<SUBMISSION>
<ACCESSION-NUMBER>0000950134-04-004097
<TYPE>S-3/A
<PUBLIC-DOCUMENT-COUNT>3
<FILING-DATE>20040326
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>IMMERSION CORP
<CIK>0001058811
<ASSIGNED-SIC>3577
<IRS-NUMBER>943180138
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3/A
<ACT>33
<FILE-NUMBER>333-108607
<FILM-NUMBER>04691177
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
<PHONE>4084671900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>IMMERSION HUMAN INTERFACE CORP
<DATE-CHANGED>19980602
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>f92905a3sv3za.htm
<DESCRIPTION>AMENDMENT NO. 3 TO FORM S-3
<TEXT>
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<P align="left"><FONT size="1">

</FONT>
<DIV align="center" style="font-size: 10pt"><B>As filed with the
Securities and Exchange Commission on March&nbsp;26, 2004</B></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="right" style="font-size: 10pt">Registration No.&nbsp;333-108607</DIV>



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<P align="center" style="font-size: 14pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<P align="left"><FONT size="1">

</FONT>
<DIV align="center" style="font-size: 10pt"><B>Amendment No.&nbsp;3
</B></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center" style="font-size: 10pt"><B>to</B>
<DIV align="center" style="font-size: 18pt"><B>FORM S-3</B></DIV>


<P align="center" style="font-size: 10pt">REGISTRATION STATEMENT<BR>
<B>Under<BR>
THE SECURITIES ACT OF 1933</B>


<P align="center" style="font-size: 24pt"><B>IMMERSION CORPORATION</B>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>94-3180138</B><BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>

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</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><B>801 Fox Lane<BR>
San Jose, California 95131<BR>
(408)&nbsp;467-1900</B><BR>
(Address, including zip code, and telephone number, including area code, of Registrant&#146;s principal executive offices)


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>



<P align="center" style="font-size: 10pt"><B>VICTOR A. VIEGAS<BR>
President, Chief Executive Officer<BR>
and Chief Financial Officer<BR>
IMMERSION CORPORATION<BR>
801 Fox Lane<BR>
San Jose, California 95131<BR>
(408)&nbsp;467-1900</B>



<P align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center">


<DIV align="center" style="font-size: 10pt">(Name, address, including zip code, and telephone number, including area code, of agent for service)</DIV>



<P align="center" style="font-size: 10pt"><B><I>Copy to:</I></B>



<P align="center" style="font-size: 10pt"><B>JAMES M. KOSHLAND, ESQ.</B><BR>
Gray Cary Ware &#038; Freidenrich LLP<BR>
2000 University Avenue<BR>
East Palo Alto, CA 94303-2248<BR>
(650)&nbsp;833-2000


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>Approximate date of commencement of proposed sale to the public:</B><BR>
As soon as practicable after the effective date of this registration statement.



<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: <FONT face="wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act
of 1933, check the following box: <FONT face="wingdings">&#120;</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to a register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. <FONT face="wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. <FONT face="wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434,
check the following box. <FONT face="wingdings">&#111;</FONT>


<P align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center">



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with </B><B>Section 8(a)</B><B> of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section&nbsp;</B><B>8(a)</B><B>, may
determine.</B>


<P>
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<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">








<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">Subject to Completion,
Dated March&nbsp;26, 2004
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>PROSPECTUS</B>
<P align="center" style="font-size: 10pt"><B>6,542,552 Shares of Common Stock of<BR>
Immersion Corporation<BR>
(issuable upon conversion of preferred stock and debentures)</B>




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to the public offering, which is not being
underwritten, of 6,542,552 shares of common stock of Immersion
Corporation. The shares of our common stock may be offered by the
selling stockholder named in this prospectus, upon conversion of issued
and issuable shares of Series&nbsp;A Redeemable Convertible Preferred Stock
and upon the conversion of issuable Senior Redeemable Convertible
Debentures. The shares of Preferred Stock are convertible into
approximately 2,686,897 shares of Immersion&#146;s Common Stock, and the
Debentures are convertible into approximately 3,855,655 shares of
Immersion&#146;s Common Stock. Additional shares of Immersion&#146;s Preferred
Stock and additional Debentures, which are convertible into Immersion&#146;s
Common Stock, may be issued in lieu of cash as dividends on the
Preferred Stock and interest on the Debentures, respectively. We will
not receive any proceeds from the sale of our Common Stock by the
selling stockholder. All expenses of registration incurred in
connection with this offering are being borne by us, but all selling
and other expenses incurred by the selling stockholder will be borne by
the selling stockholder. None of the shares offered pursuant to this
prospectus have been registered prior to the filing of the registration
statement of which this prospectus is a part.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock offered in this prospectus may be offered and
sold by the selling stockholder directly or through broker-dealers
acting solely as agents. The distribution of the Common Stock may be
effected in one or more of the following types of transactions:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transactions on any national securities
exchange or quotation service on which the common stock
may be listed or quoted at the time of the sale,
including the Nasdaq National Market;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transactions in the over-the-counter
market; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transactions otherwise than on such
exchanges or services or in the over-the-counter market.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These transactions may include block transactions or crosses.
Crosses are transactions in which the same broker acts as an agent on
both sides of the trade. These transactions may be made at market
prices and on terms prevailing at the time of sale, prices related to
such prevailing market prices or negotiated prices. Usual and
customary or specially negotiated brokerage fees or commissions may be
paid by the selling stockholder in connection with these sales.

<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion Corporation&#146;s Common Stock is traded on the Nasdaq
National Market under the symbol &#147;IMMR&#148;. On March&nbsp;25, 2004, the last
reported sales price for the common stock was $7.56 per share.</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>INVESTING IN THE COMMON STOCK OFFERED IN THIS PROSPECTUS INVOLVES
A HIGH DEGREE OF RISK. SEE &#147;RISK FACTORS&#148; BEGINNING ON PAGE
3.</B>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder and any brokers executing selling orders
on behalf of the selling stockholder may be deemed to be &#147;underwriters&#148;
within the meaning of the Securities Act of 1933. Commissions received
by a broker executing selling orders may be deemed to be underwriting
commissions under the Securities Act.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt">NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE<BR>
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR<BR>
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.<BR>
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
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</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#101">Disclosure Regarding Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">i</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#102">Summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#103">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#104">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#105">Dividend Policy</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#106">Description of Capital Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#107">Selling Stockholder</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#108">Plan of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#109">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#110">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#111">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>

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<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a3exv5w1.txt">EXHIBIT 5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a3exv23w2.txt">EXHIBIT 23.2</A></FONT></TD></TR>
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
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</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. The selling stockholder is not making
an offer to sell these securities in any jurisdiction where the offer or sale
is not permitted. You should assume that the information appearing in this
prospectus is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion is a registered trademark of Immersion Corporation. This
prospectus contains product names, trade names and trademarks of Immersion and
other organizations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms &#147;Immersion,&#148; &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; and the &#147;company,&#148; as used in
this prospectus, refer to Immersion Corporation and its consolidated
subsidiaries.

<DIV align="left">
<A name="101"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus includes forward-looking statements within the meaning of
Section&nbsp;27A of the Securities Act of 1933, as amended, and Section&nbsp;21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements
involve risks and uncertainties. Forward-looking statements are identified by
words such as &#147;anticipates&#148;, &#147;believes&#148;, &#147;expects&#148;, &#147;intends&#148;, &#147;may&#148;, &#147;will&#148;
and other similar expressions. However, these words are not the only way we
identify forward-looking statements. In addition, any statements, which refer
to expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. Actual results could differ
materially from those projected in the forward-looking statements as a result
of a number of factors, including those listed under &#147;Risk Factors&#148; and
elsewhere in this prospectus and those described in our other reports filed
with the SEC. We caution you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report, and
we undertake no obligation to update these forward-looking statements after the
filing of this report. You are urged to review carefully and consider our
various disclosures in this report and in our other reports filed with the SEC
that attempt to advise you of the risks and factors that may affect our
business.



<P align="center" style="font-size: 10pt">i
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="102"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SUMMARY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary highlights selected information contained elsewhere in this
prospectus. You should read the entire prospectus and the documents
incorporated by reference in this prospectus carefully before making an
investment decision.</I>


<P align="center" style="font-size: 10pt"><B>Immersion Corporation</B>

<P align="center" style="font-size: 10pt">&nbsp;

<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading provider of haptic technology that brings the sense of
feel or touch to a wide variety of markets. We develop, manufacture, license
and support a wide range of hardware and software technologies that let users
interact with digital devices using their sense of touch. We focus on four
application areas &#150; consumer, computing and entertainment; industrial and
automotive; three-dimensional and professional products; and medical
simulation. We manage these application areas under two operating and
reportable segments: 1) Immersion Computing, Entertainment and Industrial, and
2) Immersion Medical.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In markets where our touch technology is a small piece of a larger system
(such as cellular phones, consumer gaming peripherals and automotive
interfaces), we license our technologies to third party manufacturers who
integrate our technology into their products and resell it under their own
brand names. In other markets, where our touch technology is a complete system
(like medical simulation systems and three-dimensional and professional
products), we manufacture and sell products under our own Immersion brand name,
through direct sales, distributors and value added resellers. In all market
areas, we also engage in development projects for third parties and government
agencies from time to time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our objective is to proliferate our TouchSense&#174; technologies across
markets, platforms and applications so that touch and feel become as common as
color, graphics and sound in modern user interfaces. Immersion and its wholly
owned subsidiaries hold more than 210 issued patents and more than 240 pending
patent applications worldwide, covering various aspects of hardware and
software technologies.

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated in California in May&nbsp;1993 and reincorporated in
Delaware in November&nbsp;1999. Our principal executive offices are located at 801
Fox Lane, San Jose, California 95131, our telephone number is (408)&nbsp;467-1900
and our website is located at www.immersion.com. Information on our website is
not a part of this prospectus.


