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What changed in IMMERSION CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of IMMERSION CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+221 added−526 removedSource: 10-K (2026-03-12) vs 10-K (2024-03-11)

Top changes in IMMERSION CORP's 2025 10-K

221 paragraphs added · 526 removed · 118 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

93 edited+75 added−31 removed146 unchanged
Biggest changeInternational operations are subject to a number of difficulties, risks, and special costs, including: • compliance with multiple, conflicting and changing governmental laws and regulations; • laws and business practices favoring local competitors; • foreign exchange and currency risks; • changing import and export restrictions, duties, tariffs, quotas and other barriers; • difficulties staffing and managing foreign operations; • business risks, including fluctuations in demand for our technologies and products and the cost and effort to conduct international operations and travel abroad to promote international distribution and overall global economic conditions; • multiple conflicting and changing tax laws and regulations; • political and economic instability; • the possibility of an outbreak of hostilities or unrest in markets where major customers are located, including Korea; • potential economic disruption based on the United Kingdom’s recent withdrawal from the European Union, commonly referred to as Brexit ; and • the possibility of volatility in financial markets as certain market participants transition away from the London Inter-bank Offered Rate (LIBOR). 17 Table of Contents In addition, since we derive a significant portion of our revenues from licenses and royalties from our haptic patents in foreign countries, our ability to maintain and grow our revenue in foreign countries, such as China, will depend in part on our ability to obtain additional patent rights in these countries and our ability to effectively enforce such patents and contractual rights in these countries, which is uncertain.
Biggest changeInternational operations are subject to a number of difficulties, risks, and special costs, including: • compliance with multiple, conflicting and changing governmental laws and regulations; • laws and business practices favoring local competitors; • foreign exchange and currency risks; • changing import and export restrictions, duties, tariffs, quotas and other barriers; • business risks, including fluctuations in demand for our technologies and products and the cost and effort to conduct international operations and travel abroad to promote international distribution and overall global economic conditions; • multiple conflicting and changing tax laws and regulations; • political and economic instability; and • the possibility of an outbreak of hostilities or unrest in markets where major customers are located, including Korea.
Any potential changes in the law, the IP rights policies of standards bodies or other developments that reduce the number of forums available or the type of relief available in such forums (such as injunctive relief), restrict permissible licensing practices (such as our ability to license on a worldwide portfolio basis) or that otherwise cause us to seek alternative forums (such as arbitration or state court), could make it more difficult for us to enforce our patents, whether in adversarial proceedings or in negotiations.
Any potential changes in the law, the IP rights policies of standards bodies or other developments that reduce the number of forums available or the type of relief available in such forums 22 (such as injunctive relief), restrict permissible licensing practices (such as our ability to license on a worldwide portfolio basis) or that otherwise cause us to seek alternative forums (such as arbitration or state court), could make it more difficult for us to enforce our patents, whether in adversarial proceedings or in negotiations.
While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible and our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible and our exposure for violating these laws increases as our international presence expands and as we increase sales in foreign jurisdictions.
The market price of our common stock has been, and in the future could be, significantly affected by our operations as well such as: actual or anticipated fluctuations in operating results; announcements of technical innovations; announcements regarding litigation in which we are involved; the acquisition or loss of customers; changes by game console manufacturers to not include touch-enabling capabilities in their products; new products or new contracts; sales or the perception in the market of possible sales of large number of shares of our common stock by insiders or others; stock repurchase activity; sale of stock by the company, changes in securities analysts’ recommendations; personnel changes; changing circumstances regarding competitors or their customers; governmental regulatory action or inaction; developments with respect to patents or proprietary rights; inclusion in or exclusion from various stock indices; increased tariffs and international trade disputes; and general market conditions.
The market price of our common stock has been, and in the future could be, significantly affected by our operations as well such as: actual or anticipated fluctuations in operating results; announcements regarding litigation in which we are involved; the acquisition or loss of customers; changes by game console manufacturers to not include touch-enabling capabilities in their products; new products or new contracts; sales or the perception in the market of possible sales of large number of shares of our common stock by insiders or others; stock repurchase activity; sale of stock by the company, changes in securities analysts’ recommendations; personnel changes; changing circumstances regarding competitors or their customers; governmental regulatory action or inaction; developments with respect to patents or proprietary rights; inclusion in or exclusion from various stock indices; increased tariffs and international trade disputes; and general market conditions.
Any violation of such laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, and other consequences which may have an adverse effect on our reputation, business, results of operations and financial condition. Our international operations could also increase our exposure to foreign and international laws and regulations.
Any violation of such laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, and other consequences which may have an adverse effect on our reputation, business, results of operations and financial condition. Our international revenues could also increase our exposure to foreign and international laws and regulations.
In addition, while Microsoft, Sony, and Nintendo are among our licensees in the gaming market, a significant portion of our gaming royalty revenues comes from third-party peripheral makers who make licensed gaming products designed for use with popular video game console systems from such video game console makers.
While Microsoft, Sony, and Nintendo are among our licensees in the gaming market, a significant portion of our gaming royalty revenues comes from third-party peripheral makers who make licensed gaming products designed for use with popular video game console systems from such video game console makers.
Evolving and changing definitions of personal data and personal information within the U.S., the European Union (“EU”), and elsewhere, especially relating to classification of IP addresses, machine identification, location data and other information, may limit or inhibit our ability to operate or expand our business.
Evolving and changing definitions of personal data and personal information within the U.S., the European Union (“EU”), and elsewhere, especially relating to classification of 28 IP addresses, machine identification, location data and other information, may limit or inhibit our ability to operate or expand our business.
In addition, we rely on multiple software programmers to design our proprietary products and technologies and we cannot be certain that open source software is not inadvertently incorporated into products and technologies we intend to keep proprietary.
In addition, we rely on software programmers to design our proprietary products and technologies and we cannot be certain that open-source software is not inadvertently incorporated into products and technologies we intend to keep proprietary.
Already, some of our proprietary technologies incorporate open source software that may be subject to open source licenses, which licenses may require that source code subject to the license be released or made available to the public.
Some of our proprietary technologies incorporate open-source software that may be subject to open-source licenses, which licenses may require that source code subject to the license be released or made available to the public.
These factors include: • the impact of disruptions in the supply of electronic components (such as integrated circuits) that our customers incorporate into their products could reduce the amount of royalties that are payable to us; • the establishment or loss of licensing relationships; • the timing and recognition of payments under fixed and/or up-front fee license agreements, as well as other multi-element arrangements; • seasonality in the demand for our technologies or products or our licensees’ products; • the timing of our expenses, including costs related to litigation, stock-based awards, acquisitions of technologies, or businesses; • developments in and costs of pursuing or settling any pending litigation; • the timing of introductions and market acceptance of new technologies and products and product enhancements by us, our licensees, our competitors, or their competitors; • errors in our licensees’ royalty reports, and corrections and true-ups to royalty payments and royalty rates from prior periods. 25 Table of Contents Our stock price may fluctuate regardless of our performance.
These factors include: • the impact of disruptions in the supply of electronic components (such as integrated circuits) that our customers incorporate into their products could reduce the amount of royalties that are payable to us; • the establishment or loss of licensing relationships; • the timing and recognition of payments under fixed and/or up-front fee license agreements, as well as other multi-element arrangements; • seasonality in the demand for our technologies or products or our licensees’ products; • the timing of our expenses, including costs related to litigation, stock-based awards, acquisitions of technologies, or businesses; • developments in and costs of pursuing or settling any pending litigation; • the timing of introductions and market acceptance of new technologies and products and product enhancements by us, our licensees, our competitors, or their competitors; • errors in our licensees’ royalty reports, and corrections and true-ups to royalty payments and royalty rates from prior periods. 33 Our stock price may fluctuate regardless of our performance.
If we determine that it is more likely than not that we will not prevail against the claims from the Korean tax authorities, or a portion thereof, then we would estimate the anticipated additional tax expense associated with that outcome and record it as additional income tax expense in our Consolidated Statements of Income and Comprehensive Income in the period of the new determination.
If we determine that it is more likely than not that we will not prevail against the claims from the Korean tax authorities, or a portion thereof, then we would estimate the anticipated additional tax expense associated with that outcome and record it as additional income tax expense in our Consolidated Statements of Operations in the period of the new determination.
Additionally, the implementation of these initiatives impose additional costs on us. If our ESG initiatives fail to satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to license technology and sell services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquiror could be negatively impacted.
Additionally, the implementation of these initiatives impose additional costs on us. If our ESG initiatives fail to satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to license technology and sell services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquirer could be negatively impacted.
Changes in, or interpretations of, tax rules and regulations may adversely affect our income tax provision. In addition, our operations outside the United States may be affected by changes in trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including the FCPA and local laws prohibiting corrupt payments by our employees, vendors, or agents.
Changes in, or interpretations of, tax rules and regulations may adversely affect our income tax provision. In addition, our revenues outside the United States may be affected by changes in trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including the FCPA and local laws prohibiting corrupt payments by our employees, vendors, or agents.
In addition, foreign countries may impose tariffs, duties, price controls, or other restrictions on foreign currencies or trade barriers, any of which could make it more difficult for us to conduct our business internationally. Our international operations could also increase our exposure to complex international tax rules and regulations.
In addition, foreign countries may impose tariffs, duties, price controls, or other restrictions on foreign currencies or trade barriers, any of which could make it more difficult for us to conduct our business internationally. Our international revenues could also increase our exposure to complex international tax rules and regulations.
The discontinuation of such product lines by our customers has resulted in and may in the future result in lower shipments of products that incorporate our haptic innovations which in turn has had and may continue to have a material adverse effect on our business, financial condition and results of operations.
The discontinuation of such product lines by our customers has resulted in and may in the future result in lower shipments of products that incorporate our haptic patents which in turn has had and may continue to have a material adverse effect on our business, financial condition and results of operations.
Developing open source compliant products without imperiling the IP rights upon which our licensing business depends may prove difficult under certain circumstances, thereby placing us at a competitive disadvantage for new product designs.
Maintaining open-source compliant products without imperiling the IP rights upon which our licensing business depends may prove difficult under certain circumstances, thereby placing us at a competitive disadvantage for new product designs.
Many of our current and future technologies are designed for use with third-party platforms and technologies. Our business relies on our access to these platforms and technologies of third parties, which can be withdrawn, denied or not be available on terms acceptable to us.
