SCHEDULE: Activist Investor Larson Targets Immersion Corp Board

Activist investor Scott A. Larson and the Irrevocable Larson Family Investment Trust have filed a Schedule 13D, revealing a 7.1% stake in Immersion Corp and demanding significant changes to corporate governance, executive compensation, and strategic direction.

Summary

• Scott A. Larson and the Irrevocable Larson Family Investment Trust (the "Reporting Persons") collectively own 2,310,000 shares of Immersion Corp common stock, representing 7.1% of the outstanding shares as of March 6, 2025.
• The Reporting Persons acquired these securities for investment purposes, with an aggregate purchase price of approximately $16,342,844.
• On November 3, 2025, the Reporting Persons sent a letter to Immersion Corp's Board of Directors expressing concerns about the Board's failure to ensure a long-term value strategy, corporate governance weaknesses, high expense structure including executive compensation, and five years of shareholder value destruction.
• They urged the Board to commit to specific actions, including the repayment of certain 2024/2025 bonus compensation by highly compensated officers, an independent review of management and director compensation, and a well-articulated strategic business plan to maximize shareholder value, potentially involving a sale, merger, asset sale, or liquidation.
• If these commitments are not made, the Reporting Persons urged the Board to commit to a plan of liquidation for the company.
• The Reporting Persons intend to engage in dialogue with the Board and management and may explore changes in operations, management, governance, capital structure, and strategic transactions, including nominating director candidates.

Sentiment

Score: 3

Explanation: The filing expresses strong dissatisfaction with Immersion Corp's current business strategy, corporate governance, executive compensation, and perceived destruction of shareholder value over the past five years. It outlines demands for significant changes, including potential liquidation, indicating a highly critical stance from a major shareholder.

Positives

• A significant shareholder is actively advocating for changes aimed at maximizing shareholder value.
• The Reporting Persons have a substantial investment, aligning their interests with other shareholders.
• The proposals include a call for independent external review of compensation and strategic planning, which could lead to improved corporate governance and performance.

Negatives

• The Reporting Persons perceive a failure by the Board to ensure a business strategy for long-term value.
• Concerns about corporate governance weaknesses in the oversight of management.
• Criticism of the Issuer's expense structure, particularly executive compensation.
• Allegations of shareholder value destruction over the last five years.
• The potential for a contentious relationship between a significant shareholder and current management/Board.

Risks

• Failure of the Board to address the Reporting Persons' concerns could lead to continued shareholder value destruction.
• Potential for a proxy contest or other activist actions, which can be costly and distracting for the company.
• Uncertainty regarding the company's future strategic direction if the Board does not adopt a clear plan.
• The possibility of a liquidation scenario, which may or may not maximize value for all shareholders depending on market conditions and asset values.

Future Outlook

The Reporting Persons intend to continue engaging with Immersion Corp's Board and management to address their concerns and maximize shareholder value. They may propose significant changes to the company's operations, governance, capital structure, and strategic direction, potentially including a sale, merger, asset sale, or even liquidation if their demands are not met. They reserve the right to acquire or dispose of additional securities.

Management Comments

• The Board's failure to ensure a business strategy to achieve long-term value for all shareholders.
• Perceived corporate governance weaknesses in the oversight of management and the expense structure of the Issuer, including executive compensation.
• The destruction of shareholder value for the last five years.
• Urged the Board to publicly commit to provide for (i) the repayment or return by such highly compensated officers of certain cash and stock-based bonus compensation paid or awarded to them in 2024 or 2025, (ii) a plan for independent external review, and peer-based review and performance standards, for approving compensation for management and Directors, and (iii) a well-articulated strategic business plan... for maximizing shareholder value, as compared to alternatives that may involve a sale or merger of the Company or a sale of Company assets or liquidation of the Company.
• If the Board... are unable or unwilling to make such commitments, the Reporting Persons urged the Board to commit to a plan of liquidation for the Company.

Industry Context

This filing reflects a common trend of activist investors targeting companies perceived to be underperforming or having governance issues. Such activism often arises in mature industries or companies with significant intellectual property where investors believe value is not being fully realized. The call for strategic review, potential M&A, or even liquidation is a typical activist playbook when a company's core business strategy is questioned.

Comparison to Industry Standards

• This filing does not provide company-specific results to compare against industry standards. Instead, it highlights the Reporting Persons' belief that Immersion Corp's corporate governance and strategic planning fall short of what is needed to maximize shareholder value, implying a deviation from best practices or peer performance.
• The demand for "peer-based review and performance standards" for compensation explicitly suggests a perceived gap against industry norms.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the activist's proposals lead to improved performance, strategic changes, or a favorable sale/liquidation. Conversely, a prolonged activist battle could create uncertainty and volatility.
• Management and Board: Increased scrutiny, potential for changes in roles, compensation, or even removal if the activist's demands gain traction.
• Employees: Potential for significant changes in company operations, structure, or even job security if a sale, merger, or liquidation occurs.
• Creditors: A liquidation scenario could impact creditors depending on the company's asset values and liabilities.

Next Steps

• Engage in dialogue with Immersion Corp's Board and/or management regarding the concerns and proposals.
• Consider, explore, and/or develop plans and proposals related to changes in operations, management, organizational documents, Board composition (including nominating director candidates), ownership, capital or corporate structure, strategic transactions, capital allocation policy, business strategy, compensation practices, transparency, or corporate governance.
• Communicate with other shareholders or third parties, including potential director and management candidates.
• Review their investment in Immersion Corp on a continuing basis.
• Potentially acquire additional securities or dispose of existing holdings, or engage in hedging transactions, depending on various factors.

Key Dates

Recommendation

The filing indicates significant shareholder dissatisfaction and a potential for major corporate changes, including a sale or liquidation. While the activist's intent is to unlock value, the outcome is uncertain and could involve a contentious process. Investors should hold to observe how the Board responds and the potential for these proposals to materialize, as the situation is dynamic and could lead to either significant upside or prolonged uncertainty. A 'buy' would be premature given the uncertainty, and a 'sell' would be premature given the potential for value creation.

Keywords

Immersion Corp, IMMR, Schedule 13D, Activist Investor, Corporate Governance, Shareholder Value, Executive Compensation, Strategic Review, Liquidation, Board of Directors, Scott A. Larson, Investment Trust