<P align="center" style="font-size: 10pt"><B>Recent Developments</B>

<P align="center" style="font-size: 10pt">&nbsp;

<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;16, 2004, Sony Computer Entertainment, Inc. and Sony Computer
Entertainment of America, Inc. (collectively, &#147;Sony Computer Entertainment&#148;)
filed motions for summary judgment on grounds of invalidity of our claims and
requested that it be dismissed as a party to our lawsuit against it. We also
filed a motion for summary judgment seeking dismissal to Sony Computer
Entertainment&#146;s defenses that our asserted patents are unenforceable. On
February&nbsp;27, 2004, the court held a hearing on these motions. On March&nbsp;2,
2004, the court issued a written ruling on the summary judgment motions. The
court denied Sony Computer Entertainment&#146;s motion for summary judgment of
invalidity. The court granted all but one of our motions and dismissed several
of Sony Computer Entertainment&#146;s defenses.</DIV>


<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>The Offering</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock offered by the selling
stockholder
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">6,542,552 shares, includes
2,686,897 shares issuable upon
conversion of the Preferred
Stock and dividends on the
Preferred Stock and 3,855,655
shares issuable upon conversion
of the Debentures and interest
on the Debentures.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock to be outstanding after this
offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Up to 27,442,203 shares, which
includes 20,899,651 shares
outstanding as of March&nbsp;10,
2004.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We will not receive any of the
proceeds from the sale of shares
by the selling stockholder.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nasdaq National Market symbol
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IMMR</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Risk Factors
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">See &#147;Risk Factors&#148; beginning on
page 3 and other information in
this prospectus for a discussion
of factors you should consider
carefully before investing in
shares of our Common Stock.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares that will be outstanding after the offering is
based on the number of shares outstanding as of March&nbsp;10, 2004 and excludes
shares of common stock reserved for issuance under our stock option plans,
employee stock purchase plan and outstanding warrants and upon exercise of
stock options and warrants assumed in connection with our acquisitions of HT
Medical Systems, Inc. and Virtual Technologies, Inc.

<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>


<DIV align="center" style="font-size: 10pt"><B>RISK FACTORS</B>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>An investment in the securities offered by this prospectus involves a high
degree of risk. You should carefully consider the following factors and other
information in this prospectus and in the documents incorporated by reference
in this prospectus before deciding to purchase shares of our common stock. If
any of these risks occur, our business could be harmed, the trading price of
our stock could decline and you may lose all or part of your investment.</I>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE HAD AN ACCUMULATED DEFICIT OF $93 MILLION AS OF DECEMBER 31, 2003, HAVE A
HISTORY OF LOSSES, WILL EXPERIENCE LOSSES IN THE FUTURE AND MAY NOT ACHIEVE OR
MAINTAIN PROFITABILITY.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1997, we have incurred losses in every fiscal quarter. We will need
to generate significant revenue to achieve and maintain profitability. We
anticipate that our expenses will increase in the foreseeable future as we:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protect and enforce our intellectual property, including the costs of
our litigation against Sony Computer Entertainment;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continue to develop our technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>attempt to expand the market for touch-enabled products;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase our sales efforts; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pursue strategic relationships.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our revenues grow more slowly than we anticipate or if our operating
expenses exceed our expectations, we may not achieve or maintain profitability.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR CURRENT LITIGATION AGAINST SONY COMPUTER ENTERTAINMENT IS EXPENSIVE,
DISRUPTIVE AND TIME CONSUMING AND WILL CONTINUE TO BE, AND REGARDLESS OF
WHETHER WE ARE ULTIMATELY SUCCESSFUL, COULD ADVERSELY AFFECT OUR BUSINESS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;11, 2002, we filed a complaint against Microsoft Corporation,
Sony Computer Entertainment, Inc., and Sony Computer Entertainment of America,
Inc. in the U.S. District Court for the Northern District Court of California
alleging infringement of U.S. Patent Nos. 5,889,672 and 6,275,213. The case was
assigned to United States District Judge Claudia Wilken. On April&nbsp;4, 2002, Sony
Computer Entertainment and Microsoft answered the complaint by denying the
material allegations and alleging counterclaims seeking a judicial declaration
that the asserted patents were invalid, unenforceable, or not infringed. Under
the counterclaims, the defendants are also seeking damages for attorneys&#146; fees.
The process of discovery and exchanging information and documents on
infringement, invalidity, and damages, is ongoing. On October&nbsp;8, 2002, we filed
an amended complaint, withdrawing the claim under the &#145;672 patent and adding
claims under a new patent, U.S. Patent No.&nbsp;6,424,333.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;10, 2002, the Court entered an Amended Case Management Order
that set, among other dates in the case, April&nbsp;25, 2003 for a hearing to
construe the claims of the asserted patents and April&nbsp;5, 2004 for the start of
trial. On October&nbsp;28, 2002, Sony Computer Entertainment and Microsoft answered
the amended complaint and alleged similar counterclaims for declaratory relief
that the asserted patents are invalid, unenforceable, or not infringed. On
March&nbsp;21, 2003, Sony Computer Entertainment filed a motion for summary judgment
of non-infringement. At Immersion&#146;s request, the Court ordered this motion
stricken, without prejudice to its being refiled at a later date after the
Court rules on claim construction. On April&nbsp;25, 2003, the Court held the
scheduled claim construction hearing. On July&nbsp;9, 2003, the Court issued an
Order Modifying Case Management Order that reset certain scheduled dates in the
case, including setting April&nbsp;12, 2004 as the start of trial. On October&nbsp;2,
2003, the Court issued its Claim Construction Order construing certain terms of
the patents asserted in the lawsuit. On January&nbsp;16, 2004, Sony Computer
Entertainment moved for summary judgment on the grounds that all asserted

<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">claims are invalid. Immersion has opposed these motions. On February&nbsp;27,
2004, the Court held a hearing on these motions. On March&nbsp;2, 2004, the Court
issued a written ruling on the summary judgment motions. The Court denied
Sony&#146;s motion for summary judgment of invalidity. The Court granted all but
one of Immersion&#146;s motions and dismissed several Sony defenses. On March
23, 2004 the court rescheduled the trial from April 12, 2004 to April 19, 2004.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;28, 2003, we announced that we had settled our legal differences
with Microsoft and we and Microsoft agreed to dismiss all claims and
counterclaims relating to this matter as well as assume financial
responsibility for our respective legal costs with respect to the lawsuit
between Immersion and Microsoft. We continue to pursue our claims of
infringement against Sony Computer Entertainment. In the event we settle our
lawsuit with Sony Computer Entertainment, we will be obligated to pay certain
sums to Microsoft. If Sony Computer Entertainment were successful in its
counterclaims and our patents were deemed invalid and unenforceable, the assets
relating to the patents that were deemed invalid would be impaired and we may
be required to pay Sony Computer Entertainment&#146;s attorneys fees. The case is
scheduled to go to trial in April&nbsp;2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the inherent uncertainties of litigation, we cannot accurately
predict the ultimate outcome of the litigation. We anticipate that the
litigation will continue to be costly, and there can be no assurance that we
will be able to recover the costs we incur in connection with the litigation.
We expense litigation costs as incurred and only accrue for costs that have
been incurred but not paid to the vendor as of the financial statement date.
The litigation has diverted, and is likely to continue to divert, the efforts
and attention of some of our key management and personnel. As a result, until
such time as it is resolved, the litigation could adversely affect our
business. Further, any unfavorable outcome could adversely affect our business.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">THE MARKET FOR TOUCH-ENABLING TECHNOLOGIES AND TOUCH-ENABLED PRODUCTS IS AT AN
EARLY STAGE AND IF MARKET DEMAND DOES NOT DEVELOP, WE MAY NOT ACHIEVE OR
SUSTAIN REVENUE GROWTH.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market for our touch-enabling technologies, and our licensees&#146;
touch-enabled products is at an early stage. If we and our licensees are unable
to develop demand for touch-enabling technologies and touch-enabled products,
we may not achieve or sustain revenue growth. We cannot accurately predict the
growth of the markets for these technologies and products, the timing of
product introductions or the timing of commercial acceptance of these products.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Even if our touch-enabling technologies and our licensees&#146; touch-enabled
products are ultimately widely adopted, widespread adoption may take a long
time to occur. The timing and amount of royalties and product sales that we
receive will depend on whether the products marketed achieve widespread
adoption and, if so, how rapidly that adoption occurs. We expect that we will
need to pursue extensive and expensive marketing and sales efforts to educate
prospective licensees and end users about the uses and benefits of our
technologies and to persuade software developers to create software that
utilizes our technologies.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenues and operating results are likely to vary significantly from
quarter to quarter due to a number of factors, many of which are outside of our
control and any of which could cause the price of our common stock to decline.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These factors include:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the establishment or loss of licensing relationships;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of payments under fixed and/or up-front license agreements;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of our expenses, including costs related to litigation,
acquisitions of technologies or businesses;</TD>
</TR>

</TABLE>
<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of introductions of new products and product enhancements
by us, our licensees or their competitors;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to develop and improve our technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to attract, integrate and retain qualified personnel; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>seasonality in the demand for our licensees&#146; products.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordingly, we believe that period-to-period comparisons of our operating
results should not be relied upon as an indicator of our future performance. In
addition, because a high percentage of our operating expenses are fixed, a
shortfall of revenues can cause significant variations in operating results
from period to period.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE ARE UNABLE TO ENTER INTO NEW LICENSING ARRANGEMENTS WITH OUR EXISTING
LICENSEES AND WITH ADDITIONAL THIRD-PARTY MANUFACTURERS FOR OUR TOUCH-ENABLING
TECHNOLOGY, OUR ROYALTY REVENUE MAY NOT GROW.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenue growth is significantly dependent on our ability to enter into
new licensing arrangements. Our failure to enter into new licensing
arrangements will cause our operating results to suffer. We face numerous risks
in obtaining new licenses on terms consistent with our business objectives and
in maintaining, expanding and supporting our relationships with our current
licensees. These risks include:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the lengthy and expensive process of building a relationship with potential licensees;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the fact that we may compete with the internal design teams of existing and potential licensees;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in persuading consumer product manufacturers to work with us, to rely on us for
critical technology and to disclose to us proprietary product development and other strategies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>
if we are not successful in the litigation with Sony, not only might we have a difficult time
signing up new gaming licensees, we also risk losing our existing licensees as well;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in convincing car companies to sign a license agreement with us when they will
need to purchase components from one of their vendors who may or may not yet be able to meet
the car companies&#146; stringent quality and parts availability standards;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in persuading existing and potential licensees to bear the development costs
necessary to incorporate our technologies into their products; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>challenges in demonstrating the compelling value of our technologies in new applications like
cell phones and automobiles.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of our current royalty revenue has been derived from the
licensing of our portfolio of touch-enabling technologies for personal computer
gaming peripherals, such as joysticks and steering wheels. The market for
joysticks and steering wheels for use with personal computers is declining and
is a substantially smaller market than either the dedicated gaming console
market and is characterized by declining average selling prices. If we are
unable to gain market acceptance beyond the personal computer gaming
peripherals market, we may not achieve royalty revenue growth.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.

