1. \u00a0\u00a0SIGNIFICANT ACCOUNTING POLICIES
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\nDescription of Business
\nImmersion Corporation (\u201cImmersion\u201d) was incorporated in 1993 in California and reincorporated in Delaware in 1999. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the \u201cCompany\u201d, \u201cwe\u201d, \u201cus\u201d and \u201cour\u201d refer to Immersion and our consolidated subsidiaries.
\nImmersion generates license and royalty revenues from a wide range of intellectual property (\u201cIP\u201d) that more fully engage users\u2019 sense of touch when operating digital devices. We focus on the following target application areas: mobile devices, wearables, consumer, mobile entertainment and other content; console gaming; automotive; medical; and commercial.
\nOn June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware\u00a0corporation (\u201cBarnes & Noble Education\u201d or \u201cBNED\u201d) refer to Note 2. Business Combination for more information.\u00a0The financial results of Barnes & Noble Education have been included in our condensed consolidated financial statements from the acquisition date of June 10, 2024.
\nBarnes & Noble Education is\u00a0a contract operator of physical and virtual bookstores for college and university campuses and K-12\u00a0institutions across the United States. Barnes & Noble Education is also a textbook wholesaler and inventory management hardware and software providers. Barnes & Noble Education operates physical, virtual, and custom bookstores, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.\u00a0\u00a0
BNC First Day Equitable and Inclusive Access Programs
\nBarnes & Noble Education\u00a0provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its\u00a0BNC First Day\u00ae affordable textbook access programs, consisting of First Day Complete and First Day, which provide faculty-required course materials to students on or before the first day of class.
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\u2022 First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students with both physical and digital materials. In addition to providing numerous benefits to students, faculty and administrators, the First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.
\u2022 First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system (\u201cLMS\u201d).
The Barnes & Noble brand (licensed from Barnes & Noble Education's former parent) along with its subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing in the United States. BNED's large college footprint, reputation, and credibility in the marketplace not only support its marketing efforts to universities, students, and faculty, but are also important to its relationship with leading educational publishers who rely on us as one of their primary distribution channels.
Principles of Consolidation and Basis of Presentation
\nThe results of operations reflected in our condensed consolidated financial statements include the accounts of Immersion and our wholly-owned subsidiaries, as well as the accounts of Barnes & Noble Education, a consolidated variable interest entity, since June 10, 2024.\u00a0All significant intercompany accounts and transactions have been eliminated in consolidation.
\nThe noncontrolling interest on the unaudited Condensed Consolidated Statements of Operations represents the portion of earnings or loss attributable to the interest in Barnes & Noble Education held by other owners. The noncontrolling interest on the unaudited Condensed Consolidated Balance Sheets represents the portion of our net assets attributable to the other owners, based on the portion of the interest owned by such owners.\u00a0As of October 31, 2024, the noncontrolling interest was $171.6 million. At the end of each reporting period, equity related to Barnes & Noble Education that is attributable to Immersion and the other owners is rebalanced to reflect Immersion\u2019s and the other owners\u2019 ownership in Barnes & Noble Education.
\n\n\nThe condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (\u201cU.S. GAAP\u201d) for interim financial information and with the instructions for Form 10-Q and the applicable articles of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, and cash flows, in conformity with U.S. GAAP and should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments consisting of only normal and recurring items necessary for the fair presentation of the financial position and results of operations for the interim periods presented have been included. Certain prior year amounts have been reclassified to conform with the current year presentation.
\nDue to their nonhomogeneous operations, our Condensed Consolidated Balance Sheets\u00a0as of October 31, 2024 and April 30, 2024 and Condensed Consolidated Statement of Operations\u00a0for the month ended July 31, 2024 and the three and six months ended October 31, 2024, separately present the operating assets, liabilities, and operations of Immersion\u2019s business from the operating assets, liabilities and operations of Barnes & Noble Education's business.\u00a0 All of the assets of Barnes & Noble Education, reported on the balance sheet, can be used only to settle obligations of Barnes & Noble Education. None of the liabilities of Barnes & Noble Education have recourse to the general credit of Immersion Corporation.
Use of Estimates
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In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
\n\nReporting Periods
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\nImmersion previously reported our financial results based on a calendar year basis. For interim period reporting, we reported our quarterly financial results as of March 31; June 30; September 30 and December 31\u00a0in each calendar year.\u00a0Barnes & Noble Education's fiscal year is comprised of\u00a052\u00a0or\u00a053\u00a0weeks, ending on the Saturday closest to the last\u00a0day\u00a0of April.
\nIn order to more closely align with Barnes & Noble Education\u2019s fiscal year end, on September 27, 2024, the Board of Directors of Immersion (the\u00a0\u201cBoard\u201d)\u00a0approved a change of our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on May 1 and ending on April 30.\u00a0As a result of the change in fiscal year end, we filed a Transition Report on Form 10-QT for the transition period from\u00a0January 1, 2024,\u00a0through\u00a0April 30, 2024 on November 8, 2024.\u00a0The change in quarterly reporting from the old to the new fiscal year resulted in the\u00a0one\u00a0month period ended July 31, 2024 not being covered by a separate report on Form 10-Q. As this period is not covered in the transition report, it is included in this first initial report on Form 10-Q for the newly adopted fiscal year.\u00a0
\nOur new fiscal year begins on May 1 and ends on April 30. Our new fiscal quarters end on July 31, October 31, January 31 and April 30.\u00a0Therefore, the financial results of certain fiscal quarters may not be comparable to prior fiscal quarters. References throughout this Quarterly Report on Form 10-Q to fiscal\u00a02025\u00a0with respect to Immersion refer to the fiscal year ending April 30, 2025.
\nThe financial information presented in this Quarterly Report on Form 10-Q includes the financial information of Barnes & Noble Education for the\u00a013\u00a0weeks and\u00a026\u00a0weeks ended October 26, 2024.\u00a0
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\nWe did not recast the condensed consolidated financial statements for the three and six\u00a0months ended October 31, 2023\u00a0because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical and would not have been cost-justified.\u00a0Prior to the completion of the Transactions, our business was not highly seasonal and seasonal differences do not generally affect the comparability of prior fiscal quarters.\u00a0As a result, the condensed consolidated financial statements for the three and six months ended June 30, 2023,\u00a0are presented as the most nearly comparable quarter of the prior year.
\nSegment Information
\nFollowing the closing of the Transaction (as defined below) with Barnes & Noble Education, we operate as two\u00a0reportable segments, Immersion and Barnes & Noble Education.\u00a0
\n\nEarnings per Share of the Company
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\u00a0 \u00a0 \u00a0 We present both basic and diluted earnings per share (\u201cEPS\u201d) using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to Immersion stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share\u00a0amount.\u00a0
Business Combinations
\nThe determination of the fair value of net assets acquired in a business combination requires estimates and judgments of future cash flow expectations for the acquired business and the related identifiable tangible and intangible assets. Fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques. For current assets and current liabilities, book value is generally assumed to approximate fair value. Goodwill is the amount by which consideration paid for an acquired entity exceeds the fair value of its acquired net assets.\u00a0 Acquisition costs are expensed as incurred and are included within general and administrative expenses in the consolidated statements of operations.
\nDue to the time required to gather and analyze the necessary data for each acquisition, U.S. GAAP provides a \u201cmeasurement period\u201d of up to one year from the date of acquisition in which to finalize these fair value determinations. During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existing as of the date of acquisition or based on the final net assets and working capital of the acquired business, as prescribed in the applicable purchase agreement. Such adjustments may result in the recognition of, or an adjustment to the fair values of, acquisition-related assets and liabilities and/or consideration paid, and are referred to as \u201cmeasurement period\u201d adjustments. Measurement period adjustments are recorded to goodwill. Other revisions to fair value estimates, including those relating to facts and circumstances that occur subsequent to the date of acquisition, are reflected as income or expense, as appropriate.
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\n\nGoodwill and Indefinite-Lived Intangible Assets
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\nWe have goodwill and indefinite-lived intangible assets that have been recorded in connection with the acquisition of Barnes & Noble Education. Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment at least annually. \u00a0We\u00a0monitor these assets on a quarterly basis for potential indicators of impairment. Goodwill is required to be tested for impairment at the reporting unit level, which is an operating segment, or one level below the operating segment.
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\n\nImpairment of Long-Lived Assets
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\nOur long-lived assets include property and equipment, operating lease right-of-use assets, and amortizable intangibles recorded in connection with our business acquisition of Barnes & Noble Education.\u00a0We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset\u2019s carrying value in excess of fair value.
\nSignificant Accounting Policies Related to Barnes & Noble Education
\nA summary of the new significant accounting policies as a result of our acquisition of Barnes & Noble Education is as follows:
\nSeasonality
\nBarnes & Noble Education's\u00a0business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education's quarterly results also may fluctuate depending on the timing of the start of the various schools\u2019 semesters, as well as shifts in its fiscal calendar dates.
\nAs the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to: (i) the rental of physical textbook where revenue is recognized over the rental period, and (ii) ala carte courseware sales where revenue is recognized when the customer takes physical possession of Barnes & Noble Education products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by customers for products ordered through Barnes & Noble Education\u2019s websites and virtual bookstores.
\nRestricted Cash
\nAs of October 31, 2024, Barnes & Noble Education had restricted cash of $17.3 million, comprised of $14.9 million in Prepaid expenses and other current assets in the Condensed\u00a0Consolidated Balance Sheet\u00a0related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $2.4 million in Other assets-noncurrent in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.\u00a0The restricted cash was part of net assets acquired as part of the Transactions (defined below).
\n\nMerchandise Inventories
\nMerchandise inventories, which consist of finished goods, are stated at the lower of cost or market. The market value of Barnes & Noble Education's inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.
\nCost is determined primarily by the retail inventory method for Barnes & Noble Education's retail product sales. Textbook and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of inventories. There were no LIFO adjustments during the period from June 10, 2024, to October 31, 2024.
\nFor the physical bookstores, Barnes & Noble Education also estimates and accrues shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.
\nOn June 10, 2024, Immersion acquired $336.7 million in the merchandise inventory, measured at fair value, as part of the Transactions (defined below).
\n\n\nTextbook Rental Inventories
\nPhysical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of sales. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.
\nOn June 10, 2024, Immersion acquired $9.8 million in rental textbook inventory, measured at fair value, as part of the Transactions (defined below).
\n\nLeases
\nBarnes & Noble Education recognizes lease assets and lease liabilities on the Condensed Consolidated Balance Sheet\u00a0for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification (\u201cASC\u201d) Topic 842, Leases. Barnes & Noble Education does not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). Barnes & Noble Education recognizes lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. Barnes & Noble Education recognizes lease expense related to college and university contracts, inclusive of the amortization of the unfavorable lease terms determined at the acquisition date of June 10, 2024, as cost of sales in the\u00a0Condensed\u00a0Consolidated Statements of Operations and Barnes & Noble Education recognizes lease expense related to its various office spaces as selling and administrative expenses in the Condensed Consolidated Statements of Operations.
\nFor leases entered into after June 10, 2024, Barnes & Noble Education uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the commencement date, as the rate implicit in the lease is not readily determinable. Barnes & Noble Education\u00a0utilizes an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.
\nRevenue Recognition and Deferred Revenue
\nProduct sales and rentals
\nThe majority of Barnes & Noble Education's revenue is derived from the sale of products through its bookstore locations, including virtual bookstores, and its bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of products is recognized at the point in time when control of the products is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for the products.\u00a0
\nProduct sales is recognized when the customer takes physical possession of its products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by its customers for products ordered through websites and virtual bookstores.\u00a0Product\u00a0sales\u00a0shipped from Barnes & Noble Education's wholesale operations are recognized upon shipment of physical textbooks\u00a0at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of sales.
\n\nRevenue from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product sale in Barnes & Noble Education's\u00a0condensed consolidated financial statements. A software feature is embedded within the content of Barnes & Noble Education's digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbooks allow the customer to access digital content for a fixed period of time, once the digital content is delivered to customers, the performance obligation is complete.
\nRevenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in Barnes & Noble Education's condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. Barnes & Noble Education offers a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. It records the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, Barnes & Noble Education accelerates any remaining deferred rental revenue at the point of sale.
\nRevenue recognized for the\u00a0BNC First Day offerings is consistent with Barnes & Noble Education's policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from Barnes & Noble Education's school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day\u00a0affordable textbook access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in Barnes & Noble Education's third quarter given the timing of the Spring Term and its quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.
\nBarnes & Noble Education estimates returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded.
\nFor sales and rentals involving third-party products, Barnes & Noble Education evaluates whether it is acting as a principal or an agent. This determination is based on Barnes & Noble Education's evaluation of whether it controls the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether Barnes & Noble Education controls the specified goods or services prior to transferring them to the customer, including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where Barnes & Noble Education is the principal, it records revenue on a gross basis, and for those transactions where Barnes & Noble Education is an agent to a third-party, it records revenue on a net basis.
\nAs the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics Retail Group Fulfillment, LLC (\u201cFanatics\u201d, collectively, F/L Relationship), Barnes & Noble Education recognizes commission revenue earned for these sales on a net basis in its condensed consolidated financial statements.
\nBarnes & Noble Education does not have gift cards or customer loyalty programs. Barnes & Noble Education does not treat any promotional offers as expenses. Sales tax collected from Barnes & Noble Education's customers is excluded from reported revenues. Barnes & Noble Education's payment terms are generally 30 days and do not extend beyond one year.
\n\nService and other revenue
\nService and other revenue is primarily derived from brand marketing services which include promotional activities and advertisements within Barnes & Noble Education's physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.
\nBrand marketing agreements often include multiple performance obligations which are individually negotiated with Barnes & Noble Education's customers. For these arrangements that contain distinct performance obligations, Barnes & Noble Education allocates the transaction price based on the relative standalone selling price method by comparing the standalone selling price (\u201cSSP\u201d) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand marketing service and over time for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.
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\nCost of Sales
\nCost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses. Rent expense is inclusive of the amortization of unfavorable lease terms that was recognized at the Closing Date.
\nExcept as set forth herein, there\u00a0are no other changes in our significant accounting policies. Please refer to\u00a0Note 1 Significant Accounting Policies\u00a0contained in Part II, Item 8\u00a0of our Annual Report on Form 10-K for the year ended\u00a0December 31, 2023, filed with the SEC on March 11, 2024, for a complete discussion of our\u00a0significant\u00a0accounting policies.
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\nRecent Accounting Pronouncements\u00a0Not Yet Adopted
\nIn November 2024, the Financial Accounting Standards Board (\u2018FASB\u2019) issued Accounting Standards Update (ASU) 2024-03,\u00a0Income Statement \u2013 Reporting Comprehensive Income \u2013 Expense Disaggregation Disclosures. The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. This ASU is effective for annual and interim periods beginning after December 15, 2026 (our 2028 fiscal year), with early adoption permitted. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
\nIn December 2023, the FASB issued ASU No. 2023-09:\u00a0Income Taxes (Topic 740): Improvements to Income Tax Disclosures\u00a0that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance will be effective for the fiscal year beginning May 1, 2025. The guidance does not affect recognition or measurement in our consolidated financial statements.\u00a0We are evaluating the impact of this amendment on our consolidated financial statements.
\nIn November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for us for the annual report for the fiscal year ending April 30, 2025,\u00a0and subsequent interim periods. Early adoption is permitted, and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our consolidated financial statements.
\n\nDescription of Business
\nImmersion Corporation (\u201cImmersion\u201d) was incorporated in 1993 in California and reincorporated in Delaware in 1999. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the \u201cCompany\u201d, \u201cwe\u201d, \u201cus\u201d and \u201cour\u201d refer to Immersion and our consolidated subsidiaries.
\nImmersion generates license and royalty revenues from a wide range of intellectual property (\u201cIP\u201d) that more fully engage users\u2019 sense of touch when operating digital devices. We focus on the following target application areas: mobile devices, wearables, consumer, mobile entertainment and other content; console gaming; automotive; medical; and commercial.
\nOn June 10, 2024, we acquired a controlling interest in Barnes & Noble Education, Inc., a Delaware\u00a0corporation (\u201cBarnes & Noble Education\u201d or \u201cBNED\u201d) refer to Note 2. Business Combination for more information.\u00a0The financial results of Barnes & Noble Education have been included in our condensed consolidated financial statements from the acquisition date of June 10, 2024.
