What changed in this filing

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Item 1A. Risk Factors

2020-11-06 compared with 2020-08-07 · 126 added, 62 removed, 387 unchanged (33% of the section changed)

As previously discussed, our actual results could differ materially from our forward-looking statements.

Factors that might cause or contribute to such differences include, but are not limited to, those discussed below.

Factors that might cause or contribute to such differences include, but are not limited to:

These and many other factors described in this report could adversely affect our operations, performance and financial condition.

Risk Factor Summary

• Risks related to our business:

◦ Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19.

◦ If we are unable to renew our existing licensing arrangements for our patents and other technologies on favorable terms that are consistent with our business objectives, our royalty and license revenue and cash flow could be materially and adversely affected.

◦ If we are unable to enter into new licensing arrangements for our patents or other technologies (including reference designs, firmware/software or other products) on favorable terms that are consistent with our business objectives, our royalty and license revenue and cash flow could be materially adversely affected.

◦ A limited number of customers account for a significant portion of our revenue, and the loss of major customers could harm our operating results.

◦ If we fail to protect and enforce our patent rights and other IP rights, our ability to license our technologies and generate revenues could be impaired.

◦ Our failure to continuously develop or acquire successful innovations and obtain patents on those innovations could significantly harm our business, financial condition, results of operations or cash flows.

◦ Potential patent and litigation reform legislation, potential United States Patent and Trademark Office (“USPTO”) and international patent rule changes, potential legislation affecting mechanisms for patent enforcement and available remedies, and potential changes to the intellectual property rights policies of worldwide standards bodies, as well as rulings in legal proceedings may affect our investments in research and development and our strategies for patent prosecution, licensing and enforcement and could have a material adverse effect on our licensing business as well as our business as a whole.

◦ Our licenses with semiconductor and actuator manufacturers may cause confusion as to our licensing model and may prevent us from enforcing our patents based on the patent exhaustion doctrine, the implied license doctrine, or other legal doctrines.

◦ We had an accumulated deficit of $121 million as of September 30, 2020 and we may not return to consistent profitability in the future.

◦ If we are not able to attract, recruit and retain qualified personnel, we may not be able to effectively develop and deploy our technologies.

◦ We have experienced turnover in our senior management and our employee base, which could result in operational and administrative inefficiencies and could hinder the execution of our growth strategy.

◦ We may incur greater tax liability than we have provided for or have anticipated and may incur additional tax liability due to certain indemnification agreements with certain licensees, which could adversely affect our financial condition and operating results.

◦ We are or may become involved in litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices that are expensive, disruptive and time consuming, and will continue to be, until resolved, and regardless of whether we are ultimately successful, could adversely affect our business.

◦ The terms in our agreements may be construed by our licensees in a manner that is inconsistent with the rights that we have granted to other licensees or in a manner that may require us to incur substantial costs to resolve conflicts over license terms.

◦ Our international operations subject us to additional risks and costs.

◦ Our failure to comply with complex US and foreign laws and regulations could have a material adverse effect on our operations.

◦ We may not be able to continue to derive significant revenues from makers of peripherals for popular video gaming platforms, which could adversely affect our financial condition and operating results.

◦ Because we have a fixed payment license with Microsoft, our royalty revenue from licensing in the gaming market and other consumer markets has previously declined and may further do so if Microsoft increases its volume of sales of touch-enabled products at the expense of our other licensees.

◦ Automobiles incorporating our touch-enabling technologies are subject to lengthy product development periods, making it difficult to predict when and whether we will receive royalties for these product types.

◦ Our inability to control or influence our licensees’ design, manufacturing, quality control, promotion, distribution, or pricing of their products incorporating our touch-enabling technologies could result in diminished royalty revenue if our licensees’ efforts fail to generate consumer demand.

◦ Our business may suffer if third parties assert that we violate their IP rights.

◦ Our business and operations could suffer in the event of any actual or perceived security breaches.

◦ The rejection of our haptic technology by standards-setting organizations, or failure of the standards-setting organization to develop timely commercially viable standards may negatively impact our business.

◦ Entrance into the highly competitive and fragmented sexual wellness market may adversely impact our financial results.

◦ If we are unable to develop open source compliant products, our ability to license our technologies and generate revenues may be impaired.

◦ Our business depends in part on access to third-party platforms and technologies.

If such access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change, our business and operating results could be adversely affected.

◦ The uncertain economic and political environment could reduce our revenues and could have an adverse effect on our financial condition and results of operations.

