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 ~~July~~October 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 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 atas ~~March~~of 20April 10, 2026, was 3233,~~921~~100,~~888~~452.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q for the fiscal quarter ended ~~July~~October 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
FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of July 31, 2025 and April 30, 2025	1
	Condensed Consolidated Statements of Operations for the Three Months Ended July 31, 2025 and 2024	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended July 31, 2025 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended July 31, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2025 and 2024	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 6.	Exhibits	46
SIGNATURES		47

FISCAL QUARTER ENDED OCTOBER 31, 2025


DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
PART I		Page
FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of October 31, 2025 and April 30, 2025	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended October 31, 2025 and 2024	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended October 31, 2025 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended October 31, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended October 31, 2025 and 2024	7
	Notes to the Condensed Consolidated Financial Statements	9
	Note 1. Organization	9
	Note 2. Basis of Presentation and Summary of Significant Accounting Policies	10
	Note 3. Restatement of Previously-Issued Financial Statements	14
	Note 4. Business Combination	15
	Note 5. Segment Reporting	16
	Note 6. Revenue Recognition	18
	Note 7. Investments and Fair Value Measurements	20
	Note 8. Leases	23
	Note 9. Goodwill and Intangible Assets	24
	Note 10. Debt	25
	Note 11. Participation Interest Purchase Agreement	26
	Note 12. Stock-Based Compensation	27
	Note 13. Employee Benefit Plan	29
	Note 14. Stockholders’ Equity	29
	Note 15. Noncontrolling Interest	30
	Note 16. Income Taxes	30
	Note 17. Earnings Per Share	32
	Note 18. Commitments and Contingencies	32
	Note 19. Supplementary Information	36
	Note 20. Subsequent Events	37
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 6.	Exhibits	51
SIGNATURES		52

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

IMMERSION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands except share data)	~~July~~October 31, 2025		April 30, 2025
ASSETS
Immersion
Cash and cash equivalents	$	82115,~~800~~197	$	63,550
Investments – current		7759,~~351~~758		88,789
Accounts receivable, net		23,~~638~~590		2,767
Prepaid expenses and other current assets		12,~~720~~532		11,331
		175,509		166,437
		191,077		166,437
Barnes & Noble Education
Cash and cash equivalents		711,~~340~~720		9,058
Accounts receivable, net		~~161~~314,~~974~~962		98,075
Merchandise inventories, net		~~400~~329,~~565~~123		299,564
Textbook rental inventories, net		848,~~890~~477		26,439
Prepaid expenses and other current assets		4238,~~595~~885		32,250
		621,364		465,386
		743,167		465,386
Total Current Assets		~~796~~934,~~873~~244		631,823
Immersion
Property and equipment, net		~~104~~85		113
Investments – noncurrent		133,~~876~~263		13,880
Long-term deposits		6,~~223~~152		6,188
Other assets – noncurrent		20,~~489~~683		27,362
		40,692		47,543
		30,183		47,543
Barnes & Noble Education
Property and equipment, net		8882,~~075~~645		95,702
Intangible assets, net		9089,~~619~~657		91,581
Goodwill		69,162		69,162
Operating lease right-of-use assets		~~165~~160,~~551~~776		155,281
Other assets – noncurrent		10,~~737~~428		11,181
		424,144		422,907
		412,668		422,907
Total Assets	$	1,~~261~~377,~~709~~095	$	1,102,273

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands except share data)	~~July~~October 31, 2025			April 30, 2025
LIABILITIES AND STOCKHOLDERS’ EQUITY
Immersion
Accounts payable	$	2054		$	13
Accrued compensation		~~490~~741			343
Deferred revenue – current		2,~~934~~929			2,938
Other current liabilities		98,~~677~~779			10,240
		13,121			13,534
		12,503			13,534
Barnes & Noble Education
Accounts payable		~~236~~345,~~520~~406			148,848
Accrued liabilities		4962,~~507~~686			44,295
Deferred revenue – current		1231,~~402~~888			10,411
Operating lease liabilities – current		4643,~~439~~230			48,796
		344,868			252,350
		483,210			252,350
Total Current Liabilities		~~357~~495,~~989~~713			265,884
Immersion
Deferred revenue – noncurrent		54,~~058~~326			5,790
Deferred income taxes – noncurrent		1114,~~403~~002			11,034
Other long-term liabilities		12,372			13,344
		28,833			30,168
		30,700			30,168
Barnes & Noble Education
Deferred income taxes – noncurrent		32,~~963~~173			4,193
Operating lease liabilities – noncurrent		~~135~~133,~~912~~852			121,093
Deferred revenue – noncurrent		32,~~060~~954			3,155
Other long-term liabilities		15,~~867~~350			15,987
Long-term borrowings		~~170~~122,~~000~~500			103,098
		328,802			247,526
		276,829			247,526
Total Liabilities		~~715~~803,~~624~~242			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
Common stock – $0.001 par value; 100,000,000 shares authorized; 50,029,484 and 32,876,610 shares issued and outstanding at October 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~~377,~~179~~050			374,327
Accumulated other comprehensive income (loss)		~~354~~312			535
Accumulated earnings (deficit)		3242,~~256~~743			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	)
Treasury stock: 17,152,874 and 16,930,351 shares as of October 31, 2025 and April 30, 2025, respectively, at cost		(113,219	)		(111,477	)
Total Stockholders' Equity Attributable to Immersion Corporation Stockholders		~~295~~306,~~820~~936			298,125
Noncontrolling interest in consolidated subsidiaries		~~250~~266,~~265~~917			260,570
Total Stockholders' Equity		~~546~~573,~~085~~853			558,695
Total Liabilities and Stockholders’ Equity	$	1,~~261~~377,~~709~~095		$	1,102,273

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended July 31,
	Three Months Ended October 31,							Six Months Ended October 31,
(In thousands except per-share data)	2025			2024	~~2024~~			2025			2024
REVENUES
				As Restated							As Restated
Immersion
REVENUES
Royalty and license	$	3,872			$	48,425
Immersion
Barnes & Noble Education
Royalty and license	$	5,760		$	14,127			$	9,632		$	62,552
Product and other		274,179				130,118
Barnes & Noble Education
Rental income		13,981				4,946
Product and other		598,211			559,674				872,390			689,792
		288,160				135,064
Rental income		46,203			42,448				60,184			47,394
Total revenues		292,032				183,489
		644,414			602,122				932,574			737,186
COST OF SALES (excludes depreciation and amortization expense)
Total revenues		650,174			616,249				942,206			799,738
Barnes & Noble Education
COST OF SALES (excludes depreciation and amortization expense)
Product and other cost of sales		226,174				106,865
Barnes & Noble Education
Rental cost of sales		7,420				3,045
Product and other cost of sales		489,511			436,859				715,685			543,724
Total cost of sales		233,594				109,910
Rental cost of sales		25,591			22,619				33,011			25,664
OPERATING EXPENSES
Total cost of sales		515,102			459,478				748,696			569,388
Immersion
OPERATING EXPENSES
Selling and administrative expenses		3,695				13,411
Immersion
Barnes & Noble Education
Selling and administrative expenses		2,949			4,165				6,644			17,576
Selling and administrative expenses		67,805				36,330
Barnes & Noble Education
Depreciation and amortization expense		10,397				5,275
Selling and administrative expenses		77,282			72,717				145,087			109,046
Restructuring and other charges		2,896				5,005
Depreciation and amortization expense		10,487			9,400				20,884			14,676
		81,098				46,610
Restructuring and other charges		4,296			59				7,192			5,064
Total operating expenses		84,793				60,021
		92,065			82,176				173,163			128,786
Operating Income (Loss)		(26,355	)			13,558
Total operating expenses		95,014			86,341				179,807			146,362
Interest and other income (expense), net		7,741				10,696
Operating Income (Loss)		40,058			70,430				13,703			83,988
Interest expense		2,829				2,367
Interest and other income (expense), net		4,543			3,540				12,284			14,236
Income (Loss) Before Income Taxes		(21,443	)			21,887
Interest expense		2,969			4,547				5,798			6,914
Income tax benefit (expense)		7,727				(9,687	)
Income (Loss) Before Income Taxes		41,632			69,423				20,189			91,310
Net Income (Loss)		(13,716	)			12,200
Income tax benefit (expense)		(14,750	)		(5,036	)			(7,023	)		(14,723	)
Less: Net income (loss) attributable to noncontrolling interest		(12,786	)			(14,877	)
Net Income (Loss)		26,882			64,387				13,166			76,587
Net Income (Loss) Attributable to Immersion Stockholders	$	(930	)		$	27,077
Less: Net income (loss) attributable to noncontrolling interest		14,891			33,583				2,105			18,706
Earnings (Loss) Per Common Share Attributable to Immersion Stockholders
Net Income (Loss) Attributable to Immersion Stockholders	$	11,991		$	30,804			$	11,061		$	57,881
Basic	$	(0.03	)		$	0.85
Earnings (Loss) Per Common Share Attributable to Immersion Stockholders
Diluted	$	(0.03	)		$	0.83
Basic	$	0.37		$	0.95			$	0.34		$	1.81
Weighted-Average Common Shares Outstanding
Diluted	$	0.36		$	0.93			$	0.33		$	1.77
Basic		32,615				31,970
Weighted-Average Common Shares Outstanding
Diluted		32,615				32,700
Basic		32,838			32,222				32,728			32,093
Diluted		33,240			32,917				33,026			32,889