Many of our technologies are designed for use with third-party platforms and technologies. Our business relies on our access to these platforms and technologies of third parties, which can be withdrawn, denied or not be available on terms acceptable to us.
Our royalties from licenses and therefore the growth of our business, are dependent, in part, on the success of our customers’ products that incorporate our haptic innovations. Many of the industries we license into are highly competitive.
Our royalties from licenses and therefore the growth of our business, are dependent, in part, on the success of our customers’ products that incorporate our haptic patents. Many of the industries we license into are highly competitive.
To the extent that we do not ultimately prevail in our appeal in the Korean courts with respect to the LGE case, the applicable deposits included in Long-term deposits would be recorded as additional income tax expense on our Consolidated Statements of Income and Comprehensive Income , in the period in which we do not ultimately prevail.
To the extent that we do not ultimately prevail in our appeal in the Korean courts with respect to the LGE case, the applicable deposits included in Long-term deposits would be recorded as additional income tax expense on our Consolidated Statements of Operations , in the period in which we do not ultimately prevail.
In addition, if potential customers or customers with expiring agreements view the loss of one of our major customers as an indicator of the value of our software and/or the strength of our intellectual property, they may choose not to take or renew a license which could adversely affect our operating results. 11 Table of Contents If our customers discontinue product lines that incorporate our technology, our operating results may be negatively impacted.
In addition, if potential customers or customers with expiring agreements view the loss of one of our major customers as an indicator of the value of our software and/or the strength of our intellectual property, they may choose not to take or renew a license which could adversely affect our operating results. 20 If our customers discontinue product lines that incorporate our technology, our operating results may be negatively impacted.
In the event that it is determined that we are obligated to further indemnify Samsung and/or LGE for withholding taxes imposed by the Korean tax authorities, receive further requests for reimbursement of tax liabilities from other licensees, we could incur significant expenses. Our international operations subject us to additional risks and costs.
In the event that it is determined that we are obligated to further indemnify LGE for withholding taxes imposed by the Korean tax authorities, receive further requests for reimbursement of tax liabilities from other licensees, we could incur significant expenses. Our international revenues subject us to additional risks and costs.
In addition, since October 16, 2017, we have ongoing disputes related to LGE’s request that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE’s royalty payments to Immersion Software Ireland from 2012 to 2014.
For example, since October 16, 2017, we have ongoing disputes related to LGE’s request that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE’s royalty payments to Immersion Software Ireland from 2012 to 2014.
For additional background on this matter, please see Part I, Item 3 Legal Proceedings . 16 Table of Contents Based on the developments in the LGE cases, we regularly reassess the likelihood that we will prevail in the claims from the Korean tax authorities with respect to the LGE case.
For additional background on this matter, please see Part I, Item 3 Legal Proceedings. For additional background on this matter, please see Part I, Item 3 Legal Proceedings . Based on the developments in the LGE cases, we regularly reassess the likelihood that we will prevail in the claims from the Korean tax authorities with respect to the LGE case.
The outbreak resulted in governments around the world repeatedly implementing stringent measures to help control the spread of the virus, including quarantines, travel restrictions, business curtailments, school closures, and other measures, which has resulted in a significant number of layoffs or furloughs of employees, and/or other negative economic conditions in many of the countries in which we operate.
For example, the outbreak of COVID-19 resulted in governments around the world repeatedly implementing stringent measures to help control the spread of the virus, including quarantines, travel restrictions, business curtailments, school closures, and other measures, which resulted in a significant number of layoffs or furloughs of employees, and/or other negative economic conditions in many of the countries in which we operate.
Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19.
Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies.
A limited number of customers account for a significant portion of our revenue, and the loss of major customers could harm our operating results. A significant amount of our revenue is derived from a limited number of customers, and we expect that this will continue to be the case in the future.
A limited number of customers account for a significant portion of our revenue, and the loss of major customers could harm our operating results. Historically, a significant amount of our revenue has been derived from a limited number of customers, and we expect that this will continue to be the case in the future.
To the extent that we determine that it is more likely than not that we will prevail against the claims from the Korean tax authorities, then no additional tax expense is provided for in our Consolidated Statements of Income and Comprehensive Income .
To the extent that we determine that it is more likely than not that we will prevail against the claims from the Korean tax authorities, then no additional tax expense is provided for in our Consolidated Statements of Operations .
In Montreal, Canada, and other geographical regions, candidates and employees view the stock component of compensation as an important factor in deciding both whether to accept an employment opportunity as well as whether to remain in a position at a company.
In certain geographical regions, candidates and employees view the stock component of compensation as an important factor in deciding both whether to accept an employment opportunity as well as whether to remain in a position at a company.
In 2018, California enacted the California Consumer Privacy Act , which was amended in 2020 by the California Privacy Rights Act (“CP R A”), legislation that, among other things, requires covered companies to provide numerous disclosures to California consumers and affords such consumers new abilities to opt-out of certain sales and sharing of personal information.
For example in 2018, California enacted the California Consumer Privacy Act, which was amended in 2020 by the California Privacy Rights Act (“CPRA”), legislation that, among other things, requires covered companies to provide numerous disclosures to California consumers and affords such consumers new abilities to opt-out of certain sales and sharing of personal information.
We cannot fully predict the impact of the se numerous state laws on our business or operations, but the laws may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comp ly.
We cannot fully predict the impact of these numerous state laws on our business or operations, but the laws may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
Such violation could result in penalties, including prohibiting us from exporting our products to one or more countries, and could materially and adversely affect our business. 18 Table of Contents We may not be able to continue to innovate in the gaming market or continue to derive significant revenues from third party gaming peripheral makers for video gaming platforms.
Such violation could result in penalties, including prohibiting us from exporting our products to one or more countries, and could materially and adversely affect our business. We may not be able to continue to derive significant revenues from third party gaming peripheral makers for video gaming platforms.
If we determine to purchase digital or alternative currencies as part of our capital allocation and investment strategy, these investments would be less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents, and our financial results and the market price of our common stock may be affected by the price of these digital or alternative currencies.
The value of futures and options also depends upon the price of the securities underlying them. 34 If we determine to purchase digital or alternative currencies as part of our capital allocation and investment strategy, these investments would be less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents, and our financial results and the market price of our common stock may be affected by the price of these digital or alternative currencies.
Specific challenges that we face related to negotiations with existing licensees include: • difficulties in persuading existing customers to renew a license to our patents or other technologies (including delays associated with existing customers questioning the scope, validity, or enforceability) without the expenditure of significant resources; • difficulties in persuading existing customers that they need a license to our patents as individual patents expire or become limited in scope, declared unenforceable or invalidated; • reluctance of existing customers to renew their license to our patents or other technologies because other companies are not licensed; • difficulties in renewing gaming licenses if video game console makers choose not to license third parties to make peripherals for their new consoles, if video game console makers no longer require peripherals to play video games, if video game console makers no longer utilize technology in the peripherals that are covered by our patents or if the overall market for video game consoles deteriorates substantially; • the competition we may face from third parties, including the internal design and development teams of existing licensees; and • inability of current licensees to ship certain devices if they are involved in IP infringement claims by third parties that ultimately prevent them from shipping products or that impose substantial royalties on their products. 10 Table of Contents If we are unable to enter into new licensing arrangements for our patents on favorable terms that are consistent with our business objectives, our royalty and license revenue and cash flow could be materially adversely affected.
Specific challenges that we face related to negotiations with existing licensees include: • difficulties in persuading existing customers to renew a license to our patents or other technologies (including delays associated with existing customers questioning the scope, validity, or enforceability) without the expenditure of significant resources; • difficulties in persuading existing customers that they need a license to our patents as individual patents expire or become limited in scope, declared unenforceable or invalidated; • reluctance of existing customers to renew their license to our patents or other technologies because other companies are not licensed; • difficulties in renewing gaming licenses if video game console makers choose not to license third parties to make peripherals for their new consoles, if video game console makers no longer require peripherals to play video games, if video game console makers no longer utilize technology in the peripherals that are covered by our patents or if the overall market for video game consoles deteriorates substantially; • the competition we may face from third parties, including the internal design and development teams of existing licensees; and 19 • inability of current licensees to ship certain devices if they are involved in IP infringement claims by third parties that ultimately prevent them from shipping products or that impose substantial royalties on their products.
For instance, the semiconductor industry has over the past several years faced significant global supply chain issues as a result of the impact of the COVID-19 pandemic and the related imposition of government restrictions on staffing and facility operations, supply chain shortages, and other disruptions.
For instance, the semiconductor industry has over the past several years faced significant global supply chain issues as a result of the impact of the COVID-19 pandemic and the related imposition of government restrictions on staffing and facility operations, supply chain shortages, and other disruptions and may continue to face global supply chain issues as the result of tariffs and international trade tensions.
Price movements of commodities, futures and options contracts are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies. The value of futures and options also depends upon the price of the securities underlying them.
Price movements of commodities, futures and options contracts are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies.
For example, for the year ended December 31, 2023 Samsung accounted for a significant amount of our total revenues. In addition, we cannot be certain that other customers that have accounted for significant revenue in past periods, individually or as a group, will continue to generate similar revenue in any future period.
For example, for the fiscal year ended April 30, 2025 the top five customers accounted for a significant amount of our total revenues. In addition, we cannot be certain that other customers that have accounted for significant revenue in past periods, individually or as a group, will continue to generate similar revenue in any future period.
Our success largely depends on our ability to integrate any new senior management within our organization in order to achieve our operating objectives, and changes in other key positions may affect our financial performance and results of operations as new members of management become familiar with our business.
Our success largely depends on our ability to integrate any new senior management within our organization in order to achieve our operating objectives, and changes in other key positions may affect our financial performance and results of operations as new members of management become familiar with our business. General employee turnover also presents the risks discussed in this paragraph.
Patent expiration could adversely affect our ability to enter into or renew licensing arrangements and future product development, which could adversely affect our operating results and financial position.
Patent expiration or adverse rulings on the validity of our patents could adversely affect our ability to enter into or renew licensing arrangements and future product development, which could adversely affect our operating results and financial position.
In addition, our customers, potential customers, and business partners would likely face similar challenges, which could materially and adversely affect the level of business they conduct with us or the sales volume of products that include our technology. Our technologies are complex and may contain undetected errors, which could harm our reputation and future sales.
