What changed in this filing

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Item 1. Financial Statements

2023-08-11 compared with 2023-05-11 · 200 added, 110 removed, 462 unchanged (40% of the section changed)

3 unchanged sentences

(In thousands)

March 31, 2023

June 30, 2023

December 31, 2022

29 unchanged sentences

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION S

AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Royalty and license

8 unchanged sentences

Interest and other income (loss), net

Income before provision for income taxes

Provision for income taxes

Basic net income per share

Shares used in calculating basic net income per share

Diluted net income per share

Shares used in calculating diluted net income per share

Other comprehensive income, net of tax

Income (loss) before benefit from (provision for) income taxes

Benefit from (provision for) income taxes

Net income (loss)

Basic net income (loss) per share

Shares used in calculating basic net income (loss) per share

Diluted net income (loss) per share

Shares used in calculating diluted net income (loss) per share

Other comprehensive income (loss), net of tax

Deferred gains on available-for-sale marketable debt securities

Realized gains on available-for-sale marketable debt securities reclassified to net income

Total comprehensive income

Realized losses on available-for-sale marketable debt securities reclassified to net income

Total other comprehensive income (loss)

Total comprehensive income (loss)

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except number of shares)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Common Stock and Additional Paid-In Capital

3 unchanged sentences

Stockholders ’ Equity

Balances at December 31, 2022

Balances at March 31, 2023

Unrealized gain on available-for-sale securities, net of taxes

Release of restricted stock units and awards, net of shares withheld

Issuance of stock for ESPP purchase

Stock option exercises

Shares issued to an employee in lieu of cash compensation

Stock repurchases

Dividends declared

Stock-based compensation

Balances at June 30, 2023

Three Months Ended June 30, 2022

Common Stock and

Additional Paid-In Capital

Comprehensive

Income (Loss)

Treasury Stock

Stockholders’

Balances at March 31, 2022

Three Months Ended March 31, 2022

Unrealized loss on available-for-sale securities, net of taxes

Stock repurchases

Release of restricted stock units and awards, net of shares withheld

Shares issued to an employee in lieu of cash compensation

Stock-based compensation

Balances at June 30, 2022

Six Months Ended June 30, 2023

Common Stock and Additional Paid-In Capital

6 unchanged sentences

Stock repurchases

Release of restricted stock units and awards

Release of restricted stock units and awards, net of shares withheld

Proceeds from stock options exercises

Issuance of stock for ESPP purchase

Shares issued to an employee in lieu of cash compensation

Dividends declared

Stock-based compensation

Balances at June 30, 2023

Six Months Ended June 30, 2022

Common Stock and

Additional Paid-In Capital

Comprehensive

Income (Loss)

Treasury Stock

Stockholders’

Balances at December 31, 2021

Unrealized loss on available-for-sale securities, net of taxes

Stock repurchases

Issuance of stock for ESPP purchase

Release of restricted stock units and awards, net of shares withheld

Shares issued to an employee in lieu of cash compensation

Shares issued in connection with public offering, net of issuance costs

Stock-based compensation

Balances at March 31, 2022

Balances at June 30, 2022

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended June 30,

Cash flows provided by (used in) operating activities:

3 unchanged sentences

Stock-based compensation

Net gains on investment in marketable securities

Net (gains) losses on investment in marketable securities

Net (gain) loss on derivative instruments

Foreign currency remeasurement losses

Deferred income taxes

Foreign currency remeasurement gains (losses)

Shares issued to an employee in lieu of cash compensation

Other non cash

Changes in operating assets and liabilities:

13 unchanged sentences

Payments for settlement of derivative instruments

Net cash and cash equivalents provided by (used in) investing activities

Purchases of property and equipment

Net cash and cash equivalents used in investing activities

Cash flows provided by (used in) financing activities:

Dividends payments to stockholders

Dividend payments to stockholders

Payment for purchases of treasury stock

Proceeds from issuance of common stock under employee stock purchase plan

Proceeds from stock options exercises

Shares withheld to cover payroll taxes

9 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental disclosure of cash flow information:

2 unchanged sentences

Dividends declared but not yet paid

Leased assets obtained in exchange for new operating lease liabilities

Leased assets obtained in exchange for new operating lea se liabilities

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

We have adopted a business model under which we provide advanced tactile software, related tools and technical assistance designed to help integrate our patented technology into our customers’ products or enhance the functionality of our patented technology to certain customers, and offer licenses for our patented technology to other customers.