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended July 31,
		Three Months Ended October 31,							Six Months Ended October 31,
(In thousands)	2025			2024
		2025				2024			2025			2024
Net Income (Loss)	$	(13,716	)	$	12,200
(In thousands)						As Restated						As Restated
Change in unrealized gains (losses) on available-for-sale securities		(181	)		(218	)
Net Income (Loss)		$	26,882			$	64,387		$	13,166		$	76,587
Comprehensive Income (Loss)		(13,897	)		11,982
Change in unrealized gains (losses) on available-for-sale securities			(42	)			(269	)		(223	)		(487	)
Comprehensive income (loss) attributable to noncontrolling interests		(12,786	)		(14,877	)
Pension adjustments			—				7,828			—			7,828
Comprehensive Income (Loss) Attributable to Immersion Stockholders	$	(1,111	)	$	26,859
Comprehensive Income (Loss)			26,840				71,946			12,943			83,928
Comprehensive income (loss) attributable to noncontrolling interests			14,891				38,163			2,105			23,286
Comprehensive Income (Loss) Attributable to Immersion Stockholders		$	11,949			$	33,783		$	10,838		$	60,642

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

	Three Months Ended July 31, 2025
	Three Months Ended October 31, 2025
	Common Stock					Treasury Stock		Total
							Additional			Accumulated Other			Accumulated								Total Stockholders'					Total
(In thousands, except number of shares)	Shares	Amount	AdditionalPaid InCapital	Accumulated Other Comprehensive Income (Loss)	AccumulatedEarnings(Deficit)	Shares	Amount	Stockholders'EquityAttributableto ImmersionStockholder	NoncontrollingInterest	TotalStockholders’Equity
	Common Stock						Paid-In			Comprehensive			Earnings			Treasury Stock					Equity Attributable			Noncontrolling		Stockholders'
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
(In thousands, except number of shares)	Shares			Amount			Capital			Income (Loss)			(Deficit)			Shares		Amount			to Immersion Stockholder			Interest		Equity
Net income (loss)	—	—	—	—	(930)	—	—	(930)	(12,786)	(13,716)
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
Unrealized gain (loss) on available-for-sale securities, net of taxes	—	—	—	(181)	—	—	—	(181)	—	(181)
Net income (loss)		—			—			—			—			11,991			—		—			11,991			14,891		26,882
Release of restricted stock units and awards, net of shares withheld	491,500	1	(1)	—	—	194,649	(1,542)	(1,542)	—	(1,542)
Unrealized gain (loss) on available-for-sale securities, net of taxes		—			—			—			(42	)		—			—		—			(42	)		—		(42	)
Shares issued to an employee in lieu of cash compensation	17,379	—	126	—	—	—	—	126	—	126
Release of restricted stock units and awards, net of shares withheld for payroll taxes		79,333			—			—			—			—			27,874		(200	)		(200	)		—		(200	)
Dividends declared	—	—	—	—	(1,505)	—	—	(1,505)	—	(1,505)
Shares issued to an employee in lieu of cash compensation		7,952			—			53			—			—			—		—			53			—		53
Stock-based compensation	—	—	1,907	—	—	—	—	1,907	2,481	4,388
Dividends declared		—			—			—			—			(1,504	)		—		—			(1,504	)		—		(1,504	)
Tax effects of changes in controlling and noncontrolling interest	—	—	(180)	—	—	—	—	(180)	—	(180)
Tax effects of changes in controlling and noncontrolling interests		—			—			(128	)		—			—			—		—			(128	)		—		(128	)
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
Stock-based compensation		—			—			946			—			—			—		—			946			1,761		2,707
Balances at October 31, 2025		50,029,484		$	50		$	377,050		$	312		$	42,743			17,152,874	$	(113,219	)	$	306,936		$	266,917	$	573,853

	Three Months Ended July 31, 2024
		Three Months Ended October 31, 2024
	Common Stock															Treasury Stock
		As Restated
	Shares			Amount			AdditionalPaid-In Capital			Accumulated Other Comprehensive Income (Loss)			AccumulatedEarnings (Deficit)			Shares			Amount			Total Stockholders' Equity Attributable to Immersion Stockholder			NoncontrollingInterest			Total Stockholders' Equity
								Additional			Accumulated Other			Accumulated									Total Stockholders'						Total
Balances at April 30, 2024		48,047,329		$	48		$	322,786		$	2,019		$	(18,263	)		16,192,492		$	(105,360	)	$	201,230		$	—		$	201,230
		Common Stock						Paid-In			Comprehensive			Earnings			Treasury Stock						Equity Attributable			Noncontrolling			Stockholders'
Barnes & Noble Education acquisition		—			—			—			—			—			—			—			—			203,657			203,657
(In thousands, except number of shares)		Shares			Amount			Capital			Income (Loss)			(Deficit)			Shares			Amount			to Immersion Stockholders			Interest			Equity
Net income (loss)		—			—			—			—			27,077			—			—			27,077			(14,877	)		12,200
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
Unrealized gain (loss) on available-for-sale securities, net of taxes		—			—			—			(218	)		—			—			—			(218	)		—			(218	)
Net income (loss)			—			—			—			—			30,804			—			—			30,804			33,583			64,387
Rebalancing of controlling and noncontrolling interest		—			—			55,520			—			—			—			—			55,520			(55,520	)		—
Unrealized gain (loss) on available-for-sale securities, net of taxes			—			—			—			(269	)		—			—			—			(269	)		—			(269	)
Tax effects of changes in controlling and noncontrolling interests		—			—			(11,451	)		—			—			—			—			(11,451	)		—			(11,451	)
Pension adjustments			—			—			—			3,248			—			—			—			3,248			4,580			7,828
Release of restricted stock units and awards, net of shares withheld for payroll taxes		300,000			—			—			—			—			119,307			(1,129	)		(1,129	)		—			(1,129	)
Sale of Barnes & Noble Education's common stock, net of commissions			—			—			(953	)		—			—			—			—			(953	)		10,365			9,412
Shares issued to an employee in lieu of cash compensation		89,243			—			762			—			—			—			—			762			—			762
Rebalancing of controlling and noncontrolling interest			—			—			703			—			—			—			—			703			(703	)		—
Principal stockholder expense reimbursement		—			—			1,500			—			—			—			—			1,500			—			1,500
Tax effects of changes in controlling and noncontrolling interests			—			—			(1,097	)		—			—			—			—			(1,097	)		—			(1,097	)
Dividends declared		—			—			(1,524	)		—			(1	)		—			—			(1,525	)		—			(1,525	)
Release of restricted stock units and awards, net of shares withheld for payroll taxes			242,333			1			(1	)		—			—			98,073			(919	)		(919	)		—			(919	)
Stock-based compensation		—			—			1,531			—			—			—			—			1,531			84			1,615
Shares issued to an employee in lieu of cash compensation			6,672			—			52			—			—			—			—			52			—			52
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
Dividends declared			—			—			—			—			(1,517	)		—			—			(1,517	)		—			(1,517	)
Stock-based compensation			—			—			2,154			—			—			—			—			2,154			1,031			3,185
Balances at October 31, 2024			48,685,577		$	49		$	369,982		$	4,780		$	38,100			16,409,872		$	(107,408	)	$	305,503		$	182,200		$	487,703

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

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

		Three Months Ended July 31,
	Six Months Ended October 31, 2025
(in thousands)		2025				2024
							Additional			Accumulated Other			Accumulated								Total Stockholders'					Total
Cash flows from operating activities:
	Common Stock						Paid-in			Comprehensive			Earnings			Treasury Stock					Equity Attributable			Noncontrolling		Stockholders’
Net income (loss)		$	(13,716	)		$	12,200
(In thousands, except number of shares)	Shares			Amount			Capital			Income (Loss)			(Deficit)			Shares		Amount			to Immersion Stockholders			Interest		Equity
Adjustments to reconcile net income (loss) to cash flows from operating activities:
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
Depreciation and amortization expense			10,423				5,300
Net income (loss)		—			—			—			—			11,061			—		—			11,061			2,105		13,166
Stock-based compensation			4,388				1,615
Unrealized gain (loss) on available-for-sale securities, net of taxes		—			—			—			(223	)		—			—		—			(223	)		—		(223	)
Loss on disposal of property and equipment			1,929				2,884
Release of restricted stock units and awards, net of shares withheld		570,833			1			(1	)		—			—			222,523		(1,742	)		(1,742	)		—		(1,742	)
Deferred income taxes			(1,010	)			(2,672	)
Shares issued to an employee in lieu of cash compensation		25,331			—			179			—			—			—		—			179			—		179
Net (gains) losses on investment in marketable securities			(2,203	)			(6,011	)
Dividends declared		—			—			—			—			(3,009	)		—		—			(3,009	)		—		(3,009	)
Net (gains) losses on derivative instruments			(3,782	)			(2,071	)
Stock-based compensation		—			—			2,853			—			—			—		—			2,853			4,242		7,095
Shares issued to an employee in lieu of cash compensation			126				762
Tax effects of changes in controlling and noncontrolling interest		—			—			(308	)		—			—			—		—			(308	)		—		(308	)
Other noncash			(38	)			1,327
Balances at October 31, 2025		50,029,484		$	50		$	377,050		$	312		$	42,743			17,152,874	$	(113,219	)	$	306,936		$	266,917	$	573,853
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