<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into, and will continue to enter into, agreements pursuant
to which our licensees are granted rights under our technology and intellectual
property. These rights may be granted in certain fields of use, or with
respect to certain market sectors or product categories, and may include
exclusive rights or sublicensing rights. The license terms and restrictions in
our agreements, including but not limited to field of use definitions, market
sector and product category definitions, and sublicensing and exclusivity
terms, shall collectively be referred to as &#147;License Provisions.&#148;
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the continuing evolution of market sectors, product categories and
licensee business models, and to the compromises inherent in the drafting and
negotiation of License Provisions, our licensees may, at some time during the
term of their agreements with us, interpret License Provisions in their
agreements in a way that is different to our interpretation of such License
Provisions, or in a way that is in conflict with the rights that we have
granted to other licensees. Such interpretations by our licensees may lead to
(a)&nbsp;claims that we have granted rights to one licensee which are inconsistent
with the rights that we have granted to another licensee, and/or (b)&nbsp;claims by
one licensee against another licensee that may result in our incurring
indemnification or other obligations or liabilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, after entering into an agreement it is possible that markets
and/or products, or legal and/or regulatory environments, will evolve in a
manner that was not foreseen or was not foreseeable at the time the agreement
was entered into. As a consequence, in the agreement we may have granted
rights that will preclude or restrict our exploitation of potentially lucrative
new opportunities that arise after the execution of the agreement.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">AUTOMOTIVE ROYALTIES COULD BE REDUCED IF BMW WERE TO ABANDON ITS IDRIVE SYSTEM.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our largest royalty stream from the auto industry is from BMW for its
iDrive controller. Press reviews of this system have been largely negative and
critical of the system&#146;s complexity. While this negative press is not our
fault, it may mean limited sales of BMW&#146;s cars, and could ultimately lead to
their abandoning the system, which could reduce or eliminate the related
royalties.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">BECAUSE WE HAVE A FIXED PAYMENT LICENSE WITH MICROSOFT, OUR ROYALTY REVENUE
FROM LICENSING IN THE GAMING MARKET AND OTHER CONSUMER MARKETS MIGHT DECLINE IF
MICROSOFT INCREASES ITS VOLUME OF SALES OF TOUCH-ENABLED GAMING PRODUCTS AND
CONSUMER PRODUCTS AT THE EXPENSE OF OUR OTHER LICENSEES.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of our present agreement with Microsoft, Microsoft
receives a royalty-free, perpetual, irrevocable license to Immersion&#146;s
worldwide portfolio of patents. This license permits Microsoft to make, use and
sell hardware, software and services, excluding specified products, covered by
Immersion&#146;s patents. Immersion also granted to Microsoft a limited right, under
Immersion&#146;s patents relating to touch technology, to sublicense specified
rights, excluding rights to excluded products and peripheral devices, to third
party customers of Microsoft&#146;s or Microsoft&#146;s subsidiaries&#146; operating systems
(other than Sony Corporation, Sony Computer Entertainment, Inc., Sony Computer
Entertainment of America, Inc., and their subsidiaries). In exchange, for the
grant of these rights and the rights included in a separate Sublicense
Agreement, Microsoft paid Immersion a one-time payment of $20.0&nbsp;million. We
will not receive any further revenues or royalties from Microsoft under our
current agreement with Microsoft. Microsoft has a significant share of the
market for touch-enabled gaming computer peripherals and is pursuing other
consumer markets such as cell phones and PDAs. Microsoft has significantly
greater financial, sales and marketing resources, as well as greater name
recognition and a larger customer base, than our other licensees. In the event
that Microsoft increases its share of these markets, our royalty revenue from
other licensees in these market segments might decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR RELATIONSHIP WITH MEDTRONIC, A LEADING MEDICAL DEVICE COMPANY, MAY
INTERFERE WITH OUR ABILITY TO ENTER INTO DEVELOPMENT AND LICENSING
RELATIONSHIPS WITH MEDTRONIC&#146;S COMPETITORS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February&nbsp;2003, we entered into an agreement with Medtronic, a leading
medical device company, in which Medtronic was granted a right of first
negotiation. The right of first negotiation applies to any agreement, which we
refer to as a &#147;Proposed Agreement,&#148; under which we would grant a third party
rights to use specified Immersion intellectual property in specified fields of
use. Under the terms of the right of first negotiation, we must

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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">notify Medtronic if we have received a written offer from a third party to
enter into a Proposed Agreement, or if we are seeking to find a third party to
enter into a Proposed Agreement. Medtronic has the exclusive right, for a
period of forty days, to negotiate with us regarding the material terms of the
Proposed Agreement. If during such forty-day period, Medtronic and Immersion
fail to reach agreement in principle upon the material terms of the Proposed
Agreement, then we will have twelve months after the expiration of such forty
day period to enter into an agreement with the applicable third party, provided
that the terms of such agreement are in the aggregate more favorable to
Immersion than the offer presented by Medtronic or the terms under which we
initially sought to find a third party to enter into the Proposed Agreement.
The right of first negotiation ceases to apply to any Proposed Agreement for
which Medtronic and Immersion reach agreement in principle upon the material
terms during the applicable forty-day period, but thereafter do not execute a
definitive agreement within 145&nbsp;days after the expiration of such forty-day
period. In addition, Medtronic&#146;s right of first negotiation terminates upon the
second anniversary of the completion of a development project to be undertaken
by us for Medtronic. Although the right of first negotiation has not impeded
our ability to interest other medical device companies in our technologies to
date, this right of first negotiation or our relationship with Medtronic may
impede, restrict or delay our ability to enter into development or license
agreements with large medical device companies that compete with Medtronic. Any
restriction in our ability to enter into development or license agreements with
other medical device companies would adversely affect our revenues.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">MEDTRONIC ACCOUNTS FOR A LARGE PORTION OF OUR REVENUES AND A REDUCTION IN SALES
TO MEDTRONIC, A REDUCTION IN DEVELOPMENT WORK, OR A DECISION NOT TO RENEW
EXISTING LICENSES BY MEDTRONIC MAY REDUCE OUR TOTAL REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the years ended December&nbsp;31, 2003, 2002 and 2001 we derived 18%, 10%
and 9%, respectively, of our total revenue from Medtronic. If our royalty and
license revenue or product sales to Medtronic decline, and/or Medtronic reduces
the development activities we perform, then our total revenue may decline. In
addition, under our recent agreements with Medtronic, monies advanced by
Medtronic are subject to refund provisions under certain circumstances. These
circumstances have not arisen to date, but we cannot predict whether these
circumstances will arise in the future.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">MAD CATZ ACCOUNTS FOR A SIGNIFICANT PORTION OF OUR REVENUE AND THE FAILURE OF
MAD CATZ TO ACHIEVE SALES VOLUMES FOR ITS GAMING PRODUCTS THAT INCORPORATE OUR
TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR TOTAL REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mad Catz accounts for a significant portion of our total revenue. For the
year ended December&nbsp;31, 2003 our revenue from Mad Catz increased as compared to
2002. For the years ended December&nbsp;31, 2003, 2002 and 2001 we derived 7%, 6%
and 2%, respectively of our total revenue from Mad Catz. We expect that a
significant portion of our total revenue will continue to be derived from Mad
Catz. If Mad Catz fails to achieve anticipated sales volumes for its computer
peripheral products that incorporate our technologies, our total revenue may
decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LOGITECH ACCOUNTS FOR A SIGNIFICANT PORTION OF OUR REVENUE AND THE FAILURE OF
LOGITECH TO ACHIEVE SALES VOLUMES FOR ITS GAMING PERIPHERAL PRODUCTS THAT
INCORPORATE OUR TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR TOTAL REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Logitech has in the past and may in the future account for a significant
portion of our revenue. For the year ended December&nbsp;31, 2003 our revenue from
Logitech declined from 2002. For the years ended December&nbsp;31, 2003, 2002 and
2001 we derived from Logitech 5%, 8% and 14%, respectively of our total
revenue. We expect that a significant portion of our total revenue will
continue to be derived from Logitech. If Logitech fails to achieve anticipated
sales volumes for its computer peripheral products that incorporate our
technologies, our total revenue may decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MAY ELECT TO OR NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY
RESULT IN SUBSTANTIAL DILUTION TO OUR STOCKHOLDERS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should any unanticipated circumstances arise which significantly increase
our cash or capital requirements we may elect to or need to raise additional
capital in order to ensure a sufficient supply of cash for such events or
future periods. Our plans to raise additional capital may include possible
customer prepayments of certain royalty

<P align="center" style="font-size: 10pt">7
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">obligations in exchange for a royalty discount and/or other negotiated
concessions, entering into new license agreements that require up-front license
payments, and through debt or equity financing. We have taken measures to
control our costs and will continue to monitor these efforts. We cannot be
certain that additional financing will be available to us on favorable terms
when required, or at all. Changes in equity markets over the past three years
have adversely affected the ability of companies to raise equity financing and
have adversely affected the markets for financing for companies with a history
of losses such as ours. Additional financing may require us to issue additional
shares of our common or preferred stock such that our existing stockholders may
experience substantial dilution.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MAY BE UNABLE TO INCREASE SALES OF OUR MEDICAL SIMULATION DEVICES IF, AS A
RESULT OF THE CURRENT ECONOMIC SLOWDOWN OR OTHER FACTORS, MEDICAL INSTITUTIONS
DO NOT BUDGET FOR SUCH DEVICES.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our medical simulation products, such as our AccuTouch Endoscopy
Simulator, the AccuTouch Endovascular Simulator and our Laparoscopic Surgical
Workstation&#153;, have only recently begun to be used by hospitals and medical
schools to train healthcare professionals. As a result, many of these medical
institutions do not budget for such simulation devices. To increase sales of
our simulation devices, we must, in addition to convincing medical institution
personnel of the utility of the devices, persuade them to include a significant
expenditure for the devices in their budgets. If these medical institutions are
unwilling to budget for simulation devices or reduce their budgets as a result
of the economic slowdown, cost-containment pressures or other factors, we may
not be able to increase sales of medical simulators at a satisfactory rate. As
a result of the terrorist attacks against the United States on September&nbsp;11,
2001 and the continuing threat of terrorist acts, hospitals may have assigned
priority in their capital expenditure budgets to equipment that will enable
them to respond more effectively to catastrophic emergencies, and federal,
state and local governments may have delayed certain funding for medical and
educational institutions, in which case purchases of medical simulators may
have been deferred. If we are unable to increase sales of our medical
simulation products, our results of operations and financial condition may be
adversely affected. We believe that medical device companies may also decrease
their expenditures in corporate research and development budgets and this may
adversely affect our contract and development revenue generated by the medical
segment.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE DO NOT CONTROL OR INFLUENCE OUR LICENSEES&#146; MANUFACTURING, PROMOTION,
DISTRIBUTION OR PRICING OF THEIR PRODUCTS INCORPORATING OUR TOUCH-ENABLING
TECHNOLOGIES, UPON WHICH WE ARE DEPENDENT TO GENERATE ROYALTY REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A key part of our business strategy is to license our intellectual
property to companies that manufacture and sell products incorporating our
touch-enabling technologies. Sales of those products generate royalty and
license revenue for us. For the years ended December&nbsp;31, 2003, 2002 and 2001,
30%, 26% and 28% of our total revenues were royalty and license revenues.
However, we do not control or influence the manufacture, quality control,
promotion, distribution or pricing of products that are manufactured and sold
by our licensees. In addition, we generally do not have commitments from our
licensees that they will continue to use our technology in future products. As
a result, products incorporating our technologies may not be brought to market,
meet quality control standards, achieve commercial acceptance or generate
meaningful royalty revenue for us. For us to generate royalty revenue,
licensees that pay us per-unit royalties must manufacture and distribute
products incorporating our touch-enabling technologies in a timely fashion and
generate consumer demand through marketing and other promotional activities.
Products incorporating our touch-enabling technologies are generally difficult
to design and manufacture which may cause product introduction delays or
quality control problems. If our licensees fail to stimulate and capitalize
upon market demand for products that generate royalties for us, or if products
are recalled because of quality control problems, our revenues will not grow
and could decline.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peak demand for products that incorporate our technologies, especially in
the computer gaming peripherals market, typically occurs in the third and
fourth calendar quarters as a result of increased demand during the year-end
holiday season. If our licensees do not ship products incorporating our
touch-enabling technology in a timely fashion or fail to achieve strong sales
in the fourth quarter of the calendar year, we may not receive related royalty
and license revenue.