Impact of COVID-19

The outbreak of a novel strain of coronavirus (“COVID-19”) caused governments and public health officials around the world to implement stringent measures to help control the spread of the virus.

In response to the COVID-19 pandemic, we implemented work-from-home and restricted travel policies in the first quarter of 2020, but have since lifted our travel restriction and our employees now work either from the office or from home.

Principles of Consolidation and Basis of Presentation

2 unchanged sentences

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ( “ U.S.

GAAP ” ) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.

GAAP ” ) 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.

6 unchanged sentences

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Segment Information

9 unchanged sentences

Recent Account Pronouncements

We do not expect recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2023, to have significant impact on our financial positions and results of operations.

We do not expect recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2023, to have significant impact on our financial positions and results of operations.

REVENUE RECOGNITION

Disaggregated Revenue

The following table presents the disaggregation of our revenue for the three months ended March 31, 2023 , and 2022 (in thousands):

Three Months Ended March 31,

The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2023 , and 2022 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Fixed fee license revenue

8 unchanged sentences

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 March 31, 2023, we recorded adjustments of $ 0.4 million to increase royalty revenue.

We recorded adjustments of $ 0.3 million to increase royalty revenue during the three months ended March 31, 2022.

In the three months ended June 30, 2023, we recorded adjustments of $ 0.3 million to increase royalty revenue.

We recorded adjustments of $ 0.5 million to increase royalty revenue during the three months ended June 30, 2022.

Contract Assets

As of March 31, 2023 , we had contract assets of $ 6.8 million included within Prepaid expenses and other current asset s, and $ 0.4 million included within Other assets on the Condensed Consolidated Balance Sheets .

As of June 30, 2023 , we had contract assets of $ 5.8 million included within Prepaid expenses and other current asset s, and $ 0.3 million included within Other assets on the Condensed Consolidated Balance Sheets .

As of December 31, 2022, we had contract assets of $ 7.7 million included within Prepaid expenses and other current assets , and $ 0.5 million included within Other assets on the Condensed Consolidated Balance Sheets .

Contract assets decreased by $ 1.1 million from January 1, 2023, to March 31, 2023, primarily due to actual royalties billed during the quarter.

Contract assets decreased by $ 2.1 million from January 1, 2023, to June 30 , 2023, primarily due to actual royalties billed during the first half of 2023.

Deferred Revenue

13 unchanged sentences

As the rights and obligations in a contract are interdependent, contract assets and contract liabilities that arise in the same contract are presented on a net basis.

Based on contracts signed and payments received as of March 31, 2023, we expect to recognize $ 16.2 million in revenue related to Performance Obligation B under our fixed fee license agreements, which are satisfied over time, including $ 10.5 million over one to three years and $ 5.7 million over more than three years.

Based on contracts signed and payments received as of June 30, 2023, we expect to recognize $ 15.0 million in revenue related to Performance Obligation B under our fixed fee license agreements, which are satisfied over time, including $ 9.3 million over one to three years and $ 5.7 million over more than three years.

As of December 31, 2022, total deferred revenue was $ 17.4 million.

We recognized $ 1.2 million of deferred revenue during the three months ended March 31, 2023.

We recognized $ 2.3 million of deferred revenue during the six months ended June 30, 2023.

INVESTMENTS AND FAIR VALUE MEASUREMENTS

5 unchanged sentences

Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis for the investment.