	Six Months Ended October 31, 2024
	As Restated

					Additional			Accumulated Other			Accumulated								Total Stockholders'						Total
	Common Stock				Paid-In			Comprehensive			Earnings			Treasury Stock					Equity Attributable			Noncontrolling			Stockholders'
(In thousands, except number of shares)	Shares		Amount		Capital			Income (Loss)			(Deficit)			Shares		Amount			to Immersion Stockholder			Interest			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)		—		—		—			—			57,881			—		—			57,881			18,706			76,587
Unrealized gain (loss) on available-for-sale securities, net of taxes		—		—		—			(487	)		—			—		—			(487	)		—			(487	)
Pension adjustments				—		—			3,248			—			—		—			3,248			4,580			7,828
Sale of Barnes & Noble Education's common stock, net of commissions		—		—		(953	)		—			—			—		—			(953	)		10,365			9,412
Rebalancing of controlling and noncontrolling interest		—		—		56,223			—			—			—		—			56,223			(56,223	)		—
Tax effects of changes in controlling and noncontrolling interests		—		—		(12,548	)		—			—			—		—			(12,548	)		—			(12,548	)
Release of restricted stock units and awards, net of shares withheld for payroll taxes		542,333		1		(1	)		—			—			217,380		(2,048	)		(2,048	)		—			(2,048	)
Shares issued to an employee in lieu of cash compensation		95,915		—		814			—			—			—		—			814			—			814
Principal stockholder expense reimbursement		—		—		1,500			—			—			—		—			1,500			—			1,500
Dividends declared		—		—		(1,524	)		—			(1,518	)		—		—			(3,042	)		—			(3,042	)
Stock-based compensation		—		—		3,685			—			—			—		—			3,685			1,115			4,800
Balances at October 31, 2024		48,685,577	$	49	$	369,982		$	4,780		$	38,100			16,409,872	$	(107,408	)	$	305,503		$	182,200		$	487,703

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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


	Six Months Ended October 31,
	2025			2024
(in thousands)				As Restated
Cash flows from operating activities:
Net income (loss)	$	13,166		$	76,587
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization expense		20,936			14,725
Stock-based compensation		7,095			4,795
Pension adjustment		—			7,828
Loss on disposal of property and equipment		2,148			3,036
Deferred income tax		(329	)		(2,556	)
Net (gains) losses on investment in marketable securities		(1,800	)		(4,474	)
Net (gains) losses on derivative instruments		(6,714	)		(4,219	)
Shares issued to an employee in lieu of cash compensation		179			818
Other noncash		18			1,041
Changes in operating assets and liabilities, net of acquisitions:
Accounts and other receivables		(217,701	)		(148,017	)
Merchandise inventories		(29,561	)		21,272
Textbook rental inventories		(22,038	)		(39,836	)
Prepaid expenses and other current assets		(2,838	)		(1,980	)
Long-term deposits		26			35
Changes in lease right-of-use assets and liabilities		2,077			14,725
Other assets		7,453			(23,424	)
Accounts payable and accrued liabilities		215,392			(8,136	)
Other current liabilities		2,308			13,347
Deferred revenue		19,803			19,579
Other long-term liabilities		(638	)		(9,121	)
Net cash flows provided by (used in) operating activities		8,982			(63,975	)
Cash flows from investing activities:
Purchases of marketable securities and other investments		(17,905	)		(47,992	)
Proceeds from sale or maturities of marketable securities and other investments		59,115			75,443
Proceeds from sale of derivative instruments		5,522			4,122
Payments for settlement of derivative instruments		(2,580	)		(1,450	)
Acquisition of business net of cash acquired		—			(29,647	)
Purchase of property and equipment		(8,051	)		(5,587	)
Proceeds from disposition of property and equipment		—			792
Net cash flows provided by (used in) investing activities		36,101			(4,319	)
Cash flows from financing activities:
Proceeds from borrowings		349,200			404,144
Repayment of borrowing		(329,800	)		(327,828	)
Proceeds from sale of Barnes & Noble Education common stock, net of commissions and issuance costs		—			9,412
Dividend payments to stockholders		(3,009	)		(3,043	)
Payment of finance lease principal		(379	)		—
Shares withheld to cover payroll taxes		(1,742	)		(2,049	)
Net cash provided by (used in) financing activities		14,270			80,636
Net increase (decrease) in cash, cash equivalents and restricted cash		59,353			12,342
Cash, cash equivalents, and restricted cash:
Beginning of period		92,273			85,521
End of period	$	151,626		$	97,863

	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

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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


	Six Months Ended October 31,
	2025		2024
(In thousands)			As Restated
Cash and cash equivalents
Immersion	$	115,197	$	68,920
Barnes & Noble Education		11,720		11,619
		126,917		80,539
Barnes & Noble Education restricted cash reported as:
Prepaid expenses and other current assets		22,330		14,946
Other assets - noncurrent		2,379		2,378
Total restricted cash		24,709		17,324
Total cash, cash equivalents and restricted cash	$	151,626	$	97,863

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1This Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended April 30, 2025, which includes restated consolidated financial statements for certain interim periods within the fiscal year ended April 30, 2025. ~~ORGANIZATION~~

NOTE 1. ORGANIZATION

Description of Business

Immersion

Immersion Corporation (“Immersion”) was incorporated in 1993 in California and reincorporated in Delaware in 1999. Unless the context otherwise requires, references in these Notes to the Condensed Consolidated Financial Statements to the “Company”, “we”, “us” and “our” refer to Immersion and our consolidated subsidiaries.

Immersion generates license and royalty revenues from a wide range of intellectual property (“IP”) that more fully engage users’ sense of touch when operating digital devices. We focus on the following target application areas: mobile devices, wearables, mobile entertainment; console gaming; 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 (the “Closing Date”).

Barnes & Noble Education

Barnes & Noble Education is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. Barnes & Noble Education is also a textbook wholesaler, and bookstore management hardware and software provider. Barnes & Noble Education operates physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.

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~~9

Principles of Consolidation and Basis of Presentation

The results of operations reflected in our Condensed Consolidated Financial Statements include the accounts of Immersion and our wholly-owned subsidiaries, as well as the accounts of Barnes & Noble Education, a consolidated variable interest entity, since June 10, 2024. All significant intercompany accounts and transactions have been eliminated in consolidation.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~The~~NOTE ~~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~~2. BASIS ~~The~~OF ~~noncontrolling~~PRESENTATION ~~interest~~AND onSUMMARY ~~the~~OF ~~Condensed~~SIGNIFICANT ~~Consolidated~~ACCOUNTING 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.POLICIES

~~These~~Principles ~~Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America~~Consolidation ~~(“U.S. GAAP”) for interim financial information~~ and ~~with~~Basis ~~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 April 30, 2025, as amended. 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. Presentation

~~Due~~The toresults ~~their~~of ~~non-homogeneous~~ operations, ~~our~~reflected ~~Condensed~~in ~~Consolidated~~the ~~Balance~~Company’s ~~Sheet as of July 31, 2025 and Consolidated Balance Sheet as of April 30, 2025 and~~ Condensed Consolidated Financial Statements ofinclude ~~Operations for~~ the ~~three~~accounts ~~months ended July 31, 2025 and 2024, separately present the operating assets, liabilities, and operations~~ of Immersion’s ~~business~~and ~~from~~our ~~the~~wholly-owned ~~operating assets~~subsidiaries, ~~liabilities~~as ~~and~~well ~~operations~~as ~~of Barnes & Noble Education's business. All of~~ the ~~assets~~accounts of Barnes & Noble Education, ~~reported~~a onconsolidated ~~the~~variable ~~Condensed~~interest ~~Consolidated Balance Sheets~~entity, ~~can~~since beJune ~~used~~10, ~~only to settle obligations of Barnes & Noble Education~~2024. ~~None~~All ofsignificant ~~the~~intercompany ~~liabilities~~accounts ofand ~~Barnes~~transactions ~~& Noble Education~~ have ~~recourse~~been toeliminated ~~the~~in ~~general credit of Immersion Corporation~~consolidation.

~~Reporting~~The ~~Periods~~noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of earnings or loss attributable to the interest in Barnes & Noble Education held by other owners. The noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of Barnes & Noble Education’s net assets attributable to the other owners, based on the portion of the interest owned by such owners. As of October 31, 2025, the noncontrolling interest was $266.9 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.