<P align="center" style="font-size: 10pt">8
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">REDUCED SPENDING BY CORPORATE RESEARCH AND DEVELOPMENT DEPARTMENTS MAY
ADVERSELY AFFECT SALES OF OUR THREE-DIMENSIONAL AND PROFESSIONAL PRODUCTS.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that the current economic downturn has led to a reduction in
corporations&#146; budgets for research and development in several sectors,
including the automotive and aerospace sectors, which use our three-dimensional
and professional products. Sales of our three-dimensional and professional
products, including our CyberGlove line of whole-hand sensing gloves and our
MicroScribe G2 line of three-dimensional digitizers may be adversely affected
by these cuts in corporate research and development budgets.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE HAVE LIMITED DISTRIBUTION CHANNELS AND RESOURCES TO MARKET AND SELL OUR
MEDICAL SIMULATION AND THREE-DIMENSIONAL SIMULATION PRODUCTS, AND IF WE ARE
UNSUCCESSFUL IN MARKETING AND SELLING THESE PRODUCTS WE MAY NOT ACHIEVE OR
SUSTAIN PRODUCT REVENUE GROWTH.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have limited resources for marketing and selling medical simulation or
three-dimensional simulation products either directly or through distributors.
To achieve our business objectives we must build a balanced mixture of sales
through a direct sales channel and through qualified distribution channels. The
success of our efforts to sell medical simulation and three-dimensional
simulation products will depend upon our ability to retain and develop a
qualified sales force and effective distributor channels. We may not be
successful in attracting and retaining the personnel necessary to sell and
market our simulation products. A number of our distributors represent
small-specialized companies that may not have sufficient capital or human
resources to support the complexities of selling and supporting simulation
products. There is no assurance that our direct selling efforts will be
effective, distributors will market our products successfully or, if our
relationships with distributors terminate, we will be able to establish
relationships with other distributors on satisfactory terms, if at all. Any
disruption in the distribution, sales or marketing network for our simulation
products could have a material adverse effect on our product revenues.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS COULD BE EXPENSIVE,
DISRUPTIVE, AND TIME CONSUMING; COULD RESULT IN THE IMPAIRMENT OR LOSS OF
PORTIONS OF OUR INTELLECTUAL PROPERTY; AND COULD ADVERSELY AFFECT OUR BUSINESS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intellectual property litigation, whether brought by us or by others
against us, could result in the expenditure of significant financial resources
and the diversion of management&#146;s time and efforts. From time to time, we
initiate claims against third parties that we believe infringe our intellectual
property rights. We intend to enforce our intellectual property rights
vigorously and may initiate litigation against parties that we believe are
infringing our intellectual property rights if we are unable to resolve matters
satisfactorily through negotiation. Litigation brought to protect and enforce
our intellectual property rights could be costly, time-consuming and
distracting to management and could result in the impairment or loss of
portions of our intellectual property. In addition, any litigation in which we
are accused of infringement may cause product shipment delays, require us to
develop non-infringing technology or require us to enter into royalty or
license agreements even before the issue of infringement has been decided on
the merits. If any litigation were not resolved in our favor, we could become
subject to substantial damage claims from third parties and indemnification
claims from our licensees. We and our licensees could be enjoined from the
continued use of the technology at issue without a royalty or license
agreement. Royalty or license agreements, if required, might not be available
on acceptable terms, or at all. If a third party claiming infringement against
us prevailed and we could not develop non-infringing technology or license the
infringed or similar technology on a timely and cost-effective basis, our
expenses would increase and our revenues could decrease.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We attempt to avoid infringing known proprietary rights of third parties.
However, third parties may hold, or may in the future be issued, patents that
could be infringed by our products or technologies. Any of these third parties
might make a claim of infringement against us with respect to the products that
we manufacture and the technologies that we license. From time to time, we have
received letters from companies, several of which have significantly greater
financial resources than we do, asserting that some of our technologies, or
those of our licensees, infringe their intellectual property rights. Certain of
our licensees have received similar letters from these or other companies. Such
letters may influence our licensees&#146; decisions whether to ship products
incorporating our technologies. Although none of these matters has resulted in
litigation to date, any of these notices, or additional notices that we could
receive in the future from these or other companies, could lead to litigation.

<P align="center" style="font-size: 10pt">9
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<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acquired patents from third parties and also license some
technologies from third parties. We must rely upon the owners of the patents or
the technologies for information on the origin and ownership of the acquired or
licensed technologies. As a result, our exposure to infringement claims may
increase. We generally obtain representations as to the origin and ownership of
acquired or licensed technology and indemnification to cover any breach of
these representations. However, representations may not be accurate and
indemnification may not provide adequate compensation for breach of the
representations. Intellectual property claims against our licensees, or us
whether or not they have merit, could be time-consuming to defend, cause
product shipment delays, require us to pay damages, harm existing license
arrangements, or require us or our licensees to cease utilizing the technology
unless we can enter into royalty or licensing agreements. Royalty or licensing
agreements might not be available on terms acceptable to us or at all.
Furthermore, claims could also result in claims from our licensees under the
indemnification provisions of their agreements with us.
 </DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE FAIL TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS, OUR ABILITY
TO LICENSE OUR TECHNOLOGIES AND TO GENERATE REVENUES WOULD BE IMPAIRED.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business depends on generating revenues by licensing our intellectual
property rights and by selling products that incorporate our technologies. If
we are not able to protect and enforce those rights, our ability to obtain
future licenses or maintain current licenses and royalty revenue could be
impaired. In addition, if a court were to limit the scope of, declare
unenforceable or invalidate any of our patents, current licensees may refuse to
make royalty payments or may themselves choose to challenge one or more of our
patents. Also it is possible that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our pending patent applications may not result in the issuance of patents;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our patents may not be broad enough to protect our proprietary rights; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>effective patent protection may not be available in every country in which our licensees do business.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also rely on licenses, confidentiality agreements and copyright,
trademark and trade secret laws to establish and protect our proprietary
rights. It is possible that:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>laws and contractual restrictions may not be sufficient to prevent
misappropriation of our technologies or deter others from developing
similar technologies; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>policing unauthorized use of our products and trademarks would be
difficult, expensive and time-consuming, particularly overseas.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">PRODUCT LIABILITY CLAIMS COULD BE TIME-CONSUMING AND COSTLY TO DEFEND, AND
COULD EXPOSE US TO LOSS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Claims that our products or our licensees&#146; products have flaws or other
defects that lead to personal or other injury are common in the computer
peripherals industry and medical fields. If products that we or our licensees
sell cause personal injury, financial loss or other injury to our or our
licensees&#146; customers, the customers or our licensees may seek damages or other
recovery from us. Any claims against us would be time-consuming, expensive to
defend and distracting to management and could result in damages and injure our
reputation or the reputation of our licensees or their products. This damage
could limit the market for our and our licensees&#146; products and harm our results
of operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the past, manufacturers of peripheral products including certain gaming
products such as joysticks, wheels or gamepads, have been subject to claims
alleging that use of their products has caused or contributed to various types
of repetitive stress injuries, including carpal tunnel syndrome. We have not
experienced any product liability claims to date. Although our license
agreements typically contain provisions designed to limit our exposure to
product liability claims, existing or future laws or unfavorable judicial
decisions could limit or invalidate the provisions.