\nBarnes & Noble Education is\u00a0a contract operator of physical and virtual bookstores for college and university campuses and K-12\u00a0institutions across the United States. Barnes & Noble Education is also a textbook wholesaler and inventory management hardware and software providers. Barnes & Noble Education operates physical, virtual, and custom bookstores, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.\u00a0\u00a0
BNC First Day Equitable and Inclusive Access Programs
\nBarnes & Noble Education\u00a0provides product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. Barnes & Noble Education offers its\u00a0BNC First Day\u00ae affordable textbook access programs, consisting of First Day Complete and First Day, which provide faculty-required course materials to students on or before the first day of class.
\n
\u2022 First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students with both physical and digital materials. In addition to providing numerous benefits to students, faculty and administrators, the First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.
\u2022 First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system (\u201cLMS\u201d).
The Barnes & Noble brand (licensed from Barnes & Noble Education's former parent) along with its subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing in the United States. BNED's large college footprint, reputation, and credibility in the marketplace not only support its marketing efforts to universities, students, and faculty, but are also important to its relationship with leading educational publishers who rely on us as one of their primary distribution channels.
Principles of Consolidation and Basis of Presentation
\nThe results of operations reflected in our condensed consolidated financial statements include the accounts of Immersion and our wholly-owned subsidiaries, as well as the accounts of Barnes & Noble Education, a consolidated variable interest entity, since June 10, 2024.\u00a0All significant intercompany accounts and transactions have been eliminated in consolidation.
\nThe noncontrolling interest on the unaudited Condensed Consolidated Statements of Operations represents the portion of earnings or loss attributable to the interest in Barnes & Noble Education held by other owners. The noncontrolling interest on the unaudited Condensed Consolidated Balance Sheets represents the portion of our net assets attributable to the other owners, based on the portion of the interest owned by such owners.\u00a0As of October 31, 2024, the noncontrolling interest was $171.6 million. At the end of each reporting period, equity related to Barnes & Noble Education that is attributable to Immersion and the other owners is rebalanced to reflect Immersion\u2019s and the other owners\u2019 ownership in Barnes & Noble Education.
\n\n\nThe condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (\u201cU.S. GAAP\u201d) for interim financial information and with the instructions for Form 10-Q and the applicable articles of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, and cash flows, in conformity with U.S. GAAP and should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments consisting of only normal and recurring items necessary for the fair presentation of the financial position and results of operations for the interim periods presented have been included. Certain prior year amounts have been reclassified to conform with the current year presentation.
\nDue to their nonhomogeneous operations, our Condensed Consolidated Balance Sheets\u00a0as of October 31, 2024 and April 30, 2024 and Condensed Consolidated Statement of Operations\u00a0for the month ended July 31, 2024 and the three and six months ended October 31, 2024, separately present the operating assets, liabilities, and operations of Immersion\u2019s business from the operating assets, liabilities and operations of Barnes & Noble Education's business.\u00a0 All of the assets of Barnes & Noble Education, reported on the balance sheet, can be used only to settle obligations of Barnes & Noble Education. None of the liabilities of Barnes & Noble Education have recourse to the general credit of Immersion Corporation.
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\n\n
In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
\n"}]},{"name":"rpt:f-632","factDimensions":{"xbrl:concept":"us-gaap:FiscalPeriod","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811"},"factValues":[{"value":"\nReporting Periods
\n\u00a0
\nImmersion previously reported our financial results based on a calendar year basis. For interim period reporting, we reported our quarterly financial results as of March 31; June 30; September 30 and December 31\u00a0in each calendar year.\u00a0Barnes & Noble Education's fiscal year is comprised of\u00a052\u00a0or\u00a053\u00a0weeks, ending on the Saturday closest to the last\u00a0day\u00a0of April.
\nIn order to more closely align with Barnes & Noble Education\u2019s fiscal year end, on September 27, 2024, the Board of Directors of Immersion (the\u00a0\u201cBoard\u201d)\u00a0approved a change of our fiscal year from the period beginning on January 1 and ending on December 31 to the period beginning on May 1 and ending on April 30.\u00a0As a result of the change in fiscal year end, we filed a Transition Report on Form 10-QT for the transition period from\u00a0January 1, 2024,\u00a0through\u00a0April 30, 2024 on November 8, 2024.\u00a0The change in quarterly reporting from the old to the new fiscal year resulted in the\u00a0one\u00a0month period ended July 31, 2024 not being covered by a separate report on Form 10-Q. As this period is not covered in the transition report, it is included in this first initial report on Form 10-Q for the newly adopted fiscal year.\u00a0
\nOur new fiscal year begins on May 1 and ends on April 30. Our new fiscal quarters end on July 31, October 31, January 31 and April 30.\u00a0Therefore, the financial results of certain fiscal quarters may not be comparable to prior fiscal quarters. References throughout this Quarterly Report on Form 10-Q to fiscal\u00a02025\u00a0with respect to Immersion refer to the fiscal year ending April 30, 2025.
\nThe financial information presented in this Quarterly Report on Form 10-Q includes the financial information of Barnes & Noble Education for the\u00a013\u00a0weeks and\u00a026\u00a0weeks ended October 26, 2024.\u00a0
\n\u00a0\u00a0
\nWe did not recast the condensed consolidated financial statements for the three and six\u00a0months ended October 31, 2023\u00a0because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical and would not have been cost-justified.\u00a0Prior to the completion of the Transactions, our business was not highly seasonal and seasonal differences do not generally affect the comparability of prior fiscal quarters.\u00a0As a result, the condensed consolidated financial statements for the three and six months ended June 30, 2023,\u00a0are presented as the most nearly comparable quarter of the prior year.
\nSegment Information
\nFollowing the closing of the Transaction (as defined below) with Barnes & Noble Education, we operate as two\u00a0reportable segments, Immersion and Barnes & Noble Education.\u00a0
\n"}]},{"name":"rpt:f-634","factDimensions":{"xbrl:concept":"us-gaap:NumberOfOperatingSegments","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"immr:Number"},"factValues":[{"value":"2","decimals":0}]},{"name":"rpt:f-635","factDimensions":{"xbrl:concept":"us-gaap:EarningsPerSharePolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811"},"factValues":[{"value":"\nEarnings per Share of the Company
\n
\u00a0 \u00a0 \u00a0 We present both basic and diluted earnings per share (\u201cEPS\u201d) using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to Immersion stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share\u00a0amount.\u00a0
Business Combinations
\nThe determination of the fair value of net assets acquired in a business combination requires estimates and judgments of future cash flow expectations for the acquired business and the related identifiable tangible and intangible assets. Fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques. For current assets and current liabilities, book value is generally assumed to approximate fair value. Goodwill is the amount by which consideration paid for an acquired entity exceeds the fair value of its acquired net assets.\u00a0 Acquisition costs are expensed as incurred and are included within general and administrative expenses in the consolidated statements of operations.
\nDue to the time required to gather and analyze the necessary data for each acquisition, U.S. GAAP provides a \u201cmeasurement period\u201d of up to one year from the date of acquisition in which to finalize these fair value determinations. During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existing as of the date of acquisition or based on the final net assets and working capital of the acquired business, as prescribed in the applicable purchase agreement. Such adjustments may result in the recognition of, or an adjustment to the fair values of, acquisition-related assets and liabilities and/or consideration paid, and are referred to as \u201cmeasurement period\u201d adjustments. Measurement period adjustments are recorded to goodwill. Other revisions to fair value estimates, including those relating to facts and circumstances that occur subsequent to the date of acquisition, are reflected as income or expense, as appropriate.
\n"}]},{"name":"rpt:f-637","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811"},"factValues":[{"value":"\nGoodwill and Indefinite-Lived Intangible Assets
\n\u00a0
\nWe have goodwill and indefinite-lived intangible assets that have been recorded in connection with the acquisition of Barnes & Noble Education. Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment at least annually. \u00a0We\u00a0monitor these assets on a quarterly basis for potential indicators of impairment. Goodwill is required to be tested for impairment at the reporting unit level, which is an operating segment, or one level below the operating segment.
\n"}]},{"name":"rpt:f-638","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOrDisposalOfLongLivedAssetsIncludingIntangibleAssetsPolicyPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811"},"factValues":[{"value":"\nImpairment of Long-Lived Assets
\n\u00a0
\nOur long-lived assets include property and equipment, operating lease right-of-use assets, and amortizable intangibles recorded in connection with our business acquisition of Barnes & Noble Education.\u00a0We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset\u2019s carrying value in excess of fair value.
\nSeasonality
\nBarnes & Noble Education's\u00a0business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. Barnes & Noble Education's quarterly results also may fluctuate depending on the timing of the start of the various schools\u2019 semesters, as well as shifts in its fiscal calendar dates.
\nAs the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to: (i) the rental of physical textbook where revenue is recognized over the rental period, and (ii) ala carte courseware sales where revenue is recognized when the customer takes physical possession of Barnes & Noble Education products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by customers for products ordered through Barnes & Noble Education\u2019s websites and virtual bookstores.
\nRestricted Cash
\nAs of October 31, 2024, Barnes & Noble Education had restricted cash of $17.3 million, comprised of $14.9 million in Prepaid expenses and other current assets in the Condensed\u00a0Consolidated Balance Sheet\u00a0related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $2.4 million in Other assets-noncurrent in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.\u00a0The restricted cash was part of net assets acquired as part of the Transactions (defined below).
\n"}]},{"name":"rpt:f-641","factDimensions":{"xbrl:concept":"us-gaap:RestrictedCashAndCashEquivalents","xbrl:period":"2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"17300000","decimals":-5}]},{"name":"rpt:f-642","factDimensions":{"xbrl:concept":"us-gaap:RestrictedCashAndCashEquivalents","xbrl:period":"2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember","us-gaap:BalanceSheetLocationAxis":"us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember"},"factValues":[{"value":"14900000","decimals":-5}]},{"name":"rpt:f-643","factDimensions":{"xbrl:concept":"us-gaap:RestrictedCashAndCashEquivalents","xbrl:period":"2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember","us-gaap:BalanceSheetLocationAxis":"us-gaap:OtherNoncurrentAssetsMember"},"factValues":[{"value":"2400000","decimals":-5}]},{"name":"rpt:f-644","factDimensions":{"xbrl:concept":"us-gaap:InventoryPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"\nMerchandise Inventories
\nMerchandise inventories, which consist of finished goods, are stated at the lower of cost or market. The market value of Barnes & Noble Education's inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.
\nCost is determined primarily by the retail inventory method for Barnes & Noble Education's retail product sales. Textbook and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of inventories. There were no LIFO adjustments during the period from June 10, 2024, to October 31, 2024.
\nFor the physical bookstores, Barnes & Noble Education also estimates and accrues shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.
\nOn June 10, 2024, Immersion acquired $336.7 million in the merchandise inventory, measured at fair value, as part of the Transactions (defined below).
\n"}]},{"name":"rpt:f-645","factDimensions":{"xbrl:concept":"immr:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedMerchandiseInventories","xbrl:period":"2024-06-11T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"336700000","decimals":-5}]},{"name":"rpt:f-646","factDimensions":{"xbrl:concept":"immr:TextbookRentalsInventoriesPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"\nTextbook Rental Inventories
\nPhysical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of sales. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.
\nOn June 10, 2024, Immersion acquired $9.8 million in rental textbook inventory, measured at fair value, as part of the Transactions (defined below).
\n"}]},{"name":"rpt:f-647","factDimensions":{"xbrl:concept":"immr:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedTextbookRentalInventories","xbrl:period":"2024-06-11T00:00:00","xbrl:entity":"cik:0001058811","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"9800000","decimals":-5}]},{"name":"rpt:f-648","factDimensions":{"xbrl:concept":"us-gaap:LesseeLeasesPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"\nLeases
\nBarnes & Noble Education recognizes lease assets and lease liabilities on the Condensed Consolidated Balance Sheet\u00a0for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification (\u201cASC\u201d) Topic 842, Leases. Barnes & Noble Education does not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). Barnes & Noble Education recognizes lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. Barnes & Noble Education recognizes lease expense related to college and university contracts, inclusive of the amortization of the unfavorable lease terms determined at the acquisition date of June 10, 2024, as cost of sales in the\u00a0Condensed\u00a0Consolidated Statements of Operations and Barnes & Noble Education recognizes lease expense related to its various office spaces as selling and administrative expenses in the Condensed Consolidated Statements of Operations.
\nFor leases entered into after June 10, 2024, Barnes & Noble Education uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the commencement date, as the rate implicit in the lease is not readily determinable. Barnes & Noble Education\u00a0utilizes an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.
\nRevenue Recognition and Deferred Revenue
\nProduct sales and rentals
\nThe majority of Barnes & Noble Education's revenue is derived from the sale of products through its bookstore locations, including virtual bookstores, and its bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of products is recognized at the point in time when control of the products is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for the products.\u00a0
\nProduct sales is recognized when the customer takes physical possession of its products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of products by its customers for products ordered through websites and virtual bookstores.\u00a0Product\u00a0sales\u00a0shipped from Barnes & Noble Education's wholesale operations are recognized upon shipment of physical textbooks\u00a0at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of sales.
\n\nRevenue from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product sale in Barnes & Noble Education's\u00a0condensed consolidated financial statements. A software feature is embedded within the content of Barnes & Noble Education's digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbooks allow the customer to access digital content for a fixed period of time, once the digital content is delivered to customers, the performance obligation is complete.
\nRevenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in Barnes & Noble Education's condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. Barnes & Noble Education offers a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. It records the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, Barnes & Noble Education accelerates any remaining deferred rental revenue at the point of sale.
\nRevenue recognized for the\u00a0BNC First Day offerings is consistent with Barnes & Noble Education's policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from Barnes & Noble Education's school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day\u00a0affordable textbook access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in Barnes & Noble Education's third quarter given the timing of the Spring Term and its quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.
\nBarnes & Noble Education estimates returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded.
\nFor sales and rentals involving third-party products, Barnes & Noble Education evaluates whether it is acting as a principal or an agent. This determination is based on Barnes & Noble Education's evaluation of whether it controls the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether Barnes & Noble Education controls the specified goods or services prior to transferring them to the customer, including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where Barnes & Noble Education is the principal, it records revenue on a gross basis, and for those transactions where Barnes & Noble Education is an agent to a third-party, it records revenue on a net basis.
\nAs the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics Retail Group Fulfillment, LLC (\u201cFanatics\u201d, collectively, F/L Relationship), Barnes & Noble Education recognizes commission revenue earned for these sales on a net basis in its condensed consolidated financial statements.
\nBarnes & Noble Education does not have gift cards or customer loyalty programs. Barnes & Noble Education does not treat any promotional offers as expenses. Sales tax collected from Barnes & Noble Education's customers is excluded from reported revenues. Barnes & Noble Education's payment terms are generally 30 days and do not extend beyond one year.
\n\nService and other revenue
\nService and other revenue is primarily derived from brand marketing services which include promotional activities and advertisements within Barnes & Noble Education's physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.
\nBrand marketing agreements often include multiple performance obligations which are individually negotiated with Barnes & Noble Education's customers. For these arrangements that contain distinct performance obligations, Barnes & Noble Education allocates the transaction price based on the relative standalone selling price method by comparing the standalone selling price (\u201cSSP\u201d) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand marketing service and over time for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.
\nCost of Sales
\nCost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses. Rent expense is inclusive of the amortization of unfavorable lease terms that was recognized at the Closing Date.
\nExcept as set forth herein, there\u00a0are no other changes in our significant accounting policies. Please refer to\u00a0Note 1 Significant Accounting Policies\u00a0contained in Part II, Item 8\u00a0of our Annual Report on Form 10-K for the year ended\u00a0December 31, 2023, filed with the SEC on March 11, 2024, for a complete discussion of our\u00a0significant\u00a0accounting policies.
\n"}]},{"name":"rpt:f-653","factDimensions":{"xbrl:concept":"us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811","us-gaap:BusinessAcquisitionAxis":"immr:BarnesAndNobleEducationIncMember"},"factValues":[{"value":"\nRecent Accounting Pronouncements\u00a0Not Yet Adopted
\nIn November 2024, the Financial Accounting Standards Board (\u2018FASB\u2019) issued Accounting Standards Update (ASU) 2024-03,\u00a0Income Statement \u2013 Reporting Comprehensive Income \u2013 Expense Disaggregation Disclosures. The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. This ASU is effective for annual and interim periods beginning after December 15, 2026 (our 2028 fiscal year), with early adoption permitted. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
\nIn December 2023, the FASB issued ASU No. 2023-09:\u00a0Income Taxes (Topic 740): Improvements to Income Tax Disclosures\u00a0that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance will be effective for the fiscal year beginning May 1, 2025. The guidance does not affect recognition or measurement in our consolidated financial statements.\u00a0We are evaluating the impact of this amendment on our consolidated financial statements.