OnThese ~~September~~Condensed ~~27,~~Consolidated ~~2024,~~Financial ~~following~~Statements have been prepared in accordance with accounting principles generally accepted in the ~~issuance~~United States of America (“U.S. GAAP”) for interim financial information and with the ~~Company’s~~instructions for Form 10-Q and the applicable articles of Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements asdo ofnot ~~June~~include ~~30,~~all ~~2024~~information and footnotes necessary for ~~the~~a ~~three~~complete ~~months~~presentation ~~ended~~of ~~June~~the 30financial position, ~~2024~~results of operations, and ~~2023~~cash flows, ~~the~~in ~~Board~~conformity ofwith ~~Directors~~U.S. ofGAAP ~~Immersion~~and ~~approved~~should abe ~~change~~read in ~~our~~conjunction ~~fiscal~~with ~~year~~our ~~for~~audited ~~the~~consolidated ~~period~~financial ~~beginning~~statements onincluded ~~January~~in 1our ~~and~~Annual ~~ending~~Report on ~~December~~Form 3110-K tofor the ~~period~~fiscal ~~beginning~~year onended ~~May~~April 130, ~~and~~2025, ~~ending~~as onamended. ~~April~~In ~~30. The~~the ~~Company~~opinion ~~has~~of ~~recast~~management, ~~the~~all ~~historical~~adjustments ~~financial~~consisting ~~statements~~of ~~presented~~only ~~herein~~normal and recurring items necessary for the ~~three~~fair ~~months~~presentation ~~ended~~of ~~July~~the ~~31,~~financial ~~2024~~position toand ~~align~~results ~~with~~of operations for the ~~Company’s~~interim ~~new~~periods ~~fiscal~~presented ~~year~~have been included.

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

Summary of Significant Accounting Policies

Use of Estimates

In preparing these financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts in the Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

Earnings (Losses) Per Share

We 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.

910

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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~~The Company’s long-lived assets include property and equipment, operating lease right-of-use assets, and amortizable intangibles recorded in connection with our business acquisition of Barnes & Noble Education. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Seasonality

Barnes & Noble Education’s business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education’s quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in its fiscal calendar dates.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the digital content is made available to the customer compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period,; and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of Barnes & Noble Education’s products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of Barnes & Noble Education’s products by its customers for products ordered through Barnes & Noble Education’s websites and virtual bookstores. See Revenue Recognition and Deferred Revenue discussion below.

These shifts in timing may affect the comparability of Barnes & Noble Education’s results across periods. Sales attributable to Barnes & Noble Education’s wholesale business are generally highest in Barnes & Noble Education’s first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.

Restricted Cash

At ~~July~~October 31, 2025 and April 30, 2025, restricted cash was comprised of $1222.73 million and $17.3 million, respectively, in Prepaid expenses and other current assets in the Condensed Consolidated Balance 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, $2.4 million in Other assets - noncurrent in the Condensed Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or 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 Barnes & Noble Education’s history of liquidating non-returnable inventory, which includes certain assumptions, including markdowns and inventory aging.

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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~~October 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 with the amortization expense recognized in cost of 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.

Leases

Barnes & Noble Education recognizes lease assets and lease liabilities on the Condensed Consolidated Balance 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~~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 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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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized upon delivery of 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.

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 Barnes & 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.

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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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cost of Sales

Cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to Barnes & Noble Education’s college and university contracts and other facility related expenses.

Selling and Administrative Expenses

The Company’s ~~selling~~Selling and 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.

Barnes & Noble Education’s ~~selling~~Selling and administrative expenses consist primarily of employee payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance, and accounting.

Accounting Pronouncements

Recently issued accounting pronouncements

There 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 year 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~~Recently OFIssued ~~PREVIOUSLY-ISSUED~~Accounting ~~FINANCIAL STATEMENTS~~Pronouncements

AsExcept ~~previously disclosed in Note 20 of the Company’s consolidated financial statements~~ for ~~the~~ASU ~~fiscal year ended April 30,~~ 2025-07, ~~the~~there ~~Company~~were ~~restated~~no ~~the~~new ~~unaudited~~accounting ~~quarterly~~pronouncements, ~~Condensed~~issued ~~Consolidated~~during ~~Financial Statements for~~ the ~~quarterly~~three ~~and~~months ~~year-to-date periods~~ ended ~~January~~October 31, 2025 ~~and~~that ~~October~~are ~~31,~~expected ~~2024, calendar quarter and year-~~to~~-date~~ ~~ended~~have ~~June~~a ~~30, 2024, and the one month period ended July 31, 2024 (the “restated periods”) in connection with the identification of~~ material ~~errors~~impact ~~related~~on 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~~Condensed ~~for~~Consolidated ~~the~~Financial 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 yearStatements. ~~See Note 2. Basis of Presentation and Summary of Significant Accounting Policies.~~

13NOTE 3. RESTATEMENT OF PREVIOUSLY-ISSUED FINANCIAL STATEMENTS

As previously disclosed in Note 20. Restatement of Quarterly Financial Information (Unaudited) in the Company’s Annual Report on Form 10-K 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. The quantitative impact of the restatement on the Company’s consolidated statements of operations, cash flows and stockholders’ equity for the three and six months ended October 31, 2024 is presented in Note 20. Restatement of Quarterly Financial Information (Unaudited)in the Company’s Annual Report.

The restatement did not result in any changes to the classification of cash flows among operating, investing, or financing activities. The accompanying Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q reflect the restated amounts for all applicable prior periods presented and are prepared on a basis consistent with the restated consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. BUSINESS COMBINATION

On June 10, 2024 (“Closing Date”), we acquired 42% of all outstanding common shares of Barnes & Noble Education, as well as control over Barnes & Noble Education through five Immersion-appointed 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 and the Company) and $2.5 million in transaction costs, incurred by Immersion but reimbursed by Barnes & Noble Education. For the fiscal year ended April 30, 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 Selling and administrative expenses in the accompanying Condensed Consolidated Statement of Operations. The acquisition aims to expand Immersion's offerings, increase its customer reach, and diversify into the education sector.

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. 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, 2025. See Note 9. Goodwill and Intangible Assets for additional information. The results of the purchase price allocation below are presented, inclusive of the restatement adjustments. For the impacts of the restatement on the preliminary purchase price allocation, see, Note 20. Restatement of Quarterly Financial Information (Unaudited) ~~as previously disclosed~~ in the Company’s ~~consolidated~~Annual ~~financial~~Report ~~statements~~on Form 10-K for the fiscal year ended April 30, 2025.

The following table presents the results of the final purchase price allocation, inclusive of the restatement adjustments (in thousands):


	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

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


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

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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 liability of $4.8 million, recorded under Deferred income taxes – noncurrent, as part of this business combination.

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~~Closing ~~date~~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~~Closing ~~date~~Date.

15NOTE 5. SEGMENT REPORTING

The Company operates as two operating and reportable segments, Immersion and Barnes & Noble Education. Our 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):

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. SEGMENT REPORTING


	Three Months Ended October 31,				Six Months Ended October 31,
(in thousands)	2025		2024		2025		2024
			As Restated				As Restated
Revenues:
Immersion	$	5,760	$	14,127	$	9,632	$	62,552
Barnes & Noble Education		644,414		602,122		932,574		737,186
Total revenues		650,174		616,249		942,206		799,738

Cost of sales (excludes depreciation and amortization expense):
Barnes & Noble Education		515,102		459,478		748,696		569,388
Operating expenses:
Immersion
Selling and administrative expenses		2,949		4,165		6,644		17,576
Barnes & Noble Education
Selling and administrative expenses		77,282		72,717		145,087		109,046
Depreciation and amortization expense		10,487		9,400		20,884		14,676
Restructuring and professional fees		4,296		59		7,192		5,064
		92,065		82,176		173,163		128,786
Total operating expenses		95,014		86,341		179,807		146,362
Operating Income (Loss):
Immersion		2,811		9,962		2,988		44,976
Barnes & Noble Education		37,247		60,468		10,715		39,012
Operating Income (Loss)	$	40,058	$	70,430	$	13,703	$	83,988

WeThe ~~operate~~reconciliation asbetween ~~two~~segment ~~operating and reportable segments, Immersion and Barnes & Noble Education. Our Chief Executive Officer, as the Company’s Chief~~ Operating ~~Decision~~Income ~~Maker, uses Operating income~~ (~~loss~~Loss) ~~as the profitability metric for the purposes of making decisions related to the allocation of resources to each segment~~ and ~~assessing~~Income ~~performance~~(Loss) ofBefore ~~each~~Income ~~segment, Summarized~~Taxes ~~financial~~is ~~information~~included ~~for~~within our ~~reportable~~Condensed ~~segments~~Consolidated isStatements ~~reported~~of ~~below (in thousands):~~Operations.

