8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

February 24, 2022

Date of Report (Date of earliest event reported)

IMMERSION CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	001-38334	94-3180138
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

330 Townsend Street, Suite 234, San Francisco, CA 94107

(Address of principal executive offices and zip code)

(408) 467-1900

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.) 

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	IMMR	The NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 24, 2022, Immersion Corporation (the “Company”) issued a press release regarding financial results for the third quarter ended December 31, 2021. A copy of the press release is attached to this Current Report as Exhibit 99.1, and the information in Exhibit 99.1 is incorporated herein by reference.

The information in Item 2.02 and Exhibit 99.1 in this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 8.01 Other Events.

On February 23, 2022, the Board of Directors of the Company approved a stock repurchase program of up to $30 million of its common stock for a period of up to twelve months. Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the foregoing transactions. The stock repurchase program was implemented as a method to return value to the Company’s stockholders. The timing, pricing and sizes of any repurchases will depend on a number of factors, including the market price of the Company’s common stock and general market and economic conditions. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time.

Forward Looking Statements

This Item 8.01 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the anticipated amount, duration, methods, timing and other aspects of our stock repurchase program. These statements involve risks and uncertainties, including, but not limited to, that the Company may not successfully repurchase stock under its stock repurchase program. For a detailed discussion of other risks and uncertainties see the Company’s Form 10-K for the fiscal year ended December 30, 2020 and subsequent SEC filings. Statements included in this report are based upon information known to the Company as of the date of this report, and the Company assumes no obligation to update information contained in this report.

Item 9.01 Financial Statements and Exhibits.

a.Exhibits.

Exhibit No.	Exhibit Title
99.1	Press Release dated February 24, 2022 (regarding financial results for the fourth quarter ended December 31, 2021)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			IMMERSION CORPORATION
Date:	February 24, 2022	By:	/s/ AARON AKERMAN
		Name:	Aaron Akerman
		Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

Immersion Corporation Reports Fourth Quarter 2021 Results 

Company Continues Focus on Driving Profitability

SAN FRANCISCO, February 24, 2022 – Immersion Corporation (NASDAQ: IMMR), the leading developer and provider of technologies for haptics, today reported financial results for the fourth quarter ended December 31, 2021.

Fourth Quarter Financial Summary:

•    Total revenues of $9.7 million, compared to $10.9 million in the fourth quarter of 2020. Royalty and license revenues were $9.7 million, compared to $10.9 million in the fourth quarter of 2020.

•    GAAP operating expenses of $3.9 million declined 31% from $5.7 million in the fourth quarter of 2020. Non-GAAP operating expenses of $3.2 million declined 8% from $3.5 million in the fourth quarter of 2020. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

•    GAAP net income was $1.3 million, or $0.04 per diluted share, compared to GAAP net income of $8.1 million, or $0.30 per diluted share, in the fourth quarter of 2020. The reduction in GAAP net income was primarily due to the GAAP accounting treatment for income taxes related to our foreign subsidiaries.

•    Non-GAAP net income was $5.8 million, or $0.17 per diluted share, compared to non-GAAP net income of $8.0 million, or $0.29 per diluted share in the fourth quarter of 2020.

•Cash, cash equivalents and short-term investments was $137.9 million as of December 31, 2021.

Fiscal Year 2021 Financial Summary:

•    Revenues for 2021 were $35.1 million, compared to $30.5 million in 2020. Royalty and license revenues for 2021 totaled $34.7 million, compared to $30.2 million in 2020.

•Net income for 2021 was $12.5 million, or $0.39 per diluted share, compared to net income of $5.4 million, or $0.19 per diluted share, for 2020.

•Non-GAAP net income for 2021 was $20.6 million, or $0.65 per diluted share, compared to non-GAAP net loss for 2020 of $10.3 million, or $0.36 per diluted share.

“We are proud of Immersion’s progress in 2021. The business has now posted solid operating profitability in each of the past two years, even without large one-time litigation settlements. Importantly, our cost structure and balance sheet have been significantly improved. All of this is quite the turnaround from our prior history,” said Francis Jose, CEO. “We are currently focused on pursuing opportunities to drive the adoption of our haptics intellectual property in the automotive industry, especially in the burgeoning electric vehicle market; establishing industry technical standards for haptics in mobility and

gaming; and ensuring that our intellectual property is recognized in the emerging AR/VR/metaverse market, either through execution of licenses or by proactive enforcement.”