\nIn November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for us for the annual report for the fiscal year ending April 30, 2025,\u00a0and subsequent interim periods. Early adoption is permitted, and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our consolidated financial statements.
\n\n2.\u00a0 BUSINESS COMBINATION
\nOn June 10, 2024 (\u201cClosing Date\u201d), the Transactions (defined below) were consummated pursuant to the terms of the Purchase Agreement among Barnes & Noble Education and the Purchasers (as defined in the Purchase agreement), following Barnes & Noble Education\u2019s receipt of the requisite approval of its stockholders at a special meeting of its stockholders held on June 5, 2024.\u00a0The following is presented on a post-reverse stock split basis, which is defined as a reverse stock split of Barnes & Noble Education\u2019s outstanding shares of common stock at a ratio of 1-for-100, effective as of June 11, 2024..
\n\u00a0
\nPursuant to the terms of the Purchase Agreement, Barnes & Noble Education conducted a rights offering (the \u201cRights Offering\u201d), whereby Barnes & Noble Education distributed at no charge to the holders of its common stock (\u201cBNED Common Stock\u201d) non-transferable subscription rights (\u201cRights\u201d) to purchase up to an aggregate of 9,000,000 new shares of BNED Common Stock (the \u201cOffered Shares\u201d) at a subscription price of $5.00 per share (the \u201cSubscription Price\u201d). On the Closing Date, Barnes & Noble Education issued the Offered Shares, which generated $45 million\u00a0in gross proceeds, including approximately $10 million\u00a0of Offered Shares purchased by Toro 18 Holdings LLC, a wholly-owned subsidiary of Immersion, (\u201cInvestor\u201d) pursuant to the Backstop Commitment (as defined in the Purchase Agreement). Pursuant to the Backstop Commitment, Immersion through Investor, purchased 2,006,701 shares of BNED Common Stock. Barnes & Noble Education reimbursed Immersion, through Investor, for reasonable legal and other expenses in connection with the Transactions in the amount of $2.5 million. Barnes & Noble Education also paid an amount equal to $2.5 million to Immersion, through Investor, as payment in consideration for its Backstop Commitment.
\n\u00a0
\nIn addition to the Rights Offering, Immersion, through Investor, purchased from Barnes & Noble Education an aggregate of 9,000,000 new shares of BNED Common Stock at the Subscription Price for a purchase price of $45 million (the \u201cPIPE Transaction\u201d, and together with the Rights Offering, the \u201cTransactions\u201d).
\n\u00a0
\nAs a result of the Transactions, Barnes & Noble Education received a total of $95 million in gross proceeds, of which $80.7 million was used to reduce its outstanding debt.
\n\u00a0
\nIn connection with the closing, Barnes & Noble Education appointed Eric Singer, William C. Martin, Emily S. Hoffman, and Elias Nader to serve as members of the board of directors of BNED (the \u201cBNED Board\u201d) following the Closing. Messrs. Singer, Martin and Nader and Ms. Hoffman are current members of our Board. In addition, at the closing, Sean Madnani was appointed to the Barnes & Noble Education Board along with two existing directors, Kathryn Eberle Walker and Denise Warren who will each continue to serve on the BNED Board following the Closing.
\n\u00a0
\nAs part of the Transactions, we acquired 42% of all outstanding common shares of Barnes & Noble Education, as well as control over Barnes & Noble Education\u00a0through the five Immersion-appointed board seats. The total consideration transferred was approximately $50.1 million, consisting of $52.2 million in cash consideration paid to Barnes & Noble Education less $2.1 million in transaction costs incurred by Immersion but reimbursed by Barnes & Noble Education. For the six months ended October 31, 2024, Immersion\u00a0incurred costs related to this acquisition of $1.2 million, inclusive of the expenses reimbursed by Barnes & Noble Education, that were expensed as incurred and recorded in general and administrative expenses\u00a0in the accompanying consolidated statement of operations. The acquisition aims to expand Immersion's offerings, increase its customer reach, and diversify into the education sector.
\n\u00a0
\nThe acquisition was accounted for as a business combination and the total purchase price was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date with the excess recorded as goodwill. We expect to continue to obtain information to assist in determining the fair value of the net assets acquired as of the Closing Date while the measurement period remains open, which will not exceed one year from the acquisition date. Measurement period adjustments related to the acquisition will be applied retrospectively to the Closing Date.
\n\u00a0
\n\u00a0 \u00a0 \u00a0 \u00a0 The fair value of the noncontrolling interest of $203.7 million on the Closing Date was calculated using the acquisition-date fair value of $13.40 per share multiplied by the number of noncontrolling interest shares.
\n\u00a0
\n\n
The following table presents the preliminary purchase\u00a0price allocation for the acquisition (in thousands):
\n| Preliminary Amount Recognized as of\u00a0the Acquisition Date | \n\n | \n | |
| Assets acquired | \n\n | \n | |
| Cash and cash equivalents | \n$ | \n14,736 | \n|
| Accounts receivable | \n\n | 113,743 | \n|
| Merchandise inventories | \n\n | 336,741 | \n|
| Textbook rental inventories | \n\n | 9,835 | \n|
| Prepaid expenses and other current assets (including $4.8 million in restricted cash) | \n\n | 26,969 | \n|
| Property and equipment | \n\n | 118,818 | \n|
| Operating lease right-of-use assets | \n\n | 155,664 | \n|
| Intangible assets | \n\n | 95,000 | \n|
| Other assets noncurrent (including $1.0 million in restricted cash) | \n\n | 11,634 | \n|
| Total assets acquired | \n$ | \n883,140 | \n|
| Liabilities assumed | \n\n | \n | |
| Accounts payable | \n$ | \n279,456 | \n|
| Accrued liabilities | \n\n | 51,123 | \n|
| Deferred revenue\u00a0\u2013 current | \n7,651 | \n||
| Operating lease liabilities\u00a0\u2013 current | \n\n | 80,263 | \n|
| Deferred tax liabilities\u00a0\u2013 noncurrent | \n\n | 636 | \n|
| Operating lease liabilities\u00a0\u2013 noncurrent | \n\n | 107,400 | \n|
| Deferred revenue\u00a0\u2013 noncurrent | \n3,393 | \n||
| Other long-term liabilities | \n\n | 12,413 | \n|
| Long-term borrowings | \n\n | 101,235 | \n|
| Total liabilities assumed | \n$ | \n643,570 | \n|
| Net assets acquired | \n\n | 239,570 | \n|
| \n | \n | \n | |
| Total consideration transferred | \n$ | \n50,133 | \n|
| Less: Net assets acquired | \n\n | (239,570 | \n) | \n
| Plus: Noncontrolling interest | \n\n | 203,657 | \n|
| Goodwill | \n\n | 14,220 | \n
| Amount | \nEstimated Life | \n|||
| Trade name | \n$ | \n45,000 | \nIndefinite | \n|
| Customer relationships | \n50,000 | \n13\u00a0years | \n||
| Total intangible assets | \n$ | \n95,000 | \n
Trade\u00a0name represents Barnes & Noble Education\u2019s right to its trade name on a perpetual, royalty-free basis as it existed on the acquisition Closing Date. Customer relationships consist of distinct values associated with Barnes & Noble\u00a0Education\u2019s large operating footprint with direct access to students and faculty across a diverse customer base.
\nWe used the assistance\u00a0of a third-party firm to estimate the fair value of the intangible assets acquired. We used an\u00a0income approach to estimate the fair values of the trade names and customer relationships.\u00a0The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used to estimate the values of identifiable intangible assets include management\u2019s estimates of future revenue, adjusted for growth and attrition based on historical data and management's forward-looking expectations. These cash flows were discounted at a rate of\u00a021%, which reflects our cost of equity. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flow.
\nGoodwill generated from this acquisition is primarily attributed to the value of Barnes & Noble\u00a0Education\u2019s assembled workforce. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our entire goodwill balance is associated with the Barnes & Noble Education reporting unit. Goodwill is not deductible for tax purposes.
\nWe acquired a deferred tax asset\u00a0of $0.7 million,\u00a0recorded and a deferred tax liability of $1.3 million, recorded under Deferred tax liabilities, net \u2013 noncurrent, as part of this business combination, as shown in the accompanying consolidated balance sheet.
\nWe also used the assistance of a third-party valuation firm to estimate the fair value of the property and equipment, and inventory acquired. The fair value as of the Closing Date reflects a step-up in basis due to the highly depreciable nature of the property and equipment. No material fair value adjustments for inventory were identified, as there are minimal costs associated with procurement.
\u00a0
\nMost of the net tangible assets were valued at their respective carrying amounts as of the acquisition date, as we believe that these amounts approximate their current fair values. The leases acquired were recorded at their respective fair values as of the acquisition date.
\nThe acquired entity\u2019s results of operations were included in our condensed consolidated financial statements from the date of acquisition, June 10, 2024, as adjusted for specific fair value adjustments discussed above. For the month ended July 31, 2024, the\u00a0three and six months ended October 31, 2024, Barnes & Noble Education contributed net operating revenue of $88.0 million, $602.1\u00a0million and $737.2 million, respectively, which is reflected in the accompanying Condensed Consolidated Statement of Operations.\u00a0
\nThe following unaudited pro forma condensed combined financial information gives effect to the acquisition of Barnes & Noble Education as if it was consummated on January 1, 2023 (the beginning of the comparable prior reporting period), and includes pro forma adjustments related to the amortization of acquired intangible assets, stock-based compensation expense, and direct and incremental transaction costs reflected in the historical financial statements. Specifically, the following nonrecurring adjustments were made:
\n| \u2022 | \nFor the six months ended\u00a0October 31, 2024, our direct and incremental acquisition-related expenses of $1.2 million and one-time severance payment of $1.5 million are excluded from the pro forma condensed combined net income. | \n
| \u2022 | \nFor the six months ended June 30, 2023, our direct and incremental acquisition-related expenses of $1.2\u00a0million and\u00a0one-time severance payment of $1.5\u00a0million are included in the pro forma condensed combined net loss. | \n
This unaudited data is presented for informational purposes only and is not intended to represent or be indicative of the results of operations that would have been reported had the acquisition occurred on January 1, 2023. It should not be taken as representative of future results of operations of the combined company.
The following table presents the unaudited pro forma condensed combined financial information (in thousands):
\n| Three Months Ended | \nSix Months Ended | \n||||||||||||||
| October 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n||||||||||||
| Revenues | \n$ | \n616,249 | \n$ | \n221,171 | \n$ | \n928,105 | \n$ | \n667,299 | \n|||||||
| Net income (loss) | \n57,256 | \n(35,189 | \n) | \n1,569 | \n(48,975 | \n) | \n
\n
The following table presents the preliminary purchase\u00a0price allocation for the acquisition (in thousands):
\n| Preliminary Amount Recognized as of\u00a0the Acquisition Date | \n\n | \n | |
| Assets acquired | \n\n | \n | |
| Cash and cash equivalents | \n$ | \n14,736 | \n|
| Accounts receivable | \n\n | 113,743 | \n|
| Merchandise inventories | \n\n | 336,741 | \n|
| Textbook rental inventories | \n\n | 9,835 | \n|
| Prepaid expenses and other current assets (including $4.8 million in restricted cash) | \n\n | 26,969 | \n|
| Property and equipment | \n\n | 118,818 | \n|
| Operating lease right-of-use assets | \n\n | 155,664 | \n|
| Intangible assets | \n\n | 95,000 | \n|
| Other assets noncurrent (including $1.0 million in restricted cash) | \n\n | 11,634 | \n|
| Total assets acquired | \n$ | \n883,140 | \n|
| Liabilities assumed | \n\n | \n | |
| Accounts payable | \n$ | \n279,456 | \n|
| Accrued liabilities | \n\n | 51,123 | \n|
| Deferred revenue\u00a0\u2013 current | \n7,651 | \n||
| Operating lease liabilities\u00a0\u2013 current | \n\n | 80,263 | \n|
| Deferred tax liabilities\u00a0\u2013 noncurrent | \n\n | 636 | \n|
| Operating lease liabilities\u00a0\u2013 noncurrent | \n\n | 107,400 | \n|
| Deferred revenue\u00a0\u2013 noncurrent | \n3,393 | \n||
| Other long-term liabilities | \n\n | 12,413 | \n|
| Long-term borrowings | \n\n | 101,235 | \n|
| Total liabilities assumed | \n$ | \n643,570 | \n|
| Net assets acquired | \n\n | 239,570 | \n|
| \n | \n | \n | |
| Total consideration transferred | \n$ | \n50,133 | \n|
| Less: Net assets acquired | \n\n | (239,570 | \n) | \n
| Plus: Noncontrolling interest | \n\n | 203,657 | \n|
| Goodwill | \n\n | 14,220 | \n
| Amount | \nEstimated Life | \n|||
| Trade name | \n$ | \n45,000 | \nIndefinite | \n|
| Customer relationships | \n50,000 | \n13\u00a0years | \n||
| Total intangible assets | \n$ | \n95,000 | \n
The following table presents the unaudited pro forma condensed combined financial information (in thousands):
\n| Three Months Ended | \nSix Months Ended | \n||||||||||||||
| October 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n||||||||||||
| Revenues | \n$ | \n616,249 | \n$ | \n221,171 | \n$ | \n928,105 | \n$ | \n667,299 | \n|||||||
| Net income (loss) | \n57,256 | \n(35,189 | \n) | \n1,569 | \n(48,975 | \n) | \n
3.\u00a0SEGMENT REPORTING
\n\nWe operate two\u00a0operating and reportable segments, Immersion and Barnes & Noble Education.\u00a0Summarized financial information for our reportable segments is reported below (in thousands):
| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| Revenues: | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n$ | \n1,900 | \n$ | \n14,127 | \n$ | \n6,983 | \n$ | \n62,552 | \n$ | \n14,057 | \n|||||||||
| Barnes & Noble Education | \n88,043 | \n602,122 | \n\u2014 | \n737,186 | \n\u2014 | \n||||||||||||||
| Total revenues | \n89,943 | \n616,249 | \n6,983 | \n799,738 | \n14,057 | \n||||||||||||||
| \n | \n | \n | \n | \n | |||||||||||||||
| Cost of sales (excludes depreciation and amortization expense): | \n\n | \n | \n | \n | |||||||||||||||
| Barnes & Noble Education | \n72,871 | \n465,510 | \n\u2014 | \n579,187 | \n\u2014 | \n||||||||||||||
| Operating expenses: | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n1,752 | \n4,165 | \n3,870 | \n17,576 | \n7,685 | \n||||||||||||||
| Barnes & Noble Education | \n25,835 | \n82,167 | \n\u2014 | \n127,039 | \n\u2014 | \n||||||||||||||
| Total operating expenses | \n27,587 | \n86,332 | \n3,870 | \n144,615 | \n7,685 | \n||||||||||||||
| Operating income (loss) | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n148 | \n9,962 | \n3,113 | \n44,976 | \n6,372 | \n||||||||||||||
| Barnes & Noble Education | \n(10,663 | \n) | \n54,445 | \n\n | \u2014 | \n30,960 | \n\n | \u2014 | \n|||||||||||
| Operating income (loss) | \n$ | \n(10,515 | \n) | \n$ | \n64,407 | \n$ | \n3,113 | \n$ | \n75,936 | \n$ | \n6,372 | \n
We operate two\u00a0operating and reportable segments, Immersion and Barnes & Noble Education.\u00a0Summarized financial information for our reportable segments is reported below (in thousands):
| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| Revenues: | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n$ | \n1,900 | \n$ | \n14,127 | \n$ | \n6,983 | \n$ | \n62,552 | \n$ | \n14,057 | \n|||||||||
| Barnes & Noble Education | \n88,043 | \n602,122 | \n\u2014 | \n737,186 | \n\u2014 | \n||||||||||||||
| Total revenues | \n89,943 | \n616,249 | \n6,983 | \n799,738 | \n14,057 | \n||||||||||||||
| \n | \n | \n | \n | \n | |||||||||||||||
| Cost of sales (excludes depreciation and amortization expense): | \n\n | \n | \n | \n | |||||||||||||||
| Barnes & Noble Education | \n72,871 | \n465,510 | \n\u2014 | \n579,187 | \n\u2014 | \n||||||||||||||
| Operating expenses: | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n1,752 | \n4,165 | \n3,870 | \n17,576 | \n7,685 | \n||||||||||||||
| Barnes & Noble Education | \n25,835 | \n82,167 | \n\u2014 | \n127,039 | \n\u2014 | \n||||||||||||||
| Total operating expenses | \n27,587 | \n86,332 | \n3,870 | \n144,615 | \n7,685 | \n||||||||||||||
| Operating income (loss) | \n\n | \n | \n | \n | |||||||||||||||
| Immersion | \n148 | \n9,962 | \n3,113 | \n44,976 | \n6,372 | \n||||||||||||||
| Barnes & Noble Education | \n(10,663 | \n) | \n54,445 | \n\n | \u2014 | \n30,960 | \n\n | \u2014 | \n|||||||||||
| Operating income (loss) | \n$ | \n(10,515 | \n) | \n$ | \n64,407 | \n$ | \n3,113 | \n$ | \n75,936 | \n$ | \n6,372 | \n
4. REVENUE RECOGNITION
\nImmersion\u00a0
\nDisaggregated Revenue
\n\nThe following table presents the disaggregation of our revenue of Immersion for the month ended July 31, 2024, and the three and six months ended October 31, 2024\u00a0and June 30, 2023 (in thousands):
\n\u00a0
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \n July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Fixed fee license revenue | \n$ | \n483 | \n$ | \n\n 10,676 | \n\n \u00a0 | \n$ | \n\n 1,254 | \n$ | \n56,003 | \n$ | \n2,404 | \n||||||||
| \n Per-unit royalty revenue | \n1,417 | \n\n 3,451 | \n\n \u00a0 | \n\n 5,729 | \n6,549 | \n11,653 | \n|||||||||||||
| \n Total revenues | \n$ | \n1,900 | \n$ | \n\n \u00a014,127 | \n\n \u00a0 | \n$ | \n\n 6,983 | \n$ | \n62,552 | \n$ | \n14,057 | \n
As a result of accruing per-unit royalty revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true up revenue to the actual amounts reported by our licensees. In the three months ended October 31, 2024, we recorded no adjustments to\u00a0royalty revenue recognized in the previous quarter. We recorded adjustments of $0.3\u00a0million to increase royalty revenue during the three months ended June 30, 2023.