	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 Immersion’s revenue for the three months ended July 31, 2025 and 2024 (in thousands):

	Three Months Ended
	July 31,2025		July 31,2024
Fixed fee license revenue	$	736	$	45,326
Per-unit royalty revenue		3,136		3,099
Total royalty and license revenue	$	3,872	$	48,425

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. REVENUE RECOGNITION

Immersion

Disaggregated Revenue

The following table presents the disaggregation of Immersion’s revenue for the three and six months ended October 31, 2025 and 2024 (in thousands):


	Three Months Ended October 31,				Six Months Ended October 31,
	2025		2024		2025		2024
			As Restated				As Restated
Fixed fee license revenue	$	736	$	10,676	$	1,472	$	56,003
Per-unit royalty revenue		5,024		3,451		8,160		6,549
Total royalty and license revenue	$	5,760	$	14,127	$	9,632	$	62,552

Contract Assets

As of ~~July~~October 31, 2025, we had contract assets of $8.10 million included within Prepaid expenses and other current assets and $20.57 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 our contract liabilities (in thousands):

	July 31,2025			April 30,2025
	October 31,2025			April 30,2025
Deferred revenue beginning of the period	$	8,728		$	20,472
Additions to deferred revenue during the period		-—			882
Reductions to deferred revenue for revenue recognized during the period		(~~736~~1,473	)		(12,626	)
Deferred revenue balance end of the period	$	7,~~992~~255		$	8,728

Based on contracts signed and payments received as of ~~July~~October 31, 2025, we expect to recognize $87.03 million in revenue under our fixed fee license agreements, which are satisfied over time, including $76.58 million over one to three years and $0.5 million over more than three years.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Barnes & Noble Education

Disaggregated Revenue

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

		Three Months Ended July 31, 2025		From June 10, 2024 to July 31, 2024
	Three Months Ended October 31,					Six Months Ended		From June 10, 2024 to
Course material product sales		$	157,598	$	68,153
	2025			2024		October 31, 2025		October 31, 2024
General merchandise product sales (a)			97,710		50,838
				As Restated				As Restated
Services and other revenue (b)			18,871		11,127
Course material product sales	$	459,267		$	421,999	$	616,865	$	490,152
Total product and other revenue			274,179		130,118
General merchandise product sales (a)		112,873			109,911		210,580		160,749
Course material rental income			13,981		4,946
Services and other revenue (b)		26,071			27,764		44,945		38,891
Total revenue		$	288,160	$	135,064
Total product and other revenue		598,211			559,674		872,390		689,792
Course materials rental income		46,203			42,448		60,184		47,394
Total revenue	$	644,414		$	602,122	$	932,574	$	737,186

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

Contract Assets and Contract Liabilities

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 $0.35 million and $0.6 million for ~~July~~October 31, 2025 and April 30, 2025, respectively, on the Condensed Consolidated Balance Sheets.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Contract liabilities represent an obligation to transfer goods or services to a customer for which Barnes & Noble Education has received consideration and consists of its deferred revenue liability (deferred revenue). Deferred revenue consists of the following:

•

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

•

unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to Barnes & Noble Education’s partnership marketing customers; and

•

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
	October 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		2099,~~720~~624			173,969
Reductions to deferred revenue for revenue recognized during the period		(1878,~~824~~348	)		(171,447	)
Deferred revenue balance at the end of period	$	1534,~~462~~842		$	13,566

~~7. INVESTMENTS AND FAIR VALUE MEASUREMENTS~~19

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 July 31, 2025 and April 30, 2025 consisted of the following (in thousands):

	July 31, 2025
	Cost orAmortizedCost		UnrealizedGains		UnrealizedLosses			Fair Value
Marketable equity securities
Equity securities	$	67,956	$	6,659	$	(13,310	)	$	61,305
Marketable debt securities
U.S. treasury securities		15,907		139		—			16,046
Corporate bonds		13,787		162		(73	)		13,876
Total marketable debt securities		29,694		301		(73	)		29,922
	$	97,650	$	6,960	$	(13,383	)	$	91,227

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. INVESTMENTS AND FAIR VALUE MEASUREMENTS


Investments - current	October 31, 2025		April 30, 2025
Marketable equity securities	$	51,718	$	55,784
U.S. treasury securities		8,040		33,005
Total Investments – current	$	59,758	$	88,789


Investments - noncurrent	October 31, 2025		April 30, 2025
Corporate bonds	$	3,263	$	13,880
Total Investments – noncurrent	$	3,263	$	13,880

Marketable Securities

Marketable securities as of October 31, 2025 and April 30, 2025 consisted of the following (in thousands):


	October 31, 2025
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	56,397	$	8,385	$	(13,064	)	$	51,718
Marketable debt securities
U.S. treasury securities		7,981		59		—			8,040
Corporate bonds		3,140		123		—			3,263
Total marketable debt securities		11,121		182		—			11,303
	$	67,518	$	8,567	$	(13,064	)	$	63,021


	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):~~ 20

	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

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AsIMMERSION 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.CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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


	October 31, 2025
	Amortized Cost		Fair Value
Less than 1 year	$	7,981	$	8,040
1 to 5 years		3,140		3,263
More than 5 years		—		—
Total	$	11,121	$	11,303

As of October 31, 2025, there were no corporate bonds with unrealized loss positions. There were no U.S. treasury securities with an unrealized loss position at October 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 October 31, 2025 and April 30, 2025.

Derivative Financial Instruments

Immersion’s derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on ~~our~~the Company’s Condensed Consolidated Balance Sheets as of ~~July~~October 31, 2025 and April 30, 2025 (in thousands):

July 31, 2025

October 31, 2025

Cost

Unrealized(Gains) Losses

Fair Value

Derivative instruments

47,~~406~~363

(1,~~133~~380

)

5,~~539~~983

47,~~406~~363

(1,~~133~~380

)

5,~~539~~983


	April 30, 2025
	Cost		Unrealized (Gains) Losses		Fair Value
Derivative instruments	$	6,045	$	3,709	$	9,754
	$	6,045	$	3,709	$	9,754

19The 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 October 31,						Six Months Ended October 31,
	2025			2024			2025			2024

Net unrealized gains (losses) recognized on marketable equity securities	$	1,973		$	(2,407	)	$	3,215		$	(776	)
Net realized gains (losses) recognized on marketable equity securities		(2,138	)		834			(1,178	)		3,941
Net unrealized gains (losses) recognized on derivative instruments		2,513			1,282			5,090			757
Net realized gains recognized on derivative instruments		419			866			1,624			3,462
Net realized gains (losses) recognized on marketable debt securities		(237	)		35			(237	)		1,308
Total net gains recognized in interest and other income (loss), net	$	2,530		$	610		$	8,514		$	8,692

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IMMERSION CORPORATION

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

The fair value of certain financial instruments including Cash and cash equivalents; Accounts receivable, net; Accounts payable; and Accrued liabilities approximate their carrying value due to their short-term nature and are classified within Level 1. The fair value of our Long-term borrowings approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments.

Our financial instruments measured at fair value on a recurring basis consisted of U.S. treasury securities, equity securities, corporate bonds, and derivatives. Equity securities and certain derivative instruments are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. U.S. treasury securities, corporate bonds, and certain derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.

Financial instruments valued based on unobservable inputs, which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument, are generally classified within Level 3 of the fair value hierarchy.

See Note 11. Participation Interest Purchase Agreement for fair value information about Barnes & Noble Education’s derivative instrument held as of ~~July 31, 2025 and~~ April 30, 2025, that is fair valued using Level 3 inputs.

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

July 31, 2025

October 31, 2025

Fair Value Measurements Using

Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1)

SignificantOtherObservableInputs(Level 2)

SignificantUnobservableInputs(Level 3)

Total

Assets:

Money Market funds (within cash and cash equivalents)

6893,~~635~~589

—

6893,~~635~~589

U.S. treasury securities

—

168,~~046~~040

—

168,~~046~~040

Equity securities

6151,~~305~~718

—

6151,~~305~~718

Corporate bonds

—

133,~~876~~263

—

133,~~876~~263

Total assets at fair value

~~129~~145,~~940~~307

2911,~~922~~303

—

~~159~~156,~~862~~610

Liabilities

Derivative instruments

32,~~697~~140

13,~~842~~843

—

5,~~539~~983

Total liabilities at fair value

32,~~697~~140

13,~~842~~843

—

5,~~539~~983

2022

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IMMERSION CORPORATION

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

NOTE 8. LEASES

Immersion

For the three and six months ended ~~July~~October 31, 2025 and 2024, Immersion’s leases and related activity ~~was~~were not material.

Barnes & Noble Education

Barnes & Noble Education recognizes lease assets and lease liabilities on the Condensed Consolidated Balance Sheets for substantially all lease arrangements based on the present value of future lease payments as required by ASC Topic 842, Leases. Barnes & Noble Education’s portfolio of leases consists of operating leases comprised of operating agreements, which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. Barnes & Noble Education has one immaterial finance lease and no short-term leases (i.e., those with a term of twelve months or less).

Barnes & Noble Education recognizes a right of use (“ROU”) asset and lease liability in the Condensed Consolidated Balance Sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised.