◦ Our technologies are complex and may contain undetected errors, which could harm our reputation and future sales.

◦ If we fail to adequately protect personal information or other information we process or maintain, our business, financial condition and operating results could be adversely affected.

◦ If we fail to establish and maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our consolidated operating results, our ability to operate our business and our stock price.

• Risks related to investing in our common stock:

◦ Our quarterly revenues and operating results are volatile, and if our future results are below the expectations of public market analysts or investors, the price of our common stock is likely to decline.

◦ Our stock price may fluctuate regardless of our performance.

◦ Any stock repurchase program could affect our stock price and add volatility.

◦ Changes in financial accounting standards or policies may affect our reported financial condition or results of operations and, in certain cases, could cause a decline and/or fluctuation in the price of our common stock.

◦ Our business is subject to changing regulations regarding corporate governance and other compliance areas that will increase both our costs and the risk of noncompliance.

◦ Provisions in our charter documents and Delaware law could prevent or delay a change in control, which could reduce the market price of our common stock.

The factors summarized above should be read in connection with the detailed descriptions below.

These and many other factors described in this report could adversely affect our operations, performance and financial condition.

Company Risks

Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19.

Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19 which is spreading in many countries including the United States, Canada, and other countries in which we operate.

Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by catastrophic events, such as natural disasters, war, acts of terrorism, pandemics, epidemics, or other public health emergencies, such as the outbreak of COVID-19, which has spread throughout the United States, Canada, and much of the rest of the world.

The World Health Organization characterized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.

The outbreak has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures, which has resulted in a significant number of layoffs or furloughs of employees, and/or other negative economic conditions in many of the countries in which we operate.

While some governments around the world are easing restrictions designed to help control the spread of the virus, a resurgence of COVID-19 cases (including increased COVID-19 cases in recent months) may cause governments around the world to implement or reinstitute such restrictions.

While some governments around the world are easing restrictions designed to help control the spread of the virus, a resurgence of COVID-19 cases may cause governments around the world to implement or reinstitute such restrictions.

The full extent to which the COVID-19 pandemic will impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted.

The COVID-19 pandemic and its resulting economic and other effects could result in significant adverse effects on our customers’ cash flow and their ability to manufacture, distribute and sell products incorporating our touch-enabling technologies.

This in turn, may cause our customers to be less able to pay invoices for our royalties or may result in a reduction in the royalties we receive which may be based on the number of units sold or distributed by our customers, which reduction could cause adverse effects on our business, results of operations, financial condition, cash flows and stock price.

This in turn, may cause our customers to be less able to pay invoices for our royalties or may result in a reduction in the royalties we earn which are often based on the number of units sold or distributed by our customers, which reduction could cause adverse effects on our business, results of operations, financial condition, cash flows and stock price.

In addition, any depression or recession resulting from the COVID-19 pandemic may adversely change consumer behavior and demand, including with respect to products sold by our customers, which may result in a significant reduction in our revenue, results of operations, and financial condition.

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A significant amount of our revenue is derived from a limited number of customers, and we expect that this will continue to be the case in the future.

For example, for the three months ended June 30, 2020, Samsung accounted for a significant amount of our total revenues.

For example, for the three months ended September 30, 2020, Samsung accounted for a significant amount of our total revenues.

In addition, we cannot be certain that other customers that have accounted for significant revenue in past periods, individually or as a group, will continue to generate similar revenue in any future period.

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In addition, licensing to semiconductor and actuator manufacturers increases the risk of patent exhaustion and implied licenses such that incorrectly structured licenses could negatively impact our business and financial results.

We had an accumulated deficit of $124 million as of June 30, 2020 and we may not return to consistent profitability in the future.

As of June 30, 2020, we had an accumulated deficit of $124 million .

We had an accumulated deficit of $121 million as of September 30, 2020, and we may not return to consistent profitability in the future.

As of September 30, 2020, we had an accumulated deficit of $121 million.

We need to generate significant ongoing revenues to return to consistent profitability.

We will continue to incur expenses as we:

• increase our sales and marketing efforts;

• engage in research and develop our technologies;

• protect and enforce our IP;

• incur costs related to litigation.

Among other ongoing expenses, we may continue to incur expenses related to:

• sales and marketing efforts;

• research and development activities;

• the protection and enforcement of our IP;

• litigation.

If our revenues grow more slowly than we anticipate or if our operating expenses exceed our expectations, we may not return to profitability.