\nContract Assets
\nAs of October 31, 2024, we had contract assets of $6.7 million included within Prepaid expenses and other current assets and $24.3 million within Other assets -noncurrent\u00a0on the Condensed Consolidated Balance Sheets. As of April 30, 2024, we had contract assets of $6.6 million included within Prepaid expenses and other current assets\u00a0on the Condensed Consolidated Balance Sheets.\u00a0
\nContract assets increased by $24.4 million from May\u00a01, 2024,\u00a0to October 31, 2024, primarily due to an increase in unbilled revenue related to the new contracts we entered into during the six months ended October 31, 2024.
\n\nDeferred Revenue
\nThe following table presents changes in deferred revenue associated with Immersion\u2019s contract liabilities (in thousands):
\n\u00a0
\n| \n | \n \u00a0 | \n\n October 31, 2024 | \n\n June 30, 2023 | \n||||
| \n Deferred revenue beginning of the period | \n\n $ | \n\n 20,472 | \n$ | \n17,395 | \n|||
| \n Additions to deferred revenue during the period | \n\n \u00a0 | \n\n 1,312 | \n\u2014 | \n||||
| \n Reductions to deferred revenue for revenue recognized during the period | \n\n \u00a0 | \n\n (11,566 | \n) | \n(2,387 | \n) | ||
| \n Deferred revenue balance end of the period | \n$ | \n\n \u00a010,218 | \n$ | \n15,008 | \n
Barnes & Noble Education
\nDisaggregated Revenue\u00a0
\nThe following table disaggregated\u00a0the revenue associated with our major products\u00a0and service offerings\u00a0(in thousands):
\n| \n | One Month Ended July 31, 2024 | \nThree Months Ended October 31, 2024 | \nFrom June 10, 2024 to October 31, 2024 | \n||||||||
| Course material sale | \n$ | \n65,559 | \n$ | \n431,443 | \n$ | \n523,816 | \n|||||
| General merchandise sale | \n15,144 | \n99,659 | \n130,811 | \n||||||||
| Services and other revenue | \n4,342 | \n28,572 | \n35,165 | \n||||||||
| Total product and other revenue | \n85,045 | \n559,674 | \n689,792 | \n||||||||
| Course material rental income | \n2,998 | \n42,448 | \n47,394 | \n||||||||
| Total revenue | \n$ | \n88,043 | \n$ | \n602,122 | \n$ | \n737,186 | \n
Deferred Revenue
The following table presents changes in deferred revenue associated with Barnes & Noble Education's contract liabilities (in thousands):\u00a0
\n| \n | October 31, 2024 | \n||
| Deferred revenue as of the acquisition date | \n$ | \n11,044 | \n|
| Additions to deferred revenue during the period | \n91,225 | \n||
| Reductions to deferred revenue for revenue recognized during the period | \n(61,392 | \n) | |
| Deferred revenue balance at the end of period | \n$ | \n40,877 | \n
The following table presents the disaggregation of our revenue of Immersion for the month ended July 31, 2024, and the three and six months ended October 31, 2024\u00a0and June 30, 2023 (in thousands):
\n\u00a0
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \n July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Fixed fee license revenue | \n$ | \n483 | \n$ | \n\n 10,676 | \n\n \u00a0 | \n$ | \n\n 1,254 | \n$ | \n56,003 | \n$ | \n2,404 | \n||||||||
| \n Per-unit royalty revenue | \n1,417 | \n\n 3,451 | \n\n \u00a0 | \n\n 5,729 | \n6,549 | \n11,653 | \n|||||||||||||
| \n Total revenues | \n$ | \n1,900 | \n$ | \n\n \u00a014,127 | \n\n \u00a0 | \n$ | \n\n 6,983 | \n$ | \n62,552 | \n$ | \n14,057 | \n
The following table presents changes in deferred revenue associated with Immersion\u2019s contract liabilities (in thousands):
\n\u00a0
\n| \n | \n \u00a0 | \n\n October 31, 2024 | \n\n June 30, 2023 | \n||||
| \n Deferred revenue beginning of the period | \n\n $ | \n\n 20,472 | \n$ | \n17,395 | \n|||
| \n Additions to deferred revenue during the period | \n\n \u00a0 | \n\n 1,312 | \n\u2014 | \n||||
| \n Reductions to deferred revenue for revenue recognized during the period | \n\n \u00a0 | \n\n (11,566 | \n) | \n(2,387 | \n) | ||
| \n Deferred revenue balance end of the period | \n$ | \n\n \u00a010,218 | \n$ | \n15,008 | \n
The following table disaggregated\u00a0the revenue associated with our major products\u00a0and service offerings\u00a0(in thousands):
\n| \n | One Month Ended July 31, 2024 | \nThree Months Ended October 31, 2024 | \nFrom June 10, 2024 to October 31, 2024 | \n||||||||
| Course material sale | \n$ | \n65,559 | \n$ | \n431,443 | \n$ | \n523,816 | \n|||||
| General merchandise sale | \n15,144 | \n99,659 | \n130,811 | \n||||||||
| Services and other revenue | \n4,342 | \n28,572 | \n35,165 | \n||||||||
| Total product and other revenue | \n85,045 | \n559,674 | \n689,792 | \n||||||||
| Course material rental income | \n2,998 | \n42,448 | \n47,394 | \n||||||||
| Total revenue | \n$ | \n88,043 | \n$ | \n602,122 | \n$ | \n737,186 | \n
The following table presents changes in deferred revenue associated with Barnes & Noble Education's contract liabilities (in thousands):\u00a0
\n| \n | October 31, 2024 | \n||
| Deferred revenue as of the acquisition date | \n$ | \n11,044 | \n|
| Additions to deferred revenue during the period | \n91,225 | \n||
| Reductions to deferred revenue for revenue recognized during the period | \n(61,392 | \n) | |
| Deferred revenue balance at the end of period | \n$ | \n40,877 | \n
\u00a05. \u00a0INVESTMENTS AND FAIR VALUE MEASUREMENTS
\nWe invest surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal.\u00a0A summary of our investments in marketable equity and debt securities as of October 31, 2024, is as follows:
\nInvestments - current were as follows (in thousands):
\n| \n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n April 30, 2024 | \n||||
| \n Marketable equity securities | \n$ | \n\n 44,413 | \n\n \u00a0 | \n$ | \n\n \u00a0 50,496 | \n||
| \n U.S. treasury securities | \n\n 34,396 | \n\n \u00a0 | \n\n 42,352 | \n||||
| \n Short-term investments | \n$ | \n\n 78,809 | \n\n \u00a0 | \n$ | \n\n 92,848 | \n
Investments- noncurrent were as follows (in thousands):
\n| \n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n April 30, 2024 | \n||||
| \n U.S. treasury securities | \n$ | \n\n \u00a0 \u00a016,101 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 19,747 | \n||
| \n Corporate bonds | \n\n 21,246 | \n\n \u00a0 | \n\n 26,798 | \n||||
| \n Investments- noncurrent | \n$ | \n\n 37,347 | \n\n \u00a0 | \n$ | \n\n 46,545 | \n
Marketable Securities
\n\u00a0
\n\nMarketable securities as of October 31, 2024\u00a0and April 30, 2024\u00a0consisted of the following (in thousands):
\n| \n | \n\n October 31, 2024 | \n||||||||||||||
| \n | \nCost or Amortized Cost | \n\u00a0 | \nUnrealized Gains | \n\u00a0 | \nUnrealized Losses | \n\u00a0 | \nFair Value | \n||||||||
| \n Marketable equity securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Equity securities | \n$ | \n\n 45,339 | \n\n | \n$ | \n\n 2,802 | \n\n | \n$ | \n\n (3,728 | \n) | \n\n | \n$ | \n\n 44,413 | \n|||
| \n Marketable debt securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n\n 49,749 | \n\n | \n\n 748 | \n\n | \n\n \u2014 | \n\n | \n | \n\n 50,497 | \n|||||||
| \n Corporate bonds | \n\n 20,584 | \n\n | \n\n 684 | \n\n | \n\n (22 | \n) | \n\n | \n\n 21,246 | \n|||||||
| \n Total marketable debt securities | \n\n 70,333 | \n\n | \n\n \u00a01,432 | \n\n | \n\n (22 | \n) | \n\n | \n\n \u00a071,743 | \n|||||||
| $ | \n\n 115,672 | \n\n | \n$ | \n\n 4,234 | \n\n | \n$ | \n\n (3,750 | \n) | \n\n | \n$ | \n\n 116,156 | \n
\u00a0
\n| \n | \n\n April 30, 2024 | \n||||||||||||||
| \n | \n\n Cost or Amortized Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Unrealized Losses | \n\n | \n\n Fair Value | \n||||||||
| \n Marketable equity securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Equity securities | \n$ | \n\n \u00a050,645 | \n\n | \n$ | \n\n 5,656 | \n\n | \n$ | \n\n (5,805 | \n) | \n\n | \n$ | \n\n 50,496 | \n|||
| \n Marketable debt securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n\n 61,306 | \n\n | \n\n 825 | \n\n | \n\n (32 | \n) | \n\n | \n\n 62,099 | \n|||||||
| \n Corporate bonds | \n\n 25,695 | \n\n | \n\n 1,151 | \n\n | \n\n (48 | \n) | \n\n | \n\n 26,798 | \n|||||||
| \n Total marketable debt securities | \n\n \u00a087,001 | \n\n | \n\n 1,976 | \n\n | \n\n (80 | \n) | \n\n | \n\n 88,897 | \n|||||||
| \n | \n$ | \n\n 137,646 | \n\n | \n$ | \n\n \u00a07,632 | \n\n | \n$ | \n\n (5,885 | \n) | \n\n | \n$ | \n\n \u00a0139,393 | \n
The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of October 31, 2024 (in thousands) are as follows:\u00a0
\u00a0
\n| \n | \n\n October 31, 2024 | \n||||||
| \n | \n\n Amortized Cost | \n\n | \n\n Fair Value | \n||||
| \n Less than 1 year | \n$ | \n\n \u00a033,842 | \n\n | \n$ | \n\n 34,396 | \n||
| \n 1 to 5 years | \n\n 36,491 | \n\n | \n\n 37,347 | \n||||
| \n Total | \n$ | \n\n \u00a070,333 | \n\n | \n$ | \n\n 71,743 | \n
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0As of October 31, 2024, the fair value of corporate bonds with unrealized loss position was $10.8\u00a0million, with an\u00a0aggregated loss of $22,000.\u00a0 There were no U.S.treasury with unrealized loss position\u00a0at October 31. 2024.As of April 30, 2024, the fair value of available-for-sale debt securities in unrealized loss position for corporate bonds and U.S. treasury securities were $5.6\u00a0million and $25.2\u00a0million, respectively, with an\u00a0aggregated loss of $0.1 million. For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. We had no credit-related impairment loss as of October 31, 2024 and April 30, 2024.
\nDerivative Financial Instruments
\n\u00a0
\n\nOur derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as on our Condensed Consolidated Balance Sheets as of October 31, 2024 and\u00a0April 30, 2024 (in thousands):
\n\u00a0
\n| \n | \n\n October 31, 2024 | \n||||||||||
| \n | \n\n Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Fair Value | \n||||||
| \n Derivative instruments | \n$ | \n\n 7,145 | \n\n | \n$ | \n\n (3,251 | \n) | \n\n | \n$ | \n\n 3,894 | \n||
| \n | \n$ | \n\n 7,145 | \n\n | \n$ | \n\n (3,251 | \n) | \n\n | \n$ | \n\n 3,894 | \n
| \n | \n\n April 30, 2024 | \n||||||||||
| \n | \n\n Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Fair Value | \n||||||
| \n Derivative instruments | \n$ | \n\n 7,935 | \n\n | \n$ | \n\n (2,495 | \n) | \n\n | \n$ | \n\n 5,440 | \n||
| \n | \n$ | \n\n 7,935 | \n\n | \n$ | \n\n (2,495 | \n) | \n\n | \n$ | \n\n 5,440 | \n
| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Net unrealized gains (losses)\u00a0recognized on marketable equity securities | \n$ | \n2,839 | \n$ | \n\n (2,407 | \n) | \n\n | \n$ | \n\n (1,255 | \n) | \n$ | \n(776 | \n) | \n$ | \n759 | \n|||||
| \n Net realized gains recognized on marketable equity securities | \n704 | \n\n \u00a0834 | \n\n | \n | \n\n 4,561 | \n\n | 3,941 | \n6,230 | \n|||||||||||
| \n Net unrealized gains (losses) recognized on derivative instruments | \n1,128 | \n\n 1,282 | \n\n | \n | \n\n (91 | \n) | \n757 | \n\n | (194 | \n) | |||||||||
| \n Net realized gains recognized on derivative instruments | \n172 | \n\n 866 | \n\n | \n | \n\n 1,520 | \n3,462 | \n2,237 | \n||||||||||||
| \n Net realized gains recognized on marketable debt securities | \n1,056 | \n\n 35 | \n\n | \n | \n\n 217 | \n1,308 | \n217 | \n||||||||||||
| \n Total net gains recognized in interest and other income (loss), net | \n$ | \n5,899 | \n$ | \n\n \u00a0610 | \n\n | \n | \n$ | \n\n 4,952 | \n\n | $ | \n8,692 | \n$ | \n9,249 | \n
Fair Value Measurements
Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair value of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of long-term debt approximates its carrying value.
\nOur financial instruments measured at fair value on a recurring basis consisted of U.S. treasury securities, equity securities, corporate bonds and derivatives. Equity securities are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. U.S. treasury securities, corporate bonds and derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.
\nFinancial instruments valued based on unobservable inputs which reflect the reporting entity\u2019s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 of the fair value hierarchy. We did not hold Level 3 financial instruments as of October 31, 2024, and April 30, 2024.