Barnes & 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 (in thousands) except for lease term and discount rate:

	Three Months Ended July 31, 2025		From June 10, 2024 to July 31, 2024
	Three Months Ended October 31,				Six Months Ended		From June 10, 2024 to
Operating lease cost	$	17,579	$	10,879
	2025		2024		October 31, 2025		October 31, 2024
Variable lease payments		20,912		3,981
			As Restated				As Restated
Short-term lease cost		—		2,771
Operating lease cost	$	15,660	$	16,658	$	33,238	$	27,537
Total lease cost	$	38,491	$	17,631
Variable lease payments		50,979		30,229		71,891		34,209
Short-term lease cost		—		4,979		—		7,750
Total lease cost	$	66,639	$	51,866	$	105,129	$	69,496

	July 31, 2025			July 31, 2024
	October 31, 2025				October 31, 2024
Cash paid for amounts included in the measurement of lease liabilities		14,199			18,868
					As Restated
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		24,884			13,234
Cash paid for amounts included in the measurement of lease liabilities		29,809				49,799
Weighted-average remaining lease term (in years)		4.7			4.6
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		32,793				15,225
Weighted-average discount rate		6.7	%		5.5	%
Weighted-average remaining lease term (in years)		4.7				4.6
Weighted-average discount rate		6.7	%			5.9	%

NOTE 9. GOODWILL AND INTANGIBLE ASSETS

The Company recognized $69.2 million in goodwill as the result of 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.Goodwill

InThe ~~accordance with ASC Topic 350, Intangibles - Goodwill and Other, the~~ Company ~~did~~recognized ~~not~~$69.2 ~~record~~million ~~any~~in goodwill ~~impairment~~as ~~losses during~~ the ~~three~~result ~~months~~of ~~ended July 31, 2025 and 2024. Goodwill represents~~ the ~~future~~business ~~economic~~combination ~~benefit~~with ~~attributable to~~ Barnes & Noble Education’s ~~assembled~~on ~~workforce~~June 10, ~~which~~2024. isSee ~~not~~Note ~~individually~~4. ~~and~~Business ~~separately~~Combination ~~recognized~~for asadditional ~~an intangible asset~~information. AsThe ~~such, the~~ carrying value of goodwill ~~has~~was ~~been~~$69.2 ~~allocated~~million toas ~~Barnes~~of October &31, ~~Noble~~2025 ~~Education Segment~~ and ~~none~~April of30, ~~the goodwill has been allocated to the Immersion Segment~~2025.

In accordance with ASC Topic 350 - Intangibles - Goodwill and Other, the Company did not record any goodwill impairment losses during the three and six months ended October 31, 2025, the three months ended October 31, 2024, and the period from June 10, 2024 to October 31, 2024. Goodwill represents 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.

Intangible Assets, net

The following is a summary of intangible assets, excluding goodwill, recorded as ~~intangible~~Intangible assets, net on ~~our~~the Company’s Condensed Consolidated Balance Sheets as of ~~July~~October 31, 2025 and April 30, 2025 (in thousands):

	July 31, 2025
	October 31, 2025
	Gross CarryingAmount		AccumulatedAmortization			Net CarryingAmount		Weighted-AverageRemaining Life (years)
Trade name	$	45,000	N/A			$	45,000	Indefinite
Customer relationships		50,000		(45,~~381~~343	)		4544,~~619~~657		11.97
Total	$	95,000	$	(45,~~381~~343	)	$	9089,~~619~~657

	April 30, 2025
	Gross CarryingAmount		AccumulatedAmortization			Net CarryingAmount		Weighted-AverageRemaining 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.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.


	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 expense was $1.0 million and $1.9 million for the three and six months ended October 31, 2025, respectively, and $1.0 million and $1.5 million for the three months ended October 31, 2024 and the period from June 10, 2024 to October 31, 2024, respectively.

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

Year ended April 30,	Amount
Fiscal Year ended April 30,	Amount
Remainder of 2026	$	21,~~885~~923
2027		3,846
2028		3,846
2029		3,846
2030		3,846
Thereafter		27,350
Total	$	4544,~~619~~657

NOTE 10. DEBT

The following is a summary of Barnes & Noble Education’s outstanding borrowing as of ~~July~~October 31, 2025 and April 30, 2025 (in thousands):

	Maturity Date	July 31, 2025
			As of
Total debt - Barnes & Noble Education credit facility	June 9, 2028	$	170,000
	Maturity Date		October 31,2025		April 30,2025
Balance sheet classification:
Total debt - Barnes & Noble Education credit facility	June 9, 2028		$	122,500	$	103,098
Long-term borrowings		$	170,000
Balance sheet classification:
Long-term borrowings			$	122,500	$	103,098

On the Closing Date, Barnes & Noble Education amended and restated and extended the maturity of its existing asset-based credit facility with Bank of America, N.A., as administrative agent, collateral agent and swing line lender, and other lenders from time to time party thereto (such amended and restated credit facility, the “Restated ABL Facility”). Pursuant to the Restated ABL Facility, the lenders thereunder have committed to provide a four-year asset-backed revolving credit facility in an aggregate committed principal amount of up to $325 million. The Restated ABL Facility has a maturity date of June 9, 2028. Barnes & Noble Education has interest only obligations until June 9, 2028, at which time the total principal is due and payable.

Interest under the Restated ABL Facility accrues, at the election of Barnes & Noble Education, either (x) based on the Secured Overnight Financing Rate (“SOFR”), which is subject to a floor of 2.5% per annum, plus a spread of 3.5% per annum or (y) at an alternate base rate, which is subject to a floor of 3.5% per annum, plus a spread of 2.5% per annum, provided that, in the event Barnes & Noble Education meets certain financial metrics for a consecutive six-month period beginning and ending after the one-year anniversary of the Closing Date, the foregoing spreads shall be reduced by 0.25% per annum.

The Restated ABL Facility contains customary negative covenants that limit Barnes & Noble Education’s ability to incur or assume additional indebtedness, grant or permit liens, make investments, make dividend payments, make Restricted Payments (as defined under the Restated ABL Facility agreement) and other specified payments, merge with other entities, dispose of or acquire ~~assets, or engage in transactions with affiliates, among other things. Additionally, the Restated ABL Facility includes the following financial maintenance covenants:~~

~~following the date that is six months following the Closing Date, Barnes & Noble Education is required to maintain a minimum Availability (as defined in the Restated ABL Facility agreement) of (x) $~~25 ~~million for the first thirty (30) months after the Closing Date and (y) $30 million after the date that is thirty (30) months after the Closing Date;~~

commencing with the month ending on or about May 31, 2025, Barnes & Noble Education is required to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Restated ABL Facility) of not less than 1.10 to 1.00, which will be tested monthly on the last day of each fiscal month for the trailing 12-month period; and

commencing with the quarter ending on or about October 31, 2024, Barnes & Noble Education is required to maintain a minimum Consolidated EBITDA (as defined in the Restated ABL Facility), which will be tested quarterly on the last day of each fiscal quarter for (a) the trailing six-month period for the first test date, (b) the trailing nine-month period of the second test date and (c) for the trailing 12-month period thereafter.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~The Restated ABL Facility contains customary events of default~~assets, ~~including~~or ~~for~~engage ~~non-payment~~in oftransactions ~~obligations~~with ~~owing under the Credit Facility~~affiliates, ~~material~~among ~~breaches of representations and warranties, failure to perform or observe covenants, default on~~ other ~~material~~things. ~~indebtedness~~Additionally, ~~customary~~the ~~ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The~~ Restated ABL Facility ~~also~~includes ~~contains customary affirmative covenants and representations and warranties. In connection with~~ the ~~timing~~following ~~of Barnes & Noble Education’s~~ financial ~~statement~~maintenance filings, Barnes & Noble Education entered into a series of limited consent and waiver agreements with the lenders under its asset-based revolving credit facility (the “Credit Facility”) to extend certain financial reporting deadlines. These waivers related solely to the timing of Barnes & Noble Education’s filings and did not arise from noncompliance with any financial covenants~~. The Investigation and related restatement of Barnes & Noble Education’s previously issued financial statements have been completed.~~:

•

~~The~~following ~~credit~~the ~~facility~~date that is ~~secured~~six bymonths ~~substantially~~following ~~all of~~ the ~~inventory~~Closing Date, ~~accounts~~Barnes ~~receivable~~& ~~and~~Noble ~~related~~Education ~~assets~~is ofrequired ~~the~~to ~~borrowers~~maintain ~~under~~a ~~the~~minimum ~~credit~~Availability ~~facility.~~(as ~~This~~defined isin ~~considered~~the anRestated ~~all~~ABL ~~asset~~Facility ~~lien~~agreement) ~~(inclusive~~ of ~~proceeds~~(x) ~~from~~$25 ~~tax~~million ~~refunds~~for ~~payable~~the tofirst ~~Barnes~~thirty &(30) ~~Noble~~months ~~Education~~after ~~and~~the ~~pledge~~Closing ofDate ~~equity~~and ~~from subsidiaries, exclusive of real estate~~(y). ~~None~~$30 ofmillion after the ~~liabilities~~date ofthat ~~Barnes~~is &thirty ~~Noble~~(30) ~~Education~~months ~~have~~after ~~recourse to~~ the ~~general~~Closing ~~credit~~Date; ~~of Immersion Corporation.~~

•

The Restated ABL Facility contains customary events of default, including for non-payment of obligations owing under the Credit Facility, material breaches of representations and warranties, failure to perform or observe covenants, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Restated ABL Facility also contains customary affirmative covenants and representations and warranties. In connection with the timing of Barnes & Noble Education’s financial statement filings, Barnes & Noble Education entered into a series of limited consent and waiver agreements with the lenders under the Restated ABL Facility to extend certain financial reporting deadlines. These waivers related solely to the timing of Barnes & Noble Education’s filings and did not arise from noncompliance with any financial covenants. The Investigation and related restatement of Barnes & Noble Education’s previously issued financial statements have been completed.