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Competition for talented candidates is intense, especially for individuals with patent licensing, engineering and haptics expertise, and we may not be successful in attracting, integrating, and continuing to motivate such qualified personnel.

In this competitive recruiting environment, especially when hiring in Montreal, Canada and Silicon Valley, our compensation packages need to be attractive to the candidates we recruit.

In this competitive recruiting environment, especially when hiring in Montreal, Canada and the greater San Francisco Bay Area, our compensation packages need to be attractive to the candidates we recruit.

However, given the negative effects that COVID-19 may have on our business, as well as the protracted and uncertain nature of our royalty collection practices, it could be difficult to craft compensation plans that will attract and retain salespeople with the skills to secure complex licensing arrangements.

In the greater San Francisco Bay Area and Montreal, Canada, candidates and employees view the stock component of compensation as an important factor in deciding both whether to accept an employment opportunity as well as whether to remain in a position at a company.

In Montreal, Canada, and the greater San Francisco Bay Area, candidates and employees view the stock component of compensation as an important factor in deciding both whether to accept an employment opportunity as well as whether to remain in a position at a company.

Even if we are able to present robust compensation packages that enable us to attract and recruit new candidates for hire, we may not be able to retain our current executive officers and key employees if the structure of their compensation packages does not provide incentives for them to remain employed by us.

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We have experienced turnover in our senior management and our employee base, which could result in operational and administrative inefficiencies and could hinder the execution of our growth strategy.

We have recently experienced turnover in our senior management.

For example, our Chief Executive Officer joined us in January 2019, our General Counsel joined us in June 2019, our Chief Financial Officer joined us in January 2020, and our Head of Human Resources joined us in April 2020.

Lack of management continuity could harm our customer relationships, delay product development processes, adversely affect our ability to successfully execute our growth strategy, result in operational and administrative inefficiencies and added costs, and could impede our ability to recruit new talented individuals to senior management positions, which could adversely impact our results of operations, stock price and customer relationships.

We have experienced turnover in our senior management.

For example, on November 3, 2020, Ramzi Haidamus departed as our Chief Executive Officer and a member of our board of directors, and Jared Smith, our Vice President, Worldwide Sales, was appointed as interim Chief Executive Officer.

senior management positions, which could adversely impact our results of operations, stock price and customer relationships.

Our success largely depends on our ability to integrate any new senior management within our organization in order to achieve our operating objectives, and changes in other key positions may affect our financial performance and results of operations as new members of management become familiar with our business.

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We are currently appealing in the Korean courts, on behalf of Samsung, the imposition of such withholding taxes and penalties.

In the event that the we do not ultimately prevail in our appeal in the Korean courts, the deposit included in Long-term deposits would be recorded as additional income tax expense on our Consolidated Statement of Operations and Comprehensive Income (Loss), in the period in which we do not ultimately prevail.

In the event that we do not ultimately prevail in our appeal in the Korean courts, the deposit included in Long-term deposits would be recorded as additional income tax expense on our Consolidated Statement of Operations and Comprehensive Income (Loss), in the period in which we do not ultimately prevail.

For additional background on this matter, please see Part II, Item 1 Legal Proceedings.

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A fourth hearing occurred on June 9, 2020.

A fifth hearing occurred on July 16, 2020.

We anticipate a decision to be rendered on or about October 8, 2020.

hearing occurred on July 16, 2020.

We anticipated a decision to be rendered on or about October 8, 2020, but the Korea Administrative Court scheduled a sixth hearing for November 12, 2020.

For additional background on this matter, please see Part II, Item 1 Legal Proceedings.

In the event that we do not ultimately prevail in our appeal in the Korean courts, any payments to LGE with respect to withholding tax imposed on LGE by the Korean tax authorities as described in the previous paragraph would be recorded as additional income tax expense on our Consolidated Statement of Operations and Comprehensive Income (Loss), in the period in which we do not ultimately prevail.

In the event that it is determined that we are obligated to further indemnify Samsung and/or LGE for such withholding taxes imposed by the Korean tax authorities, receive further requests for reimbursement of tax liabilities from other licensees, we could incur significant expenses.

We are or may become involved in litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices are expensive, disruptive and time consuming, and will continue to be, until resolved, and regardless of whether we are ultimately successful, could adversely affect our business.

We are or may become involved in litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices that are expensive, disruptive and time consuming, and will continue to be, until resolved, and regardless of whether we are ultimately successful, could adversely affect our business.

If we believe that a third party is required, but has declined, to license our intellectual property in order to manufacture, sell, offer for sale, import or use products, we have in the past and may in the future commence legal or administrative action against such third party.