\nFinancial instruments measured at fair value on a recurring basis as of October 31, 2024 and April 30, 2024 are classified based on the valuation technique in the table below (in thousands):
\n| \n | \n\n October 31, 2024 | \n\n | \n\n | \n||||||||||||
| \n | \n\n Fair Value Measurements Using | \n\n | \n\n | \n||||||||||||
| \n | \n\n Quoted\u00a0Prices in Active Markets for Identical Assets (Level 1) | \n\n | \n\n Significant Other Observable Inputs (Level 2) | \n\n | \n\n Significant Unobservable Inputs (Level 3) | \n\n | \n\n Total | \n||||||||
| \n Assets: | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities\u00a0 | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a050,497 | \n\n | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n 50,497 | \n||||
| \n Equity securities | \n\n 44,413 | \n\n | \n\n \u00a0\u2014 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a044,413 | \n||||||||
| \n Corporate bonds | \n\n \u00a0\u2014 | \n\n | \n\n \u00a021,246 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a021,246 | \n||||||||
| \n Total assets at fair value | \n$ | \n\n 44,413 | \n\n | \n$ | \n\n \u00a071,743 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 116,156 | \n||||
| \n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Liabilities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Derivative instruments | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a03,894 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 3,894 | \n||||
| \n Total liabilities at fair value | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a03,894 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 3,894 | \n
| \n | \n\n April 30, 2024 | \n\n | \n\n | \n||||||||||||
| \n | \n\n Fair Value Measurements Using | \n\n | \n\n | \n||||||||||||
| \n | \n\n Quoted\u00a0Prices in Active Markets for Identical Assets (Level 1) | \n\n | \n\n Significant Other Observable Inputs (Level 2) | \n\n | \n\n Significant Unobservable Inputs (Level 3) | \n\n | \n\n Total | \n||||||||
| \n Assets: | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n \u00a0\u00a062,099 | \n\n | \n$ | \n\n \u2014 | \n\n | \n | \n$ | \n\n 62,099 | \n|||
| \n Equity securities | \n\n \u00a050,496 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a0\u2014 | \n\n | \n\n \u00a050,496 | \n||||||||
| \n Corporate bonds | \n\n 8,220 | \n\n | \n\n 18,578 | \n\n | \n\n \u00a0\u00a0\u2014 | \n\n | \n\n 26,798 | \n||||||||
| \n Total assets at fair value | \n$ | \n\n 58,716 | \n\n | \n$ | \n\n 80,677 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 139,393 | \n||||
| \n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Liabilities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Derivative instruments | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a05,440 | \n\n | \n$ | \n\n \u00a0\u00a0\u2014 | \n\n | \n$ | \n\n \u00a0\u00a05,440 | \n||||
| \n Total liabilities at fair value | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a0\u00a05,440 | \n\n | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n 5,440 | \n
Investments - current were as follows (in thousands):
\n| \n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n April 30, 2024 | \n||||
| \n Marketable equity securities | \n$ | \n\n 44,413 | \n\n \u00a0 | \n$ | \n\n \u00a0 50,496 | \n||
| \n U.S. treasury securities | \n\n 34,396 | \n\n \u00a0 | \n\n 42,352 | \n||||
| \n Short-term investments | \n$ | \n\n 78,809 | \n\n \u00a0 | \n$ | \n\n 92,848 | \n
Investments- noncurrent were as follows (in thousands):
\n| \n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n April 30, 2024 | \n||||
| \n U.S. treasury securities | \n$ | \n\n \u00a0 \u00a016,101 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 19,747 | \n||
| \n Corporate bonds | \n\n 21,246 | \n\n \u00a0 | \n\n 26,798 | \n||||
| \n Investments- noncurrent | \n$ | \n\n 37,347 | \n\n \u00a0 | \n$ | \n\n 46,545 | \n
Marketable securities as of October 31, 2024\u00a0and April 30, 2024\u00a0consisted of the following (in thousands):
\n| \n | \n\n October 31, 2024 | \n||||||||||||||
| \n | \nCost or Amortized Cost | \n\u00a0 | \nUnrealized Gains | \n\u00a0 | \nUnrealized Losses | \n\u00a0 | \nFair Value | \n||||||||
| \n Marketable equity securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Equity securities | \n$ | \n\n 45,339 | \n\n | \n$ | \n\n 2,802 | \n\n | \n$ | \n\n (3,728 | \n) | \n\n | \n$ | \n\n 44,413 | \n|||
| \n Marketable debt securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n\n 49,749 | \n\n | \n\n 748 | \n\n | \n\n \u2014 | \n\n | \n | \n\n 50,497 | \n|||||||
| \n Corporate bonds | \n\n 20,584 | \n\n | \n\n 684 | \n\n | \n\n (22 | \n) | \n\n | \n\n 21,246 | \n|||||||
| \n Total marketable debt securities | \n\n 70,333 | \n\n | \n\n \u00a01,432 | \n\n | \n\n (22 | \n) | \n\n | \n\n \u00a071,743 | \n|||||||
| $ | \n\n 115,672 | \n\n | \n$ | \n\n 4,234 | \n\n | \n$ | \n\n (3,750 | \n) | \n\n | \n$ | \n\n 116,156 | \n
\u00a0
\n| \n | \n\n April 30, 2024 | \n||||||||||||||
| \n | \n\n Cost or Amortized Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Unrealized Losses | \n\n | \n\n Fair Value | \n||||||||
| \n Marketable equity securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Equity securities | \n$ | \n\n \u00a050,645 | \n\n | \n$ | \n\n 5,656 | \n\n | \n$ | \n\n (5,805 | \n) | \n\n | \n$ | \n\n 50,496 | \n|||
| \n Marketable debt securities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n\n 61,306 | \n\n | \n\n 825 | \n\n | \n\n (32 | \n) | \n\n | \n\n 62,099 | \n|||||||
| \n Corporate bonds | \n\n 25,695 | \n\n | \n\n 1,151 | \n\n | \n\n (48 | \n) | \n\n | \n\n 26,798 | \n|||||||
| \n Total marketable debt securities | \n\n \u00a087,001 | \n\n | \n\n 1,976 | \n\n | \n\n (80 | \n) | \n\n | \n\n 88,897 | \n|||||||
| \n | \n$ | \n\n 137,646 | \n\n | \n$ | \n\n \u00a07,632 | \n\n | \n$ | \n\n (5,885 | \n) | \n\n | \n$ | \n\n \u00a0139,393 | \n
The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of October 31, 2024 (in thousands) are as follows:\u00a0
\u00a0
\n| \n | \n\n October 31, 2024 | \n||||||
| \n | \n\n Amortized Cost | \n\n | \n\n Fair Value | \n||||
| \n Less than 1 year | \n$ | \n\n \u00a033,842 | \n\n | \n$ | \n\n 34,396 | \n||
| \n 1 to 5 years | \n\n 36,491 | \n\n | \n\n 37,347 | \n||||
| \n Total | \n$ | \n\n \u00a070,333 | \n\n | \n$ | \n\n 71,743 | \n
Our derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as on our Condensed Consolidated Balance Sheets as of October 31, 2024 and\u00a0April 30, 2024 (in thousands):
\n\u00a0
\n| \n | \n\n October 31, 2024 | \n||||||||||
| \n | \n\n Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Fair Value | \n||||||
| \n Derivative instruments | \n$ | \n\n 7,145 | \n\n | \n$ | \n\n (3,251 | \n) | \n\n | \n$ | \n\n 3,894 | \n||
| \n | \n$ | \n\n 7,145 | \n\n | \n$ | \n\n (3,251 | \n) | \n\n | \n$ | \n\n 3,894 | \n
| \n | \n\n April 30, 2024 | \n||||||||||
| \n | \n\n Cost | \n\n | \n\n Unrealized Gains | \n\n | \n\n Fair Value | \n||||||
| \n Derivative instruments | \n$ | \n\n 7,935 | \n\n | \n$ | \n\n (2,495 | \n) | \n\n | \n$ | \n\n 5,440 | \n||
| \n | \n$ | \n\n 7,935 | \n\n | \n$ | \n\n (2,495 | \n) | \n\n | \n$ | \n\n 5,440 | \n
| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Net unrealized gains (losses)\u00a0recognized on marketable equity securities | \n$ | \n2,839 | \n$ | \n\n (2,407 | \n) | \n\n | \n$ | \n\n (1,255 | \n) | \n$ | \n(776 | \n) | \n$ | \n759 | \n|||||
| \n Net realized gains recognized on marketable equity securities | \n704 | \n\n \u00a0834 | \n\n | \n | \n\n 4,561 | \n\n | 3,941 | \n6,230 | \n|||||||||||
| \n Net unrealized gains (losses) recognized on derivative instruments | \n1,128 | \n\n 1,282 | \n\n | \n | \n\n (91 | \n) | \n757 | \n\n | (194 | \n) | |||||||||
| \n Net realized gains recognized on derivative instruments | \n172 | \n\n 866 | \n\n | \n | \n\n 1,520 | \n3,462 | \n2,237 | \n||||||||||||
| \n Net realized gains recognized on marketable debt securities | \n1,056 | \n\n 35 | \n\n | \n | \n\n 217 | \n1,308 | \n217 | \n||||||||||||
| \n Total net gains recognized in interest and other income (loss), net | \n$ | \n5,899 | \n$ | \n\n \u00a0610 | \n\n | \n | \n$ | \n\n 4,952 | \n\n | $ | \n8,692 | \n$ | \n9,249 | \n
Financial instruments measured at fair value on a recurring basis as of October 31, 2024 and April 30, 2024 are classified based on the valuation technique in the table below (in thousands):
\n| \n | \n\n October 31, 2024 | \n\n | \n\n | \n||||||||||||
| \n | \n\n Fair Value Measurements Using | \n\n | \n\n | \n||||||||||||
| \n | \n\n Quoted\u00a0Prices in Active Markets for Identical Assets (Level 1) | \n\n | \n\n Significant Other Observable Inputs (Level 2) | \n\n | \n\n Significant Unobservable Inputs (Level 3) | \n\n | \n\n Total | \n||||||||
| \n Assets: | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities\u00a0 | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a050,497 | \n\n | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n 50,497 | \n||||
| \n Equity securities | \n\n 44,413 | \n\n | \n\n \u00a0\u2014 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a044,413 | \n||||||||
| \n Corporate bonds | \n\n \u00a0\u2014 | \n\n | \n\n \u00a021,246 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a021,246 | \n||||||||
| \n Total assets at fair value | \n$ | \n\n 44,413 | \n\n | \n$ | \n\n \u00a071,743 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 116,156 | \n||||
| \n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Liabilities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Derivative instruments | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a03,894 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 3,894 | \n||||
| \n Total liabilities at fair value | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a03,894 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 3,894 | \n
| \n | \n\n April 30, 2024 | \n\n | \n\n | \n||||||||||||
| \n | \n\n Fair Value Measurements Using | \n\n | \n\n | \n||||||||||||
| \n | \n\n Quoted\u00a0Prices in Active Markets for Identical Assets (Level 1) | \n\n | \n\n Significant Other Observable Inputs (Level 2) | \n\n | \n\n Significant Unobservable Inputs (Level 3) | \n\n | \n\n Total | \n||||||||
| \n Assets: | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n U.S. treasury securities | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n \u00a0\u00a062,099 | \n\n | \n$ | \n\n \u2014 | \n\n | \n | \n$ | \n\n 62,099 | \n|||
| \n Equity securities | \n\n \u00a050,496 | \n\n | \n\n \u2014 | \n\n | \n\n \u00a0\u2014 | \n\n | \n\n \u00a050,496 | \n||||||||
| \n Corporate bonds | \n\n 8,220 | \n\n | \n\n 18,578 | \n\n | \n\n \u00a0\u00a0\u2014 | \n\n | \n\n 26,798 | \n||||||||
| \n Total assets at fair value | \n$ | \n\n 58,716 | \n\n | \n$ | \n\n 80,677 | \n\n | \n$ | \n\n \u2014 | \n\n | \n$ | \n\n 139,393 | \n||||
| \n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Liabilities | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n\n | \n||||||||
| \n Derivative instruments | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a05,440 | \n\n | \n$ | \n\n \u00a0\u00a0\u2014 | \n\n | \n$ | \n\n \u00a0\u00a05,440 | \n||||
| \n Total liabilities at fair value | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n \u00a0\u00a05,440 | \n\n | \n$ | \n\n \u00a0\u2014 | \n\n | \n$ | \n\n 5,440 | \n
6.\u00a0 \u00a0LEASES
\nImmersion
\nImmersion leases office space, which is accounted for as an operating lease in accordance with the provisions of ASC Topic 842, with expiration dates on or before March 31, 2026. Immersion recognizes lease expense on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets. Immersion combines lease and non-lease components for new and reassessed leases, and applies discount rates to operating leases under a portfolio approach. \u00a0
\n\u00a0
\n\nThe following table summarizes additional information related to Immersion\u2019s operating leases:\u00a0
\n| \n \u00a0 | \n\n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n \u00a0 | \n\n June 30, 2023 | ||
| \n Weighted average remaining lease terms (in years) | \n\n \u00a0 | \n\n 1.50 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 0.70 | \n\n \u00a0 |
| \n Weighted average discount rate | \n\n \u00a0 | \n\n 4.7 | \n\n % | \n\n \u00a0 | \n\n \u00a0 | \n\n N/A\u00a0 | \n\n |
Barnes & Noble Education
\nBarnes & Noble Education leases the right to operate on-campus bookstores at colleges and universities, office space and vehicles under operating leases in accordance with the provisions of ASC Topic 842, with expiration dates on or before June 30, 2033. Barnes & Noble Education recognizes lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of the underlying leased asset. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets. Barnes & Noble Education combines lease and non-lease components for new and reassessed leases, and applies discount rates to operating leases under a portfolio approach. \u00a0
\n\u00a0
\nBarnes & Noble Education used its incremental borrowing rates to determine the present value of fixed lease payments based on the information available on June 10, 2024 (\u201cClosing Date\u201d, as discussed in Note 2, Business Combinations), as the rate implicit in the lease is not readily determinable. It utilized an estimated collateralized incremental borrowing rate as of the Closing Date. The Company also evaluated the leases for unfavorable terms and recorded an adjustment for unfavorable market terms of $32.0 million. Unfavorable lease liabilities are presented net of the corresponding right of use asset.
\n\nThe following table summarizes additional information related to Barnes & Noble Education\u2019s operating leases:\u00a0
\n| \n | One Month Ended July 31, 2024 | \nThree Months Ended October 31, 2024 | \nFrom June 10, 2024 to October 31, 2024 | \n||||||||
| Operating lease cost | \n$ | \n2,279 | \n$ | \n26,039 | \n$ | \n31,826 | \n|||||
| Variable lease payments | \n5,967 | \n29,771 | \n39,036 | \n||||||||
| Sublease income | \n1,006 | \n15,138 | \n19,399 | \n||||||||
| Total lease cost | \n$ | \n9,252 | \n$ | \n70,948 | \n$ | \n90,261 | \n
| For the period June 10, 2024 to October 31, 2024 | \n|||
| Cash paid for amounts included in the measurement of lease liabilities | \n27,421 | \n||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | \n48,143 | \n||
| Weighted-average remaining lease term (in years) | \n4.7 | \n||
| Weighted-average discount rate | \n6.6 | \n% |
The following table summarizes additional information related to Immersion\u2019s operating leases:\u00a0
\n| \n \u00a0 | \n\n \u00a0 | \n\n October 31, 2024 | \n\n \u00a0 | \n\n \u00a0 | \n\n June 30, 2023 | ||
| \n Weighted average remaining lease terms (in years) | \n\n \u00a0 | \n\n 1.50 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 0.70 | \n\n \u00a0 |
| \n Weighted average discount rate | \n\n \u00a0 | \n\n 4.7 | \n\n % | \n\n \u00a0 | \n\n \u00a0 | \n\n N/A\u00a0 | \n\n |
The following table summarizes additional information related to Barnes & Noble Education\u2019s operating leases:\u00a0
\n| \n | One Month Ended July 31, 2024 | \nThree Months Ended October 31, 2024 | \nFrom June 10, 2024 to October 31, 2024 | \n||||||||
| Operating lease cost | \n$ | \n2,279 | \n$ | \n26,039 | \n$ | \n31,826 | \n|||||
| Variable lease payments | \n5,967 | \n29,771 | \n39,036 | \n||||||||
| Sublease income | \n1,006 | \n15,138 | \n19,399 | \n||||||||
| Total lease cost | \n$ | \n9,252 | \n$ | \n70,948 | \n$ | \n90,261 | \n
| For the period June 10, 2024 to October 31, 2024 | \n|||
| Cash paid for amounts included in the measurement of lease liabilities | \n27,421 | \n||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | \n48,143 | \n||
| Weighted-average remaining lease term (in years) | \n4.7 | \n||
| Weighted-average discount rate | \n6.6 | \n% |
7.\u00a0 \u00a0GOODWILL AND INTANGIBLE ASSETS
\nGoodwill
\nWe recognized $14.2 million in goodwill as the result of the business combination with BNED on June 10, 2024, as further described in Note 2. Business Combination. The carrying value of goodwill as of October 31, 2024 and April 30, 2024, were $14.2 million and $0, respectively.
