What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-08-11 · 144 added, 115 removed, 547 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands)

June 30, 2023

September 30, 2023

December 31, 2022

30 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION S

AND COMPREHENSIVE INCOME (LOSS)

AND COMPREHENSIVE INCOME

(In thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Royalty and license

8 unchanged sentences

Interest and other income (loss), net

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

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

Deferred gains on available-for-sale marketable debt securities

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

Total other comprehensive income (loss)

Total comprehensive income (loss)

Total other comprehensive income

Total comprehensive income

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except number of shares)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Common Stock and Additional Paid-In Capital

3 unchanged sentences

Stockholders ’ Equity

Balances at March 31, 2023

Balances at June 30, 2023

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

5 unchanged sentences

Stock-based compensation

Balances at June 30, 2023

Three Months Ended June 30, 2022

Balances at September 30, 2023

Three Months Ended September 30, 2022

Common Stock and

4 unchanged sentences

Stockholders’

Balances at March 31, 2022

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

Balances at June 30, 2022

Unrealized gains 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

Issuance of stock for ESPP purchase

Stock-based compensation

Balances at June 30, 2022

Six Months Ended June 30, 2023

Balances at September 30, 2022

IMMERSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except number of shares)

Nine Months Ended September 30, 2023

Common Stock and Additional Paid-In Capital

12 unchanged sentences

Stock-based compensation

Balances at June 30, 2023

Six Months Ended June 30, 2022

Balances at September 30, 2023

Nine Months Ended September 30, 2022

Common Stock and

12 unchanged sentences

Stock-based compensation

Balances at June 30, 2022

Balances at September 30, 2022

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows provided by (used in) operating activities:

4 unchanged sentences

Net (gains) losses on investment in marketable securities

Net (gain) loss on derivative instruments

Deferred income taxes

Foreign currency remeasurement gains (losses)

Net loss on derivative instruments

Foreign currency remeasurement gains

Shares issued to an employee in lieu of cash compensation

Other non cash

Other noncash

Changes in operating assets and liabilities:

23 unchanged sentences

Net cash and cash equivalents used in financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents:

5 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosure of cash flow information:

2 unchanged sentences

Dividends declared but not yet paid

Leased assets obtained in exchange for new operating lea se liabilities

Leased assets obtained in exchange for new operating lease liabilities

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

We focus on the creation, design, development, and licensing of innovative haptic technologies that allow people to use their sense of touch more fully as they engage with products and experience the digital world around them.

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.

We offer licenses for our patented technology to our customers.

Principles of Consolidation and Basis of Presentation

9 unchanged sentences

The preparation of condensed consolidated financial statements and related disclosures requires management to make estimates and assumptions that affect the reported amounts of the condensed consolidated financial statements.

Significant estimates include revenue recognition, fair value of financial instruments, useful lives of property and equipment, valuation of income taxes including uncertain tax provisions, stock-based compensation and long-term deposits for withholding taxes.

Significant estimates include revenue recognition, fair value of financial instruments, valuation of income taxes including uncertain tax provisions, stock-based compensation and long-term deposits for withholding taxes.

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

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

Reclassification

1 unchanged sentence

Segment Information

We develop, license, and support a wide range of software and intellectual property (“IP”) that more fully engage users’ sense of touch when operating digital devices.

We develop, license, and support a wide range of intellectual property (“IP”) that more fully engage users’ sense of touch when operating digital devices.

We focus on the following target application areas:

7 unchanged sentences

Recent Account Pronouncements

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.

We do not expect recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 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 and six months ended June 30, 2023 , and 2022 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended September 30,

Nine Months Ended September 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 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.

In the three months ended September 30, 2023 , we recorded adjustments of $ 0.5 million to increase royalty revenue.

We recorded adjustments of $ 0.2 million to decrease royalty revenue during the three months ended September 30, 2022 .

Contract Assets

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 September 30, 2023 , we had contract assets of $ 6.3 million included within Prepaid expenses and other current asset s, and $ 0.2 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 $ 2.1 million from January 1, 2023, to June 30 , 2023, primarily due to actual royalties billed during the first half of 2023.

Contract assets decreased by $ 1.7 million from January 1 , 2023 , to September 30 , 2023 , primarily due to actual royalties billed during the nine months ended September 30, 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 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.

Based on contracts signed and payments received as of September 30, 2023 , we expect to recognize $ 13.8 million in revenue related to Performance Obligation B under our fixed fee license agreements, which are satisfied over time, including $ 8.1 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 $ 2.3 million of deferred revenue during the six months ended June 30, 2023.

We recognized $ 3.6 million of deferred revenue during the nine months ended September 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 June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

June 30, 2023

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

September 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 June 30, 2023 (in thousands) are as follows:

June 30, 2023

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

September 30, 2023

Amortized Cost

Less than 1 year

More than 5 years

Derivative Financial Instruments

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 June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023

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

September 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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 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 unrealized gains (losses) recognized on derivative instruments

Net realized gains recognized on derivative instruments

6 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 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

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

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

September 30, 2023

Fair Value Measurements Using

23 unchanged sentences

Cash and cash equivalents were as follows (in thousands):

September 30,

Money market funds

4 unchanged sentences

Investments - current were as follows (in thousands):

September 30,

Certificates of deposit (2)

5 unchanged sentences

Accounts and other receivables were as follows (in thousands):

Trade accounts receivables

September 30,

Trade accounts receivables, net

Other receivables

Accounts and other receivables

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

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

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets were as follows (in thousands):

September 30,

Prepaid expenses

4 unchanged sentences

Investments- noncurrent were as follows (in thousands):

September 30,

treasury securities

2 unchanged sentences

Other assets were as follows (in thousands):

September 30,

Contract assets - long-term

3 unchanged sentences

Other current liabilities were as follows (in thousands):

September 30,

Derivative instruments

23 unchanged sentences

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.