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When assessing payments due by customers under these types of arrangements, we rely upon the accuracy of our customers’ recordkeeping and reporting, and inaccuracies or payment disputes regarding amounts our customers owe under their licensing agreements may negatively impact our results of operations.

The royalties that are originally reported by a customer could differ materially from those determined by either a customer-self-reported correction or from an audit we have performed on a customer’s books and records.

The royalties that are originally reported by a customer could differ materially from those determined by either a customer-self-reported correction or from an audit we have

performed on a customer’s books and records.

Differing interpretations of royalty calculations may also cause disagreements during customer audits, may lead to claims or litigation, and may have an adverse effect on the results of our operations.

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We currently have sales personnel in Japan and Korea who engage customers and prospective customers in those regions.

International revenues accounted for approximately 84% of our total revenues in the first six months of 2020.

International revenues accounted for approximately 85% of our total revenues in the first nine months of 2020.

International operations are subject to a number of difficulties, risks, and special costs, including:

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Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) and other anticorruption, anti-bribery and anti-money laundering laws in the jurisdictions in which we do business, both domestic and abroad.

These laws generally prohibit us and our employees from improperly influencing government officials in order to obtain or retain business, direct business to any person or gain any improper advantage.

These laws generally prohibit us and our employees from improperly influencing government officials in order to obtain or retain business,

direct business to any person or gain any improper advantage.

The FCPA and other applicable anti-bribery and anti-corruption laws also may hold us liable for acts of corruption and bribery committed by our third-party business partners, representatives and agents.

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Any violation of such laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, and other consequences which may have an adverse effect on our reputation, business, results of operations and financial condition.

Our international operations could also increase our exposure to foreign and international laws and regulations, which are subject to change.

Our international operations could also increase our exposure to foreign and international laws and regulations.

If we cannot comply with foreign laws and regulations, which are often complex and subject to variation, differing or inconsistent government interpretation, and unexpected changes, we could incur unexpected costs and potential litigation.

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This license permits Microsoft to make, use, and sell hardware, software, and services, excluding specified products, covered by our patents.

We will not receive any further revenues or royalties from Microsoft under our current agreement with Microsoft, including with respect to Microsoft’s Xbox One gaming product or any other haptic-related product that Microsoft produces or sells.

Microsoft has a significant share of the market for touch-enabled console gaming computer peripherals and is pursuing other consumer markets such as mobile devices, tablets, personal computers, and VR and augmented reality (or AR).

We will not receive any further revenues or royalties from Microsoft under our current agreement with Microsoft, including with respect to Microsoft’s Xbox Series X gaming product or any other haptic-related product that Microsoft produces or sells.

Microsoft has a significant share of the market for touch-enabled console gaming computer peripherals and is pursuing other consumer markets such as mobile

devices, tablets, personal computers, and VR and augmented reality (or AR).

Microsoft has significantly greater financial, sales, and marketing resources, as well as greater name recognition and a larger customer base than some of our other licensees from whom, unlike with respect to Microsoft, we are able to collect royalty payments.

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Further, our revenues in the automotive market depend in large part on the number of haptic touch interfaces that are incorporated into vehicles.

The COVID-19 pandemic and its resulting economic and other effects has caused and may in the future cause significant adverse effects on our customers’ ability to manufacture, distribute and sell products incorporating our touch-enabling technologies.

The COVID-19 pandemic, and its resulting economic and other impacts, have caused and may in the future cause significant adverse effects on our customers’ ability to manufacture, distribute and sell products incorporating our touch-enabling technologies.

While we believe that the automotive market provides opportunities for growth for us, especially if haptic touch interfaces are adopted in more mid-tier and entry-tier vehicles, we are unable to accurately predict the full impact that COVID-19 will have on the number of vehicles sold by our customers that incorporate haptic touch interfaces.

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We license some technologies from third parties and in doing so, we must rely upon the owners of these technologies for information on the origin and ownership of the technologies.

As a result, our exposure to infringement claims may increase if the owners misrepresent, intentionally or unintentionally, the scope or validity of their ownership.

As a result, our exposure to infringement claims may increase if

the owners misrepresent, intentionally or unintentionally, the scope or validity of their ownership.

We generally obtain representations as to the origin and ownership of acquired or licensed technologies and indemnification to cover any breach of these representations.

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Our business involves the storage and transmission of customers’ proprietary and confidential information, including information that may be personal information, and other data.