\nIn accordance with ASC Topic 350, Intangibles - Goodwill and Other, the Company did not record any goodwill impairment losses during the three\u00a0and six months ended October 31, 2024. Goodwill represents the future economic benefit attributable to the Barnes & Noble Education's assembled workforce, which is not individually and separately recognized as an intangible asset. As such, the carrying value of goodwill has been allocated to the Barnes & Noble Education Segment and none of the goodwill has been allocated to the Immersion Segment.
\nIntangible Assets, net
\nThe following is a summary of intangible assets excluding goodwill recorded as intangible assets on our Condensed Consolidated Balance Sheets as of October 31, 2024 (in thousands):
\n| \n \u00a0 | \n\n \u00a0 | \n\n As of October 31, 2024 | \n||||||||||||||
| \n \u00a0 | \n\n \u00a0 | \n\n Gross Carrying Amount | \n\n \u00a0 | \n\n Accumulated Amortization | \n\n \u00a0 | \n\n Net Carrying Amount | \n\n \u00a0 | \n\n Weighted-average remaining life (Years) | \n||||||||
| \n Trade name | \n\n $ | \n\n 45,000 | \n\n $ | \n\n \u2014 | \n\n $ | \n\n 45,000 | \n\n \u00a0 | \n\n Infinite | \n||||||||
| \n Customer relationships | \n\n \u00a0 | \n\n 50,000 | \n\n \u00a0 | \n\n (1,496 | \n) | \n\n \u00a0 | \n\n 48,504 | \n\n \u00a0 | \n\n 12.6 | \n|||||||
| \n Total | \n\n $ | \n\n 95,000 | \n\n $ | \n\n (1,496 | \n) | \n\n $ | \n\n 93,504 | \n\n \u00a0 | \n\n \u00a0 | \n
Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives. Trade name is determined to have an indefinite useful life and is not subject to amortization.
\nAmortization expense was $0.3\u00a0million\u00a0for the month ended\u00a0July 31, 2024.\u00a0Amortization expense was $1.0\u00a0million for the three months ended October 31, 2024. Amortization expense was $1.5 million for the period from June 10, 2024, to October 31, 2024.\u00a0
\nEstimated amortization expense of the intangible\u00a0assets to be recognized by the Company are as follows (in thousands):
\n| \n Year ended April 30, | \n\n \u00a0 | \n\n \u00a0 | \n||
| \n Remainder of 2025 | \n\n $ | \n\n 1,923 | \n||
| \n 2026 | \n\n \u00a0 | \n\n 3,846 | \n||
| \n 2027 | \n\n \u00a0 | \n\n 3,846 | \n||
| \n 2028 | \n\n \u00a0 | \n\n 3,846 | \n||
| 2029 | \n3,846 | \n|||
| \n Thereafter | \n\n \u00a0 | \n\n 31,197 | \n||
| \n Total | \n\n $ | \n\n 48,504 | \n
The following is a summary of intangible assets excluding goodwill recorded as intangible assets on our Condensed Consolidated Balance Sheets as of October 31, 2024 (in thousands):
\n| \n \u00a0 | \n\n \u00a0 | \n\n As of October 31, 2024 | \n||||||||||||||
| \n \u00a0 | \n\n \u00a0 | \n\n Gross Carrying Amount | \n\n \u00a0 | \n\n Accumulated Amortization | \n\n \u00a0 | \n\n Net Carrying Amount | \n\n \u00a0 | \n\n Weighted-average remaining life (Years) | \n||||||||
| \n Trade name | \n\n $ | \n\n 45,000 | \n\n $ | \n\n \u2014 | \n\n $ | \n\n 45,000 | \n\n \u00a0 | \n\n Infinite | \n||||||||
| \n Customer relationships | \n\n \u00a0 | \n\n 50,000 | \n\n \u00a0 | \n\n (1,496 | \n) | \n\n \u00a0 | \n\n 48,504 | \n\n \u00a0 | \n\n 12.6 | \n|||||||
| \n Total | \n\n $ | \n\n 95,000 | \n\n $ | \n\n (1,496 | \n) | \n\n $ | \n\n 93,504 | \n\n \u00a0 | \n\n \u00a0 | \n
Estimated amortization expense of the intangible\u00a0assets to be recognized by the Company are as follows (in thousands):
\n| \n Year ended April 30, | \n\n \u00a0 | \n\n \u00a0 | \n||
| \n Remainder of 2025 | \n\n $ | \n\n 1,923 | \n||
| \n 2026 | \n\n \u00a0 | \n\n 3,846 | \n||
| \n 2027 | \n\n \u00a0 | \n\n 3,846 | \n||
| \n 2028 | \n\n \u00a0 | \n\n 3,846 | \n||
| 2029 | \n3,846 | \n|||
| \n Thereafter | \n\n \u00a0 | \n\n 31,197 | \n||
| \n Total | \n\n $ | \n\n 48,504 | \n
8.\u00a0\u00a0DEBT
\nThe following is a summary of Barnes & Noble\u00a0Education\u2019s outstanding borrowing as of October 31, 2024 (in thousands):
\n| \n \u00a0 | \n\n Maturity Date | \n\n \u00a0 | \n\n | \n As of October 31, 2024 | \n||
| \n Total debt - Barnes & Noble credit facility | \n\n June 9, 2028 | \n\n \u00a0 | \n$ | \n\n 177,551 | \n||
| \n Balance sheet classification: | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||
| \n Long-term borrowings | \n\n \u00a0 | \n\n \u00a0 | \n$ | \n\n 177,551 | \n
Interest under the Restated ABL Facility accrues, at the election of Barnes & Noble Education, either (x) based on the Secured Overnight Financing Rate (\u201cSOFR\u201d), which is subject to a floor of 2.5% per annum, plus a spread of 3.5% per annum or (y) at an alternate base rate, which is subject to a floor of 3.5% per annum, plus a spread of 2.5% per annum, provided that, in the event Barnes & Noble Education meets certain financial metrics for a consecutive period beginning and ending after the one-year anniversary of the Closing Date, the foregoing spreads shall be reduced by 0.25% per annum.
\n| \n \u2022 | \n\n following the date that is six months following the Closing Date, Barnes & Noble Education is required to maintain a minimum Availability (as defined in the Restated ABL Facility agreement) of (x) $25\u00a0million for the first thirty (30) months after the Closing Date and (y) $30\u00a0million after the date that is thirty (30) months after the Closing Date; | |
| \n \u2022 | \n\n commencing with the month ending on or about May 31, 2025, Barnes & Noble Education is required to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Restated ABL Facility) of not less than 1.10 to 1.00, which will be tested monthly on the last day of each fiscal month for the trailing 12-month period; and | |
| \n \u2022 | \n\n commencing with the quarter ending on or about October 31, 2024, Barnes & Noble Education is required to maintain a minimum Consolidated EBITDA (as defined in the Restated ABL Facility), which will be tested quarterly on the last day of each fiscal quarter for (a) the trailing period for the first test date, (b) the trailing period of the second test date and (c) for the trailing 12-month period thereafter. |
The\u00a0Restated ABL Facility contains customary events of default, including for non-payment of obligations owing under the Credit Facility, material breaches of representations and warranties, failure to perform or observe covenants, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The\u00a0Restated ABL Facility\u00a0also contains customary affirmative covenants and representations and warranties.\u00a0
\nThe credit facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the credit facility. This is considered an all asset\u00a0lien (inclusive of proceeds from tax refunds payable to Barnes & Noble Education and pledge of equity from subsidiaries, exclusive of real estate).\u00a0None of the liabilities of Barnes & Noble Education have\u00a0recourse\u00a0to the general credit of Immersion Corporation.
\nIn connection with the Restated ABL Facility, with respect to the 1.0% fee payable in connection with the eighth amendment to the Restated ABL Facility (prior to its having been restated), (x) 50% was paid on September 2, 2024, and (y) 50% is due and payable on June 10, 2025.
\nAs of October 31, 2024, and through the date of this filing, Barnes & Noble Education was in compliance with all debt covenants under the Restated ABL Facility.
\nDuring the period from June 10, 2024, to October 31, 2024, Barnes & Noble Education borrowed $404.1 million and repaid $327.8 million under the Restated ABL Facility, with $177.6 million of outstanding borrowings under the Restated ABL Facility\u00a0as of October 31, 2024. As of October 31, 2024, Barnes & Noble Education issued $3.6 million in letters of credit under the Restated ABL Facility.\u00a0\u00a0
| \n \u00a0 | \n\n Maturity Date | \n\n \u00a0 | \n\n | \n As of October 31, 2024 | \n||
| \n Total debt - Barnes & Noble credit facility | \n\n June 9, 2028 | \n\n \u00a0 | \n$ | \n\n 177,551 | \n||
| \n Balance sheet classification: | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||
| \n Long-term borrowings | \n\n \u00a0 | \n\n \u00a0 | \n$ | \n\n 177,551 | \n
9. STOCK-BASED COMPENSATION
\nImmersion
\nOur equity incentive program is a long-term retention program that is intended to attract, retain, and provide incentives for employees, consultants, officers, and directors and to align stockholder and employee interests. We may grant time-based options, market condition-based options, stock appreciation rights, restricted stock awards (\u201cRSAs\u201d), restricted stock units (\u201cRSUs\u201d), performance shares, market condition-based performance restricted stock units (\u201cPSUs\u201d), and other stock-based equity awards to employees, officers, directors, and consultants.
\nOn January 18, 2022, our stockholders approved the 2021\u00a0Equity Incentive Plan\u00a0(as amended, the \u201c2021\u00a0Plan\u201d),\u00a0which provides for a total number of shares reserved and available for grant and issuance equal to 3,525,119\u00a0shares plus up to an additional 855,351 shares that are subject to stock options or other awards previously granted under the 2011\u00a0Equity Incentive Plan.\u00a0On March 30, 2023, our stockholders approved an amendment to the\u00a02021\u00a0Plan which increased the total number of shares reserved and available for grant and issuance equal to 8,146,607\u00a0shares plus up to an additional\u00a0855,351\u00a0shares that are subject to stock options or other awards previously granted under the\u00a02011\u00a0Equity Incentive Plan.
\nUnder our equity incentive plans, stock options may be granted at prices not less than the fair market value on the date of grant for such stock options. Stock options generally vest over four years and expire seven years from the applicable grant date. Market condition-based stock awards are subject to a market conditions whereby the closing price of our common stock must exceed a certain level for a number of trading days within a specified time frame or the awards will be canceled before expiration. RSAs generally vests over one year. RSUs generally vest over three years. Awards granted other than a stock option or a stock appreciation right shall reduce the common stock shares available for grant by 1.75 shares for every share issued.
\nA summary of our equity incentive program as of October 31, 2024 is as follows (in thousands):
\n| \n Common stock shares available for grant | \n\n 2,824 | \n|
| \n RSUs outstanding | \n\n 1,361 | \n|
| \n RSAs outstanding | \n\n 86 | \n|
| \n PSUs outstanding | \n\n 50 | \n
As of October 31, 2024, we did not have any outstanding stock options.
\n\u00a0
\n\nThe following summarizes RSU activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Restricted Stock Units (in thousands) | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n | \n Weighted Average Remaining Contractual Term (Years) | \n\n \u00a0 | \n\n Aggregate Intrinsic Value (in thousands) | \n||||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,129 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a06.53 | \n\n | \n 1.09 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 8,207 | \n||||||
| \n Granted | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 424 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 9.38 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n||||||||
| \n Released | \n\n (192 | \n) | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a05.91 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||||||
| \n Forfeited | \n\n \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0 \u00a0 \u00a0\u00a01,361 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0\u00a07.50 | \n\n | \n 0.74 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a011,469 | \n
The aggregate intrinsic value is calculated as the market value as of the end of the reporting period.
Restricted Stock Awards
\n\nThe following summarizes RSA activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Restricted Stock Awards | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n \u00a0 | \n\n Weighted Average Remaining Recognition Period (Years) | \n||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a086 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a07.25 | \n\n \u00a0 | \n\n 1.00 | \n|||||
| \n Granted | \n\n \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Released | \n\n \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Forfeited | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0 \u00a0 \u00a0 \u00a0 86 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a07.25 | \n\n \u00a0 | \n\n 0.49 | \n
Market Condition-Based Performance Stock Units
In the first quarter of 2022, we granted\u00a0600,000\u00a0shares of PSUs to certain members of our management team. Each PSU represents the right to one share of our common stock with vesting subject to: (a) the achievement of specified levels of the volume weighted average closing prices of our common stock during any 100 day-period between January 1, 2022 and January 1, 2027, subject to certification by the Compensation Committee (\u201cPerformance Milestones\u201d); and (b) continued employment with us through the later of each achievement date or service vesting date, which occurs over a three (3) year period commencing on January 1, 2022.\u00a0
\nIn March 2023, the Performance Milestone of the first tranche was achieved.\u00a0 The second tranche Performance Milestone was achieved in the first quarter of fiscal 2025. In August 2024, the Performance Milestone of the third and final tranche was met. As of October 31, 2024, 50,000\u00a0PSUs were outstanding and will be released upon the satisfaction of the services condition.
\nThe following summarizes PSU activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Market Condition-Based Performance Stock Units (in thousands) | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n \u00a0 | \n\n Weighted Average Remaining Recognition Period (Years) | \n||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0400 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.63 | \n\n \u00a0 | \n\n 0.42 | \n|||||
| \n Granted | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Released | \n\n (350 | \n) | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03.63 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Forfeited | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a050 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.63 | \n\n \u00a0 | \n\n 0.17 | \n
Stock-based Compensation Expense
\nValuation and amortization methods
\nStock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation related to all of our stock-based awards for the month ended July 31, 2024, the\u00a0three and six months ended October 31, 2024, and June 30, 2023 is as follows (in thousands):\u00a0
\n\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Stock options | \n$ | \n\u2014 | \n$\u00a0 | \n\n \u2014 | \n\n | \n \u00a0 | \n$\u00a0 | \n\n 16 | \n\n | $ | \n\u2014 | \n\n | $ | \n(40 | \n) | ||||
| \n RSUs, RSAs and PSUs | \n863 | \n\n \u00a0 \u00a02,154 | \n\n \u00a0 | \n\n \u00a0 \u00a0 744 | \n3,685 | \n1,747 | \n|||||||||||||
| \n Total | \n$ | \n863 | \n$\u00a0 | \n\n 2,154 | \n\n \u00a0 | \n$\u00a0 | \n\n \u00a0 \u00a0 \u00a0\u00a0760 | \n$ | \n3,685 | \n$ | \n1,707 | \n
As of October 31, 2024, there was $5.6 million of unrecognized compensation cost adjusted for estimated forfeitures related to unvested, RSUs, RSAs and PSUs granted to our employees and directors. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 1.2 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.\u00a0
\nBarnes & Noble Education\u00a0
\nBarnes & Noble\u00a0Education\u00a0grants options, restricted stock awards and restricted stock units under the Barnes & Noble Education Equity Incentive Plan. On June 10, 2024, as part of the business combination, we assumed the following equity awards:
\n| \n | Shares Assumed | \n||
| Stock options | \n25,191 | \n||
| Restricted stock award | \n4,853 | \n||
| Restricted stock unit | \n1,518 | \n||
| Total equity awards assumed | \n31,562 | \n
The total fair value of equity award assumed was $33,000.\u00a0
\nOn June 18, 2024, Barnes & Noble Education\u00a0granted 7,441 RSUs and 29,764 RSAs\u00a0to the members of BNED Board. These\u00a0awards vested on September 18, 2024.\u00a0
\nOn September 20, 2024,\u00a0Barnes & Noble Education granted\u00a061,290 RSUs\u00a0and 81,720 RSAs\u00a0to members of BNED Board. These awards vest on the earlier of one year from the date of grant or the next annual meeting of stockholders.