Recent Business Highlights:

•Expanded footprint of licensed automotive Tier 1 suppliers by executing new agreements with Nissha and Duck-il. These new partners strengthen Immersion’s foundation of several licensed Tier 1 suppliers which positions us favorably for further growth in the automotive market.

•Executed commercial partnership with Wacom, the world’s leading manufacturer of pen tablets, interactive pen displays, and digital interface solutions.

•Further progress in development of industry standards in the MPEG and the Internet Engineering Task Force (IETF). MPEG formally approved the creation of a haptic media type in MPEG media files to enable commercial integration of standard compliant haptic technology in mobile, gaming and XR markets.

About Immersion

Immersion Corporation (NASDAQ: IMMR) is the leading innovator of touch feedback technology, also known as haptics. The company invents, accelerates, and scales haptic experiences by providing technology solutions for mobile, automotive, gaming, and consumer electronics. Haptic technology creates immersive and realistic experiences that enhance digital interactions by engaging users' sense of touch. Learn more at www.immersion.com.

Use of Non-GAAP Financial Measures

Immersion reports all financial information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Immersion discloses this non-GAAP information, such as Non-GAAP net income and Non-GAAP net income per diluted share because it is useful in understanding the company’s performance as it excludes certain non-cash expenses like stock-based compensation expense and other special charges, such as deferred tax assets valuation allowance, depreciation and restructuring costs, that many investors feel may obscure the company’s true operating performance. Likewise, management uses these non-GAAP financial measures to manage and assess the profitability of its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release.

Forward-looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements involve risks and uncertainties. Forward-looking statements are identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “places,” “estimates,” and other similar expressions. However, these words are not the only way we identify forward-looking statements. Examples of forward-looking statements include any expectations, projections, or other characterizations of future events, or circumstances, and include statements regarding our focus on pursuing opportunities to drive the adoption of our haptics intellectual property in the automotive industry, especially in the burgeoning electric vehicle market; establishing industry technical standards for haptics in mobility and gaming; and ensuring that our intellectual property is recognized in the emerging AR/VR/metaverse market, either through execution of licenses or by proactive enforcement, and new partners strengthening our foundation of several licensed Tier 1 suppliers which positions us favorably for further growth in the automotive market.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results could differ materially from those projected in the forward-looking statements, therefore we caution you not to place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the effects of the COVID-19 global pandemic on the Company and its business, and on the business of its suppliers and customers; unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate (especially in light of the ongoing adverse effects of the COVID-19 global pandemic); delay in or failure to achieve adoption of or commercial demand for the Company’s products or third party products incorporating the Company’s technologies; the inability of Immersion to renew existing licensing arrangements, or enter into new licensing arrangements on favorable terms; the loss of a major customer; the ability of Immersion to protect and enforce its intellectual property rights and other factors. For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in Immersion’s Annual Report on Form 10-K for 2020 and its most recent Quarterly Report on Form 10-Q which are on file with the U.S. Securities and Exchange Commission. Any forward-looking statements made by us in this press release speak only as of the date of this press release, and Immersion does not intend to update these forward-looking statements after the date of this press release, except as required by law.

Immersion, and the Immersion logo are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners. The use of the word “partner” or “partnership” in this press release does not mean a legal partner or legal partnership.

(IMMR – C)

Immersion Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

	December 31, 2021		December 31, 2020
ASSETS	(1)		(1)
Cash and cash equivalents	$	51,490	$	59,522
Marketable securities	86,431		—
Accounts and other receivables	1,970		2,218
Prepaid expenses and other current assets	13,432		12,610
Total current assets	153,323		74,350
Property and equipment, net	444		209
Long-term deposits	9,658		12,571
Other assets, net	12,095		9,000
TOTAL ASSETS	$	175,520	$	96,130
LIABILITIES
Accounts payable	$	2	$	149
Accrued compensation	555		1,001
Other current liabilities	11,247		2,457
Deferred revenue	4,826		5,173
Total current liabilities	16,630		8,780
Long-term deferred revenue	16,699		21,334
Other long-term liabilities	896		2,035
TOTAL LIABILITIES	34,225		32,149
STOCKHOLDERS’ EQUITY	141,295		63,981
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	175,520	$	96,130
(1) Derived from Immersion’s annual audited consolidated financial statements.

