IMMERSION CORP

m

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended April 30,2025 or

For the transition period from ______ to ______

Commission File Number 001-38334

Immersion Corporation

(Exact name of registrant as specified in its charter)

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)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒

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, a 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.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously-issued financial statements.☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on October 31, 2024, the last business day of the registrant’s most recently completed second fiscal quarter, was $227,763,695 (based on the closing sales price of the registrant’s common stock on that date). On March 4, 2026, there were 32,921,888 shares of the Company’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

EXPLANATORY NOTE

Restatement of Prior Period Financial Results and Conclusion of Investigation

As previously disclosed by Immersion Corporation (the “Company”), certain information regarding the recording of cost of digital sales was brought to the attention of the Audit Committee of the Board of Directors (“Barnes & Noble Education Audit Committee”) of Barnes & Noble Education, Inc. (“Barnes & Noble Education”), a consolidated variable interest entity of the Company. With the assistance of outside counsel and advisors, Barnes & Noble Education completed an investigation into certain accounting matters related primarily to the recording of cost of digital sales (the “Investigation”).

The Investigation is now complete and, based on the Investigation, the Barnes & Noble Education Audit Committee concluded that a former Barnes & Noble Education Payment Processing employee (whom Barnes & Noble Education has terminated) made unsupported manual journal entries that improperly reduced cost of sales in the fiscal years ended April 27, 2024 and May 3, 2025. The Investigation revealed that this employee acted alone, and without assistance, support, or direction from any other individual associated with Barnes & Noble Education. The Investigation further revealed that this employee knowingly circumvented Barnes & Noble Education’s internal accounting controls in an effort to make these journal entries, which he knew were unsupported and improper. This Barnes & Noble Education employee did not derive any pecuniary gains, directly or indirectly, because of his actions. The Investigation identified unsupported manual journal entries that improperly reduced cost of sales, with a reciprocal impact to accrued liabilities and accounts receivable, in Barnes & Noble Education’s fiscal years ended May 3, 2025, and April 27, 2024. The Investigation also concluded that certain revenue recognized in the third quarter of fiscal 2025 related to First Day Complete was incorrectly accelerated based upon incorrect opt-out assumptions; this revenue automatically reversed in the fourth quarter of fiscal 2025 based on actual opt-out rates.

The Company obtained control of Barnes & Noble Education on June 10, 2024. Accordingly, the Investigation and related improper journal entries impacted the Company’s results as of and for the fiscal year ended April 30, 2025, including interim periods within that year.

On September 8, 2025, the Board of Directors of the Company (the “Board”) concluded that the Company’s previously-issued unaudited condensed consolidated financial statements for the fiscal third quarter and nine months ended January 31, 2025, the fiscal second quarter and six months ended October 31, 2024, and the calendar second quarter and six months ended June 30, 2024, contained in its Quarterly Reports on Form 10-Q (the “Restated Periods”), as well as its disclosures related to such financial statements, including any reports, earnings releases, and investor presentations, and related communications issued by or on behalf of the Company with respect to the Restated Periods (the “Previously-Issued Financial Information”), should no longer be relied upon. Accordingly, this Annual Report on Form 10-K for the fiscal year ended April 30, 2025 (“Form 10-K”) includes the restatement of our previously-issued unaudited condensed consolidated financial statements and related disclosures for the Restated Periods (the “Restatement”). We have not filed and do not intend to file amendments to our Quarterly Reports on Form 10-Q for the Restated Periods. Accordingly, investors should rely only on the financial information and other disclosures regarding the Restated Periods in this Form 10-K or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to the Restated Periods.

The Restatement includes corrections related to the digital cost of sales matters identified in the Investigation as well as the following items:

Lease Accounting (ASC 842)

Immersion identified errors in its application of Accounting Standards Codification (“ASC”) 842 - Leases related to: (i) the application of purchase accounting, which requires treating the leases as if a new lease is formed as of the acquisition date, a portion of the following year’s payments are subject to a minimum value (“Next Year MAG”), based on the contract terms and the sales activity at the location during the current year. Therefore, as part of purchase accounting, the Company is required to capitalize and ROU asset and lease liability associated with the Next Year MAG and the value that has become fixed through the date of the acquisition; and (ii) certain contracts were incorrectly interpreted with respect to the contractual end dates, which impacted the Company’s assessment of short-term leases, resulting in either inappropriate capitalization of short-term leases or inappropriate exclusion of leases that were not short term, as part of purchase accounting.

Lease-related corrections are reflected in all Restated Periods.

Textbook Rental Inventory

A review of Barnes & Noble Education’s aged Textbook rental inventory identified $4.6 million of rental textbooks that should have been written off in fiscal years prior to fiscal 2025. As a result, an adjustment of $4.6 million was recorded to textbook rental inventories as reflected in the acquired balances upon purchase accounting.