\nOn September 20, 2024,\u00a0Barnes & Noble Education granted 1,533,250 PSUs\u00a0to employees that include both a service condition and market condition in order for PSUs to vest.\u00a0The PSUs vest upon BNED Common Stock achieving a specified price per share (measured using a 100-day average volume weighted average price) for each of three tranches and continued employment through a specified date. There is a period of seven years\u00a0from the grant date in order to achieve the specific target share price. We have determined the grant date fair value using the Monte Carlo simulation\u00a0model and compensation expense is recognized ratably over the service derived period regardless of whether the market condition is satisfied. The fair value models for the PSUs use assumptions that include the risk-free interest rate and expected volatility. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected PSU term. Volatility is based on the historical volatility of Barnes & Noble Education's common stock over a period of time corresponding to the expected PSU term.\u00a0
\n\n| PSU Tranche #1 | \nPSU Tranche #2\u00a0 | \nPSU Tranche #3 | \n|||||||||
| Performance Milestone (VWAP) | \n$ | \n10.00 | \n$ | \n15.00 | \n$ | \n20.00 | \n|||||
| Valuation method utilized | \n\n | \n | \n | ||||||||
| Risk-free interest rate | \n3.53 | \n% | \n3.53 | \n% | \n3.53 | \n% | |||||
| Company volatility | \n120 | \n% | \n120 | \n% | \n120 | \n% | |||||
| Derived service period | \n1.0 year | \n2.0 years | \n3.0 years | \n||||||||
| Grant date fair value per award | \n$ | \n9.74 | \n$ | \n9.62 | \n$ | \n9.46 | \n
Stock-based Compensation Expense
\nFor the month ended July 31, 2024, the three months ended October 31, 2024, and the period from June 10, 2024, to October 31, 2024, the total stock-based compensation expense for options,\u00a0RSAs, RSUs\u00a0and PSUs\u00a0were $0.1 million,\u00a0 $1.0 million and $1.1 million, respectively.\u00a0
\nThe total\u00a0unrecognized compensation cost related to unvested awards as of October 31, 2024, was $15.2 million and is expected to be recognized over a weighted-average period of\u00a01.8 years.
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\n| \n Common stock shares available for grant | \n\n 2,824 | \n|
| \n RSUs outstanding | \n\n 1,361 | \n|
| \n RSAs outstanding | \n\n 86 | \n|
| \n PSUs outstanding | \n\n 50 | \n
The following summarizes RSU activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Restricted Stock Units (in thousands) | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n | \n Weighted Average Remaining Contractual Term (Years) | \n\n \u00a0 | \n\n Aggregate Intrinsic Value (in thousands) | \n||||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,129 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a06.53 | \n\n | \n 1.09 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 8,207 | \n||||||
| \n Granted | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 424 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 9.38 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n||||||||
| \n Released | \n\n (192 | \n) | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a05.91 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||||||
| \n Forfeited | \n\n \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n | \n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n|||||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0 \u00a0 \u00a0\u00a01,361 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0\u00a07.50 | \n\n | \n 0.74 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a011,469 | \n
The following summarizes RSA activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Restricted Stock Awards | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n \u00a0 | \n\n Weighted Average Remaining Recognition Period (Years) | \n||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a086 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a07.25 | \n\n \u00a0 | \n\n 1.00 | \n|||||
| \n Granted | \n\n \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Released | \n\n \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2014 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Forfeited | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0 \u00a0 \u00a0 \u00a0 86 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a07.25 | \n\n \u00a0 | \n\n 0.49 | \n
The following summarizes PSU activities for the six months ended\u00a0October 31, 2024:
\n| \n \u00a0 | \n\n Number of Market Condition-Based Performance Stock Units (in thousands) | \n\n \u00a0 | \n\n Weighted Average Grant Date Fair Value Per Share | \n\n \u00a0 | \n\n Weighted Average Remaining Recognition Period (Years) | \n||||||
| \n Outstanding at April 30, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0400 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.63 | \n\n \u00a0 | \n\n 0.42 | \n|||||
| \n Granted | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n||||||
| \n Released | \n\n (350 | \n) | \n\n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03.63 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Forfeited | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n | \n \u00a0 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n|||||
| \n Outstanding at October 31, 2024 | \n\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a050 | \n\n \u00a0 | \n$ | \n\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a03.63 | \n\n \u00a0 | \n\n 0.17 | \n
| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Stock options | \n$ | \n\u2014 | \n$\u00a0 | \n\n \u2014 | \n\n | \n \u00a0 | \n$\u00a0 | \n\n 16 | \n\n | $ | \n\u2014 | \n\n | $ | \n(40 | \n) | ||||
| \n RSUs, RSAs and PSUs | \n863 | \n\n \u00a0 \u00a02,154 | \n\n \u00a0 | \n\n \u00a0 \u00a0 744 | \n3,685 | \n1,747 | \n|||||||||||||
| \n Total | \n$ | \n863 | \n$\u00a0 | \n\n 2,154 | \n\n \u00a0 | \n$\u00a0 | \n\n \u00a0 \u00a0 \u00a0\u00a0760 | \n$ | \n3,685 | \n$ | \n1,707 | \n
Barnes & Noble\u00a0Education\u00a0grants options, restricted stock awards and restricted stock units under the Barnes & Noble Education Equity Incentive Plan. On June 10, 2024, as part of the business combination, we assumed the following equity awards:
\n| \n | Shares Assumed | \n||
| Stock options | \n25,191 | \n||
| Restricted stock award | \n4,853 | \n||
| Restricted stock unit | \n1,518 | \n||
| Total equity awards assumed | \n31,562 | \n
| PSU Tranche #1 | \nPSU Tranche #2\u00a0 | \nPSU Tranche #3 | \n|||||||||
| Performance Milestone (VWAP) | \n$ | \n10.00 | \n$ | \n15.00 | \n$ | \n20.00 | \n|||||
| Valuation method utilized | \n\n | \n | \n | ||||||||
| Risk-free interest rate | \n3.53 | \n% | \n3.53 | \n% | \n3.53 | \n% | |||||
| Company volatility | \n120 | \n% | \n120 | \n% | \n120 | \n% | |||||
| Derived service period | \n1.0 year | \n2.0 years | \n3.0 years | \n||||||||
| Grant date fair value per award | \n$ | \n9.74 | \n$ | \n9.62 | \n$ | \n9.46 | \n
10.\u00a0 EMPLOYEE BENEFIT PLAN\u00a0
Barnes & Noble Education sponsors defined contribution plans for the benefit of substantially all of its employees. MBS Textbook Exchange, LLC (\u201cMBS\u201d), a subsidiary of Barnes & Noble Education, maintains a profit-sharing plan covering substantially all full-time employees of MBS. For all plans, Barnes & Noble Education is responsible to fund the employer contributions directly, if any. There was\u00a0no benefit expense for these plans during the period from June 10, 2024, to October 26, 2024.
11.\u00a0\u00a0STOCKHOLDERS\u2019 EQUITY
\nStock Repurchase Program
On December 29, 2022, the\u00a0Board\u00a0approved a stock repurchase program of up to $50.0\u00a0million of our common stock for a period of up to\u00a0twelve\u00a0months (the \u201cDecember 2022 Stock Repurchase Program\u201d), which terminated and superseded the stock repurchase program that had been approved by the Board on February 23, 2022. Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to\u00a0one\u00a0or more Rule\u00a010b5-1\u00a0trading plans adopted in accordance with Rule\u00a010b5-1\u00a0of the Securities Exchange Act of\u00a01934, as amended. Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the foregoing transactions. The December 2022 Stock Repurchase Program was implemented as a method to return value to our stockholders. The timing, pricing and sizes of any repurchases will depend on a number of factors, including the market price of our common stock and general market and economic conditions. The December 2022 Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time.\u00a0On 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\u00a0December 29, 2023,\u00a0to\u00a0December 29, 2024.\u00a0On August 27, 2024, 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, 2024, to December 29, 2025.
\nWe did not repurchase any stock during the six months ended October 31, 2024. As of October 31, 2024, we had $41.7 million available for repurchase under the December 2022 Stock Repurchase Program.\u00a0
\nDividends Declared and Dividend Payments
\nOn 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 stockholders of record on January 14, 2024.
\nOn February 28, 2024, our Board declared a quarterly dividend in the amount of\u00a0$0.045\u00a0per share, which was paid on April 19, 2024,\u00a0to stockholders of record on April 12, 2024.\u00a0
\nOn May 8, 2024, our Board declared a quarterly dividend in the amount of\u00a0$0.045\u00a0per share, which was paid on\u00a0July 26, 2024. to stockholders of record on July 8, 2024.
\nOn August 12, 2024, our Board declared a quarterly dividend in the amount of $0.045 per share, which was paid on October 18, 2024, to stockholders of record on October 4, 2024.
\nFuture dividends will be subject to further review and approval by the Board in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews our capital allocation strategy from time to time.
\nIn the six months ended October 31,\u00a02024\u00a0and June 30, 2023, the total dividends paid were $3.0 million and $3.0 million, respectively.
\n\nAt-the-Market Equity Offerings
\nOn September 19, 2024, Barnes & Noble Education entered into an At-the-Market (\"ATM\") Sales Agreement with BTIG, LLC (\u201cBTIG\u201d) (the \"Sales Agreement\"), under Barnes & Noble Education may offer and sell BNED Common Stock from time to time through BTIG as its sales agent. BTIG will use commercially reasonable efforts to sell an aggregate offering of up to $40 million of BNED Common Stock from time to time, based upon Barnes & Noble Education\u2019s instructions (including any price, time or size limits or other customary parameters or conditions Barnes & Noble Education may impose). Barnes & Noble Education will pay BTIG a commission of 2% of the gross sales proceeds of any common shares sold under the Sales Agreement. Barnes & Noble Education is not obligated to make any sales of common shares under the Sales Agreement. During the three months ended October 31, 2024, Barnes & Noble Education issued and sold 1,046,460 shares of BNED Common Stock under the sales agreement at a weighted-average price of $9.35 per share and received $9.6 million in proceeds, net of commissions.
| October 31, 2024 | \n|||||||
| Shares Owned | \n% of Ownership | \n||||||
| \n Number of Barnes & Noble Education Common Stock held by Immersion | \n11,006,701 | \n40.30 | \n% | ||||
| \n Number of Barnes & Noble Education Common Stock held by\u00a0noncontrolling\u00a0interest | \n16,279,830 | \n59.70 | \n% | ||||
| \n Total Barnes & Noble Education common stock outstanding | \n27,286,531 | \n100.0 | \n% |
| \n | One Month Ended July 31, 2024 | \n\n | Three Month Ended October 31, 2024 | \n\n | From June 10, 2024 to October 31, 2024 | \n||||||
| \n Non-controlling interest holders' weighted average ownership percentages | \n\n | 58.0 | \n\n | 58.6 | \n\n | 58.2 | \n
| \n | \n | One Month Ended July 31, 2024 | \n\n | Three Month Ended October 31, 2024 | \n\n | From June 10, 2024 to October 31, 2024 | \n|||||
| \n Net Income (loss) attributable to Immersion | \n$ | \n(4,891 | \n) | \n$ | \n20,171 | \n\n | $ | \n9,480 | \n|||
| \n Transfers from (to) non-controlling interests: | \n\n | \n | \n | \n | \n | \n | |||||
| \n Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, and sales of common stock | \n$ | \n\u2014 | \n\n | $ | \n(42 | \n) | \n$ | \n56,410 | \n|||
| \n Total effect of changes in ownership interest on equity attributable to Immersion stockholders | \n$ | \n(4,891 | \n) | \n$ | \n20,129 | \n\n | $ | \n65,890 | \n
| October 31, 2024 | \n|||||||
| Shares Owned | \n% of Ownership | \n||||||
| \n Number of Barnes & Noble Education Common Stock held by Immersion | \n11,006,701 | \n40.30 | \n% | ||||
| \n Number of Barnes & Noble Education Common Stock held by\u00a0noncontrolling\u00a0interest | \n16,279,830 | \n59.70 | \n% | ||||
| \n Total Barnes & Noble Education common stock outstanding | \n27,286,531 | \n100.0 | \n% |
| \n | One Month Ended July 31, 2024 | \n\n | Three Month Ended October 31, 2024 | \n\n | From June 10, 2024 to October 31, 2024 | \n||||||
| \n Non-controlling interest holders' weighted average ownership percentages | \n\n | 58.0 | \n\n | 58.6 | \n\n | 58.2 | \n
| \n | \n | One Month Ended July 31, 2024 | \n\n | Three Month Ended October 31, 2024 | \n\n | From June 10, 2024 to October 31, 2024 | \n|||||
| \n Net Income (loss) attributable to Immersion | \n$ | \n(4,891 | \n) | \n$ | \n20,171 | \n\n | $ | \n9,480 | \n|||
| \n Transfers from (to) non-controlling interests: | \n\n | \n | \n | \n | \n | \n | |||||
| \n Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, and sales of common stock | \n$ | \n\u2014 | \n\n | $ | \n(42 | \n) | \n$ | \n56,410 | \n|||
| \n Total effect of changes in ownership interest on equity attributable to Immersion stockholders | \n$ | \n(4,891 | \n) | \n$ | \n20,129 | \n\n | $ | \n65,890 | \n
13.\u00a0\u00a0INCOME TAXES\u00a0
\nProvision for income taxes for the month ended July 31, 2024, and the\u00a0three and six months ended October 31, 2024 and June 30, 2023 consisted of the following (in thousands):
\n| One Month Ended\u00a0 | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Income (loss) before provision for income taxes | \n$ | \n(5,457 | \n) | \n$\u00a0 | \n63,400 | \n\u00a0 | \n$\u00a0 | \n\u00a09,872 | \n\n | $ | \n83,258 | \n$ | \n19,657 | \n||||||
| \n Provision for income taxes | \n(976 | \n) | \n(7,641 | \n) | \n\u00a0 | \n(2,844 | \n) | \n(15,104 | \n) | \n(4,351 | \n) | ||||||||
| \n Effective tax rate | \n(17.9 | \n)% | \n12.1 | \n% | \n\u00a0 | \n28.8 | \n% | \n18.1 | \n% | \n22.1 | \n% |
Provision for income taxes for the month ended July 31, 2024, and the three and six months ended\u00a0October 31, 2024\u00a0resulted primarily from\u00a0estimated domestic and foreign taxes included in the calculation of the effective tax rate.
\nWe provided\u00a0no\u00a0valuation allowance for federal deferred tax assets, whose future realization is more likely than not and continue to maintain full valuation allowance for certain state deferred tax assets in the United States as well as federal tax assets in Canada. Changes in provision for income taxes resulted primarily from the change in income from continuing operations across various tax jurisdictions.
\nIn 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.
\nAs of\u00a0October 31, 2024, we had unrecognized tax benefits under ASC 740\u00a0Income Taxes\u00a0of approximately $7.6\u00a0million, all of the $7.6\u00a0million could be payable in cash. In addition, interest and penalty of $0.2\u00a0million could also be payable in cash in relation to unrecognized tax benefits. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $7.6\u00a0million.\u00a0We 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\u00a0twelve\u00a0months.
\nBarnes & Noble Education
\nBarnes & Noble Education recorded an income tax provision of $1.3\u00a0million on pre-tax loss of $48.5\u00a0million\u00a0during the period of May 1, 2024, to October 31, 2024, which represented an effective income tax rate of\u00a0(2.6)%.
\nIn assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of October 31, 2024, Barnes & Noble Education determined that it was more likely than not that it would not realize all deferred tax assets and its tax rate for the current fiscal year reflects this determination. Barnes & Noble Education will continue to evaluate this position.\u00a0\u00a0\u00a0\u00a0
\nUnder Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an \u201cownership change\u201d (generally defined as a cumulative change in our ownership by \u201c5-percent shareholders\u201d that exceeds 50 percentage points over a rolling three-year period), the corporation\u2019s ability to use its pre-change net operating losses and certain other pre-change tax attributes to offset its post-change income and taxes may be limited. Similar rules may apply under state tax laws. As a result of the rights offering, backstop commitment, private investment, and debt term loan conversion completed on June 10, 2024, Barnes & Noble Education\u00a0may have experienced an ownership change as defined by Sections 382 and 383. Barnes & Noble Education intends to perform a study to determine if an ownership change has occurred. If it is determined that an ownership change has occurred under Section 382 and 383, Barnes & Noble Education expects any corresponding annual limitations to severely impact the future utilization of its tax attributes including its $265.5\u00a0million NOL carryforward.
"}]},{"name":"rpt:f-1250","factDimensions":{"xbrl:concept":"immr:ScheduleOfIncomeTaxProvisionsFromContinuingOperationsTableTextBlock","xbrl:period":"2024-05-01T00:00:00/2024-11-01T00:00:00","xbrl:entity":"cik:0001058811"},"factValues":[{"value":"\nProvision for income taxes for the month ended July 31, 2024, and the\u00a0three and six months ended October 31, 2024 and June 30, 2023 consisted of the following (in thousands):
\n| One Month Ended\u00a0 | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | |||||||||||||||
| \n Income (loss) before provision for income taxes | \n$ | \n(5,457 | \n) | \n$\u00a0 | \n63,400 | \n\u00a0 | \n$\u00a0 | \n\u00a09,872 | \n\n | $ | \n83,258 | \n$ | \n19,657 | \n||||||
| \n Provision for income taxes | \n(976 | \n) | \n(7,641 | \n) | \n\u00a0 | \n(2,844 | \n) | \n(15,104 | \n) | \n(4,351 | \n) | ||||||||
| \n Effective tax rate | \n(17.9 | \n)% | \n12.1 | \n% | \n\u00a0 | \n28.8 | \n% | \n18.1 | \n% | \n22.1 | \n% |
14. EARNINGS PER SHARE
\nWe use the two-class method of computing EPS, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared. Under the two-class method, basic earnings per share is computed by dividing the income attributable to Immersion stockholders by the weighted-average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.\u00a0Potential common stock, computed using the treasury stock method, includes stock options and stock awards.
\nThe following are\u00a0reconciliations of the denominators used in computing basic and diluted net income per share (in thousands):\u00a0
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n|||||||||||||||
| Numerator for basic earnings per share: | \n|||||||||||||||||||
| \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0Net income attributable to Immersion stockholders | \n$ | \n323 | \n\n | $ | \n27,157 | \n$ | \n7,028 | \n$ | \n54,317 | \n$ | \n15,306 | \n||||||||
| \n Denominator: | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n||||||||||||||||
| \n Weighted-average shares outstanding, basic | \n31,970 | \n\n \u00a032,222 | \n\n \u00a0 | \n\n \u00a032,583 | \n32,093 | \n32,474 | \n|||||||||||||
| \n Shares related to outstanding options, unvested RSUs, RSAs, and PSUs | \n730 | \n\n \u00a0695 | \n\n \u00a0 | \n\n \u00a0227 | \n796 | \n365 | \n|||||||||||||
| \n Weighted average shares outstanding, diluted | \n32,700 | \n\n \u00a032,917 | \n\n \u00a0 | \n\n \u00a032,810 | \n32,889 | \n32,839 | \n|||||||||||||
| Net income per share attributable to Immersion stockholders | \n|||||||||||||||||||
| Basic | \n$ | \n0.01 | \n\n | $ | \n0.84 | \n$ | \n0.22 | \n$ | \n1.69 | \n$ | \n0.47 | \n||||||||
| Diluted | \n$ | \n0.01 | \n\n | $ | \n0.83 | \n$ | \n0.21 | \n$ | \n1.65 | \n$ | \n0.47 | \n
We include PSUs in the calculation of diluted earnings per share if the applicable performance conditions have\u00a0been satisfied as of the end of the reporting period and exclude stock equity awards if the performance condition has not been met.
\n\nFor the month ended July 31, 2024 and the\u00a0three and six months ended October 31, 2024\u00a0and June 30, 2023, we had stock options, RSUs, PSUs and RSAs outstanding that could potentially dilute basic earnings per share in the future, but these were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. These outstanding securities consisted of the following (in thousands):
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n|||||||||||||||
| \n Stock options | \n\n \u2014 | \n\n | \n\n \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n\n | \n\n 136 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0\u00a0 | \n\n \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n\n | \n 138 | \n\n \u00a0 | |||
| \n RSUs, RSAs and PSUs | \n\u2014 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 10 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 3 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | |||
| \n Total | \n\u2014 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 146 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 3 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 143 | \n\n \u00a0 |
The following are\u00a0reconciliations of the denominators used in computing basic and diluted net income per share (in thousands):\u00a0
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n|||||||||||||||
| Numerator for basic earnings per share: | \n|||||||||||||||||||
| \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0Net income attributable to Immersion stockholders | \n$ | \n323 | \n\n | $ | \n27,157 | \n$ | \n7,028 | \n$ | \n54,317 | \n$ | \n15,306 | \n||||||||
| \n Denominator: | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n||||||||||||||||
| \n Weighted-average shares outstanding, basic | \n31,970 | \n\n \u00a032,222 | \n\n \u00a0 | \n\n \u00a032,583 | \n32,093 | \n32,474 | \n|||||||||||||
| \n Shares related to outstanding options, unvested RSUs, RSAs, and PSUs | \n730 | \n\n \u00a0695 | \n\n \u00a0 | \n\n \u00a0227 | \n796 | \n365 | \n|||||||||||||
| \n Weighted average shares outstanding, diluted | \n32,700 | \n\n \u00a032,917 | \n\n \u00a0 | \n\n \u00a032,810 | \n32,889 | \n32,839 | \n|||||||||||||
| Net income per share attributable to Immersion stockholders | \n|||||||||||||||||||
| Basic | \n$ | \n0.01 | \n\n | $ | \n0.84 | \n$ | \n0.22 | \n$ | \n1.69 | \n$ | \n0.47 | \n||||||||
| Diluted | \n$ | \n0.01 | \n\n | $ | \n0.83 | \n$ | \n0.21 | \n$ | \n1.65 | \n$ | \n0.47 | \n
For the month ended July 31, 2024 and the\u00a0three and six months ended October 31, 2024\u00a0and June 30, 2023, we had stock options, RSUs, PSUs and RSAs outstanding that could potentially dilute basic earnings per share in the future, but these were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. These outstanding securities consisted of the following (in thousands):
\n| One Month Ended | \nThree Months Ended | \nSix Months Ended | |||||||||||||||||
| \u00a0July 31, 2024 | \nOctober 31, 2024 | \nJune 30, 2023 | \nOctober 31, 2024 | \nJune 30, 2023 | \n|||||||||||||||
| \n Stock options | \n\n \u2014 | \n\n | \n\n \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n\n | \n\n 136 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0\u00a0 | \n\n \u2014 | \n\n \u00a0 | \n\n \u00a0 | \n\n | \n 138 | \n\n \u00a0 | |||
| \n RSUs, RSAs and PSUs | \n\u2014 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 10 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 3 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | |||
| \n Total | \n\u2014 | \n\n \u00a0 | \n\n 5 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 146 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 3 | \n\n \u00a0 | \n\n \u00a0 | \n\n \u00a0 | \n\n 143 | \n\n \u00a0 |
\u00a015. COMMITMENTS AND\u00a0CONTINGENCIES\u00a0
\n\n
\u00a0 \u00a0 \u00a0 \u00a0We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows.\t
\nIn the normal course of business, we provide indemnification of varying scope to customers, most commonly to licensees in connection with licensing arrangements that include our IP, although these provisions can cover additional matters. Historically, costs related to these guarantees have not been significant, and we are unable to estimate the maximum potential impact of these guarantees on our future results of operations.
\n\u00a0
\nLGE Korean Withholding Tax Matter
\nOn October 16, 2017, we received a letter from LG Electronics Inc. (\u201cLGE\u201d) 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\u2019s royalty payments to Immersion Software Ireland, a subsidiary of the Company, from 2012 to 2014. 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. In the second quarter of 2020, we recorded this deposit in Long-term deposits on our Condensed Consolidated Balance Sheets.\u00a0In the fourth quarter of\u00a02021, we recorded an impairment charge of $0.8\u00a0million related to the long-term deposits paid to LGE.
\nOn November 3, 2017, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2012 to 2017\u00a0period. The Korea Tax Tribunal hearing took place on March 5, 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\u2019 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. We have had numerous hearings before the Korea Administrative Court in the years 2019 through 2022. 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.\u00a0In connection with the Korea Administrative Court\u2019s 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\u2019s decision.\u00a0The appellate case is in progress at the Seoul High Court and the first and the second hearings took place on November 30, 2023, and February 1, 2024, respectively. However, the next hearing will be set at a later date.
\nOn April 25, 2023, we received notice from LGE requesting us 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. 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. In the second quarter of 2023, we recorded this deposit in Long-term deposits on our Condensed Consolidated Balance Sheets. On June 29, 2023, on behalf of LGE, we 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 September 8, 2023, on behalf of LGE, the Company submitted its rebuttal brief in response thereto. On September 25, 2023, the Korean tax authority 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. In response thereto, on behalf of LGE, we filed an appeal with the Korea Administrative Court on December 29, 2023. On July 23, 2024, the Korea Tax Tribunal rendered a decision against LGE, and the deadline for the court appeal of the local income claim is October 21, 2024. In addition, the Korea Administrative Court scheduled a hearing date of August 29, 2024, which was cancelled and will be rescheduled at a later date. On October 18, 2024, the Company filed a complaint and a brief with the Korea Administrative Court for the local income tax appeal.\u00a0This case has been reassigned due to its significance and the Korean tax authority filed its answer on November 27, 2024. As of October 31, 2024, we have accrued $0.3 million of withholding taxes, interest and penalties related to the 2018 to 2022 period for which the Korean tax authorities have recently assessed LGE. These withholding taxes have been reclassified and reported as an impairment reduction to the Long-term deposit made in the third quarter of 2023 in order to present the deposit at its estimated recoverable value.
\nBased on the developments in these cases, we regularly reassess the likelihood that we will prevail in the claims from the Korean tax authorities with respect to the LGE case. 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 Condensed Consolidated Statements of Operations and Comprehensive Income (loss). In the event that 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 Condensed Consolidated Statements of Operations and Comprehensive Income\u00a0(Loss) in the period of the new determination. If the additional income tax expense was related to the periods assessed by Korean tax authorities and for which we recorded a Long-term deposit on our Condensed Consolidated Balance Sheets, then the additional income tax expense would be recorded as an impairment to the Long-term deposits. If the additional income tax expense was not related to the periods assessed by Korean tax authorities and for which we recorded in Long-term deposits on our Condensed Consolidated Balance Sheets, then the additional income tax expense would be accrued as an Other current liabilities.\u00a0
\nIn the event that we do not ultimately prevail in our appeal in the Korean courts with respect to this case, the applicable deposits included in Long-term deposits would be recorded as additional income tax expense on our Condensed Consolidated Statements of Operation and Comprehensive Income (loss), in the period in which we do not ultimately prevail.
\nImmersion Corporation vs. Xiaomi Group
\nOn or about March 3, 2023,\u00a0the Company initiated patent infringement lawsuits against several companies of the Xiaomi-Group in Germany, France and India\u00a0(the \u201cXiaomi Litigation\u201d). Immersion filed complaints against Xiaomi-Group companies and their agents in the D\u00fcsseldorf 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. The complaints alleged that the Xiaomi-Group\u2019s devices, including the Xiaomi 12, infringed Immersion's patents that cover various uses of haptic effects in connection with such devices.
\nOn June 12, 2024, the Company entered into a Patent License Agreement (the \u201cXiaomi License Agreement\u201d) with the Xiaomi Group, pursuant to which the parties have agreed to terms for resolving the Xiaomi Litigation and the Xiaomi Group will license, on a non-exclusive basis, the Company\u2019s patent portfolio for use in its products.\u00a0The Xiaomi Litigation was dismissed in October 2024.
Immersion Corporation vs. Valve Corporation\u00a0(\u201cValve\u201d)
\nOn May 15, 2023, the Company filed a complaint against Valve in the United States District Court for the Western District of Washington.\u00a0\u00a0The complaint alleges that Valve\u2019s 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.\u00a0\u00a0The Company is seeking\u00a0to enjoin\u00a0Valve from further infringement and to recover a reasonable royalty for such infringement.
\nThe complaint against Valve asserts infringement of the following patents:
\n| \n | \n \u2022 | \n\n U.S. Patent No. 7,336,260: \u201cMethod and Apparatus for Providing Tactile Sensations\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 8,749,507: \u201cSystems and Methods for Adaptive Interpretation of Input from a\u00a0Touch-Sensitive Input Device\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 9,430,042: \u201cVirtual Detents Through\u00a0Vibrotactile\u00a0Feedback\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 9,116,546: \u201cSystem for\u00a0Haptically\u00a0Representing Sensor Input\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 10,627,907: \u201cPosition Control of a User Input Element Associated with a Haptic Output Device\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 10,665,067: \u201cSystems and Methods for Integrating Haptics Overlay in\u00a0Augmented Reality\u201d |
| \n | \n \u2022 | \n\n U.S. Patent No. 11,175,738: \u201cSystems and Methods for Proximity-Based Haptic Feedback\u201d |
\u00a0
\nValve responded to the complaint on July 24, 2023, with a motion to dismiss. Valve re-noted its motion, which changed Immersion\u2019s response deadline from August 14, 2023, to August 21, 2023. Immersion timely filed its response, and Valve filed its reply on August 25, 2023. The Court heard arguments on Valve\u2019s motion on February 8, 2024. The Court entered a case schedule on November 21, 2023. The case scheduled did not include a trial date but set the pretrial conference for May 30, 2025.
\nValve filed IPRs, IPR2024-00477 and IPR2024-00478 on January 19, 2024. These petitions are directed to U.S. Patent Nos. 7,336,260 and 9,430,042 respectively. The Company filed its patent owner preliminary responses to these petitions on April 26, 2024, and April 29, 2024, respectively. The Patent Trial and Appeal Board issued a decision, granting institution of these petitions on July 24, 2024, and July 25, 2024, respectively. The Company\u2019s patent owner responses to these petitions were filed on October 15, 2024, and October 17, 2024, respectively. Valve filed IPR2024-00508 on January 30, 2024, which is directed to U.S. Patent No. 9,116,546. The Company elected not to file a patent owner preliminary response to this petition. The Patent Trial and Appeal Board issued a decision, granting institution of this petition on August 6, 2024. The Company elected not to file patent owner response to the petition. Valve filed IPR2024-00556 on February 7, 2024, which is directed to U.S. Patent No. 8,749,507. The Company filed its patent owner preliminary response to this petition on May 15, 2024. The Patent Trial and Appeal Board issued a decision, granting institution on August 6, 2024. The Company elected not to file a patent owner response to the petition. Valve filed IPR2024-00557 on February 7, 2024, which is directed to U.S. Patent No. 10,665,067. The Company filed its patent owner's preliminary response to this petition on May 15, 2024. The Patent Trial and Appeal Board issued a decision, granting institution on August 13, 2024. The Company\u2019s patent owner response to the petition was filed November 5, 2024. Valve filed IPR2024-00582 on February 16, 2024, which is directed to U.S. Patent No. 11,175,738. The Company filed its patent owner preliminary response to this petition on June 27, 2024. The Patent Trial and Appeal Board issued a decision on granting institution on September 25, 2024. The Company\u2019s patent owner response to the petition is due December 16, 2024. Valve filed IPR2024-00714 on March 22, 2024, which is directed to U.S. Patent No. 10,627,907. The Company filed its preliminary patent owner preliminary response to this petition on July 30, 2024. The Patent Trial and Appeal Board issued a decision, granting institution on August 28, 2024. The Company\u2019s patent owner response to the petition is due January 21, 2025.
\nThe parties submitted their joint claim construction statement and respective positions on March 29, 2024.\u00a0
\nOn March 14, 2024, Valve filed a motion to stay the district court case pending the PTAB\u2019s decisions on the IPRs. Immersion opposed the motion on March 25, 2024, and Valve filed its reply brief on March 29, 2024. The Court granted Valve\u2019s motion to stay on April 4, 2024. In connection with that order, the Court struck Valve\u2019s motion to dismiss with leave to refile at a later date.
16.\u00a0 SUPPLEMENTARY INFORMATION
\nRestructuring and Other\u00a0Charges
During the period from June 10, 2024, to October 31, 2024, Barnes & Noble Education recognized restructuring and other charges (credits) totaling $5.1 million, comprised primarily of $2.1 million related to severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction initiatives,\u00a0$2.0 million of severance costs related to the departure of Barnes & Noble Education's Chief Executive Officer on June 11, 2024, a $1.9 million loss related to fixed assets disposal and $0.8 million costs associated with legal and advisory professional services restructuring and process improvements and other charges. These costs and expenses were partially offset by a $1.4 million expense reversal related to the termination of liabilities related to a frozen retirement benefit plan.
On November 8, 2024, our Board declared a special cash dividend of $0.245\u00a0per share on our outstanding common stock payable, subject to any prior revocation, on January 24, 2025, to stockholders of record on January 10, 2025.\u00a0