The credit facility is secured by substantially all the inventory, accounts receivable and related assets of the borrowers under the credit facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to Barnes & Noble Education and pledge of equity from subsidiaries, exclusive of real estate). None of the liabilities of Barnes & Noble Education have recourse to the general credit of Immersion Corporation.

In connection with the Restated ABL Facility, with respect to the 1.0% fee payable in connection with the eighth amendment to the Restated ABL Facility (prior to its having been restated), (x) 50% was paid on September 2, 2024, and (y) 50% was paid on June 10, 2025.

As previously disclosed, Barnes & Noble Education was unable to timely file certain periodic reports due to the completion of ~~July~~a 31review of certain accounting matters and, ~~2025~~as a result, ~~and~~has ~~through~~restated its previously-issued consolidated financial statements for certain prior periods. Starting in the ~~date~~quarter ofended ~~this~~October ~~filing~~31, 2025, Barnes & Noble Education ~~was~~entered ininto ~~compliance~~a series of limited consent and waiver arrangements with ~~all~~its ~~debt~~lenders ~~covenants~~related ~~under~~to extending the ~~Restated~~timing ~~ABL~~of ~~Facility~~required financial statement deliveries through January 20, 2026, and did not arise from the noncompliance with any financial covenants.

During the ~~three~~six months ended ~~July~~October 31, 2025, Barnes & Noble Education borrowed $~~163~~349.32 million and repaid $96329.48 million under the Restated ABL Facility, with $~~170~~122.5 million of outstanding borrowings under the Restated ABL Facility as of ~~July~~October 31, 2025.

~~11. PARTICIPATION~~As ~~INTEREST~~of ~~PURCHASE~~October ~~AGREEMENT~~31, 2025, Barnes & Noble Education was in compliance with all debt covenants under the Restated ABL Facility.

NOTE 11. PARTICIPATION INTEREST PURCHASE AGREEMENT

Participation Interest Purchase Agreement

In April 2025, Barnes & Noble Education entered into a Participation Interest Purchase Agreement (the “Agreement”) with Jefferies Leveraged Credit Products LLC (“Jefferies”), under which Jefferies paid Barnes & Noble Education $12.6 million in exchange for a participation interest in the proceeds of a specified litigation claim. The Agreement is non-recourse to Barnes & Noble Education with respect to financial risk, and Jefferies’ entitlement to payment is limited to proceeds, if any, received from the litigation.

Barnes & Noble Education has continuing contractual obligations under the Agreement, including remaining the plaintiff of record, cooperating with Jefferies and its counsel, providing access to litigation-related documents, and complying with certain settlement-related provisions. These obligations are protective in nature and are intended to preserve Jefferies’ contractual rights; however, they do not require Barnes & Noble Education to repay amounts received, provide services, or otherwise create a debt obligation. 26

Effective May 4, 2025, the first day of Barnes & Noble Education’s fiscal year 2026, Barnes & Noble Education early adopted ASU No. 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. Upon adoption, the Agreement no longer met the definition of a derivative under ASC 815, as the arrangement qualifies for the scope exception for litigation funding arrangements that do not create or modify debt.

Accordingly, upon adoption, the previously recognized derivative liability was reclassified to deferred income within other long-term liabilities, and the Agreement is accounted for under ASC 470, Debt, as deferred income. The deferred income will be recognized in earnings when the related litigation is resolved and proceeds, if any, are distributed.

The guidance was applied using a modified retrospective approach, resulting in the reclassification of the derivative liability to deferred income as of the adoption date. The cumulative-effect adjustment to retained earnings upon adoption was immaterial. No amounts related to this arrangement are subject to recurring fair-value measurement subsequent to adoption.

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~12. STOCK~~Barnes & Noble Education has continuing contractual obligations under the Agreement, including remaining the plaintiff of record, cooperating with Jefferies and its counsel, providing access to litigation-~~BASED~~related ~~COMPENSATION~~documents, and complying with certain settlement-related provisions. These obligations are protective in nature and are intended to preserve Jefferies’ contractual rights; however, they do not require Barnes & Noble Education to repay amounts received, provide services, or otherwise create a debt obligation.

NOTE 12. STOCK-BASED COMPENSATION

Immersion

Our equity incentive program is a long-term retention program that is intended to attract, retain, and provide incentives for employees, consultants, officers, and directors and to align stockholder and employee interests. We may grant time-based options, market condition-based options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, market condition-based performance restricted stock units (“PSUs”), and other stock-based equity awards to employees, officers, directors, and consultants.

On January 18, 2022, our stockholders approved the 2021 Equity Incentive Plan (as amended, the “2021 Plan”), which provides for a total number of shares reserved and available for grant and issuance equal to 3,525,119 shares plus up to an additional 855,351 shares that are subject to stock options or other awards previously granted under the 2011 Equity Incentive Plan. On March 30, 2023, our stockholders approved an amendment to the 2021 Plan which increased the total number of shares reserved and available for grant and issuance equal to 8,146,607 shares plus up to an additional 855,351 shares that are subject to stock options or other awards previously granted under the 2011 Equity Incentive Plan.

Under our equity incentive plans, stock options may be granted at prices not less than the fair market value on the date of grant for such stock options. Stock options generally vest over four years and expire seven years from the applicable grant date. Market condition-based stock awards are subject to a market conditions whereby the closing price of our common stock must exceed a certain level for a number of trading days within a specified time frame or the awards will be canceled before expiration. RSAs generally vests over one year. RSUs generally vest over three years. Awards granted other than a stock option or a stock appreciation right shall reduce the common stock shares available for grant by 1.75 shares for every share issued.

A summary of our equity incentive program as of ~~July~~October 31, 2025 is as follows (in thousands):

Common stock shares available for grant			2,226
RSUs outstanding			~~633~~554
RSAs outstanding			—
PSUs outstanding			—

As of ~~July~~October 31, 2025, wethe Company did not have any outstanding stock options.

~~Restricted Stock Units~~27

The following summarizes RSU activities for the three months ended July 31, 2025:

	Number ofRestrictedStock Units(in thousands)			WeightedAverageGrant DateFair ValuePer Share		WeightedAverageRemainingContractualTerm (Years)
Outstanding at April 30, 2025		1,125		$	8.24		1.30
Granted		—			—
Released		(492	)		8.99
Forfeited		—			—
Outstanding at July 31, 2025		633		$	7.66		0.71

The aggregate intrinsic value is calculated as the market value as of the end of the reporting period.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Restricted Stock Units

The following summarizes RSU activities for the six months ended October 31, 2025:


	Number of Restricted Stock Units (in thousands)			Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term (Years)
Outstanding at April 30, 2025		1,125		$	8.24		1.30
Granted		—			—
Released		(571	)		8.69
Forfeited		—			—
Outstanding at October 31, 2025		554		$	7.78		0.54

The aggregate intrinsic value is calculated as the market value as of the end of the reporting period.

Stock-based Compensation Expense

Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The following summarizes the Company’s stock-based compensation expense related to all of ~~our~~Immersion’s stock-based awards asfor of the three and six months ended ~~July~~October 31, 2025 and ~~July 31,~~ 2024 ~~is as follows~~ (in thousands):

	Three Months Ended
	Three Months Ended October 31,				Six Months Ended October 31,
	July 31,2025		July 31,2024
	2025		2024		2025		2024
Stock options	$	—	$	—	$	—	$	—
RSUs, RSAs and PSUs		1,~~998~~772		12,~~472~~154		3,770		3,685
Total	$	1,~~998~~772	$	12,~~472~~154	$	3,770	$	3,685
Selling and administrative expenses	$	1,~~998~~772	$	12,~~472~~154	$	3,770	$	3,685
Total	$	1,~~998~~772	$	12,~~472~~154	$	3,770	$	3,685

As of ~~July~~October 31, 2025, there was $21.59 million of unrecognized compensation cost adjusted for estimated forfeitures related to unvested, RSUs, RSAs, and PSUs granted to our employees and directors. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 1.31 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

Barnes & Noble Education

Stock-based Compensation Expense

~~For~~The ~~the~~following ~~three~~summarizes ~~months ended July 31, 2025, and~~ the ~~period from June 10, 2024 to July 31, 2024, the~~ total stock-based compensation expense for options, RSAs, RSUs, and PSUs ~~were~~for the three and six months ended October 31, 2025 and 2024 (in thousands):