In addition, we collect, use and maintain our own confidential and proprietary business information, and maintain intellectual property internally on our systems.

In addition, we collect, use and maintain our own confidential and proprietary business information, including information that may be personal information, and maintain intellectual property internally on our systems.

Computer malware, cyberattacks and other threats and methods used to gain unauthorized access to our information technology networks and systems have become more prevalent and sophisticated.

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Entrance into the highly competitive and fragmented sexual wellness market may adversely impact our financial results.

As part of our strategy, we are considering entering the sexual wellness market.

If we enter this market, our competitors may have significant competitive advantages over us, including longer operating histories, larger and broader customer bases, more established relationships with a broader set of suppliers, and greater brand recognition.

As part of our strategy, we entered the sexual wellness market.

As a new market entrant, our competitors may have significant competitive advantages over us, including longer operating histories, larger and broader customer bases, more established relationships with a broader set of suppliers, and greater brand recognition.

In addition, the sexual wellness market vertical is highly fragmented, which may lead to unexpected challenges and expenses in licensing our technology.

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In addition, the sexual wellness market vertical we intend to license into may subject us to obscenity or other legal claims by third parties for which our financial position and results of operations could be harmed.

If we are unable to develop open source compliant products, our ability to license our technologies and generate revenues would be impaired.

If we are unable to develop open source compliant products, our ability to license our technologies and generate revenues may be impaired.

We have seen, and believe that we will continue to see, an increase in customers requesting that we develop products that will operate in an “open source” environment.

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Our technologies have in the past contained, and may in the future contain, undetected errors or defects.

These errors or defects may increase as our technologies are introduced into new devices, markets and applications, including the automotive market, or as new versions are released.

These errors or defects may increase as our technologies are introduced into new devices, markets and applications, including the automotive market and the sexual wellness market, or as new versions are released.

Some errors in our technologies may only be discovered after a customer’s product incorporating our technologies has been shipped to customers.

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For example, the EU General Data Protection Regulation (“GDPR”), which became fully effective on May 25, 2018, imposes more stringent data protection requirements than previously effective EU data protection law and provides for penalties for noncompliance of up to the greater of €20 million or four percent of worldwide annual revenues.

The GDPR requires, among other things, that personal data only be transferred outside of the EU to certain jurisdictions, including the United States, if steps are taken to legitimize those data transfers.

We rely on the EU-U.S.

and Swiss-U.S.

Privacy Shield programs, and the use of model contractual clauses approved by the EU Commission, to legitimize these transfers.

Both the EU-U.S.

Privacy Shield and these model contractual clauses have been subject to legal challenge, however, and it is unclear what effect these challenges will have and whether the means we presently use will continue as appropriate means for us to legitimize personal data transfers from the EU or Switzerland to the U.S.

The GDPR requires, among other things, that personal data only be transferred outside of the European Economic Area (“EEA”) to certain jurisdictions, including the United States, if steps are taken to legitimize those data transfers.

We rely on the Swiss-U.S.

Privacy Shield programs, and the use of Standard Contractual Clauses (“SCCs”) approved by the EU Commission, to legitimize these transfers.

Previously, we relied on the EU-U.S.

Privacy Shield framework to legitimize transfers of personal data from the EEA to the United States.

However, on July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S.

Privacy Shield Framework.

This decision may increase our costs and limit our ability to process personal data from the European Union.

The same decision also cast doubt on the ability to use one of the primary alternatives to the Privacy Shield, namely, SCCs, to lawfully transfer personal data from Europe to the United States and most other countries.

At present, there are few if any viable alternatives to the Privacy Shield and the SCCs.

This CJEU decision or other legal challenges relating to cross-border data transfer may serve as a basis for our personal data handling practices to be challenged and may otherwise adversely impact our business, financial condition and operating results.

Further, in June 2016, the United Kingdom voted to leave the European Union, commonly referred to as “Brexit,” which could also lead to further legislative and regulatory changes.

The United Kingdom ceased to be an EU Member State on January 31, 2020, but remains subject to EU law for a transition period ending on December 31, 2020.

The UK Data Protection Act that substantially implements the GDPR became law in May 2018 and was further amended to more closely align to GDPR post-Brexit.

The UK Data Protection

Act that substantially implements the GDPR became law in May 2018 and was further amended to more closely align to GDPR post-Brexit.

It remains unclear, however, how United Kingdom data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated.

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The CCPA has been amended on multiple occasions and is the subject of proposed regulations of the California Attorney General that were released on October 10, 2019.