In addition, our customers, potential customers, and business partners would likely face similar challenges, which could materially and adversely affect the level of business they conduct with us or the sales volume of products that include our technology.
We have established stock repurchase programs in the past, and on December 29, 2022, our Board of Directors (“Board”) approved a stock repurchase program of up to $50 million of our common stock for a period of up to twelve months, which the Board subsequently extended to December 29, 2024.
Any stock repurchase program could affect our stock price and add volatility. We have established stock repurchase programs in the past, and on December 29, 2022, our Board approved a stock repurchase program of up to $50 million of our common stock for a period of up to twelve months, which the Board subsequently extended to December 29, 2026.
Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital. We have established corporate social responsibility programs aligned with sound environmental, social and governance principles.
Unfavorable ESG ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital. 29 We have established corporate social responsibility programs aligned with sound environmental, social and governance principles.
Additionally, to the extent that we are already invested in the entities that are the subject of our acquisitions and other activities, our actions may be temporarily disruptive to the value of the investments, which could adversely affect our financial condition. 14 Table of Contents In addition, once completed, acquisitions may entail further risks, including: unanticipated costs and liabilities of the acquired businesses, including environmental liabilities, that could materially adversely affect our results of operations; increased regulatory compliance relating to the acquired business; difficulties in assimilating acquired businesses, their personnel and their financial reporting systems, which would prevent the expected benefits from the transaction from being realized within the anticipated timeframe; negative effects on existing business relationships with suppliers and customers; and loss of key employees of the acquired businesses.
In addition, once completed, acquisitions may entail further risks, including: unanticipated costs and liabilities of the acquired businesses, including environmental liabilities, that could materially adversely affect our results of operations; increased regulatory compliance relating to the acquired business; difficulties in assimilating acquired businesses, their personnel and their financial reporting systems, which would prevent the expected benefits from the transaction from being realized within the anticipated timeframe; negative effects on existing business relationships with suppliers and customers; and loss of key employees of the acquired businesses.
If our licensees’ products fail to achieve commercial success, or if their products are recalled because of quality control problems or if they do not timely ship products incorporating our touch-enabling technologies or fail to achieve strong sales, our revenues could decline.
If our licensees’ products fail to achieve commercial success, or if their products are recalled because of quality control problems or if they do not timely ship products incorporating our touch-enabling technologies or fail to achieve strong sales, our revenues could decline. Our business may suffer if third parties assert that we violate their IP rights.
Our revenue growth is largely dependent on our ability to enter into new licensing arrangements. If we are unable to obtain new licenses on terms consistent with our business objectives, our licensing revenue and cash flow could decline.
If we are unable to obtain new licenses on terms consistent with our business objectives, our licensing revenue and cash flow could decline.
Any failure to provide high quality and reliable technologies, whether caused by our own failure or failures of our suppliers or customers, could damage our reputation and reduce demand for our technologies. Our technologies have in the past contained, and may in the future contain, undetected errors or defects.
Our technologies are complex and may contain undetected errors, which could harm our reputation and future sales. Any failure to provide high quality and reliable technologies, whether caused by our own failure or failures of our suppliers or customers, could damage our reputation and reduce demand for our technologies.
The product development process for automobiles is very lengthy, sometimes longer than four years. We may not earn royalty revenue on our automotive device technologies unless and until products featuring our technologies are shipped to customers, which may not occur until several years after we enter into an agreement with a manufacturer or a supplier to a manufacturer.
We may not earn royalty revenue on our automotive device technologies unless and until products featuring our technologies are shipped to customers, which may not occur until several years after we enter into an agreement with a manufacturer or a supplier to a manufacturer.
If our revenues grow more slowly than we anticipate or if our operating expenses exceed our expectations, we may not maintain profitability. We may incur greater tax liability than we have provided for or have anticipated and may incur additional tax liability due to certain indemnification agreements with certain licensees, which could adversely affect our financial condition and operating results.
We may incur greater tax liability than we have provided for or have anticipated and may incur additional tax liability due to certain indemnification agreements with certain licensees, which could adversely affect our financial condition and operating results.
For additional background on this matter, please see Part I, Item 3 Legal Proceedings.
For additional background on our pending litigation, please see Part I Item 3 Legal Proceedings.
We have incurred and expect to incur significant expenses in an effort to prevent security breaches and other security incidents. 21 Table of Contents We cannot be certain that our insurance coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
We cannot be certain that our insurance coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
We anticipate that currently pending and any future legal proceedings will continue to be costly, especially in cases where our adverse parties have access to relatively more significant resources.
In some cases, we have and may become party to legal proceedings in which we are adverse to companies that have significantly greater financial resources than us. We anticipate that currently pending and any future legal proceedings will continue to be costly, especially in cases where our adverse parties have access to relatively more significant resources.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation. 27 If we are unable to maintain open-source compliant products, our ability to license our technologies and generate revenues may be impaired.
Any stock repurchase program could affect our stock price and add volatility.
Any repurchases by us pursuant to our stock repurchase program could affect our stock price and add volatility.
Any delay or failure on our part to remedy identified material weaknesses or any additional delays or errors in our financial reporting controls or procedures could cause our financial reporting to be unreliable, could have a material adverse effect on our business, results of operations, or financial condition, and could have a substantial adverse impact on the trading price of our common stock. 24 Table of Contents Increasing attention on environmental, social and governance (“ESG”) matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks.
Any delay or failure on our part to remedy the identified material weakness or any additional delays or errors in our financial reporting controls or procedures could cause our financial reporting to be unreliable, could have a material adverse effect on our business, results of operations, or financial condition, and could have a substantial adverse impact on the trading price of our common stock.
In addition, as laws, regulations and standards continue to change, often with varying degrees of specificity and clarity, we could face uncertainty regarding best practices and compliance with such evolving regimes, which could result in higher costs from increased attention paid to disclosure and governance practices and controls. 28 Table of Contents 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.
In addition, as laws, regulations and standards continue to change, often with varying degrees of specificity and clarity, we could face uncertainty regarding best practices and compliance with such evolving regimes, which could result in higher costs from increased attention paid to disclosure and governance practices and controls.
Any repurchases by us pursuant to our stock repurchase program could affect our stock price and add volatility. There can be no assurance that any repurchases will be made under any program, nor is there any assurance that a sufficient number of shares of our common stock will be repurchased to satisfy the market’s expectations.
There can be no assurance that any repurchases will be made under any program, nor is there any assurance that a sufficient number of shares of our common stock will be repurchased to satisfy the market’s expectations. Furthermore, there can be no assurance that any repurchases conducted under any plan will be made at the best possible price.
Undiscovered vulnerabilities in our technologies or products could expose our customers to hackers or other unscrupulous third parties who develop and deploy viruses, worms and other malicious software programs that could attach to our products or technologies.
Some errors in our technologies may only be discovered after a customer’s product incorporating our technologies has been shipped to customers. Undiscovered vulnerabilities in our technologies or products could expose our customers to hackers or other unscrupulous third parties who develop and deploy viruses, worms and other malicious software programs that could attach to our products or technologies.
The process for determining whether impairment is other-than-temporary usually requires difficult, subjective judgments about the future financial performance of the issuer.
Any of the foregoing factors could cause other-than-temporary impairment in future periods and result in realized losses. The process for determining whether impairment is other-than-temporary usually requires difficult, subjective judgments about the future financial performance of the issuer.
If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or change, our business and operating results could be adversely affected. 22 Table of Contents The uncertain economic and political environment could reduce our revenues and could have an adverse effect on our financial condition and results of operations.
If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or change, our business and operating results could be adversely affected.
However, representations may not be accurate, and indemnification may not provide adequate compensation for breach of the representations. If we cannot or do not license the infringed IP at all or on reasonable terms, or substitute similar technology from another source, our business, financial position, results of operations or cash flows could suffer.
If we cannot or do not license the infringed IP at all or on reasonable terms, or substitute similar technology from another source, our business, financial position, results of operations or cash flows could suffer. Our business and operations could suffer in the event of any actual or perceived security breaches.
Changes in financial accounting standards or policies may affect our reported financial condition or results of operations and, in certain cases, could cause a decline and/or fluctuation in the price of our common stock.
Additionally, we are permitted to and could discontinue any stock repurchase program at any time and any such discontinuation could cause the market price of our stock to decline. 35 Changes in financial accounting standards or policies may affect our reported financial condition or results of operations and, in certain cases, could cause a decline and/or fluctuation in the price of our common stock.
Because we have a fixed payment license with Microsoft, our royalty revenue from licensing in the gaming market and other consumer markets has previously declined and may further do so if Microsoft increases its volume of sales of touch-enabled products at the expense of our other licensees.
Finally, as some of our litigated patents related to video game peripherals have expired, our gaming royalty revenues will likely decline until we are successful in proving the relevance of our patents for this market. 25 Because we have a fixed payment license with Microsoft, our royalty revenue from licensing in the gaming market and other consumer markets has previously declined and may further do so if Microsoft increases its volume of sales of touch-enabled products at the expense of our other licensees.
Even though government restrictions have loosened, integrated circuit manufacturers continued to struggle to meet the new surge in demand. If our customers experience significant shortages of electronic components that result in a reduction in our revenues, then our business, results of operations, financial condition, cash flows, and stock price may be adversely affected.
If our customers experience significant shortages of electronic components that result in a reduction in our revenues, then our business, results of operations, financial condition, cash flows, and stock price may be adversely affected.
Developments in an audit or litigation could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.
Developments in an audit or litigation could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. 36 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 .
Furthermore, there can be no assurance that any repurchases conducted under any plan will be made at the best possible price. The existence of our stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
The existence of our stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
Although we have announced regular cash dividend payments and a special dividend, we are under no obligation to pay cash dividends to our stockholders in the future at historical levels or at all. The declaration and payment of any future dividends is at the discretion of our Board.
On November 14, 2022, we announced that our Board declared a quarterly dividend and have consistently paid such quarterly dividend since such dates. Although we have announced regular cash dividend payments and a special dividend, we are under no obligation to pay cash dividends to our stockholders in the future at historical levels or at all.
A spects of the CPRA and its interpretation remain unclear at this time. In addition, the following states have enacted their own similar privacy legislation, which privacy legislation has now gone into effect: Colorado, Connecticut, Utah, and Virginia.
Aspects of the CPRA and its interpretation remain unclear at this time. Numerous states have enacted their own similar privacy legislation, which privacy legislation has now gone into effect and other states have proposed privacy legislation, which may subsequently go into effect.