		Three Months Ended July 31,
	Three Months Ended October 31,							Six Months Ended October 31,
	2025	~~2025~~		2024	~~2024~~			2025		2024
Stock options		$	—		$	—
				As Restated						As Restated
RSUs, RSAs and PSUs			2,480			(187	)
Stock options	$	—		$	—			$	—	$	—
Total		$	2,480		$	(187	)
RSUs, RSAs and PSUs		1,761			1,031				4,241		1,115
Selling and administrative expenses		$	2,480		$	(187	)
Total	$	1,761		$	1,031			$	4,241	$	1,115
Total		$	2,480		$	(187	)
Selling and administrative expenses	$	1,761		$	1,031			$	4,241	$	1,115
Total	$	1,761		$	1,031			$	4,241	$	1,115

~~The total unrecognized compensation cost related to unvested awards as of July 31, 2025 was $8.6 million and is expected to be recognized over a weighted-average period of 1.85 years.~~28

13. EMPLOYEE BENEFIT PLAN

Barnes & Noble Education sponsors defined contribution plans for the benefit of substantially all of its employees. MBS Textbook Exchange, LLC (“MBS”), a subsidiary of Barnes & Noble Education, maintains a profit-sharing plan covering substantially all full-time employees of MBS. For all plans, Barnes & Noble Education is responsible to fund the employer contributions directly, if any. There was no benefit expense for these plans during the three months ended July 31, 2025, and for the period from June 10, 2024 to July 31, 2024.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

14The total unrecognized compensation cost related to unvested awards as of October 31, 2025 was $6. ~~STOCKHOLDERS’~~6 ~~EQUITY~~million and is expected to be recognized over a weighted-average period of 1.84 years.

NOTE 13. EMPLOYEE BENEFIT PLAN

Barnes & Noble Education sponsors defined contribution plans for the benefit of substantially all of its employees. MBS Textbook Exchange, LLC (“MBS”), a subsidiary of Barnes & Noble Education, maintains a profit-sharing plan covering substantially all full-time employees of MBS. For all plans, Barnes & Noble Education is responsible to fund the employer contributions directly, if any. There was no benefit expense for these plans during the three months ended October 31, 2025 and 2024, the six months ended October 31, 2025, and for the period from June 10, 2024 to October 31, 2024.

NOTE 14. STOCKHOLDERS’ EQUITY

Immersion Stock Repurchase Program

On December 29, 2022, the Board approved a stock repurchase program of up to $50.0 million of our common stock for a period of up to twelve months (the “December 2022 Stock Repurchase Program”), which terminated and superseded the stock repurchase program that had been approved by the Board on February 23, 2022. Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the foregoing transactions. The December 2022 Stock Repurchase Program was implemented as a method to return value to our stockholders. The timing, pricing and sizes of any repurchases will depend on a number of factors, including the market price of our common stock and general market and economic conditions. The December 2022 Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time. The December 2022 Stock Repurchase Program has been amended various times and the most recent amendment extended the expiration date to December 29, 2026.

During the three and six months ended ~~July~~October 31, 2025, the Company did not purchase shares under the December 2022 Stock Repurchase Program. As of ~~July~~October 31, 2025, the Company had $40.6 million available for repurchase under the December 2022 Stock Repurchase Program.

Barnes & Noble Education Stock Repurchase Program

On December 14, 2015, the Board of Directors authorized a stock repurchase program of up to $50 million in the aggregate outstanding Barnes & Noble Education’s common stock (“BNED’s Common Stock”). The stock repurchase program is carried out at the direction of Barnes & Noble Education’s management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the three and six months ended ~~July~~October 31, 2025, Barnes & Noble Education did not purchase shares under the stock repurchase program. As of ~~July~~October 31, 2025, approximately $26.7 million remains available under the stock repurchase program.

~~Immersion Dividends Declared and Dividend Payments~~29

Announcement Date	Dividend Type	Amount per Share		Record Date	Payment Date
November 13, 2023	Quarterly (increased)		0.045	January 14, 2024	January 25, 2024
March 7, 2024	Quarterly	$	0.045	April 12, 2024	April 19, 2024
May 8, 2024	Quarterly	$	0.045	July 8, 2024	July 26, 2024
August 20, 2024	Quarterly		0.045	October 4, 2024	October 18, 2024
November 8, 2024	Special		0.245	January 10, 2025	January 24, 2025
March 10, 2025	Quarterly		0.045	April 14, 2025	April 25, 2025
July 8, 2025	Quarterly		0.045	July 23, 2025	August 8, 2025
October 8, 2025	Quarterly		0.045	October 20, 2025	October 31, 2025
December 8, 2025	Quarterly (increased)		0.075	January 19, 2026	January 30, 2026

Future dividends will be subject to further review and approval by the Board in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews our capital allocation strategy from time to time.

During the three months ended July 31, 2025, the Company paid no dividends and during the three months ended July 31, 2024, the Company paid $1.5 million in dividends.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~15. NONCONTROLLING~~Immersion ~~INTEREST~~Dividends Declared and Dividend Payments


Announcement Date	Dividend Type	Amount per Share		Record Date	Payment Date
November 13, 2023	Quarterly (increased)	$	0.045	January 14, 2024	January 25, 2024
March 7, 2024	Quarterly		0.045	April 12, 2024	April 19, 2024
May 8, 2024	Quarterly		0.045	July 8, 2024	July 26, 2024
August 20, 2024	Quarterly		0.045	October 4, 2024	October 18, 2024
November 8, 2024	Special		0.245	January 10, 2025	January 24, 2025
March 10, 2025	Quarterly		0.045	April 14, 2025	April 25, 2025
July 8, 2025	Quarterly		0.045	July 23, 2025	August 8, 2025
October 8, 2025	Quarterly		0.045	October 20, 2025	October 31, 2025
December 8, 2025	Quarterly (increased)		0.075	January 19, 2026	January 30, 2026
March 27, 2026	Quarterly		0.075	April 30, 2026	May 1, 2026

During the six months ended October 31, 2025 and 2024, the Company paid $3.0 million in dividends each period.

NOTE 15. NONCONTROLLING INTEREST

Immersion is the primary beneficiary of Barnes & Noble Education and as a result, consolidates the financial results of Barnes & Noble Education and reports a noncontrolling interest representing BNED Common Stock held by other Barnes & Noble Education’s stockholders. Changes in Immersion’s ownership interest in Barnes & Noble Education while Immersion retains its controlling interest in Barnes & Noble Education are accounted for as equity transactions.

The following table summarizes the ownership interest in Barnes & Noble Education:

	July 31, 2025
	October 31, 2025
	SharesOwned		% ofOwnership
Immersion		11,208,746		32.9	%
Noncontrolling Interest		22,845,101		67.1	%
Total BNED Common Stock outstanding		34,053,847		100.0	%

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to the non-controlling interest holders and were as follows:

		Three Months Ended July 31, 2025				From June 10, 2024 toJuly 31, 2024
	Six Months Ended				From June 10, 2024 to
Noncontrolling interest's weighted-average ownership percentage			67.1	%			61.0	%
	October 31, 2025				October 31, 2024
					As Restated
Noncontrolling interest's weighted-average ownership percentage		67.3	%			58.7	%

~~The following table summarizes the effect of changes in ownership of Barnes & Noble Education on the Company’s equity for the periods presented (in thousands):~~30

	Three Months Ended July 31, 2025			From June 10, 2024 to July 31, 2024
Net Income (loss) attributable to Immersion stockholders	$	(930	)	$	27,077
Transfers from (to) noncontrolling interest:
Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, and sales of common stock		—			55,520
Total effect of changes in ownership interest on equity attributable to Immersion stockholders	$	(930	)	$	82,597

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IMMERSION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~16. INCOME~~The ~~TAXES~~following table summarizes the effect of changes in ownership of Barnes & Noble Education on the Company’s equity for the periods presented (in thousands):

Provision for income taxes for the three months ended July 31, 2025 and July 31, 2024 consisted of the following (in thousands):


	Three Months Ended October 31,					Six Months Ended		From June 10, 2024 to
	2025		2024			October 31, 2025		October 31, 2024
			As Restated					As Restated
Net Income (loss) attributable to Immersion stockholders	$	11,991	$	30,804		$	11,061	$	57,881
Transfers from (to) noncontrolling interest:
Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, and sales of common stock		—		(250	)		—		55,270
Total effect of changes in ownership interest on equity attributable to Immersion stockholders	$	11,991	$	30,554		$	11,061	$	113,151

	Three Months Ended July 31,
	2025			2024
Income (Loss) Before Income Taxes	$	(21,443	)	$	21,887
Income tax benefit (expense)		7,727			(9,687	)
Effective tax rate		36.0	%		44.3	%

NOTE 16. INCOME TAXES

~~Provision~~Income ~~for~~tax ~~income~~benefit ~~taxes~~(expense) for the three and six months ended ~~July~~October 31, 2025 ~~resulted primarily from estimated domestic~~ and ~~foreign~~2024, ~~taxes~~consisted ~~included in the calculation~~ of the ~~effective~~following ~~tax~~(in ~~rate.~~thousands):


	Three Months Ended October 31,			Six Months Ended October 31,
	2025		2024	2025	2024
			As Restated		As Restated
Income (Loss) Before Income Taxes	$	41,632

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