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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">THE HIGHER COST OF PRODUCTS INCORPORATING OUR TOUCH-ENABLING TECHNOLOGIES MAY
INHIBIT OR PREVENT THE WIDESPREAD ADOPTION AND SALE OF PRODUCTS INCORPORATING
OUR TECHNOLOGIES.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Personal computer gaming peripherals and automotive and industrial
controls incorporating our touch-enabling technologies are more expensive than
similar competitive products that are not touch-enabled. Although major
manufacturers, such as Logitech, Microsoft, ALPS Electric Co., Ltd., Samsung
and BMW, have licensed our technology, the greater expense of products
containing our touch-enabling technologies as compared to non-touch-enabled
products may be a significant barrier to the widespread adoption and sale of
touch-enabled products.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">COMPETITION BETWEEN OUR PRODUCTS AND OUR LICENSEES&#146; PRODUCTS MAY REDUCE OUR
REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rapid technological change, short product life cycles, cyclical market
patterns, declining average selling prices and increasing foreign and domestic
competition characterize the markets in which we and our licensees compete. We
believe that competition in these markets will continue to be intense, and that
competitive pressures will drive the price of our products and our licensees&#146;
products downward. These price reductions, if not offset by increases in unit
sales or productivity, will cause our revenues to decline.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face competition from unlicensed products as well. Our licensees or
other third parties may seek to develop products using our intellectual
property or alternative designs to our intellectual property, which they
believe do not require a license under our intellectual property. These
potential competitors may have significantly greater financial, technical and
marketing resources than we do, and the costs associated with asserting our
intellectual property rights against such products and such potential
competitors could be significant. Moreover, if such alternative designs were
determined by a court not to require a license under our intellectual property
rights, competition from such unlicensed products could limit or reduce our
revenues.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">COMPETITION FROM NEW COMPETITORS IN THE MEDICAL MARKET MAY REDUCE OUR REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the medical simulation market develops as we anticipate, we will
probably have a greater number of competitors and may have competition in
product lines where we have previously enjoyed sole supplier status. Increased
competition may result in the reduction of our market share and/or cause us to
reduce our selling prices which may result in a decline in our revenue.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE ARE UNABLE TO CONTINUALLY IMPROVE, AND REDUCE THE COST OF, OUR
TECHNOLOGIES, COMPANIES MAY NOT INCORPORATE OUR TECHNOLOGIES INTO THEIR
PRODUCTS, WHICH COULD IMPAIR OUR REVENUE GROWTH.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to achieve revenue growth depends on our continuing ability to
improve, and reduce the cost of, our technologies and to introduce these
technologies to the marketplace in a timely manner. If our development efforts
are not successful or are significantly delayed, companies may not incorporate
our technologies into their products and our revenue growth may be impaired.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE FAIL TO DEVELOP NEW OR ENHANCED TECHNOLOGIES FOR NEW APPLICATIONS AND
PLATFORMS, WE MAY NOT BE ABLE TO CREATE A MARKET FOR OUR TECHNOLOGIES OR OUR
TECHNOLOGIES MAY BECOME OBSOLETE AND OUR ABILITY TO GROW AND OUR RESULTS OF
OPERATIONS MIGHT BE HARMED.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our initiatives to develop new and enhanced technologies and to
commercialize these technologies for new applications and new platforms may not
be successful. Any new or enhanced technologies may not be favorably received
by consumers and could damage our reputation or our brand. Expanding our
technology could also require significant additional expenses and strain our
management, financial and operational resources. Moreover, technology products
generally have relatively short product life cycles and our current products
may become obsolete in the future. Our ability to generate revenues will be
harmed if:

<P align="center" style="font-size: 10pt">11
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we fail to develop new technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the technologies we develop infringe on existing non-Immersion patents;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our new technologies fail to gain market acceptance; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current products become obsolete.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE DEPEND ON A SINGLE SUPPLIER TO PRODUCE SOME OF OUR MEDICAL SIMULATORS AND
MAY LOSE CUSTOMERS IF THIS SUPPLIER DOES NOT MEET OUR REQUIREMENTS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have one supplier for some of our custom medical simulators. Any
disruption in the manufacturing process from our sole supplier could adversely
affect our ability to deliver our products, ensure quality workmanship and
could result in a reduction of our product sales. Additionally, the single
supplier could increase prices and thereby erode our margins before we are able
to find an alternative source.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">MEDICAL LICENSING AND CERTIFICATION AUTHORITIES MAY NOT ENDORSE OR REQUIRE USE
OF OUR TECHNOLOGIES FOR TRAINING PURPOSES, SIGNIFICANTLY SLOWING OR INHIBITING
THE MARKET PENETRATION OF OUR MEDICAL SIMULATION TECHNOLOGIES.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Several key medical certification bodies, including the American Board of
Internal Medicine, or ABIM, and the American College of Cardiology, or ACC,
have great influence in endorsing particular medical methodologies, including
medical training methodologies, for use by medical professionals. In the event
that the ABIM and the ACC, as well as other, similar bodies, do not endorse our
medical simulation training products as a training vehicle, market penetration
for our products could be significantly and adversely affected.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">AUTOMOBILES INCORPORATING OUR TOUCH-ENABLING TECHNOLOGIES ARE SUBJECT TO
LENGTHY PRODUCT DEVELOPMENT PERIODS, MAKING IT DIFFICULT TO PREDICT WHEN AND
WHETHER WE WILL RECEIVE PER UNIT AUTOMOTIVE ROYALTIES.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The product development process for automobiles is very lengthy, sometimes
longer than four years. We do not earn per unit royalty revenue on our
automotive technologies unless, and until, automobiles featuring our
technologies are shipped to customers, which may not occur until several years
after we enter into an agreement with an automobile manufacturer. Throughout
the product development process, we face the risk that an automobile
manufacturer or supplier may delay the incorporation of, or choose not to
incorporate, our technologies into its automobiles, making it difficult for us
to predict the per unit automotive royalties we may receive, if any. After the
product launches, our royalties still depend on market acceptance of the
vehicle, which is likely to be determined by many factors beyond our control.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MIGHT BE UNABLE TO RETAIN OR RECRUIT NECESSARY PERSONNEL, WHICH COULD SLOW
THE DEVELOPMENT AND DEPLOYMENT OF OUR TECHNOLOGIES.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to develop and deploy our technologies and to sustain our
revenue growth depends upon the continued service of our management and other
key personnel, many of whom would be difficult to replace. Management and
other key employees may voluntarily terminate their employment with us at any
time upon short notice. The loss of management or key personnel could delay
product development cycles or otherwise harm our business.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our future success will also depend largely on our ability
to attract, integrate and retain sales, support, marketing and research and
development personnel. Competition for such personnel is intense, and we may
not be successful in attracting, integrating and retaining such personnel.
Given the protracted nature of if, how and when we collect royalties on new
design contracts, it may be difficult to craft compensation plans that will
attract and retain the level of salesmanship needed to secure these contracts.
Some of our executive officers and key employees hold stock options with
exercise prices considerably above the current market price of our common
stock. Each of these factors may impair our ability to retain the services of
our executive officers and key

<P align="center" style="font-size: 10pt">12
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">employees. Our technologies are complex and we rely upon the continued
service of our existing engineering personnel to support licensees, enhance
existing technology and develop new technologies.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR MAJOR STOCKHOLDERS RETAIN SIGNIFICANT CONTROL OVER US, WHICH MAY LEAD TO
CONFLICTS WITH OTHER STOCKHOLDERS OVER CORPORATE GOVERNANCE MATTERS AND COULD
ALSO AFFECT THE VOLATILITY OF OUR STOCK PRICE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have, and had in the past, and may have in the future, stockholders who
retain greater than 10%, or in some cases greater than 20%, of our outstanding
stock. Acting together, these stockholders would be able to exercise
significant influence over matters that our stockholders vote upon, including
the election of directors and mergers or other business combinations, which
could have the effect of delaying or preventing a third party from acquiring
control over or merging with us. Further, if any individuals in this group
elect to sell a significant portion or all of their holdings of our common
stock, the trading price of our common stock could experience volatility.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">BECAUSE PERSONAL COMPUTER PERIPHERAL PRODUCTS THAT INCORPORATE OUR
TOUCH-ENABLING TECHNOLOGIES CURRENTLY MUST WORK WITH MICROSOFT&#146;S OPERATING
SYSTEM SOFTWARE, OUR COSTS COULD INCREASE AND OUR REVENUES COULD DECLINE IF
MICROSOFT MODIFIES ITS OPERATING SYSTEM SOFTWARE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our hardware and software technology for personal computer peripheral
products that incorporate our touch-enabling technologies is currently
compatible with Microsoft&#146;s Windows 98, Windows 2000, Windows Me and Windows XP
operating systems software, including DirectX, Microsoft&#146;s entertainment
applications programming interface. If Microsoft modifies its operating system,
including DirectX, we may need to modify our technologies and this could cause
delays in the release of products by our licensees. If Microsoft modifies its
software products in ways that limit the use of our other licensees&#146; products,
our costs could increase and our revenues could decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LEGISLATIVE ACTIONS, HIGHER INSURANCE COST AND POTENTIAL NEW ACCOUNTING
PRONOUNCEMENTS ARE LIKELY TO IMPACT OUR FUTURE FINANCIAL POSITION AND RESULTS
OF OPERATIONS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have been regulatory changes, including the Sarbanes-Oxley Act of
2002, and there may potentially be new accounting pronouncements or additional
regulatory rulings which will have an impact on our future financial position
and results of operations. The Sarbanes-Oxley Act of 2002 and other legal
changes as well as proposed legislative initiatives following the Enron
bankruptcy are likely to increase general and administrative costs. In
addition, insurers are likely to increase premiums as a result of high claims
rates over the past year, which we expect will increase our premiums for our
various insurance policies. Further, proposed initiatives are expected to
result in changes in certain accounting rules, including legislative and other
proposals to account for employee stock options as a compensation expense.
These and other potential changes could materially increase the expenses we
report under generally accepted accounting principles, and adversely affect our
operating results.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF OUR FACILITIES WERE TO EXPERIENCE CATASTROPHIC LOSS, OUR OPERATIONS WOULD BE
SERIOUSLY HARMED.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our facilities could be subject to a catastrophic loss such as fire,
flood, earthquake, power outage or terrorist activity. California has
experienced problems with its power supply in recent years. As a result, we
have experienced utility cost increases and may experience unexpected
interruptions in our power supply that could have a material adverse effect on
our sales, results of operations and financial condition. In addition, a
substantial portion of our research and development activities, manufacturing,
our corporate headquarters and other critical business operations are located
near major earthquake faults in San Jose, California, an area with a history of
seismic events. Any such loss at our facilities could disrupt our operations,
delay production, shipments and revenue and result in large expenses to repair
and replace the facility. While we believe that we maintain insurance
sufficient to cover most long-term potential losses at our facilities, our
existing insurance may not be adequate for all possible losses.

<P align="center" style="font-size: 10pt">13
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE HAVE EXPERIENCED SIGNIFICANT CHANGE IN OUR BUSINESS, AND OUR FAILURE TO
MANAGE THE COMPLEXITIES ASSOCIATED WITH THE CHANGING ECONOMIC ENVIRONMENT AND
TECHNOLOGY LANDSCAPE COULD HARM OUR BUSINESS.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any future periods of rapid change may place significant strains on our
managerial, financial, engineering and other resources. Further economic
weakness, in combination with our complex technologies, may demand an unusually
high level of managerial effectiveness in anticipating, planning, coordinating
and meeting our operational needs as well as the needs of our licensees.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MAY ENGAGE IN ACQUISITIONS THAT COULD DILUTE STOCKHOLDERS&#146; INTERESTS, DIVERT
MANAGEMENT ATTENTION OR CAUSE INTEGRATION PROBLEMS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of our business strategy, we have in the past acquired, and may in
the future acquire, businesses or intellectual property that we feel could
complement our business, enhance our technical capabilities or increase our
intellectual property portfolio. If we consummate acquisitions through cash
and/or an exchange of our securities, our stockholders could suffer significant
dilution. Acquisitions could also create risks for us, including:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unanticipated costs associated with the acquisitions;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>use of substantial portions of our available cash to consummate the acquisitions;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>diversion of management&#146;s attention from other business concerns;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in assimilation of acquired personnel or operations; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>potential intellectual property infringement claims related to newly acquired product lines.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any acquisitions, even if successfully completed, might not generate
significant additional revenue or provide any benefit to our business.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR CURRENT CLASS ACTION LAWSUIT COULD BE EXPENSIVE, DISRUPTIVE AND TIME
CONSUMING TO DEFEND AGAINST, AND IF WE ARE NOT SUCCESSFUL, COULD ADVERSELY
AFFECT OUR BUSINESS.


