INVESTMENTS AND FAIR VALUE MEASUREMENTS

3 Months Ended

Jul. 31, 2025

INVESTMENTS AND FAIR VALUE MEASUREMENTS

7. INVESTMENTS AND FAIR VALUE MEASUREMENTS

Immersion invests surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal. The following summarizes our investments in marketable-equity and debt securities as of July 31, 2025 and April 30, 2025 (in thousands):


Investments - current	July 31, 2025		April 30, 2025
Marketable equity securities	$	61,305	$	55,784
U.S. treasury securities		16,046		33,005
Total Investments – current	$	77,351	$	88,789


Investments - noncurrent	July 31, 2025		April 30, 2025
Corporate bonds	$	13,876	$	13,880
Total Investments – noncurrent	$	13,876	$	13,880

Marketable Securities

Marketable securities as of July 31, 2025 and April 30, 2025 consisted of the following (in thousands):


	July 31, 2025
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	67,956	$	6,659	$	(13,310	)	$	61,305
Marketable debt securities
U.S. treasury securities		15,907		139		—			16,046
Corporate bonds		13,787		162		(73	)		13,876
Total marketable debt securities		29,694		301		(73	)		29,922
	$	97,650	$	6,960	$	(13,383	)	$	91,227


	April 30, 2025
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	63,677	$	6,892	$	(14,785	)	$	55,784
Marketable debt securities
U.S. treasury securities		32,674		331		—			33,005
Corporate bonds		13,802		147		(69	)		13,880
Total marketable debt securities		46,476		478		(69	)		46,885
	$	110,153	$	7,370	$	(14,854	)	$	102,669

The following summarizes Immersion’s amortized costs and fair value of our marketable securities, by contractual maturity, as of July 31, 2025 (in thousands):


	July 31, 2025
	Amortized Cost		Fair Value
Less than 1 year	$	15,907	$	16,046
1 to 5 years		13,787		13,876
More than 5 years		—		—
Total	$	29,694	$	29,922

As of July 31, 2025, the fair value of corporate bonds with unrealized loss positions was $10.6 million, with an aggregated loss of $0.1 million. There were no U.S. treasury securities with an unrealized loss position at July 31, 2025. As of April 30, 2025, the fair value of available-for-sale debt securities in unrealized loss positions for corporate bonds were $10.6 million , with an aggregated loss of $0.1 million. There were no U.S. treasury securities with an unrealized loss position at April 30, 2025. For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. We had no credit-related impairment loss as of July 31, 2025 and April 30, 2025.

Derivative Financial Instruments

Immersion’s derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on our Condensed Consolidated Balance Sheets as of July 31, 2025 and April 30, 2025 (in thousands):


	July 31, 2025
	Cost		Unrealized (Gains) Losses		Fair Value
Derivative instruments	$	4,406	$	1,133	$	5,539
	$	4,406	$	1,133	$	5,539


	April 30, 2025
	Cost		Unrealized (Gains) Losses		Fair Value
Derivative instruments	$	6,045	$	3,709	$	9,754
	$	6,045	$	3,709	$	9,754

The following summarizes the realized and unrealized gains and losses from Immersion’s equity securities and derivative instruments and realized gains and losses from Immersion’s marketable debt securities are as follows (in thousands):


	Three Months Ended July 31,
	2025		2024
Net unrealized gains (losses) recognized on marketable equity securities	$	1,243	$	1,630
Net realized gains recognized on marketable equity securities		960		3,108
Net unrealized gains (losses) recognized on derivative instruments		2,577		(525	)
Net realized gains recognized on derivative instruments		1,205		2,596
Net realized gains recognized on marketable debt securities		—		1,273
Total net gains recognized in interest and other income (loss), net	$	5,985	$	8,082

Fair Value Measurements

The fair value of certain financial instruments including Cash and cash equivalents; Accounts receivable, net; Accounts payable; and Accrued liabilities approximate their carrying value due to their short-term nature and are classified within Level 1. The fair value of our Long-term borrowings approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments.

Our financial instruments measured at fair value on a recurring basis consisted of U.S. treasury securities, equity securities, corporate bonds, and derivatives. Equity securities and certain derivative instruments are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. U.S. treasury securities, corporate bonds, and certain derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.

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

See Note 11. Participation Interest Purchase Agreement for fair value information about Barnes & Noble Education’s derivative instrument held as of July 31, 2025 and April 30, 2025, that is fair valued using Level 3 inputs.

Financial instruments measured at fair value on a recurring basis as of July 31, 2025 and April 30, 2025 are classified based on the valuation technique in the table below (in thousands):


	July 31, 2025
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money Market funds (within cash and cash equivalents)	$	68,635	$	—	$	—	$	68,635
U.S. treasury securities		—		16,046		—		16,046
Equity securities		61,305		—		—		61,305
Corporate bonds		—		13,876		—		13,876
Total assets at fair value	$	129,940	$	29,922	$	—	$	159,862

Liabilities
Derivative instruments	$	3,697	$	1,842	$	—	$	5,539
Total liabilities at fair value	$	3,697	$	1,842	$	—	$	5,539


	April 30, 2025
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money Market funds (within cash and cash equivalents)	$	59,747	$	—	$	—	$	59,747
U.S. treasury securities		-		33,005		—		33,005
Equity securities		55,784		—		—		55,784
Corporate bonds		3,272		10,608		—		13,880
Total assets at fair value	$	118,803	$	43,613	$	—	$	162,416

Liabilities
Derivative instruments	$	6,456	$	3,298	$	—	$	9,754
Total liabilities at fair value	$	6,456	$	3,298	$	—	$	9,754