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.

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

The appellate case is in progress at the Seoul High Court and the first hearing has been scheduled for November 30, 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 .

2 unchanged sentences

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.

On August 7, 2023, the Assessment Authority submitted its answer against the tax appeal.

On September 8, 2023, the Appellant submitted its rebuttal brief in response thereto.

As of September 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 third 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.

21 unchanged sentences

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.

On August 2, 2023, Meta filed a mandamus petition asking the Federal Circuit to reverse the district court’s order on Meta’s transfer motion.

Immersion responded on August 11, 2023, and Meta filed its reply brief on August 14, 2023.

Meta’s petition remains pending.

Fact discovery closed on October 6, 2023.

In addition, Meta filed inter partes reviews (“IPRs”), IPR 2023 - 00942 ;

3 unchanged sentences

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.

The Company filed its response to IPR 2023 - 00942 and IPR 2023 - 0094 on September 8, 2023, and to IPR 2023 - 00944 on September 12, 2023.

Meta filed IPR 2023 - 00945 ;

3 unchanged sentences

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.

The Company filed its response to IPR 2023 - 00945 on September 8, 2023, and our response to IPR 2023 - 00946 and IPR 2023 - 00947 on September 12, 2023.

Immersion Corporation vs.

10 unchanged sentences

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 has until October 27, 2023 to respond.

In the German infringement proceeding, Xiaomi’s statement of defense is due on October 25, 2023.

Xiaomi has until December 21, 2023 to reply to Immersion’s writ of summons in the French proceeding.

The Court will hear Immersion’s application for a preliminary injunction on January 4, 2024 in the Indian proceeding.

Immersion Corporation vs.

12 unchanged sentences

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.

Valve re-noted its motion, which changed the Company’s response deadline from August 14, 2023 to August 21, 2023.

The Company timely filed its response and Valve filed its reply on August 25, 2023.

The motion remains pending, and although the parties have agreed to a case schedule, the Court has not yet entered such case schedule.

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 June 30, 2023 is as follows (in thousands):

A summary of our equity incentive program as of September 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 six months ended June 30, 2023:

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

Number of Shares Underlying Stock Options (in thousands)

4 unchanged sentences

Canceled or expired

Outstanding as of June 30, 2023

Vested and expected to vest at June 30, 2023

Exercisable at June 30, 2023

Outstanding as of September 30, 2023

Vested and expected to vest at September 30, 2023

Exercisable at September 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 six months ended June 30, 2023.

We did not grant stock options in the nine months ended September 30, 2023 .

Restricted Stock Units

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

The following summarizes RSU activities for the nine months ended September 30, 2023 :

Number of Restricted Stock Units (in thousands)

3 unchanged sentences

Outstanding at December 31, 2022

Outstanding at June 30, 2023

Outstanding at September 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 six months ended June 30, 2023:

The following summarizes RSA activities for the nine months ended September 30, 2023 :

Number of Restricted Stock Awards

3 unchanged sentences

Outstanding at December 31, 2022

Outstanding at June 30, 2023

Outstanding at September 30, 2023

Market Condition-Based Performance Stock Units

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

The following summarizes PSU activities for the nine months ended September 30, 2023 :

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

2 unchanged sentences

Outstanding at December 31, 2022

Outstanding at June 30, 2023

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

During the nine months ended September 30, 2023 , no 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 and six months ended June 30, 2023, and 2022 is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended September 30,

Nine Months Ended September 30,

Stock options

3 unchanged sentences

General and administrative

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.

As of September 30, 2023 , there was $ 3.3 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 1.6 years.

17 unchanged sentences

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.

We repurchased 898,757 shares of our common stock for $ 6.2 million at average purchase price of $ 6.8602 per share during the nine months ended September 30, 2023 .

As of September 30, 2023, we had $ 43.8 million available for repurchase under the December 2022 Stock Repurchase Program.

Dividends Payment

3 unchanged sentences

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 .

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

On November 13 , 2023, our Board declared a quarterly dividend in the amount of $ 0.045 per share , will be payable, subject to any prior revocation, on January 25, 2024 to shareholders of record on January 14, 2024.

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

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.

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

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

In the first nine months of 2023 , the total dividends paid was $ 6.4 million.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Income before provision for income taxes

Provision for income taxes

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.

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

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

Provision for income taxes for the nine months ended September 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.

4 unchanged sentences

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.

As of September 30, 2023 , we had unrecognized tax benefits under Accounting Standards Certification (“ASC”) 740 Income Taxes of approximately $ 7.3 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 $ 3.5 million.

1 unchanged sentence

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

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.

As of September 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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 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 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.

For the three and nine months ended September 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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Stock options

7 unchanged sentences

Balance Sheets Classification

September 30,

Right-of-use assets

4 unchanged sentences

Total lease liabilities

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,

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

Nine Months Ended September 30,

Cash paid within operating cash flow

15 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 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,

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

Three Months Ended September 30,

Nine Months Ended September 30,

Operating lease cost

2 unchanged sentences

Total lease cost

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

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

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

For the Years Ending December 31,

Subsequent Event

On November 10, 2023 , we filed an additional complaint against Meta in the United States District Court for the Western District of Texas, alleging that Meta’s AR/VR systems, including the Meta Quest 3, infringe five of our patents that cover various uses of haptic effects in connection with such AR/VR systems.

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

The complaint against Meta asserts infringement of the following patents:

“System and method for providing complex haptic stimulation during input of control gestures, and relating to control of virtual equipment”

“Haptically enhanced interactivity with interactive content”

“System with wearable device and haptic output device”

“Haptically enhanced interactivity with interactive content”

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