<P align="left" style="font-size: 10pt"><I>In re Immersion Corporation</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are involved in legal proceedings relating to a class action lawsuit
filed on November&nbsp;9, 2001. In re Immersion Corporation Initial Public Offering
Securities Litigation, No.&nbsp;Civ. 01-9975 (S.D.N.Y.), related to In re Initial
Public Offering Securities Litigation, No.&nbsp;21 MC 92 (S.D.N.Y.). The named
defendants are the Company and three of its current or former officers or
directors (the &#147;Immersion Defendants&#148;), and certain underwriters of the
Company&#146;s November&nbsp;12, 1999 initial public offering (&#147;IPO&#148;). Subsequently, two
of the individual defendants stipulated to a dismissal without prejudice.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operative amended complaint is brought on purported behalf of all
persons who purchased the common stock of the Company from the date of the IPO
through December&nbsp;6, 2000. It alleges liability under Sections&nbsp;11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, on the grounds that the registration statement for the IPO did not
disclose that: (1)&nbsp;the underwriters agreed to allow certain customers to
purchase shares in the IPO in exchange for excess commissions to be paid to the
underwriters; and (2)&nbsp;the underwriters arranged for certain customers to
purchase additional shares in the aftermarket at predetermined prices. The
complaint also appears to allege that false or misleading analyst reports were
issued. The complaint does not claim any specific amount of damages.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Similar allegations were made in other lawsuits challenging over 300 other
initial public offerings and follow-on offerings conducted in 1999 and 2000.
The cases were consolidated for pretrial purposes. On February&nbsp;19,

<P align="center" style="font-size: 10pt">14
</DIV>

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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">2003, the Court ruled on all defendants&#146; motions to dismiss. The motion
was denied as to claims under the Securities Act of 1933 in the case involving
the Company, as well as in all other cases (except for 10 cases). The motion
was denied as to the claim under Section 10(b) as to the Company, on the basis
that the complaint alleged that the Company had made acquisition(s) following
the IPO. The motion was granted as to the claim under Section&nbsp;10(b), but denied
as to the claim under Section&nbsp;20(a), as to the remaining individual defendant.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have decided to accept a settlement proposal presented to all issuer
defendants. In this settlement, plaintiffs will dismiss and release all claims
against the Immersion Defendants, in exchange for a contingent payment by the
insurance companies collectively responsible for insuring the issuers in all of
the IPO cases, and for the assignment or surrender of certain claims we may
have against the underwriters. The Immersion Defendants will not be required to
make any cash payments in the settlement, unless the pro rata amount paid by
the insurers in the settlement exceeds the amount of the insurance coverage, a
circumstance which we believe is remote. The settlement will require approval
of the Court, which cannot be assured, after class members are given the
opportunity to object to the settlement or opt out of the settlement.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE FAIL TO COMPLY WITH NASDAQ&#146;S MAINTENANCE CRITERIA FOR CONTINUED LISTING
ON THE NASDAQ NATIONAL MARKET, OUR COMMON STOCK COULD BE DELISTED.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To maintain the listing of our common stock on the Nasdaq National Market,
we are required to comply with one of two sets of maintenance criteria for
continued listing. Under the first set of criteria, among other things, we must
maintain stockholders&#146; equity of at least $10&nbsp;million, the market value of our
&#147;publicly held&#148; common stock (excluding shares held by our affiliates) must be
at least $5&nbsp;million, and the minimum bid price for our common stock must be at
least $1.00 per share. Under the second set of criteria, among other things,
the market value of our common stock must be at least $50&nbsp;million or we must
have both $50&nbsp;million in assets and $50&nbsp;million in revenues, the market value
of our &#147;publicly held&#148; shares must be at least $15&nbsp;million, and the minimum bid
price for our common stock must be at least $1.00 per share. As of December&nbsp;31,
2003, our most recent balance sheet date, we had a deficit in stockholders&#146;
equity, and therefore would not have been in compliance with the first set of
listing criteria as of that date. Although we were in compliance with the
second set of criteria, should the price of our common stock decline to the
point where the aggregate value of our outstanding common stock falls below $50
million, the value of our &#147;publicly held&#148;
shares falls below $15&nbsp;million, or
the bid price of our common stock falls below $1.00 per share, our shares could
be delisted from the Nasdaq National Market. If we are unable to comply with
the applicable criteria and our common stock is delisted from the Nasdaq
National Market, it would likely be more difficult to effect trades and to
determine the market price of our common stock. In addition, delisting of our
common stock could materially affect the market price and liquidity of our
common stock and our future ability to raise necessary capital.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR STOCK PRICE MAY FLUCTUATE REGARDLESS OF OUR PERFORMANCE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The stock market has experienced extreme volatility that often has been
unrelated or disproportionate to the performance of particular companies. These
market fluctuations may cause our stock price to decline regardless of our
performance. The market price of our common stock has been, and in the future
could be, significantly affected by factors such as: actual or anticipated
fluctuations in operating results; announcements of technical innovations;
announcements regarding litigation in which we are involved; new products or
new contracts; sales or the perception in the market of possible sales of large
number of shares of Immersion common stock by insiders or others including
Microsoft; changes in securities analysts&#146; recommendations; changing
circumstances regarding competitors or their customers; governmental regulatory
action; developments with respect to patents or proprietary rights; inclusion
in or exclusion from various stock indices; and general market conditions. In
the past, following periods of volatility in the market price of a company&#146;s
securities, securities class action litigation has been initiated against that
company, such as the suit currently filed against us.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions in our certificate of incorporation and bylaws may have the
effect of delaying or preventing a change of control or changes in our
management. In addition, certain provisions of Delaware law may discourage,

<P align="center" style="font-size: 10pt">15
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">delay or prevent someone from acquiring or merging with us. These
provisions could limit the price that investors might be willing to pay in the
future for shares.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>USE OF PROCEEDS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from the sale by the selling stockholder
of the common stock offered hereby. The selling stockholder will receive all
of the proceeds.

<DIV align="left">
<A name="105"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>DIVIDEND POLICY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have never paid cash dividends on our common stock. Except for the 7%
accrual of dividends on our Series&nbsp;A Redeemable Convertible Preferred Stock
which are payable semi-annually in, at our option cash or additional shares of
Series&nbsp;A Redeemable Convertible Preferred Stock, we currently intend to retain
earnings for use in our business and do not anticipate paying any cash dividend
on our common stock in the foreseeable future. Any future declaration and
payment of dividends on our common stock will be subject to the discretion of
our board of directors, will be subject to applicable law and will depend on
our results of operations, earnings, financial condition, contractual
limitations, cash requirements, future prospects and other factors deemed
relevant by our Board of Directors.


<P align="center" style="font-size: 10pt">16
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>DESCRIPTION OF CAPITAL STOCK</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our authorized capital stock consists of 100,000,000 shares of common
stock, $0.001 par value per share, and 5,000,000 shares of preferred stock,
$0.001 par value per share.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the material terms of our common stock and
preferred stock. Please see our certificate of incorporation for more detailed
information.


<P align="left" style="font-size: 10pt"><B>Common Stock</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Holders of a
majority of the shares of common stock entitled to vote in any election of
directors may elect all of the directors standing for election. Subject to
preferences applicable to the Series&nbsp;A Redeemable Convertible Preferred Stock
and any other outstanding preferred stock, holders of common stock are entitled
to receive ratably any dividends declared by the Board of Directors out of
funds legally available therefor. See &#147;Dividend Policy.&#148; In the event of a
liquidation, dissolution or winding up of Immersion, holders of common stock
are entitled to share ratably in the assets remaining after payment of
liabilities and the liquidation preferences of the Series&nbsp;A Redeemable
Convertible Preferred Stock and any other outstanding preferred stock. Holders
of our common stock have no preemptive, conversion or redemption rights.


<P align="left" style="font-size: 10pt"><B>Preferred Stock</B>



<p align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Series&nbsp;A Redeemable Convertible Preferred Stock accrues dividends at a
rate of 7% per year which are payable semi-annually. At our option, we may pay
such dividends in cash or additional shares of Series&nbsp;A Redeemable Convertible
Preferred Stock. In the event of a liquidation, dissolution or winding up of
Immersion, the holder of Series&nbsp;A Redeemable Convertible Preferred Stock is
entitled to receive up to two and one-half times the original purchase price of
the Series&nbsp;A Redeemable Convertible Preferred Stock, except that the holder of
the Series&nbsp;A Redeemable Convertible Preferred Stock is entitled to three and
one-eighths times the original purchase price of the Series&nbsp;A Redeemable
Convertible Preferred Stock under specified circumstances. The Series&nbsp;A
Redeemable Convertible Preferred Stock is convertible at the holder&#146;s option at
any time based upon a 1:1 conversion ratio. In the event of the issuance of
any equity securities, equity linked securities or securities convertible into
equity securities of the Company, at a price less than the sum of the original
purchase price of the Series&nbsp;A Redeemable Convertible Preferred Stock plus any
accrued dividends that remain unpaid, we will pay the holder of the Series&nbsp;A
Redeemable Convertible Preferred Stock fifty percent of the original purchase
price plus any accrued but unpaid cash dividends for each outstanding share of
Series&nbsp;A Redeemable Convertible Preferred Stock. We may redeem the Series&nbsp;A
Redeemable Convertible Preferred Stock at any time our Common Stock has traded
at or above a value equal to two and one-half times the original purchase price
plus any accrued but unpaid dividends for a period of 30 successive trading
days, subject to certain exceptions, for a redemption price of 125% of the sum
of the original purchase price of the Series&nbsp;A Redeemable Convertible Preferred
Stock plus accrued but unpaid dividends. On March&nbsp;12, 2004, we satisfied the
closing price and trading day requirements and therefore we have the ability to
redeem the Series&nbsp;A Redeemable Convertible Preferred Stock. The holder of the
Series&nbsp;A Redeemable Convertible Preferred Stock may cause us to redeem the
Series&nbsp;A Redeemable Convertible Preferred Stock, at any time after three years
from the original purchase date, for cash equal to two times the original
purchase price plus accrued but unpaid dividends.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holder of our Series&nbsp;A Redeemable Convertible Preferred Stock is
entitled to one vote for each share held of record on all matters submitted to
a vote of stockholders on an as converted basis. Following certain dilutive
issuances as described above which would result in a payment to the holder of
the Series&nbsp;A Redeemable Convertible Preferred Stock of an amount equal to fifty
percent of the original purchase price plus any accrued but unpaid cash
dividends for each outstanding share of Series&nbsp;A Redeemable Convertible
Preferred Stock, the voting power of each share of Series&nbsp;A Redeemable
Preferred Stock may be reduced as described in the certificate of designations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to our Series&nbsp;A Redeemable Convertible Preferred Stock, up to
2,814,208 shares of our preferred stock remain undesignated and are authorized
for issuance. Our Board of Directors has the authority, without further action
by our stockholders, to issue preferred stock in one or more series. In
addition, the Board of Directors may fix the rights, preferences and privileges
of any preferred stock it determines to issue. Any or all of


<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">these rights may be superior to the rights of the Common Stock with terms
calculated to delay or prevent a change in control of Immersion or to make
removal of management more difficult. Additionally, the issuance of preferred
stock may decrease the market price of our Common Stock.