Our technologies are complex, and we rely upon our employees to identify new sales and business development opportunities, support and maintain positive relationships with our licensees. Accordingly, we need to be able to attract, recruit, integrate, and retain personnel, including individuals highly specialized in patent licensing in order to deploy our technologies and to sustain revenue growth.
If we are not able to attract, recruit and retain qualified personnel, we may not be able to effectively deploy our technologies. Our technologies are complex, and we rely upon our employees to identify new sales and business development opportunities, support and maintain positive relationships with our licensees.
Any reduction or discontinuance by us of the payment of cash dividends could cause the market price of our common stock to decline significantly.
The declaration and payment of any future dividends is at the discretion of our Board. Any reduction or discontinuance by us of the payment of cash dividends could cause the market price of our common stock to decline significantly. 37 Item 1B. Unresolved Staff Comments None.
The CJEU and FDPIC decisions or other legal challenges relating to cross-border data transfer between various countries and economic areas may serve as a basis for our personal data handling practices to be challenged and may otherwise adversely impact our business, financial condition and operating results. 23 Table of Contents Further, in June 2016, the United Kingdom voted to leave the European Union, commonly referred to as “Brexit,” and on January 31, 2020, the United Kingdom ceased to be an EU Member State.
The CJEU and FDPIC decisions or other legal challenges relating to cross-border data transfer between various countries and economic areas may serve as a basis for our personal data handling practices to be challenged and may otherwise adversely impact our business, financial condition and operating results.
Company Risks Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19.
Overall, if our acquisition strategy is not successful or if acquisitions are not well integrated into our existing operations, the Company’s profitability, business, and financial condition could be negatively affected. 18 Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies.
Our licenses with semiconductor and actuator manufacturers may cause confusion as to our licensing model and may prevent us from enforcing our patents based on the patent exhaustion doctrine, the implied license doctrine, or other legal doctrines. 13 Table of Contents We also license our software and/or patents to semiconductor and actuator manufacturers who incorporate our technologies into their integrated circuits or actuators for use in certain electronic devices.
Our licenses with semiconductor and actuator manufacturers may cause confusion as to our licensing model and may prevent us from enforcing our patents based on the patent exhaustion doctrine, the implied license doctrine, or other legal doctrines.
If our engagement efforts are not successful or are significantly delayed, we may be unsuccessful in our innovation efforts in the gaming market, which could have an adverse effect on our revenues.
We seek to engage with third party gaming peripheral makers to utilize our advanced haptic technologies and expand the use of haptics across the gaming market. If our engagement efforts are not successful or are significantly delayed, we may be unsuccessful in our efforts in the gaming market, which could have an adverse effect on our revenues.
A key part of our business strategy is to license our software and patents (and other IP) to companies that manufacture and sell products incorporating our touch-enabling technologies. In each of the years ended December 31, 2023 and 2022 , 99% of our total revenues were royalty and license revenues.
A key part of our business strategy has been to license our software and patents (and other IP) to companies that manufacture and sell products incorporating our touch-enabling technologies.
Competition for talented candidates is intense, especially for individuals with patent licensing, and haptics expertise, and we may not be successful in attracting, integrating, and continuing to motivate such qualified personnel.
Competition for talented candidates is intense, especially for individuals with patent licensing, and haptics expertise, and we may not be successful in attracting, integrating, and continuing to motivate such qualified personnel. In this competitive recruiting environment, especially when hiring in geographical regions that have higher costs of living, our compensation packages need to be attractive to the candidates we recruit.
Any future changes in Generally Accepted Accounting Principles ("GAAP") that require us to change the manner in which we account for any bitcoins or other cryptocurrencies that we may purchase could have a material adverse effect on our financial results and the market price of our common stock. 27 Table of Contents Historically, the digital or alternative currency markets has been characterized by more price volatility, less liquidity, and lower trading volumes compared to sovereign currencies markets, as well as relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, and various other risks inherent in its entirely electronic, virtual form and decentralized network.
Historically, the digital or alternative currency markets has been characterized by more price volatility, less liquidity, and lower trading volumes compared to sovereign currencies markets, as well as relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, and various other risks inherent in its entirely electronic, virtual form and decentralized network.
These errors or defects may increase as our technologies are introduced into new devices, markets and applications, including the automotive market and the sexual wellness market, or as new versions are released. Some errors in our technologies may only be discovered after a customer’s product incorporating our technologies has been shipped to customers.
Our technologies have in the past contained, and may in the future contain, undetected errors or defects. These errors or defects may increase as our technologies are introduced into new devices, markets and applications, including the automotive market and the sexual wellness market, or as new versions are released.
While our relationships with these manufacturers increase our distribution channels by leveraging their sales channels, this could introduce confusion into our licensing model which has traditionally been focused on licensing the OEM.
We also license our software and/or patents to semiconductor and actuator manufacturers who incorporate our technologies into their integrated circuits or actuators for use in certain electronic devices. While our relationships with these manufacturers increase our distribution channels by leveraging their sales channels, this could introduce confusion into our licensing model which has traditionally been focused on licensing the OEM.
We are or may become involved in litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices that are expensive, disruptive and time consuming, and will continue to be, until resolved, and regardless of whether we are ultimately successful, could adversely affect our business. 12 Table of Contents If we believe that a third party is required, but has declined, to license our intellectual property in order to manufacture, sell, offer for sale, import or use products, we have in the past and may in the future commence legal or administrative action against such third party.
We are or may become involved in litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices that are expensive, disruptive and time consuming, and will continue to be, until resolved, and regardless of whether we are ultimately successful, could adversely affect our business.
In the event that Microsoft increases its share of these markets relative to companies from whom we are not precluded from collecting royalty payments, our royalty revenue from other licensees in these market segments may decline. 19 Table of Contents Automobiles incorporating our touch-enabling technologies are subject to lengthy product development periods, making it difficult to predict when and whether we will receive royalties for these product types.
In the event that Microsoft increases its share of these markets relative to companies from whom we are not precluded from collecting royalty payments, our royalty revenue from other licensees in these market segments may decline.
In addition, we collect, use and maintain our own confidential and proprietary business information, including information that may be personal information, and maintain intellectual property internally on our systems. Computer malware, ransomware, cyberattacks and other threats and methods used to gain unauthorized access to our information technology networks and systems have become more prevalent and sophisticated.
Computer malware, ransomware, cyberattacks and other threats and methods used to gain unauthorized access to our information technology networks and systems have become more prevalent and sophisticated.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K. Governance Disclosure. Our Board is periodically informed of our risk management process, including risks from cybersecurity threats.
Biggest changeWe have not encountered cybersecurity incidents that have materially impaired our operations or financial standing. For additional information regarding risks from cybersecurity threats, please refer to Item 1A. Risk Factors , in this Annual Report on Form 10-K. Governance Disclosure Our Board is periodically informed of our risk management process, including risks from cybersecurity threats.
Personnel at all levels and departments are made aware of our cybersecurity policies through trainings. We engage consultants, or other third parties in connection with our risk assessment processes. These service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
Personnel at all levels and departments are made aware of our cybersecurity policies through training. We engage consultants, or other third parties in connection with our risk assessment processes. These service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
Our Chief Financial Officer and IT consultant provide periodic briefings to the audit committee regarding the Company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. Our audit committee provides regular updates to the Board on such reports. 30 Table of Contents
Our Chief Financial Officer and IT consultant provide periodic briefings to the audit committee regarding the Company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. Our audit committee provides regular updates to the Board on such reports. 38

Item 2. Properties

Properties — owned and leased real estate

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Removed
Item 2. Properties We lease a fac ility in Montreal, Canada (the “Montreal Facility”) of approximately 10,000 square feet, for our subsidiary, Immersion Canada Corporation. On June 6, 2022, we entered into a sublease agreement with Innovobot Fund LLP for the Montreal Facility.
Added
Item 2. Properties Immersion Segment We lease approximately 1,390 square feet located at Aventura View Office Building, Suite 610, 2999 N.E. 191st Street, Aventura, Florida, which is our corporate headquarters. For the fiscal year ended April 30, 2025, Immersion’s leases and related activity were not material.
Removed
This sublease commenced on June 8, 2022 and ended on February 27, 2024 which approximated the lease termination date of the original Montreal Facility lease. Both the Montreal Facility lease and the sublease terminated in February 2024.
Added
Barnes & Noble Education Segment Facilities Barnes & Noble Education leases various office space in New Jersey, Missouri, and India and leases warehouse space in Missouri. For Barnes & Noble Education’s physical campus retail operations, it typically has the exclusive right to operate the official physical school bookstore on college campuses through multi-year management operating agreements with its schools.
Removed
We also lease a facility in San Jose, California (the “San Jose Facility”) of approximately 42,000 square feet, which we vacated in the first quarter of 2020. On March 12, 2020, we entered into a sublease agreement with Neato Robotics, Inc. (“Neato”) for the San Jose Facility.
Added
In turn, Barnes & Noble Education pays the school a percentage of store sales and, in some cases, a minimum fixed guarantee.
Removed
This sublease commenced in June 2020 and ended on April 30, 2023 which was the lease termination date of the San Jose Facility. Both the San Jose Facility lease and related sublease ended in April 2023.
Added
These contracts with colleges and universities are typically five years with renewal options, but can range from one to 17 years, and are typically cancellable by either party without penalty upon advance notice ranging from 90 to 180 days depending on the contract.
Removed
On January 26, 2022, we entered into a lease agreement with COFE CIX Aventura, LLC, (the "Aventura Lease") pursuant to which we lease approximately 1,390 square feet located at Aventura View Office Building, Suite 610, 2999 N.E. 191 st Street, Aventura, Florida.
Added
As of April 30, 2025, these contracts for the 653 physical stores that Barnes & Noble Education operates, expire as follows: Contract Terms to Expire During the Fiscal Year Ended April 30, Number of Physical Campus Stores 2026 94 2027 86 2028 54 2029 39 2030 245 2031 and later 135 39
Removed
The term of the Aventura Lease commenced upon the earlier of the following dates: (i) March 1, 2022; and (ii) the date on which we occupy the premises and begin conducting business from the premises, and ends on the last day of the 25 th full calendar month from the commencement date.