Marketable securities as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

March 31, 2023

Marketable securities as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

June 30, 2023

Cost or Amortized Cost

19 unchanged sentences

Total marketable debt securities

The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of March 31, 2023 (in thousands) are as follows:

March 31, 2023

The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of June 30, 2023 (in thousands) are as follows:

June 30, 2023

Amortized Cost

3 unchanged sentences

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 Other current liabilities on our Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (in thousands):

March 31, 2023

These derivative instruments are reported as Other current liabilities on our Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023

Unrealized Losses

4 unchanged sentences

A summary of realized and unrealized gains and losses from our equity securities and derivative instruments are as follows (in thousands):

Three Months Ended March 31,

Net unrealized gains recognized on marketable equity securities

Net realized gains recognized on marketable equity securities

Three Months Ended June 30,

Six Months Ended June 30,

Net unrealized gains (losses) recognized on marketable equity securities

Net realized gains (losses) recognized on marketable equity securities

Net unrealized losses recognized on derivative instruments

Net realized gains (losses) recognized on derivative instruments

Net realized gains recognized on derivative instruments

Net realized gains recognized on marketable debt securities

Total net gains recognized in interest and other income (loss), net

Total net gains (losses) recognized in interest and other income (loss), net

Fair Value Measurements

3 unchanged sentences

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

We did not hold Level 3 financial instruments as of March 31, 2023 , and December 31, 2022 .

Financial instruments measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 are classified based on the valuation technique in the table below (in thousands):

March 31, 2023

We did not hold Level 3 financial instruments as of June 30, 2023 , and December 31, 2022 .

Financial instruments measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are classified based on the valuation technique in the table below (in thousands):

June 30, 2023

Fair Value Measurements Using

14 unchanged sentences

Certificate of deposit

U.S.treasury securities

treasury securities

Equity securities

22 unchanged sentences

Accounts and other receivables

Allowance for credit losses as of March 31, 2023 and December 31, 2022 were not material.

Allowance for credit losses as of June 30, 2023 and December 31, 2022 were not material.

Prepaid Expenses and Other Current Assets

33 unchanged sentences

In the second quarter of 2020 , we recorded this deposit in Long-term deposits on our Condensed Consolidated Balance Sheets .

On 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.

In the fourth quarter of 2021 , we recorded an impairment charge of $ 0.8 million related to the long-term deposits paid to LGE.

On 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 2014 period.

The Korea Tax Tribunal hearing took place on March 5, 2019.

1 unchanged sentence

On behalf of LGE, we filed an appeal with the Korea Administrative Court on June 10, 2019.

The Company has had numerous hearings before the Korea Administrative Court in the years 2019 through 2022.

The Korea Administrative Court had indicated that it expected to render a decision on this matter by December 31, 2022, but had subsequently updated the parties to indicate that a decision on this matter was expected by February 16, 2023.

On February 15, 2023, we were informed that the Korea Administrative Court had scheduled another hearing for April 27, 2023 due to a change in the main judge for this matter.

We had a hearing on April 27, 2023, and the Korea Administrative Court indicated that it expects to render a decision on this matter by June 8, 2023.

On 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 in the amount of KRW 3,025,251,775 (approximately $ 2.3 million).

We are currently evaluating our next steps with respect to the reimbursement of such withholding taxes in accordance with our obligations pursuant to the license agreement with LGE.

As of March 31, 2023, 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.

The additional income tax is accrued in Other Current Liabilities in our Condensed Consolidated Balance Sheets.

Based 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.

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 7, 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.

In connection with the Korea Administrative Court’s decision, the Korean tax authorities filed an appeal on June 28, 2023 with the Korea Administrative Court to seek the cancellation of the court’s decision.

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.

As of June 30, 2023, 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 second quarter of 2023 in order to present the deposit at its estimated recoverable value.

Based on th e 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 Income and Comprehensive Income .

3 unchanged sentences

In 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 Income and Comprehensive Income , in the period in which we do not ultimately prevail.

In the fourth quarter of 2021, we recorded an impairment charge of $ 0.8 million related to the long-term deposits paid to LGE.

Immersion Corporation vs.

11 unchanged sentences

“Haptically enhanced interactivity with interactive content”

Meta responded to our complaint on August 1, 2022.

Meta responded to the Company’s complaint on August 1, 2022.

On September 12, 2022, Meta filed a motion to transfer the lawsuit to the Northern District of California or, in the alternative, to the Austin Division of the Western District of Texas.

Meta’s motion remains pending, and a hearing on the transfer motion occurred on January 23, 2023.

In the meantime, the claim construction briefing is closed, and fact discovery opened on February 7, 2023.

