Note 4. Business Combination for additional information. The carrying value of goodwill was $69.2 million as of July 31, 2025 and April 30, 2025.

7In accordance with ASC Topic 350, Intangibles - Goodwill and Other, the Company did not record any goodwill impairment losses during the three months ended July 31, 2025 and 2024. ~~GOODWILL~~ ~~AND~~Goodwill ~~INTANGIBLE~~represents ~~ASSETS~~the future economic benefit attributable to Barnes & Noble Education’s assembled workforce, which is not individually and separately recognized as an intangible asset. As such, the carrying value of goodwill has been allocated to Barnes & Noble Education Segment and none of the goodwill has been allocated to the Immersion Segment.

Goodwill

We recognized $14.2 million in goodwill as the result of the business combination with Barnes & Noble Education on June 10, 2024, as further described in Note 2. Business Combination. The carrying value of goodwill as of January 31, 2025 and April 30, 2024, were $10.1 million and $0, respectively. The carrying amount of goodwill decreased by $4.1 million for the quarter ended January 31, 2025, due to a measurement period adjustment related to changes in the acquired deferred income taxes of BNED.

In accordance with ASC Topic 350, Intangibles - Goodwill and Other, the Company did not record any goodwill impairment losses during the three and nine months ended January 31, 2025. Goodwill represents the future economic benefit attributable to the Barnes & Noble Education's assembled workforce, which is not individually and separately recognized as an intangible asset. As such, the carrying value of goodwill has been allocated to the Barnes & Noble Education Segment and none of the goodwill has been allocated to the Immersion Segment.

Intangible Assets, net

The following is a summary of intangible assets excluding goodwill recorded as intangible assets on our Condensed Consolidated Balance Sheets as of ~~January~~July 31, 2025 and April 30, 2025 (in thousands):

As of January 31, 2025

July 31, 2025

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Weighted-average remaining life (Years)

Gross CarryingAmount

AccumulatedAmortization

Net CarryingAmount

Weighted-AverageRemaining Life (years)

Trade name

$45,000

~~45,000~~

N/A

—$

45,000

$Indefinite

~~45,000~~

~~Infinite~~

Customer relationships

50,000

~~50,000~~

(4,381

)

~~(2,458~~

)45,619

~~47,542~~11.9

~~12.4~~

Total

$95,000

~~95,000~~

(4,381

~~(2,458~~$

)90,619

~~92,542~~


	April 30, 2025
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted-Average Remaining Life (years)
Trade name	$	45,000	N/A			$	45,000	Indefinite
Customer relationships		50,000		(3,419	)		46,581		12.2
Total	$	95,000	$	(3,419	)	$	91,581

Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives. Trade name is determined to have an indefinite useful life and is not subject to amortization.

~~Amortization expense was $1.0 million for the three months ended January 31, 2025. Amortization expense was $2.5 million for the period from June 10, 2024, to January 31, 2025.~~ 22

Estimated amortization expense of the intangible assets to be recognized by the Company are as follows (in thousands):

Year ended April 30,
Remainder of 2025	$	962
2026		3,846
2027		3,846
2028		3,846
2029		3,846
Thereafter		31,196
Total	$	47,542

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~~8. DEBT~~IMMERSION CORPORATION

~~The~~NOTES ~~following~~TO isTHE aCONDENSED ~~summary~~CONSOLIDATED ofFINANCIAL ~~Barnes~~STATEMENTS ~~& Noble Education’s outstanding borrowing as of January 31, 2025~~ (~~in thousands~~UNAUDITED):

	Maturity Date		As of January 31, 2025
Total debt - Barnes & Noble credit facility	June 9, 2028	$	141,200
Balance sheet classification:
Long-term borrowings		$	141,200

Amortization expense was $1.0 million for the three months ended July 31, 2025 and $0.5 million for the period from June 10, 2024, to July 31, 2024.

Estimated amortization expense of the intangible assets to be recognized by the Company are as follows (in thousands):


Year ended April 30,	Amount
Remainder of 2026	$	2,885
2027		3,846
2028

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