Removed
The monthly base rent is $3,359.17 for the first 12 months, $3,459.94 for the following 12 months, and $3,564.19 for the 25 th month. On February 22, 2022, our Board approved this office as our corporate headquarters. See Note 10. Leases of the Notes to Consolidated Financial Statements in Part II Item 8.
Removed
Financial Statements and Supplementary Data of this Annual Report on Form 10-K for more information on our lease obligations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeValve Corporation On May 15, 2023, the Company filed a complaint against Valve Corporation (“Valve”) in the United States District Court for the Western District of Washington.
Biggest changeThe provisional deposits remain recorded on our balance sheet net of estimated impairment charges and will be returned to us to the extent we ultimately prevail in the appeals. 40 Immersion Corporation vs. Valve Corporation (“Valve”) On May 15, 2023, we filed a complaint against Valve in the United States District Court for the Western District of Washington.
The Company had a hearing on April 27, 2023, and the Korea Administrative Court rendered a decision on this matter on June 8, 2023, in which it ruled that the withholding taxes and penalties which were imposed by the Korean tax authorities on LGE should be cancelled with litigation costs to be borne by the Korean tax authorities.
We had a hearing on April 27, 2023, and the Korea Administrative Court rendered a decision on this matter on June 8, 2023, in which it ruled that the withholding taxes and penalties which were imposed by the Korean tax authorities on LGE should be cancelled with litigation costs to be borne by the Korean tax authorities.
On March 19, 2019, the Korea Tax Tribunal issued its ruling in which it decided not to accept our arguments with respect to the Korean tax authorities’ assessment of withholding tax and penalties imposed on LGE. On behalf of LGE, the Company filed an appeal with the Korea Administrative Court on June 10, 2019.
On March 19, 2019, the Korea Tax Tribunal issued its ruling in which it decided not to accept our arguments with respect to the Korean tax authorities’ assessment of withholding tax and penalties imposed on LGE. On behalf of LGE, we filed an appeal with the Korea Administrative Court on June 10, 2019.
Pursuant to an agreement reached with LGE, on April 8, 2020, the Company provided a provisional deposit to LGE in the amount of KRW 5,916,845,454 (approximately $5.0 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to us to the extent we ultimately prevail in the appeal in the Korea courts.
Pursuant to an agreement reached with LGE, on April 8, 2020, we provided a provisional deposit to LGE in the amount of KRW 5,916,845,454 (approximately $5.0 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to us to the extent we ultimately prevail in the appeal in the Korean courts.
On June 29, 2023, on behalf of LGE, the Company filed an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2018 to 2022 period. On August 7, 2023, the Korean tax authority submitted its answer against the tax appeal.
On June 29, 2023, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding its findings with respect to the withholding taxes related to the 2018 to 2022 period. On August 7, 2023, the Korean tax authority submitted its answer against the tax appeal.
Patent No. 11,175,738: “Systems and Methods for Proximity-Based Haptic Feedback” Valve responded to the complaint on July 24, 2023 with a motion to dismiss. Valve re-noted its motion, which changed Immersion’s response deadline from August 14, 2023 to August 21, 2023. Immersion timely filed its response, and Valve filed its reply on August 25, 2023.
Patent No. 11,175,738: “Systems and Methods for Proximity-Based Haptic Feedback” Valve responded to the complaint on July 24, 2023, with a motion to dismiss. Valve re‑noted its motion, which changed our response deadline from August 14, 2023, to August 21, 2023. We timely filed our response, and Valve filed its reply on August 25, 2023.
On April 25, 2023, the Company received notice from LGE requesting the Company to reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following a recent tax audit of LGE for the years 2018 through 2022.
On April 25, 2023, we received notice from LGE requesting that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following a recent tax audit of LGE for the years 2018 through 2022.
(“LGE”) requesting that the Company reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE’s royalty payments to Immersion Software Ireland Limited from 2012 to 2014.
(“LGE”) requesting that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE’s royalty payments to Immersion Software Ireland Limited, a subsidiary of the Company, from 2012 to 2014.
The complaint alleges that Valve’s AR/VR systems, including the Valve Index, and handheld Steam Deck, infringe seven of our patents that cover various uses of haptic effects in connection with such AR/VR systems and other video game systems. The Company is seeking to enjoin Valve from further infringement and to recover a reasonable royalty for such infringement.
The complaint alleges that Valve’s AR/VR systems, including the Valve Index, and its handheld Steam Deck, infringe seven of our patents that cover various uses of haptic effects in connection with such AR/VR systems and other video game systems. We are seeking to enjoin Valve from further infringement and to recover a reasonable royalty for such infringement.
Pursuant to an agreement reached with LGE, on June 2, 2023, the Company provided a provisional deposit to LGE in the amount of KRW 3,024,877,044 (approximately $2.3 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to the Company to the extent the Company ultimately prevails in the appeal in the Korean courts.
Pursuant to an agreement reached with LGE, on June 2, 2023, we provided a provisional deposit to LGE in the amount of KRW 3,024,877,044 (approximately $2.3 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to us to the extent we ultimately prevail in the appeal in the Korean courts.
On November 3, 2017, on behalf of LGE, the Company made an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2012 to 2017 period. The Korea Tax Tribunal hearing took place on March 5, 2019.
On November 3, 2017, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding its findings with respect to the withholding taxes related to the 2012 to 2017 period. The Korea Tax Tribunal hearing took place on March 5, 2019.
The Company has had numerous hearings before the Korea Administrative Court in the years 2019 through 2022.
We had numerous hearings before the Korea Administrative Court in the years 2019 through 2022.
On September 25, 2023, the Korean tax authority, on behalf of LGE, the Company submitted an additional response brief, and on November 23, 2023, the Korea Tax Tribunal rendered a decision against LGE, dismissing the claims of the Company on the grounds that its claims are without merit.
On September 8, 2023, on behalf of LGE, we submitted our rebuttal brief in response thereto. On September 25, 2023, the Korean tax authority submitted an additional response brief. On November 23, 2023, the Korea Tax Tribunal rendered a decision against LGE, dismissing our claims on the grounds that they are without merit.
The Court entered a case schedule on November 21, 2023. The case schedule does not include a trial date but set the pretrial conference for May 30, 2025.
The Court heard arguments on Valve's motion on February 8, 2024. The Court entered a case schedule on November 21, 2023. The case schedule did not include a trial date but set the pretrial conference for May 30, 2025.
In connection with the Korea Administrative Court’s decision, the Korean tax authorities filed an appeal on June 28, 2023, with the Seoul High Court to seek the cancellation of the lower court’s decision.
In connection with the Korea Administrative Court's decision, the Korean tax authorities filed an appeal on June 28, 2023, with the Seoul High Court to seek the cancellation of the lower court's decision. The appellate case is in progress at the Seoul High Court. The first and second hearings took place on November 30, 2023, and February 1, 2024, respectively.
The next case management hearing is scheduled for March 21, 2024. LGE Korean Withholding Tax Matter On October 16, 2017, the Co mpany received a letter from LG Electronics Inc.
Item 3. Legal Proceedings LGE Korean Withholding Tax Matter On October 16, 2017, we received a letter from LG Electronics Inc.
Removed
Item 3. Legal Proceedings Immersion Corporation vs. Meta Platforms, Inc., f/k/a Facebook, Inc. (“Meta”) On May 26, 2022, the Company filed a complaint against Meta in the United States District Court for the Western District of Texas.
Added
As of the date of this filing, the next hearing date had not yet been set. The Seoul Administrative Court issued an additional judgment on July 27, 2022 (clarifying the ratio of software vs. patent usage) and that, as of the date of this filing, the Seoul High Court appeal remained pending.
Removed
The complaint alleges that Meta’s augmented and virtual reality (“AR/VR”) systems, including the Meta Quest 2, infringe six of our patents that cover various uses of haptic effects in connection with such AR/VR systems. The Company is seeking to enjoin Meta from further infringement and to recover a reasonable royalty for such infringement.
Added
In response thereto, on behalf of LGE, we filed an appeal with the Korea Administrative Court on December 29, 2023. On July 25, 2024, the Korea Tax Tribunal rendered a decision against LGE on the related local income tax assessment, and the deadline for the court appeal of the local income tax claim was October 21, 2024.
Removed
The complaint against Meta asserts infringement of the following patents: • U.S. Patent No. 8,469,806: “System and method for providing complex haptic stimulation during input of control gestures, and relating to control of virtual equipment” • U.S. Patent No. 8,896,524: “Context-dependent haptic confirmation system” • U.S. Patent No. 9,727,217: “Haptically enhanced interactivity with interactive content” • U.S.
Added
On October 18, 2024, we filed a complaint and a brief with the Korea Administrative Court for the local income tax appeal. This case has been reassigned due to its significance. The Korean tax authority filed its answer on November 27, 2024.
Removed
Patent No. 10,248,298: “Haptically enhanced interactivity with interactive content” • U.S. Patent No. 10,269,222: “System with wearable device and haptic output device” • U.S. Patent No. 10,664,143: “Haptically enhanced interactivity with interactive content” Meta responded to the Company’s complaint on August 1, 2022.
Added
The first hearing date, which was originally scheduled for March 21, 2025, has been set at a later date, as the counsel for the plaintiff submitted an application for hearing date to be set at a later date by obtaining the defendant’s consent. No subsequent changes have been made so far.
Removed
On September 12, 2022, Meta filed a motion to transfer the lawsuit to the Northern District of California or, in the alternative, to the Austin Division of the Western District of Texas. The Court denied Meta’s motion on May 30, 2023, and held the claim construction hearing on the same day.
Added
On March 14, 2024, Valve filed a motion to stay the district court case pending the Patent Trial and Appeal Board's (“PTAB”) decisions on Valve’s inter partes review (“IPR”) petitions. We opposed the motion on March 25, 2024, and Valve filed its reply brief on March 29, 2024.
Removed
The Court adopted certain claim constructions during the hearing and issued a formal claim construction order consistent with those constructions on July 7, 2023. On August 2, 2023, Meta filed a mandamus petition asking the Federal Circuit to reverse the district court’s order on Meta’s transfer motion. Fact discovery closed on October 6, 2023.
Added
On April 4, 2024, the Court granted Valve’s motion to stay the district court proceedings. In connection with that order, the Court struck Valve's motion to dismiss with leave to refile at a later date. The case remains stayed pending resolution of the IPR proceedings.