Legal Settlement

A $1.3 million class action settlement involving Barnes & Noble Education was finalized in December 2024 and accrued in the fourth quarter of fiscal 2025. Because the obligation was incurred in the third quarter, the liability and expense have been restated into the fiscal quarter and nine-months ended January 31, 2025.

Remeasurement of Noncontrolling Interest (“NCI”)

As part of the Restatement, Immersion corrected the timing of the remeasurement of the NCI in Barnes & Noble Education in the second quarter of fiscal 2024 that was filed prior to the Company’s change in fiscal year end, which was not adjusted in the Company’s previously-issued financial statements. As a result of the remeasurement, the Company recorded a $55.6 million reduction to noncontrolling interest in consolidated subsidiaries with a corresponding increase to additional paid-in capital.

Revenue Recognition

As part of the Restatement, Immersion corrected the timing of revenue recognition for a customer contract from the second quarter of calendar year 2024. As a result, revenue was decreased by $3.9 million and income tax benefit decreased by $1.0 million in the quarter and six-months ended June 30, 2024.

As a result of the Restatement, including the historical results of Barnes & Noble Education and the application of ASC 805 in accounting for the business combination, the Company has restated the results of the business combination accounting described in Note 3. Business Combination. The effects of the Restatement resulted in an increase to goodwill of $54.9 million, associated with a reduction in the net assets identified at the closing of the Transactions (as defined below).

The quantitative impact of these restatement adjustments is presented in Restatement of Previously-Issued Consolidated Financial Statements in Note 20. Restatement of Quarterly Financial Information (Unaudited) in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K.

Compensation Recovery Policy

In connection with the Securities and Exchange Commission (“SEC”)’s and Nasdaq’s rules requiring adoption of a clawback policy applicable to incentive-based compensation for Section 16 officers of listed companies, the Company has adopted the Immersion Dodd-Frank Clawback Policy. Under such policy, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Company will recoup any erroneously awarded incentive-based compensation from the Company’s current and former executive officers. Further, our Executive Incentive Plan provides the Company with the authority to require repayment of annual cash incentive awards in instances of fraudulent activity and (or) misstated financials or otherwise inaccurate financial reporting. As such, we conducted a clawback analysis in connection with the Restatement as required by the Company’s policies and concluded that recovery of erroneously awarded compensation was not required under the Immersion Dodd-Frank Clawback Policy as no excess compensation was paid to any subject executive officer based on the financial results for the Restatement Periods.

Internal Control Considerations

In connection with the restatement of the Restated Periods, management concluded our disclosure controls and procedures and internal control over financial reporting were not effective as of April 30, 2025, as described in Part II, Item 9A, Controls and Procedures. Management is taking steps to remediate the material weaknesses in our internal control over financial reporting, as described in Part II, Item 9A, Controls and Procedures.

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“the Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements involve risks and uncertainties. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “target,” “project,” “forecast,” “seek,” “may,” “should,” “could,” “would,” or other similar expressions. However, these words are not the only way we identify forward-looking statements. Examples of forward-looking statements include among other things, any expectations, projections, or other characterizations of future events, or circumstances, and include, but are not limited to, statements regarding: (i) our strategy and our ability to execute our business plan; (ii) our competition and the market in which we operate; (iii) our customers and suppliers; (iv) our revenue and trends related thereto, and the recognition and components thereof; (v) our costs and expenses, including our investment of surplus funds and sales of marketable debt securities; (vi) seasonality and demand; (vii) our investment in research and technology development; (viii) changes to general and administrative expenses; (ix) our foreign operations and the reinvestment of our earnings related thereto; (x) our investment in and protection of our intellectual property (“IP”); (xi) our employees; (xii) the sufficiency of our capital resources; (xiii) unrecognized tax benefit and tax liabilities; (xiv) the impact of changes in interest rates and foreign exchange rates, as well as our plans with respect to foreign currency hedging in general; (xv) changes in laws and regulations, including with respect to taxes; (xvi) our plans and estimates related to and the impact of current and future litigation and arbitration; (xvii) our leases and subleases including the timing and income related thereto; (xviii) our ability to establish and maintain proper and effective internal controls; (xix) our ability to regain and maintain compliance with SEC reporting requirements and Nasdaq continued listing rules; and (xviii) our dividend, stock-repurchase, and equity-distribution programs.

Forward-looking statements are subject to risks, uncertainties, 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, 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, but are not limited to, the risk factors contained in Part I, “Item 1A. Risk Factors.”

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.

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. Before deciding whether to invest in our company, you should carefully consider all the information in this report and the following principal risks and the additional risks described in Part I, “Item 1A. Risk Factors” of this Annual Report on Form 10-K and in Barnes & Noble Education, Inc.’s Annual Report on Form 10-K filed with the SEC and available at www.sec.gov.