<P align="left" style="font-size: 10pt"><B>Registration Rights</B>


<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our agreements with Microsoft, we agreed to file, at our expense,
with the Commission a shelf registration statement on Form S-3 covering the
resale of shares of Immersion common stock issued to Microsoft upon conversion
of the Series&nbsp;A Redeemable Convertible Preferred Stock and the Common Stock
issuable upon the conversion of any debentures issued to Microsoft. There is a
monthly penalty (equal to $45,000) for the failure to file or update this
registration statement on Form S-3, failure to deliver our response letter to
the Commission within 15&nbsp;days of receipt, obtain the effectiveness of the
registration statement within 180&nbsp;days after filing, to fail to maintain the
effectiveness of the registration statement, or for the suspension of trading
under the registration statement on Form S-3 for more than 90&nbsp;days in any
six-month period. As we did not obtain the effectiveness of the registration
statement by March&nbsp;6, 2004, we have not satisfied our obligation to do so
within 180&nbsp;days after filing. On March 18, 2004, Microsoft waived its right to receive penalties for this
failure to timely register its shares, as well as its right to receive dividends
 that would otherwise accrue after the registration statement becomes effective.
In exchange, we agreed that Microsoft shall have the right to convert its shares of Series
A Redeemable Convertible Preferred Stock into Common Stock in advance of any decision by us
to redeem such shares of Series A Redeemable Convertible Preferred Stock.  We also agreed to
continue to work diligently towards obtaining the effectiveness of
 the registration statement.

 Other terms of our agreement with respect to the
registration of the shares are set forth under the caption &#147;Plan of
Distribution&#148; below.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>Antitakeover Provisions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Delaware Law</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion is subject to Section&nbsp;203 of the Delaware General Corporation
Law regulating corporate takeovers, which prohibits a Delaware corporation from
engaging in any business combination with an &#147;interested stockholder,&#148; unless:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>prior to the date of the transaction, the Board of Directors of
the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding (a)&nbsp;shares owned by persons who are directors and also
officers, and (b)&nbsp;shares owned by employee stock plans in which
employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>on or subsequent to the date of the transaction, the business
combination is approved by the board and authorized at an annual or
special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise specified in Section&nbsp;203, an &#147;interested stockholder&#148;
is defined to include (a)&nbsp;any person that is the owner of 15% or more of the
outstanding voting securities of the corporation, or is an affiliate or
associate of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation at any time within three years
immediately prior to the date of determination and (b)&nbsp;the affiliates and
associates of any such person.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Certificate of Incorporation and Bylaw Provisions</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Certificate of Incorporation provides that the Board of Directors will
be divided into three classes of directors serving staggered three-year terms.
Each class of directors need not be of equal number, with the size to be fixed
exclusively by the Board. As a result, only one of the three classes of the
Board will be elected each year. The directors are removable only for cause
upon the affirmative vote of the holders of at least a majority of the voting
power of all outstanding shares of voting stock, voting together as a single
class. The Board has the exclusive right to set the authorized number of
directors and to fill vacancies on the Board. Our Certificate of Incorporation
requires that any action required or permitted to be taken by stockholders of
Immersion must be effected at a duly


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">called annual or special meeting of the stockholders and may not be
effected by a consent in writing. In addition, special meetings of the
stockholders of Immersion may be called only by the Board or the holders of not
less than ten percent of the shares entitled to vote at such a meeting.
Advance notice is required for stockholder proposals or director nominations by
stockholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, pursuant to our Certificate of Incorporation, the Board has
authority to issue up to 5,000,000 shares of preferred stock and to fix the
rights, preferences, privileges and restrictions, including voting rights, of
these shares without any further vote or action by the stockholders. The
rights of the holders of the common stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that
may be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
company, thereby delaying, deferring or preventing a change in control of the
company. Furthermore, such preferred stock may have other rights, including
economic rights, senior to the common stock, and as a result, the issuance of
such preferred stock could have a material adverse effect on the market price
of the common stock.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These provisions could discourage potential acquisition proposals and
could delay or prevent a change in control of the company. Such provisions
could diminish the opportunities for a stockholder to participate in tender
offers, including tender offers at a price above the then current market price
of the common stock. Such provisions also may inhibit fluctuations in the
market price of the common stock that could result from takeover attempts.


<P align="left" style="font-size: 10pt"><B>Transfer Agent and Registrar</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock is Boston Equiserve.

<DIV align="left">
<A name="107"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SELLING STOCKHOLDER</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of common stock offered hereby were issued by us in a private
placement in connection with a series of agreements with the selling
stockholder including licenses, issuance of equity and a settlement of ongoing
litigation between Immersion and the selling stockholder. The selling
stockholder may, from time to time, offer and sell pursuant to this prospectus
any or all of the common stock offered hereby.

<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the number of shares owned by the selling
stockholder as of March&nbsp;26, 2004. No estimate can be given as to the amount of
shares that will be held by the selling stockholder after completion of this
offering because the selling stockholder may offer all, some or none of the
shares. The shares offered by this prospectus may be offered from time to time
by the selling stockholder named below.
 </DIV><DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Number of Shares of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Common Stock</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding and</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Issuable Upon</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Selling</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Conversion of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Stockholder</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned(1)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Debentures(2)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Hereby(3)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>the Offering(4)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Microsoft Corporation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,686,897</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,855,655</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6,542,552</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Represents shares issuable upon conversion of the Series&nbsp;A Redeemable
Convertible Preferred Stock previously issued to the selling stockholder
plus three years of dividends that we may elect to pay in lieu of cash to
the selling stockholder in the form of additional shares of Series&nbsp;A
Redeemable Convertible Preferred Stock.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Represents shares issuable upon conversion of the maximum amount of
Debentures that may be issued to the selling stockholder plus three years
of interest payments that we may elect to pay in lieu of cash to the
selling stockholder in the form of additional Debentures convertible into
Common Stock.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This registration statement shall also cover any additional shares of
Immersion Common Stock which become issuable in connection with the shares
registered for sale hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of outstanding
shares of Immersion Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assumes sale, transfer or other disposition of all Common Stock issuable
upon conversion of the Series&nbsp;A Redeemable Convertible Preferred Stock and
the Debentures.</TD>
</TR>

</TABLE>

<DIV align="left">
<A name="108"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PLAN OF DISTRIBUTION</B>



<P align="left" style="font-size: 10pt"><B>Selling Stockholder</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder may transfer, pledge, donate or assign the Common
Stock to lenders or others and each of such persons and their transferees and
successors in interest will be deemed to be a &#147;selling stockholder&#148; for
purposes of this prospectus. The number of Common Stock beneficially owned by
a selling stockholder who transfers, pledges, donates or assigns Common Stock
will decrease as and when they take such actions. The plan of distribution for
Common Stock sold hereunder will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be a selling stockholder
hereunder.


<P align="left" style="font-size: 10pt"><B>Method of Sale</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold pursuant to this prospectus by the selling
stockholder in any of the following ways:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold through underwriters in one or more
underwritten offerings on a firm commitment or best efforts basis.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold through a broker or brokers. Transactions
through broker-dealers may include block trades in which brokers or dealers
will attempt to sell the Common Stock as agent but may position and resell the
block as principal to facilitate the transaction. The Common Stock may be sold
through dealers or agents or to dealers acting as market makers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold on any exchange on which the securities are
listed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold in private sales directly to purchasers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A selling stockholder may enter into hedging transactions with
counterparties (including broker-dealers), and the counterparties may engage in
short sales of the Common Stock in the course of hedging the positions they
assume with such selling stockholder, including, without limitation, in
connection with distribution of the Common Stock by such counterparties. In
addition, the selling stockholder may sell short the Common Stock, and in such
instances, this prospectus may be delivered in connection with such short sales
and the Common Stock offered hereby may be used to cover such short sales. The
selling stockholder may also enter into option or other transactions with
counterparties that involve the delivery of the Common Stock to the
counterparties, who may then resell or otherwise transfer such Common Stock.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder may also loan or pledge the Common Stock and the
borrower or pledgee may sell the Common Stock as loaned or upon a default may
sell or otherwise transfer the pledged Common Stock.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock covered by this prospectus which qualify for sale pursuant to
Rule&nbsp;144 or Rule&nbsp;145 of the Common Stock Act may be sold under Rule&nbsp;144 or Rule
145 rather than pursuant to this prospectus.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder reserves the right to accept and, together with
its agents from time to time to reject, in whole or in part, any proposed
purchase of Common Stock to be made directly or through agents.


<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Timing and Price</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold from time to time by a selling stockholder.
There is no assurance that any selling stockholder will sell or dispose of
Common Stock.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling stockholders will be subject to applicable provisions of the
Securities Exchange Act of 1934 and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of our securities by
them.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock may be sold at a fixed price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the holders of such securities or by agreement
between such holders and purchasers or underwriters and/or dealers (who may
receive fees or commissions in connection therewith).


<P align="left" style="font-size: 10pt"><B>Proceeds, Commissions and Expenses</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from this offering.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder will be responsible for payment of all
commissions, concessions and discounts of underwriters, dealers or agents, if
any.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay for all costs of the registration of the securities,
including, without limitation, SEC filing fees and expenses of compliance with
state securities or &#147;blue sky&#148; laws.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder and any broker-dealers or agents that participate
with the selling stockholder in the distribution of the Common Stock may be
deemed to be &#147;underwriters&#148; within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Common Stock
may be deemed to be underwriting commissions or discounts under the Securities
Act.