Removed
The Federal Circuit denied Meta’s mandamus petition on October 30, 2023. 31 Table of Contents On November 10, 2023, Immersion filed a separate action in the Western District of Texas against Meta directed to its newly launched Quest 3 product, asserting the following patents: • U.S.
Added
Valve has filed multiple IPR petitions with the PTAB challenging the validity of the patents asserted in the district court litigation. As of the date of this filing, the status of these proceedings is as follows: • IPR2024‑00477 and IPR2024‑00478 (filed January 19, 2024) directed to U.S. Patent Nos. 7,336,260 and 9,430,042, respectively.
Removed
Patent No. 8,469,806: “System and method for providing complex haptic stimulation during input of control gestures, and relating to control of virtual equipment” • U.S. Patent No. 9,727,217: “Haptically enhanced interactivity with interactive content” • U.S. Patent No. 10,248,298: “Haptically enhanced interactivity with interactive content” • U.S. Patent No. 10,269,222: “System with wearable device and haptic output device” • U.S.
Added
We filed our patent owner preliminary responses on April 26, 2024, and April 29, 2024, respectively. The PTAB instituted review on July 24, 2024, and July 25, 2024, respectively. We filed our patent owner responses on October 15, 2024, and October 17, 2024, respectively. Our patent owner sur‑replies to Valve’s replies were both filed on February 28, 2025.
Removed
Patent No. 10,664,143: “Haptically enhanced interactivity with interactive content” In addition, Meta filed inter partes reviews (“IPRs”), IPR2023-00942; IPR2023-00943; and IPR2023-00944 on May 25, 2023. These are directed to U.S. Patent Nos. 8,469,806; 8,896,524; and 10,269,222, respectively. The Company filed its response to IPR2023-00942 and IPR2023-0094 on September 8, 2023, and to IPR2023-00944 on September 12, 2023.
Added
Oral arguments in both proceedings were held on April 30, 2025. • On June 12, 2025, the PTAB issued final written decisions determining all challenged claims unpatentable for both IPRs, and we filed a notice of appeal in IPR2024‑00478 on August 14, 2025 with an opening Federal Circuit brief filed January 29, 2026. • IPR2024‑00508 (filed January 30, 2024) directed to U.S.
Removed
Meta filed IPR2023-00945; IPR2023-00946; and IPR2023-00947 on May 26, 2023. These IPRs are directed to United States Patent Nos. 10,664,143; 9,727,217; and 10,248,298, respectively.
Added
Patent No. 9,116,546. We elected not to file a patent owner preliminary response. The PTAB instituted review on August 6, 2024.
Removed
The Patent Trial and Appeal Board instituted review of IPR2023-00942 on December 6, 2023; IPR2023-00943 on December 6, 2023; IPR2023-00944 on December 7, 2023; IPR2023-00945 on December 6, 2023; IPR2023-00946 on December 8, 2023; and IPR2023-00947 on December 6, 2023.
Added
We elected not to file a patent owner response to the petition. • On July 31, 2025, the PTAB issued a final written decision determining all challenged claims unpatentable, with a statutory deadline for final written decision not later than August 6, 2025.
Removed
On January 16, 2024, Immersion and Meta jointly moved to stay all deadlines in district court because they had arrived at a settlement in principle. On January 17, 2024, the Court stayed all deadlines.
Added
The Company elected not to file a patent owner response to the petition. • IPR2024‑00556 (filed February 7, 2024) directed to U.S. Patent No. 8,749,507. We filed our patent owner preliminary response on May 15, 2024. The PTAB instituted review on August 6, 2024.
Removed
Under the Court’s order, the parties were to either move to dismiss the proceedings if they finalized the settlement agreement, or alternatively they were to provide the Court with a status update, by January 31, 2024.
Added
We elected not to file a patent owner response to the petition. • On July 28, 2025, the PTAB issued a final written decision determining all challenged claims unpatentable, with the statutory deadline for the final written decision not later than August 6, 2025. 41 • IPR2024‑00557 (filed February 7, 2024) directed to U.S. Patent No. 10,665,067.
Removed
On February 9, 2024, Immersion entered into a Patent License and Settlement Agreement (the “License and Settlement Agreement”) with Meta, pursuant to which the parties have agreed to terms for resolving the litigation matters described above (the Litigation”) and Meta will license, on a non-exclusive basis, Immersion’s patent portfolio for use in its products.
Added
We filed our patent owner preliminary response on May 15, 2024. The PTAB instituted review on August 13, 2024. Our patent owner response was filed on November 5, 2024. Valve filed its reply on February 4, 2025.
Removed
Under the License and Settlement Agreement, in consideration for the license and releases granted therein, Immersion expects to receive approximately $17,500,000, after deducting for legal fees related to the Litigation (and other pending litigation) and other liabilities.
Added
Our patent owner sur‑reply was filed March 18, 2025. • Oral argument occurred on May 9, 2025, and on August 11, 2025, the PTAB issued a final written decision determining all challenged claims unpatentable.
Removed
Pursuant to the License and Settlement Agreement, Immersion and Meta have agreed to terms for dismissal by them of the outstanding Litigation and the IPRs.
Added
We filed a notice of appeal on September 26, 2025, with our opening Federal Circuit brief due March 12, 2026. • IPR2024‑00582 (filed February 16, 2024) directed to U.S. Patent No. 11,175,738. We filed our patent owner preliminary response on June 27, 2024. The PTAB instituted review on September 25, 2024.
Removed
The description of the License and Settlement Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the License and Settlement Agreement, which the Company intends to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2024. Immersion Corporation vs.
Added
Our patent owner response was filed on December 20, 2024. The Company’s patent owner sur-reply to Petitioner’s reply was filed on May 5, 2025. Oral argument in the proceeding was held on June 23, 2025. On September 4, 2025, the Board extended its statutory deadline of September 25, 2025, for a final written decision by up to six months.
Removed
Xiaomi Group On or about March 3, 2023, the Company initiated patent infringement lawsuits against several companies of the Xiaomi-Group in Germany, France and India.
Added
The final written decision in this proceeding is now expected by March 25, 2026. • Our sur‑reply was filed May 5, 2025, oral argument was held June 23, 2025, and on September 4, 2025, the PTAB extended the statutory deadline for a final written decision to March 25, 2026. • IPR2024‑00714 (filed March 22, 2024) directed to U.S.
Removed
Immersion filed complaints against Xiaomi-Group companies and their agents in the Düsseldorf Regional Court in Germany, the Tribunal judiciaire de Paris (Paris First Instance Civil Court) in France, and the High Court of Delhi, at New Delhi, in India.
Added
Patent No. 10,627,907. We filed our patent owner preliminary response on July 30, 2024. The PTAB instituted review on August 28, 2024. Our patent owner response was filed on January 21, 2025. The Company’s sur-reply to Petitioner’s reply was filed June 10, 2025. Oral argument in the proceeding was held on July 29, 2025.
Removed
The complaints allege that the Xiaomi-Group’s devices, including the Xiaomi 12, infringe Immersion’s patents that cover various uses of haptic effects in connection with such devices. Immersion is seeking injunctions that would allow Immersion to prohibit Xiaomi-Group from selling the infringing devices in Germany, France and India, as well as costs and damages as compensation for such infringement.
Added
The Board issued a final written decision determining all challenged claims unpatentable on October 24, 2025. • Our sur‑reply was filed on June 10, 2025, oral argument occurred on July 29, 2025, and on October 24, 2025, the PTAB issued a final written decision determining all challenged claims unpatentable.
Removed
The complaints against the Xiaomi-Group assert infringement of the following patents: • EP 2 463 752 B1 (German part) titled “ Haptisches Feedback-System mit gespeicherten Effekten ” • EP 2 463 752 B1 (French part) titled “ Système de rendu haptique avec stockage d’effets ” • IN 304 396 (India) titled “ Haptic Feedback System With Stored Effects” On June 19, 2023, Xiaomi filed an initial response to the Company’s lawsuit in India.
Added
The parties submitted their joint claim construction statement and respective positions in the district court litigation on March 29, 2024. The district court case is currently stayed pending the outcome of the IPR proceedings.
Removed
On July 7, 2023, the Indian litigation was listed before the Learned Joint Registrar (“JR”), Mr. Siddharth Mathur.
Added
We are unable at this time to predict the ultimate outcome of the district court litigation or the related IPR proceedings, the impact of any PTAB decisions and any appeals therefrom, or to reasonably estimate the amount or range of any possible loss or recovery associated with these matters.
Removed
The application seeking interim injunction will be heard on March 21, 2024. 32 Table of Contents On July 11, 2023, in the German proceeding Xiaomi filed its nullity action in the German Federal Patent Court, which was served on Immersion on July 27, 2023.
Removed
Immersion replied on October 27, 2023, and is awaiting Xiaomi’s response which is anticipated to be filed in late January or early February 2024, with a decision expected in March or April of 2024. In the German infringement proceeding, Xiaomi’s statement of defense was due on October 25, 2023. Immersion’s reply was due on February 26, 2024.
Removed
Xiaomi’s rejoinder is scheduled for July 25, 2024. The oral hearing is scheduled for August 29, 2024. Xiaomi had until December 21, 2023 to reply to Immersion’s writ of summons in the French proceeding. Xiaomi requested an extension and replied on January 4, 2024. Immersion’s tentative deadline to respond is March 14, 2024.
Removed
The appellate case is in progress at the Seoul High Court and the first hearing and the second hearing took place on November 30, 2023 and February 1, 2024, respectively. However, the next hearing will be set at a later date.
Removed
On September 8, 2023, on behalf of LGE, the Company submitted its rebuttal brief in response thereto.
Removed
In response thereto, on behalf of LGE, the Company filed an appeal with the Korea Administrative Court on December 29, 2023. The first hearing date has not yet been set. 33 Table of Contents Immersion Corporation vs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

6 edited+1 added−341 removed4 unchanged
Biggest changeAs of December 31, 2023, we have $41.7 million available for repurchase under the December 2022 Stock Repurchase Program. 35 Table of Contents Share repurchase activity under the December 2022 Stock Repurchase Program during the three months ended December 31, 2023 was as follows (in thousands, except per share amounts): Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ( 1 ) October 1 to October 31, 2023 — N/A — 43,870,000 November 1 to November 30, 2023 112,343 $ 6.4477 724,348 43,094,000 December 1 to December 31, 2023 206,674 $6.5530 1,354,344 41,736,000 ( 1 ) The amounts represent the amount available to repurchase shares under the authorized repurchase program as of December 31, 2023 .