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Our evolving business model increases the complexity of our business. Our business strategy includes acquisitions, that entail numerous risks, including the risk of management diversion and increased costs and expenses.

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Although we have been profitable from operations since 2020, there is no assurance that we will continue to generate net income in the future and we may not be able to maintain or increase profitability.

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Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by catastrophic events, uncertain economic and political environment in geographies in which we operate or changes in trade policies.

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Our business could be materially and adversely affected if we are unable to enter new licensing arrangements (or renew licenses) on favorable terms or if our customers discontinue product lines that incorporate our technology. In addition, a limited number of customers account for a significant portion of our revenue, and the loss of major customers could harm our operating results.

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Our failure to develop or acquire successful patents and obtain patents on those patents could significantly harm our business. Shortages of electronic components may cause a decrease in production and sales of our customers’ products which could result in lower royalties payable to us.

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We are or may become involved in litigation to enforce our IP rights (or defend against assertions that we violate a third party’s IP), or to resolve conflicts over license terms in our license agreements, and the costs thereof could adversely affect our business.

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The terms in our agreements may be construed by our licensees in a manner that is inconsistent with the rights that we have granted to other licensees or in a manner that may require us to incur substantial costs to resolve conflicts over license terms or may prevent us from enforcing our patents based on legal doctrines.

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If we fail to protect and enforce our patent rights and other IP rights (or if there are adverse changes in patent and litigation legislation or enforcement), our ability to license our technologies and generate revenues could be impaired.

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If we are not able to attract, recruit and retain qualified personnel, we may not be able to effectively deploy our technologies and may create operational and administrative inefficiencies that hinder our growth strategy.

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We may incur greater tax liability than anticipated which could adversely affect our financial condition and operating results.

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Our international revenues subject us to additional risks and costs. Further, our failure to comply with complex laws and regulations could have a material adverse effect on our operations.

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We may not be able to continue to derive significant revenues from third party gaming peripheral makers for video gaming platforms. Automobiles incorporating our technologies are subject to lengthy development periods, making it difficult to predict when and whether we will receive royalties for these product types.

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If our licensees’ efforts fail to generate consumer demand, our revenue may be adversely affected.

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Our business may suffer if third parties assert that we violate their IP rights

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Our business and operations could suffer in the event of any actual or perceived security breaches.

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If we are unable to maintain open-source compliant products (or our products contain undetected errors), our ability to license our technologies and generate revenues may be impaired.

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Our business depends in part on access to third-party platforms and technologies. If such access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change, our business and operating results could be adversely affected.

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Our technologies may contain undetected errors and we may fail to adequately protect personal information, which could harm our reputation and future sales.

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If we fail to establish and maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our business and our stock price. We have not been in compliance with SEC reporting requirements and Nasdaq continued listing rules. If we are unable to remain in compliance, there may be a material adverse effect on the Company and our stockholders.

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Our consolidated variable interest entity, Barnes & Noble Education, is a public company which may expose us to additional costs, and our management may be required to devote substantial time to compliance initiatives. Changes in Barnes & Noble Education’s relationships with significant clients and suppliers could have a material adverse impact on its business. Tariffs, trade wars and other restrictions may have a material adverse impact on our financial condition and results of operations.

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If Barnes & Noble Education fails to maintain proper and effective internal controls, our business and financial condition could be materially adversely impacted.

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If Barnes & Noble Education is unable to remain in compliance, there may be a material adverse effect on Barnes & Noble Education and the Company. Barnes & Noble Education’s failure to prepare and timely file its periodic reports with the SEC limits its access to the public markets to raise debt or equity capital, may impact its ability to obtain alternative financing, and could have negative consequences under the terms of its existing credit agreements.

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Our quarterly revenues and operating results are volatile, and if our future results are below expectations, the price of our common stock is likely to decline. Our stock price may fluctuate regardless of our performance.

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Future sales of our equity could result in significant dilution to our existing stockholders and depress the market price of our common stock.

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We may elect to purchase marketable securities, or digital or alternative currencies, as part of our capital allocation or investment strategy; if purchased, our financial results and the market price of our common stock may be affected by the price of these alternative investments, which may be highly volatile.

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Any stock repurchase program could affect our stock price and add volatility. Any decision to reduce or discontinue the payment of cash dividends to our stockholders could cause the market price of our common stock to decline significantly.

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Changes in financial accounting standards or policies may affect our reported financial condition or results of operations.

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Our business is subject to changing regulations regarding corporate governance and other compliance areas that will increase both our costs and the risk of noncompliance. Further, provisions in our charter documents and Delaware law could prevent or delay a change in control, which could reduce the market price of our common stock.