Immersion Corporation

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended December 31,				Year Ended December 31,
	2021		2020		2021		2020
	(1)		(1)		(2)		(2)
Revenues:
Royalty and license	$	9,672	$	10,870	$	34,689	$	30,176
Development, services, and other	75		65		400		280
Total revenues	9,747		10,935		35,089		30,456
Costs and expenses:
Cost of revenues	10		30		88		168
Sales and marketing	498		932		3,241		4,999
Research and development	708		1,082		4,150		5,014
General and administrative	2,729		3,649		9,835		18,055
Total costs and expenses	3,945		5,693		17,314		28,236
Operating Income	5,802		5,242		17,775		2,220
Interest and other income (loss)	(647)		605		(485)		939
Income before benefit from (provision for) income taxes	5,155		5,847		17,290		3,159
Benefit from (provision for) income taxes	(3,819)		2,239		(4,806)		2,242
Net Income	$	1,336	$	8,086	$	12,484	$	5,401
Basic net income per share	$	0.04	$	0.30	$	0.40	$	0.19
Shares used in calculating basic net income per share	33,735		26,959		31,459		28,117
Diluted net income per share	$	0.04	$	0.30	$	0.39	$	0.19
Shares used in calculating diluted net income per share	33,851		27,321		31,769		28,477
(1) unaudited quarterly financial data
(2) Derived from audited annual consolidated financial statements

Immersion Corporation

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended December 31,				Year Ended December 31,
	2021		2020		2021		2020
GAAP net income	$	1,336	$	8,086	$	12,484	$	5,401
Add: Provision for (benefit from) income taxes	3,819		(2,239)		4,806		(2,242)
Less: Non-GAAP provision for income taxes	(66)		(26)		(205)		(129)
Add: Stock-based compensation	341		1,323		2,338		4,756
Add: Restructuring expense	78		827		690		1,446
Add: Depreciation and amortization of property and equipment	24		23		99		1,052
Other non recurring charge	269		—		369		—
Non-GAAP net income	$	5,801	$	7,994	$	20,581	$	10,284
Non-GAAP net income per diluted share	$	0.17	$	0.29	$	0.65	$	0.36
Shares used in calculating Non-GAAP net income per diluted share	33,851		27,321		31,769		28,477

Immersion Corporation

Disaggregated Revenue Information

(In thousands)

(Unaudited)

	Three Months Ended December 31,				Years Ended December 31,
	2021		2020		2021		2020
Fixed fee license revenue	$	1,497	$	1,651	$	5,843	$	5,472
Per-Unit royalty revenue	8,175		9,219		28,846		24,704
Total royalty and license revenue	9,672		10,870		34,689		30,176
Development, services, and other revenue	75		65		400		280
Total revenues	$	9,747	$	10,935	$	35,089	$	30,456

Immersion Corporation

Revenue by Line of Business

(Unaudited)

	Three Months Ended December 31,				Years Ended December 31,
	2021		2020		2021		2020
Mobility	50	%	57	%	60	%	69	%
Automotive	32	%	24	%	19	%	15	%
Gaming	18	%	19	%	21	%	15	%
Other	—	%	—	%	—	%	1	%
	100	%	100	%	100	%	100	%

Immersion Corporation

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses

(In thousands)

(Unaudited)

	Three Months Ended December 31,					Years Ended December 31,
	2021			2020		2021		2020
GAAP operating expenses	$	3,935	—	$	5,663	$	17,226	$	28,068
Adjustments to GAAP operating expenses:
Stock-based compensation expense - S&M	(67)			(254)		(745)		(846)
Stock-based compensation expense - R&D	(89)			(216)		(742)		(870)
Stock-based compensation expense - G&A	(185)			(853)		(851)		(3,040)
Restructuring expense	(78)			(827)		(690)		(1,446)
Depreciation and amortization expense of property and equipment	(24)			(23)		(99)		(1,052)
Other non recurring charges	(269)			—		(369)		—
Non-GAAP operating expenses	$	3,223		$	3,490	$	13,730	$	20,814

Investor Contact:

Aaron Akerman

Immersion Corporation

514-987-9800 ext. 5110

aakerman@immersion.com

XML

Cover	Feb. 24, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 24, 2022
Entity Registrant Name	IMMERSION CORPORATION
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38334
Entity Tax Identification Number	94-3180138
Entity Address, Address Line One	330 Townsend Street, Suite 234
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94107
City Area Code	408
Local Phone Number	467-1900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	IMMR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001058811
Amendment Flag	false
Document Information [Line Items]
Entity Registrant Name	IMMERSION CORPORATION
Entity Addresses [Line Items]
Entity Address, Address Line One	330 Townsend Street, Suite 234