Biggest changeThe following table summarizes the share repurchase activity under the December 2022 Stock Repurchase Program for the three months ended April 30, 2025: Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) February 1 to February 28, 2025 — $ — — 40,566,109 March 1 to March 31, 2025 — $ — — 40,566,109 April 1 to April 30, 2025 173,975 $ 6.93 173,975 39,360,742 (1) The amounts represent the amount available to repurchase shares under the authorized repurchase program as of April 30, 2025.
As of February 28, 2024, there were 57 holders of record of our common stock. Unregistered Sales of Securities During the period covered by this Annual Report on Form 10-K, we have not sold any equity securities that were not registered under the Securities Act.
As of March 4, 2026, there were 49 holders of record of our common stock. Unregistered Sales of Securities During the period covered by this Annual Report on Form 10-K, we have not sold any equity securities that were not registered under the Securities Act.
Item 4. Mine Safety Disclosures Not applicable. 34 Table of Contents PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information, Holders of Record and Dividends Our common stock is traded on the Nasdaq Global Market under the symbol “IMMR”.
Item 4. Min e Safety Disclosures Not applicable. 42 P ART II Item 5 Market for Registrant ’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information, Holders of Record, and Dividends Our common stock is traded on the Nasdaq Global Market under the symbol “IMMR”.
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. In the year ended December 31, 2023, the total dividends paid was $ 7.4 million.
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. For the fiscal year ended April 30, 2025, the four months ended April 30, 2024, and the calendar year ended December 31, 2023, the total dividends paid were $12.9 million, $3.0 million, and $7.4 million, respectively.
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 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 program has been amended various times and the most recent amendment extended the expiration date to December 29, 2026.
In the year ended December 31, 2023 we repurchased 1,217,774 shares of our common stock for $8.3 million at an average purchase price of $6.77 per share. As of December 31, 2023 we have $41.7 million available for repurchase under the December 2022 Stock Repurchase Program.
In Fiscal Year 2025, we repurchased 310,643 shares of our common stock for $2.4 million at an average purchase price of $7.64 per share. As of April 30, 2025, Immersion has $39.4 million available for repurchase under the December 2022 Stock Repurchase Program.
Removed
Stock Repurchase Agreement On February 14, 2022, we entered into a Common Stock Repurchase Agreement (the “Agreement”) with Invenomic Capital Management LP. (“Invenomic”). P ursuant to the Agreement, we purchased 904,499 shares of our common stock from Invenomic at $ 4.725 per share, or an aggregate purchase price of $ 4.3 million.
Added
Our stock repurchase program does not obligate us to acquire any specific number of shares. 43 Dividends Payment The following table summarizes the dividend payment activity for the fiscal year ended April 30, 2025, the four months ended April 30, 2024, and the calendar year ended December 31, 2023: Announcement Date Dividend Type Amount per Share Record Date Payment Date November 14, 2022 Quarterly $ 0.030 January 15, 2023 January 30, 2023 December 29, 2022 Special 0.100 January 15, 2023 January 30, 2023 February 21, 2023 Quarterly 0.030 April 13, 2023 April 28, 2023 May 10, 2023 Quarterly 0.030 July 13, 2023 July 28, 2023 August 11, 2023 Quarterly 0.030 October 16, 2023 October 27, 2023 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 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.
Removed
The closing price of our common stock on February 14, 2022 was $ 4.80 per share.
Removed
We adopted a Section 382 Tax Benefits Preservation Plan on November 17, 2021 to diminish the risk we could experience an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986 , as amended, which could substantially limit or permanently eliminate our ability to utilize its net operating loss carryovers to reduce potential future income tax obligations.
Removed
Under this plan, a person who acquires, without the approval of our Board, beneficial ownership of 4.99 % or more of the outstanding common stock could be subject to significant dilution. Following the repurchase, Invenomic’s holdings dropped to below 4.99 % of the outstanding common stock.
Removed
On August 8, 2023, the Board approved an amendment to extend the expiration date of the December 2022 Stock Repurchase Program that was set to expire on December 29, 2023 to December 29, 2024. In 2023, we repurchased 1,217,774 shares of our common stock for $8.2 million at an average purchase price of $6.77 per share.
Removed
Our stock repurchase program does not obligate us to acquire any specific number of shares. Dividends Payment On November 14, 2022, the Board declared a quarterly dividend in the amount of $ 0.03 per share, which was paid on January 30, 2023, to stockholders of record on January 15, 2023.
Removed
In addition, on December 29, 2022, our Board declared a special dividend in the amount of $ 0.10 per share, which was paid on January 30, 2023 to stockholders of record on January 15, 2023.
Removed
On February 21, 2023, the Board declared a quarterly dividend, in the amount of $ 0.03 per share, which will be paid on April 28, 2023 to stockholders of record on April 13, 2023.
Removed
On May 10, 2023, the Board declared a third quarterly dividend in the amount of $ 0.03 per share which was paid on July 28, 2023, to shareholders of record on July 13, 2023.
Removed
On August 11, 2023, the Board declared a quarterly dividend in the amount of $ 0.03 per share, which was paid on October 27, 2023 to shareholders of record on October 16, 2023.
Removed
On November 13, 2023, our Board declared a quarterly dividend in the amount of $ 0.045 per share, which was paid on January 25, 2024 to shareholders of record on January 14, 2024. Future dividends will be subject to further review and approval by the Board in accordance with applicable law.
Removed
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. In the year ended December 31, 2023 , the total dividends paid was $7.4 million. Item 6 . [ Reserved] 36 Table of Contents Item 7 .
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and notes thereto.
Removed
Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with GAAP and our discussion and analysis of its financial condition and operating results require the management to make judgments, assumptions and estimates that affect the amounts reported. See Note 1 .
Removed
Significant Accounting Policies of the N otes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements.
Removed
Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Removed
Revenue Recognition Fixed fee license revenue In certain contracts, we grant a fixed fee license to our existing patent portfolio at the inception of the license agreement as well as rights to the portfolio as it evolves throughout the contract term.
Removed
For such arrangements, we have two separate performance obligations: • Performance Obligation A - Transfer rights to our patent portfolio as it exists when the contract is executed; • Performance Obligation B - Transfer rights to our patent portfolio as it evolves over the term of the contract, including access to new patent applications that the licensee can benefit from over the term of the contract.
Removed
For fixed fee license agreements that contain both Performance Obligation A and B, we will allocate the transaction price based on the standalone price for each of the two performance obligations.
Removed
We use a number of factors primarily related to the attributes of our patent portfolio to estimate standalone prices related to Performance Obligation A and B to perform this allocation.
Removed
Per-unit Royalty revenue As we may not receive the per-unit licensee royalty reports for sales during a given quarter within the time frame that allows us to adequately review the reports and include the actual amounts in our quarterly results for such quarter, we accrue the related revenue based on estimates of our licensees’ underlying sales, subject to certain constraints on our ability to estimate such amounts.
Removed
We develop such estimates based on a combination of available data including, but not limited to, approved customer forecasts, a look back at historical royalty reporting for each of our customers, and industry information available for the licensed products.
Removed
As a result of accruing per-unit royalty revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true up revenue to the actual amounts reported by our licensees.
Removed
The true-ups represent the difference between per-unit royalty based on actual sales reported by our licensees in a quarter-lag, and the estimate of per-unit royalty that was reported in the same quarter the underlying sales occurred. Income Taxes We are subject to income taxes in the U.S. and foreign jurisdictions.
Removed
The evaluation of our uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the Act and matters related to the allocation of international taxation rights between countries.
Removed
Although management believes our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination or the refinement of an estimate.
Removed
Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our financial condition and operating results. 37 Table of Contents As disclosed in Note 5 .
Removed
Contingencies of the Notes to the Consolidated Financial Statements, we have made a deposit payment to reimburse LGE for withholding taxes and related penalties paid by LGE as a result of an assessment LGE have received from the South Korean tax authorities. This payment is recorded as Long-term deposits on our Consolidated Balance Sheets .
Removed
We expect to be reimbursed by LGE to the extent we ultimately prevail or prevailed in the appeal in the Korean courts. We regularly assess the likelihood that we will prevail in this case against the South Korean tax authorities and consequently the likelihood that this deposit will be recoverable.
Removed
In the event that we do not ultimately prevail in our appeal in the Korean courts, the deposit included in Long-term deposits would be recorded as additional income tax expense on our Consolidated Statements of Income and Comprehensive Income , in the period in which we do not ultimately prevail.
Removed
Results of Operations Overview Total revenues in 2023 were $ 33.9 million, a decrease of $ 4.5 million, or 12 %, compared to 2022 . Total operating expenses were $ 16.0 million, an increase of $ 2.0 million or 14 % compared to 2022 .
Removed
In 2023 , we had net income of $ 34.0 million, an increase of $ 3.3 million, or 11 % compared to 2022 .
Removed
The following table sets forth our Consolidated Statements of Income and Comprehensive Income data as a percentage of total revenues: Year Ended December 31, 2023 2022 Revenues: Total royalty and license revenue 99 % 99 % Development, services, and other 1 1 Total revenues 100 100 Costs and expenses: Sales and marketing 5 3 Research and development 1 3 General and administrative 41 30 Total costs and expenses 47 36 Operating income 53 64 Interest and other income 74 6 Income before benefit from (provision for) income taxes 127 70 Benefit from (provision for) income taxes ( 26 ) 10 Net income 100 % 80 % 38 Table of Contents Revenues Our revenue is primarily derived from fixed fee license agreements and per-unit royalty agreements, along with less significant revenue earned from development, services and other revenue.
Removed
Royalty and license revenue is composed of per unit royalties earned based on usage or net sales by licensees and fixed payment license fees charged for our IP and software.
Removed
A revenue summary for the year ended December 31, 2023 and 2022 are as follows (in thousands, except for percentages): Years Ended December 31, 2023 2022 $ Change % Change Fixed fee license revenue $ 5,283 $ 11,953 $ ( 6,670 ) ( 56 )% Per-unit royalty revenue 28,498 26,225 2,273 9 % Total royalty and license revenue 33,781 38,178 ( 4,397 ) ( 12 )% Development, services, and other revenue 138 283 ( 145 ) ( 51 )% Total revenues $ 33,919 $ 38,461 $ ( 4,542 ) ( 12 )% Fixed fee license revenue decreased $ 6.7 million, or 56 % in 2023 compared to 2022 , primarily attributable to a $ 6.6 million decrease in mobility revenue, a $ 0.6 million decrease in automotive license revenue partially offset by a $0.5 million increase in gaming license revenue.