The claim construction hearing was scheduled for March 6, 2023, but was rescheduled by the Court for April 24, 2023 and again rescheduled to May 11, 2023.

The Court denied Meta’s motion on May 30, 2023, and held the claim construction hearing on the same day.

The Court adopted certain claim constructions during the hearing, and issued a formal claim construction order consistent with those constructions on July 7, 2023.

Fact discovery is ongoing, and is set to close on September 6, 2023.

In addition, Meta filed inter partes reviews (“IPRs”), IPR2023-00942;

IPR2023-00943;

and IPR2023-00944 on May 25, 2023.

These are directed to U.S.

and 10,269,222, respectively.

The Company’s response to IPR2023-00942 and IPR2023-0094 is due on September 8, 2023, and to IPR2023-00944 is due on September 12, 2023.

Meta filed IPR2023-00945;

IPR2023-00946;

and IPR2023-00947 on May 26, 2023.

These IPRs are directed to United States Patent Nos.

and 10,248,298, respectively.

Our response to IPR2023-00945 is due on September 8, 2023, and our response to IPR2023-00946 and IPR2023-00947 is due on September 12, 2023.

Immersion Corporation vs.

7 unchanged sentences

• IN 304 396 (India) titled “ Haptic Feedback System With Stored Effects”

On June 19, 2023, Xiaomi filed an initial response to the Company’s lawsuit in India.

On July 7, 2023, the Indian litigation was listed before the Learned Joint Registrar (“JR”), Mr.

Siddharth Mathur.

Immersion’s preliminary response to Xiaomi’s initial response is due on August 11, 2023.

On July 11, 2023, in the German proceeding Xiaomi filed its nullity action in the German Federal Patent Court, which was served on Immersion on July 27, 2023.

Immersion Corporation vs.

Valve Corporation

On May 15, 2023, we filed a complaint against Valve Corporation (“ Valve ”) in the United States District Court for the Western District of Washington.

The complaint alleges that Valve’s AR/VR systems, including the Valve Index, and handheld Steam Deck, infringe seven of our patents that cover various uses of haptic effects in connection with such AR/VR systems and other video game systems.

We are seeking to enjoin Valve from further infringement and to recover a reasonable royalty for such infringement.

The complaint against Valve asserts infringement of the following patents:

“Method and Apparatus for Providing Tactile Sensations”

“Systems and Methods for Adaptive Interpretation of Input from a Touch-Sensitive Input Device”

“Virtual Detents Through Vibrotactile Feedback”

“System for Haptically Representing Sensor Input”

“Position Control of a User Input Element Associated With a Haptic Output Device”

“Systems and Methods for Integrating Haptics Overlay in Augmented Reality”

“Systems and Methods for Proximity-Based Haptic Feedback”

Valve responded to the Complaint on July 24, 2023 with a motion to dismiss.

Immersion’s response to the motion is due on August 14, 2023.

STOCK-BASED COMPENSATION

10 unchanged sentences

Awards granted other than a stock option or a stock appreciation right shall reduce the common stock shares available for grant by 1.75 shares for every share issued.

A summary of our equity incentive program as of March 31, 2023 is as follows (in thousands):

A summary of our equity incentive program as of June 30, 2023 is as follows (in thousands):

Common stock shares available for grant

4 unchanged sentences

Time-Based Stock Options

The following summarizes time-based stock options activities for the three months ended March 31, 2023:

The following summarizes time-based stock options activities for the six months ended June 30, 2023:

Number of Shares Underlying Stock Options (in thousands)

4 unchanged sentences

Canceled or expired

Outstanding as of March 31, 2023

Vested and expected to vest at March 31, 2023

Exercisable at March 31, 2023

Outstanding as of June 30, 2023

Vested and expected to vest at June 30, 2023

Exercisable at June 30, 2023

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the exercise price of our common stock for the options that were in-the-money.

We did not grant stock options in the three months ended March 31, 2023.

We did not grant stock options in the six months ended June 30, 2023.