<P align="left" style="font-size: 10pt"><B>Registration</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We agreed with the selling stockholder to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such time as all of the shares have been sold by the selling
stockholder;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such time as all of the shares have been otherwise transferred
to persons who may trade such shares without restriction under the
Securities Act; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such time as the selling stockholder may sell all of the shares
held by them without registration pursuant to Rule&nbsp;144 under the
Securities Act within a three-month period.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to de-register any of the shares not sold by the selling
stockholder at the end of such period. At such time, however, any unsold
shares may be freely tradable subject to compliance with Rule&nbsp;144 under the
Securities Act.

<DIV align="left">
<A name="109"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>LEGAL MATTERS</B>



<p align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares of common stock offered hereby will be passed
upon for us by Gray Cary Ware &#038; Freidenrich LLP, Palo Alto, California. As of
March&nbsp;23, 2004, attorneys of Gray Cary Ware &#038; Freidenrich LLP beneficially own
an aggregate of 2,000 shares of our common stock.

 <P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>EXPERTS</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
consolidated financial statements and the related consolidated
financial statement schedule as of December&nbsp;31, 2003 and 2002,
and for each of the three years in the period ended December&nbsp;31,
2003, which expresses an unqualified opinion and includes an
explanatory paragraph regarding the adoption of Statement of
Financial Accounting Standards No.&nbsp;142, &#147;Goodwill and Other
Intangibles&#148; in 2002, incorporated in this prospectus by
reference from the Company&#146;s Current Report on Form 8-K have
been audited by Deloitte &amp; Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.


<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="111"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file reports, proxy statements and other information with the SEC. You
may read and copy all or any portion of any materials we file with the SEC at
the SEC&#146;s public reference room at Room&nbsp;1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC.
You can request copies of these documents upon payment of a duplicating fee, by
writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. Our SEC filings
will also be available to you on the SEC&#146;s Web site at http://www.sec.gov. Our
SEC filings are also available at the offices of the Nasdaq National Market,
1730 K Street, N.W., Washington, D.C. 20006-1500.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of our SEC filings and other information about us are also
available on our website at www.immersion.com. The information on our website
is neither incorporated into, nor a part of, this prospectus.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information incorporated by reference is considered to be a part of
this prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made by us with the
Commission under Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act until
this offering is complete:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Annual Report on Form 10-K for the year ended December&nbsp;31, 2002;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2003;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarter ended
September&nbsp;30, 2003;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our definitive Proxy Statement on Schedule&nbsp;14A filed on April&nbsp;29, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated July&nbsp;29, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated October&nbsp;27, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated February&nbsp;9, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated March&nbsp;1, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated March&nbsp;24, 2004; and</TD>
</TR>
<TR valign="bottom">
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Registration Statement on Form 8-A12G, filed on November&nbsp;5,
1999, which contains a description of our common stock.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is
contrary to that previous statement. Any statement so modified or superseded
will not be deemed a part of this prospectus except as so modified or
superseded.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Investor Relations, Immersion
Corporation, 801 Fox Lane, San Jose, California 95131 (408)&nbsp;467-1900.


<P align="center" style="font-size: 10pt">23
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>PART II<BR>
INFORMATION NOT REQUIRED IN PROSPECTUS</B>



<P align="left" style="font-size: 10pt"><B>ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the fees and expenses in connection with
the issuance and distribution of the securities being registered hereunder.
Except for the SEC registration fee, all amounts are estimates.

<DIV>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SEC registration fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accounting fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Legal fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Printing and engraving expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Miscellaneous expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law (&#147;DGCL&#148;) permits
indemnification of officers, directors and other corporate agents under certain
circumstances and subject to certain limitations. The Registrant&#146;s Certificate
of Incorporation and Bylaws provided that the Registrant shall indemnify its
directors, officers, employees and agents to the full extent permitted by the
DGCL, including in circumstances in which indemnification is otherwise
discretionary under such law. In addition, with the approval of the Board of
Directors and the stockholders, the Registrant has entered into separate
indemnification agreements with its directors, officers and certain employees
which require the Registrant, among other things, to indemnify them against
certain liabilities which may arise by reason of their status or service (other
than liabilities arising from willful misconduct of a culpable nature) and to
obtain directors&#146; and officers&#146; insurance, if available on reasonable terms.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These indemnification provisions may be sufficiently broad to permit
indemnification of the Registrant&#146;s officers, directors and other corporate
agents for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act of 1933.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s President, Chief Executive Officer and Chief Financial
Officer has been named a defendant in the securities class action lawsuit
described under the caption &#147;Risk Factors&#150;Our current class action lawsuit
could be expensive, disruptive and time consuming to defend against, and if we
are not successful, could adversely affect our business&#148; in Part&nbsp;I of the
registration statement. This officer is likely to assert claims for
indemnification in connection with that litigation. Other than the securities
class action lawsuit, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Registrant in which
indemnification is being sought nor is the Registrant aware of any threatened
litigation that may result in a claim for indemnification by any director,
officer, employee or other agent of the Registrant.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant has obtained liability insurance for the benefit of its
directors and officers.


<P align="left" style="font-size: 10pt"><B>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation(2)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designation(3)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7% Senior Redeemable Convertible Debenture(4)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement dated July&nbsp;25, 2003(5)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">II-1
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Gray Cary Ware &#038; Freidenrich LLP</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series&nbsp;A Redeemable Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Redeemable Convertible Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion
Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated November&nbsp;13, 2003 by and between Tim Tight and Immersion
Corporation*</TD>
</TR>


<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated February&nbsp;24, 2004 by and between Richard Vogel and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between WW&#038;LJ Gateways, Ltd. and Immersion Corporation dated
March&nbsp;17, 2004*</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement dated March 18,
2004 by and between Microsoft Corporation and Immersion Corporation*</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New Form of Indemnity Agreement*</TD>
</TR>

<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Deloitte &#038; Touche LLP, Independent Auditors</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained in the signature page hereof)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Previously filed</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form 10-K filed March&nbsp;28, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form 10-Q on August&nbsp;14, 2000.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(7)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(8)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">This exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
exhibit have been omitted and are marked by asterisks.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>ITEM 17. UNDERTAKINGS.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item&nbsp;15 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered
hereunder, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.


<P align="center" style="font-size: 10pt">II-2
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the &#147;Calculation of Registration
Fee&#148; table in the effective registration statement; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant&#146;s annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan&#146;s annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the
time it was declared effective; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide
offering thereof.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">II-3
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>

<DIV align="left">
<A name="112"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this
Amendment No.&nbsp;3 to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of San Jose, State of California on March&nbsp;26, 2004.
 </DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">IMMERSION CORPORATION</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Victor A. Viegas</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Victor A. Viegas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive Officer and Chief</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Officer</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this Amendment
No.&nbsp;3 has been signed by the following persons in the capacities and on the
dates indicated:
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Victor A. Viegas
<HR size="1" noshade width="100%" align="left">
Victor A. Viegas
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive
Officer, Chief Financial
Officer and Director
(Principal Executive Officer
and Principal Financial and
Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Steven Blank
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Jonathan Rubinstein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
John Hodgman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Jack Saltich
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Robert Van Naarden
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;26, 2004</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:/s/ Victor A. Viegas</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR size="1" noshade width="15%" align="left"></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Victor A. Viegas</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorney-In-Fact</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
<DIV align="left"><FONT size="1">

</FONT></DIV></DIV>



<P align="center" style="font-size: 10pt">II-4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: Times New Roman,Times,serif">

<DIV align="left">
<A name="113"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>INDEX TO EXHIBITS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation(2)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designation(3)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7% Senior Redeemable Convertible Debenture(4)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement dated July&nbsp;25, 2003(5)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Gray Cary Ware &#038; Freidenrich LLP</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series&nbsp;A Redeemable
Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Redeemable Convertible
Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</TD>
</TR>

<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion
Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated November&nbsp;13, 2003 by and between Tim Tight and Immersion
Corporation*</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated February&nbsp;24, 2004 by and between Richard Vogel and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between WW&#038;LJ Gateways, Ltd. and Immersion Corporation dated
March&nbsp;17, 2004*</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement dated March 18,
2004 by and between Microsoft Corporation and Immersion Corporation*</TD>
</TR>
<TR valign="bottom">
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New Form of Indemnity Agreement*</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Deloitte &#038; Touche LLP, Independent Auditors</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained in the signature page hereof)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
 <TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Previously filed</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form 10-K filed March&nbsp;28, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form 10-Q on August&nbsp;14, 2000.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(7)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(8)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">This exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
exhibit have been omitted and are marked by asterisks.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>f92905a3exv5w1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<PAGE>


                                                                     EXHIBIT 5.1
                                 March 25, 2004

Immersion Corporation
801 Fox Lane
San Jose, California 95131

         RE: REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

         As counsel to Immersion Corporation, a Delaware corporation ( the
"Company"), we are rendering this opinion in connection with the preparation and
filing of a registration statement on Form S-3 (the "Registration Statement")
relating to the registration under the Securities Act of 1933, as amended, of
6,542,552 shares of Common Stock, $0.001 par value (the "Common Stock"), of the
Company (the "Shares") which may be offered and sold by the selling stockholder
named therein.

         We have examined all instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.

         Based on such examination, we are of the opinion that the Shares have
been duly authorized and, when issued, will be validly issued, fully paid and
nonassessable.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and the Prospectus included therein, as
originally filed or as subsequently amended.

                                          Very truly yours,

                                          Gray Cary Ware & Freidenrich LLP

                                          /s/ Gray Cary Ware & Freidenrich LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>f92905a3exv23w2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this Amendment No. 3 to
Registration Statement No. 333-108607 of Immersion Corporation on Form S-3 of
our report dated March 23, 2004 appearing in the Current Report on Form 8-K of
Immersion Corporation dated March 24, 2004 on the consolidated financial
statements and related financial statement schedule as of December 31, 2003 and
2002, and for each of the three years in the period ended December 31, 2003,
which expresses an unqualified opinion and includes an explanatory paragraph
regarding the adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangibles" in 2002, and to the reference to us under the
heading ''Experts'' in the Prospectus, which is part of this registration
statement.

/s/ DELOITTE & TOUCHE LLP
--------------------------

San Jose, California
March 25, 2004



</TEXT>
</DOCUMENT>
</SUBMISSION>