Removed
Per-unit royalty revenue increased by $ 2.3 million, or 9 %, in 2023 compared to 2022 , primarily caused by a $3.3 million increase in royalties from automotive licensees and a $2.2 million increase in royalties from gaming licensees.
Removed
These increases were partially offset by a $2.5 million decrease in royalties from mobility licensees and a $0.6 million decrease in royalties from other licensees. We expect royalty and license revenue to continue to be a major component of our future revenue as our technology is included in products and we succeed in our efforts to monetize our IP.
Removed
Our fixed fee license revenue could fluctuate depending upon the timing of execution of new fixed license fee arrangements. We also anticipate that our royalty revenue will fluctuate relative to our customers’ unit shipments.
Removed
Geographically, revenues generated in Asia, Europe and North America for the year ended December 31, 2023 represented 74 %, 17 %, and 9%, respectively, of our total revenue as compared to 62 %, 10 % and 28 %, respectively, for the year ended December 31, 2022 Operating Expenses A summary of operating expenses for the year ended December 31, 2023 and 2022 are as follows (in thousands, except for percentages): Years Ended December 31, 2023 2022 $ Change % Change Sales and marketing $ 1,751 1,219 $ 532 44 % Research and development 281 1,380 ( 1,099 ) ( 80 ) % General and administrative 13,960 11,442 2,518 22 % Sales and Marketing - Our sales and marketing expenses primarily consisted of employee compensation and benefits, including stock-based compensation, marketing costs and allocated facilities costs.
Removed
Sales and marketing expenses increased $ 0.5 million, or 44 %, in 2023 compared to 2022 , primarily attributable to a $ 0.6 million increase in compensation, benefits and other personnel related costs largely due to higher variable compensation and stock-based compensation expenses. 39 Table of Contents Research and Development - Our research and development expenses primarily consisted of employee compensation and benefits, including stock-based compensation; outside services and consulting fees; tooling and supplies; and allocated facilities costs.
Removed
Research and development expenses decreased $ 1.1 million, or 80 %, in 2023 compared to 2022 , primarily attributable to a $ 0.8 million decrease in compensation, benefits, and other personnel related costs and a $ 0.2 million decrease in office expenses and allocated facilities costs.
Removed
The decrease in compensation, benefits and other personnel related costs in 2023 compared to 2022 were largely attributable to lower headcount and decreases in stock-based compensation expense.
Removed
General and Administrative - Our general and administrative expenses primarily consisted of employee compensation and benefits including stock-based compensation; legal other professional fees; external legal costs for patents; office expense; travel; and allocated facilities costs.
Removed
General and administrative expenses increased $ 2.5 million, or 22 %, in 2023 as compared to 2022 primarily due to a $ 2.2 million increase in compensation, benefits and other personnel related costs and $ 0.3 million increase in legal fees.
Removed
The increase in compensation, benefits, and other personnel related costs in 2023 compared to 2022 were largely driven by increases in variable compensation and severance costs. The increase in legal expenses in 2023 compared to 2022 was largely attributable to an increase in legal consulting costs.
Removed
We may be required to engage in litigation to protect our IP, in which case our general and administrative expenses could substantially increase reflecting such litigation costs.
Removed
Interest and Other Income (Loss) A summary of interest and other income, other expense for the year ended December 31, 2023 and 2022 are as follows (in thousands): Years Ended December 31, 2023 2022 $ Change % Change Interest and other income (loss), net 25,008 2,838 $ 22,170 781 % Other income (expense), net ( 20 ) ( 293 ) 273 ( 93 ) % $ 24,988 $ 2,545 $ 22,443 882 % Interest and Other Income (loss) - Interest and other income (loss) consists primarily of interest and dividend income from cash and cash equivalents, marketable debt and equity securities, realized and unrealized gains (losses) on our marketable equity securities and derivative instruments and realized gains (losses) on our marketable debt securities.
Removed
Interest and other income increased $22.2 million during 2023 compared to 2022 primarily driven by a $ 19.9 million increase in gains from investments in marketable securities and derivative instruments net and a $ 2.3 million increase in interest and dividend income.
Removed
Other income (expense), net increased $ 0.3 million in 2023 compared to 2022 , primarily driven by increase in net foreign currency transaction gains. 40 Table of Contents Income Taxes A summary of provision for income taxes and effective tax rates for the year ended December 31, 2023 and 2022 are as follows (in thousands): Years Ended December 31, 2023 2022 $ Change % Change Income before provision for (benefit from) income taxes $ 42,915 $ 26,965 Provision for (benefit from) income taxes 8,939 ( 3,699 ) 12,638 ( 342 ) % Effective tax rate ( 20.8 ) % 13.7 % Provision for income taxes for the year ended December 31, 2023 , resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.
Removed
Benefit from income taxes for the year ended December 31, 2022, resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.
Removed
We provided no valuation allowance for federal assets, whose future realization is more likely than not and continue to maintain full valuation allowance for state deferred tax assets in the United States as well as federal tax assets in Canada.
Removed
The year-over-year change in provision for income taxes resulted primarily from the change in income from continuing operations across various tax jurisdictions.
Removed
We continue to maintain full valuation allowance for state and certain foreign deferred tax assets in the United States and Canada as a result of uncertainties regarding the realization of the asset balance due to historical losses, the variability of operating results, and uncertainty regarding near term projected results.
Removed
In the event that we determine the deferred tax assets are realizable based on an assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made. The valuation allowance does not impact our ability to utilize the underlying net operating loss carryforwards. We also maintain liabilities for uncertain tax positions.
Removed
As of December 31, 2023 we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $ 7.5 million, of which $ 4.9 million could be payable in cash. In addition, interest and penalty $ 0.2 million could also be payable in cash in relation to the unrecognized tax benefits.
Removed
The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $ 4.9 million. We account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.
Removed
Liquidity and Capital Resources Our cash equivalents, investments - current and investments - noncurrent consist primarily of money-market funds, investment in equity and debt marketable securities (including mutual funds) and certificates of deposit. All marketable securities are stated at market value.
Removed
Realized gains and losses on marketable equity securities and marketable debt securities are recorded in Other income (expense), net on the Consolidated Statements of Income and Comprehensive Income . Unrealized gains and losses on marketable equity securities (including mutual funds) are reported as Other income (expense), net on our Consolidated Statement of Income and Comprehensive Income.
Removed
Unrealized gains and losses on marketable debt securities reported as a component of Accumulated other comprehensive income(loss) on our Consolidated Balance Sheets . Certificates of deposit are reported as Investments-current or Investments -noncurrent based on their term when purchased.
Removed
Interest income from certificates of deposit are reported as Interest and other income (loss), net on the Consolidated Statement of Income and Comprehensive Income. 41 Table of Contents Cash, cash equivalents and investments- As of December 31, 2023 our cash, cash equivalents, and investments-current totaled $ 160.4 million, an increase of $10.7 million from $ 149.7 million on December 31, 2022 .
Removed
A summary of select cash flow information for the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, 2023 2022 Net cash provided by operating activities $ 20,600 $ 40,146 Net cash provided by (used in) investing activities $ 3,398 $ ( 29,405 ) Net cash provided by used in financing activities $ ( 16,747 ) $ ( 13,411 ) Cash provided by operating activities - Our operating activities primarily consists of net income adjusted for certain non-cash items including depreciation and amortization; stock-based compensation expense, deferred income taxes and the effect of changes in operating assets and liabilities.
Removed
Net cash provided by operating activities was $ 20.6 million in the year ended December 31, 2023 a $ 19.5 million decrease compared to the same period in 2022 .
Removed
This cash decrease was primarily attributable to a $11.2 million decrease from changes in noncash items a $11.7 million decrease from changes in net operating assets and partially offset by a $3.3 million increase in net income.
Removed
Cash provided by (used in) investing activities - Our investing activities primarily consist of purchases of marketable securities and other investments and proceeds from disposal of marketable securities and other investments; proceeds from issuance of derivative instruments; payments made to settle derivative instruments and purchases of computer equipment, furniture and leasehold improvements.
Removed
Net cash provided by investing activities during the year ended December 31, 2023 was $ 3.4 million primarily consisting of $193.7 million in proceeds from selling marketable securities and derivatives partially offset by $190.3 million used to purchase marketable securities and in the settlement of derivative instruments.
Removed
Net cash used in investing activities during the year ended December 31, 2022 was $ 29.4 million primarily consisting of $ 165.4 million of purchases marketable securities and in the settlement of derivative instrument partially offset by $ 136.0 million of proceeds from sale of derivative instruments.
Removed
Cash provided by (used in) financing activities — Our financing activities primarily consist of cash proceeds from issuance of common stock, proceeds from stock option exercises and stock purchases under our employee stock purchase plan and cash paid for repurchases of our common stock.
Removed
Net cash used by financing activities during the year ended December 31, 2023 was $ 16.7 million primarily consisting of $ 8.3 million stock repurchases, $ 7.4 million in dividend payments and $ 1.2 million in shares withheld to cover payroll taxes.
Removed
Net cash provided by financing activities during the year ended December 31, 2022 was $ 13.4 million primarily consisting of cash paid for stock repurchases. 42 Table of Contents Total cash, cash equivalents, and investments-current were $ 160.4 million as of December 31, 2023 of which approximately 24 %, or $ 38.2 million, was held by our foreign subsidiaries and subject to repatriation tax effects.
Removed
Our intent is to permanently reinvest a majority of our earnings from foreign operations, and current plans do not anticipate that we will need funds generated from foreign operations to fund our domestic operations.
Removed
We intend to continue to invest in, protect, and defend our extensive IP portfolio, which can result in the use of cash in the event of litigation.
Removed
On February 23, 2022, our Board approved a stock repurchase program of up to $ 30.0 million of our common stock for a period of up to twelve months (the “February 2022 Stock Repurchase Program”).
Removed
In the year ended December 31, 2022, we repurchased 1,637,566 shares of our common stock for $ 8.9 million at an average purchase price of $ 5.46 per share. The February 2022 Stock Repurchase Program was terminated on December 29, 2022.

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