Restricted Stock Units

The following summarizes RSU activities for the three months ended March 31, 2023:

The following summarizes RSU activities for the six months ended June 30, 2023:

Number of Restricted Stock Units (in thousands)

3 unchanged sentences

Outstanding at December 31, 2022

Outstanding at March 31, 2023

Outstanding at June 30, 2023

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

Restricted Stock Awards

The following summarizes RSA activities for the three months ended March 31, 2023:

The following summarizes RSA activities for the six months ended June 30, 2023:

Number of Restricted Stock Awards

3 unchanged sentences

Outstanding at December 31, 2022

Outstanding at March 31, 2023

Outstanding at June 30, 2023

Market Condition-Based Performance Stock Units

The following summarizes PSU activities for the three months ended March 31, 2023:

The following summarizes PSU activities for the six months ended June 30, 2023:

Number of Market Condition-Based Performance Stock Units (in thousands)

2 unchanged sentences

Outstanding at December 31, 2022

Outstanding at March 31, 2023

Outstanding at June 30, 2023

Employee Stock Purchase Plan

2 unchanged sentences

A total of 1.0 million shares of common stock have been reserved for issuance under the ESPP.

During the three months ended March 31, 2023 , 1,298 shares were purchased under the ESPP.

During the six months ended June 30, 2023 , 1,298 shares were purchased under the ESPP.

Effective February 1, 2023, our ESPP was discontinued and 193,134 shares expired following the ESPP termination.

3 unchanged sentences

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 and ESPP for the three months ended March 31, 2023, and 2022 is as follows (in thousands):

Three Months Ended March 31,

The stock-based compensation related to all of our stock-based awards and ESPP for the three and six months ended June 30, 2023, and 2022 is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Stock options

3 unchanged sentences

General and administrative

As of March 31, 2023 , there was $ 5.6 million of unrecognized compensation cost adjusted for estimated forfeitures related to non-vested stock options, RSUs, RSAs and PSUs granted to our employees and directors.

As of June 30, 2023 , there was $ 3.8 million of unrecognized compensation cost adjusted for estimated forfeitures related to non-vested stock options, 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 1.7 years.

8 unchanged sentences

The stock repurchase program did not obligate us to repurchase any dollar amount or number of shares, and the program could be suspended or discontinued at any time.

The February 2022 Stock Repurchase Program was terminated on December 29, 2022.

In the year ended December 31, 2022, we repurchased 1,637,566 shares of our common stock for $ 8.9 million at an average purchase price of $ 5.46 per share.

6 unchanged sentences

The 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.

We did not repurchase shares during the three months ended March 31, 2023.

As of March 31, 2023, we had $ 50.0 million available for repurchase under the December 2022 Stock Repurchase Program.

On August 8, 2023, the Board approved an amendment to extend the expiration date of the December 2022 Stock Repurchase Program that was set to expire on December 29, 2023 to December 29, 2024 .

We repurchased 413,696 shares of our common stock for $ 2.9 million at average purchase price of $ 6.88 per share during the six months ended June 30, 2023.

As of June 30, 2023, we had $ 47.1 million available for repurchase under the December 2022 Stock Repurchase Program.

Dividends Payment

2 unchanged sentences

On February 21, 2023, the Board declared a second quarterly dividend, in the amount of $ 0.03 per share, which was paid on April 28, 2023 to stockholders of record on April 13, 2023.

On May 10, 2023, we announced that the Board declared a quarterly dividend.

The quarterly dividend, in the amount of $ 0.03 per share, will be payable, subject to any prior revocation, on July 28, 2023, to shareholders of record on July 13, 2023.

On May 10, 2023, the Board declared a third quarterly dividend in the amount of $ 0.03 per share which was paid on July 28, 2023, to shareholders of record on July 13, 2023.

On August 11, 2023 , the Board declared a quarterly dividend in the amount of $ 0.03 per share,.which will be payable on October 27 , 2023 to shareholders of record on October 16 , 2023 .

Future dividends will be subject to further review and approval by the Board in accordance with applicable law.

The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews the Company’s capital allocation strategy from time-to-time.

Provision for income taxes the three months ended March 31, 2023 and 2022 consisted of the following (in thousands):

Three Months Ended March 31,

Income before provision for income taxes

Provision for income taxes

In the first half of 2023, the total dividends paid was $ 5.4 million.