While the CCPA went into effect on

January 1, 2020, aspects of the legislation and its interpretation remain unclear at this time.

While the CCPA went into effect on January 1, 2020, aspects of the legislation and its interpretation remain unclear at this time.

We therefore cannot fully predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Other privacy bills have been introduced at both the state and federal levels, and certain international territories are also imposing new or expanded privacy obligations.

In addition, ballot initiatives may also impose new or expanded privacy obligations.

For example, California voters appear to have passed Proposition 24, also known as the California Privacy Rights and Enforcement Act of 2020, a November 2020 ballot measure that, among other effects, expands or amends the provisions of the CCPA, allows consumers to direct businesses to not share their personal information, removes the time period in which businesses can fix violations before being penalized, and creates the California Privacy Protection Agency to enforce the state’s consumer data privacy laws.

Even the perception of privacy, data protection or information security concerns, whether or not valid, may harm our reputation, inhibit adoption of our products by current and future customers, or adversely impact our ability to hire and retain workforce talent.

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Under ASC 606, we are required to record per-unit royalty revenue in the same period in which the licensee’s underlying sales occur.

As we generally do not receive the per-unit licensee royalty reports for sales during a given quarter within the time frame

that allows us to adequately review the reports and include the actual amounts in our quarterly results for such quarter, we accrue the related revenue based on estimates of our licensees’ underlying sales, subject to certain contractual terms on our ability to estimate such amounts.

As we generally do not receive the per-unit licensee royalty reports for sales during a given quarter within the time frame that allows us to adequately review the reports and include the actual amounts in our quarterly results for such quarter, we accrue the related revenue based on estimates of our licensees’ underlying sales, subject to certain contractual terms on our ability to estimate such amounts.

As a result of accruing per-unit royalty revenue for the quarter based on estimates, adjustments will be required in the following quarter to true up revenue to the actual amounts reported by our licensees.

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EXHIBIT INDEX

Exhibit Description

Incorporated by Reference

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit Filing Date

Amended and Restated Bylaws of Immersion Corporation, as adopted on October 31, 2016

8-K 000-27969 3.1 November 4,

Amended and Restated Certificate of Incorporation of Immersion Corporation

8-K 000-27969 3.1 June 7,

Certificate of Designation of the Powers, Preferences and Rights of Series A Redeemable Convertible Preferred Stock

8-K 000-27969 3.1 July 29,

Certificate of Designations of Series B Participating Preferred Stock of Immersion Corporation

Description of Compensation Reductions for Directors and Officers as disclosed in the Company’s Form 8-K filed with the SEC on April 7, 2020

Description of Cancellation of the Company’s 2020 Executive Incentive Plan as disclosed in the Company’s Form 8-K filed with the SEC on July 1, 2020

Sublease, dated March 12, 2020, by and between Immersion Corporation, a Delaware corporation, and Neato Robotics, Inc.

First Amendment to Sublease, dated May 1, 2020, by and between Immersion Corporation, a Delaware corporation, and Neato Robotics, Inc.

Certification of Ramzi Haidamus, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

8-K 000-27969 3.1 December 27,

Amendment No.

1 to Employment Agreement, dated February 27, 2020, between Immersion Corporation and Ramzi Haidamus

Amendment No.

2 to Employment Agreement, dated June 25, 2020, between Immersion Corporation and Ramzi Haidamus

Form of Amendment No.

1 to Retention and Ownership Change Event Agreement with each of its executive officers (other than Ramzi Form of Amendment No.

1 to Retention and Ownership Change Event Agreement with each of its executive officers (other than Ramzi Haidamus) )

Certification of Jared Smith , Interi m Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

Certification of Aaron Akerman, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Ramzi Haidamus, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Aaron Akerman, Interim Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Report Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Presentation Linkbase Document

Certification of Jared S mith , Interim Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Aaron Akerman, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Report Instance Document X

101.SCH XBRL Taxonomy Extension Schema Document X

101.CAL XBRL Taxonomy Calculation Linkbase Document X

101.DEF XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB XBRL Taxonomy Label Linkbase Document X

101.PRE XBRL Presentation Linkbase Document X

* This certification is deemed not filed for purposes of section 18 of the Exchange Act, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, as amended, or the Exchange Act, as amended.

Management contract.

** Constitutes a management contract or compensatory plan.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

IMMERSION CORPORATION

August 6, 2020

November 5, 2020 By:

/s/ AARON AKERMAN

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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 1A. Risk Factors