Provision for income taxes the three and six months ended June 30, 2023 and 2022 consisted of the following (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Income (loss) before provision for income taxes

Benefit from (provision for) income taxes

Effective tax rate

Provision for income taxes for the three months ended March 31, 2023 and 2022 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.

Provision for income taxes for the three and six months ended June 30, 2023 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.

Benefit from income taxes for the three months ended June 30, 2022 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate.

Provision for income taxes for the six months ended June 30, 2022 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate.

We maintain a partial valuation allowance against our U.S.

1 unchanged sentence

state and Canadian federal deferred tax assets.

As of March 31, 2023, we had unrecognized tax benefits under Accounting Standards Certification (“ASC”) 740 Income Taxes of approximately $ 7.2 million and applicable interest of $ 0.1 million.

The change in the estimated effective tax rate was mainly driven by higher U.S.

taxable income which was a result of higher U.S.

passive income.

As of June 30, 2023, we had unrecognized tax benefits under Accounting Standards Certification (“ASC”) 740 Income Taxes of approximately $ 7.2 million and applicable interest of $ 0.1 million.

The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $ 3.2 million.

1 unchanged sentence

We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.

As of March 31, 2023, we had net deferred income tax assets of $ 7.0 million and deferred income tax liabilities of $ 0.1 million.

As of June 30, 2023, we had net deferred income tax assets of $ 7.0 million and deferred income tax liabilities of $ 0.1 million.

Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine our tax returns for all years from 2005 through the current period.

6 unchanged sentences

The following is a reconciliation of the denominators used in computing basic and diluted net income (loss) per share (in thousands, except per share amounts):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Weighted-average shares outstanding, basic

2 unchanged sentences

We include PSUs in the calculation of diluted earnings per share if the applicable performance condition has been satisfied as of the end of the reporting period and exclude stock equity awards if the performance condition has not been met.

For the three months ended March 31, 2023 and 2022, 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.

For the three and six months ended June 30, 2023 and 2022, 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):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options

13 unchanged sentences

Total lease liabilities

The table below provides supplemental information related to operating leases during the three months ended March 31, 2023 and 2022 (in thousands except for lease term):

Three Months Ended March 31,

The table below provides supplemental information related to operating leases during the six months ended June 30, 2023 and 2022 (in thousands except for lease term):

Six Months Ended June 30,

Cash paid within operating cash flow

3 unchanged sentences

This sublease commenced on June 8, 2022, and ends on February 27, 2024 which approximates the lease termination date of the original Montreal Facility lease.

On November 12, 2014, we entered into an amendment to the lease of approximately 42,000 square feet office space in San Jose, California facilities (the "SJ Facility").

The lease commenced in May 2015 and expired as of April 2023.

We vacated the SJ Facility in the first quarter of 2020.

On March 12, 2020, we entered into a sublease agreement with Neato Robotics, Inc.

for our facility located in San Jose, California ( “ SJ Facility ” ).

This sublease commenced in June 2020 and ended on April 30, 2023, which is the lease termination date of the original SJ Facility lease.

(“Neato”) for the SJ facility.

This sublease commenced in June 2020 and ended on April 30, 2023, which is the lease termination date of the San Jose Facility.

Both SJ Facility lease and related sublease expired in April 2023.

In accordance with provisions of ASC 842, we treated each sublease as a separate lease as we were not relieved of the primary obligation under each original lease.

3 unchanged sentences

We recognize operating lease expense and lease payments from the sublease, on a straight-line basis, in our Condensed Consolidated Statements of Income and Comprehensive Income over the lease terms.

During the three months ended March 31, 2023 and 2022, our net operating lease expenses were as follows (in thousands):

Three Months Ended March 31,

During the three and six months ended June 30, 2023 and 2022, our net operating lease expenses were as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease cost

2 unchanged sentences

Total lease cost

Minimum future lease payments obligations as of March 31, 2023 were as follows (in thousands):

Minimum future lease payments obligations as of June 30, 2023 were as follows (in thousands):

For the Years Ending December 31,

1 unchanged sentence

Total lease liability

Future cash receipts from our sublease agreements as of March 31, 2023 were as follows (in thousands):

Future cash receipts from our sublease agreements as of June 30, 2023 were as follows (in thousands):

For the Years Ending December 31,

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements