Exhibit 99.2
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The
following unaudited pro forma condensed combined financial information has been
prepared in accordance with Article 11 of Regulation S-X. The unaudited pro
forma condensed combined financial information presents the pro forma effects
of Immersion Corporation’s (the “Company” or “Immersion”) acquisition (such transaction, the
“Acquisition”) of approximately 42% of common stock of Barnes & Noble
Education, Inc., (“BNED”) for total cash consideration of $50.1 million completed
as of June 10, 2024 (“Closing Date”).
Description
of the Acquisition
On
June 10, 2024, the Transactions (defined below) were consummated pursuant to
the terms of the Standby, Securities Purchase and Debt Conversion Agreement
(the “Purchase Agreement”) among BNED and the Purchasers (as defined in
the Purchase Agreement), following BNED’s receipt of the requisite approval of
its stockholders at a special meeting of its stockholders held on June 5, 2024.
The following is presented on a post-reverse stock split basis, which is
defined as a reverse stock split of BNED’s outstanding shares of common stock
at a ratio of 1-for-100, effective as of June 11, 2024.
Pursuant
to the terms of the Purchase Agreement, BNED conducted a rights offering (the
“Rights Offering”), whereby BNED distributed at no charge to the holders of its
common stock (“BNED Common Stock”) non-transferable subscription rights
(“Rights”) to purchase up to an aggregate of 9,000,000 new shares of BNED
Common Stock (the “Offered Shares”) at a subscription price of $5.00 per share
(the “Subscription Price”). On the Closing Date, BNED issued the Offered
Shares, which generated $45,000,000 in gross proceeds, including $10,033,507 of
Offered Shares purchased by Toro 18 Holdings, LLC, a wholly owned subsidiary of the Company (“Investor”) pursuant to the
Backstop Commitment (as defined in the Purchase Agreement). Pursuant to the
Backstop Commitment, Immersion through Investor, purchased 2,006,701 shares of
BNED Common Stock. BNED reimbursed Immersion, through Investor, for reasonable
legal and other expenses in connection with the Transactions in the amount of
$2,450,000. BNED also paid an amount equal to $2,450,000 to Immersion, through
Investor, as payment in consideration for its Backstop Commitment.
In
addition to the Rights Offering, Immersion, through Investor, purchased from BNED
an aggregate of 9,000,000 new shares of BNED Common Stock at the Subscription
Price for a purchase price of $45,000,000 (the “PIPE Transaction”, and together
with the Rights Offering, the “Transactions”).
As
part of the Transactions, Immersion acquired 42% of all outstanding common
shares of BNED, as well as control over BNED through the five
Immersion-appointed board seats.
Accounting
for the Acquisition
The
Acquisition was accounted for as a business combination using the acquisition
method with Immersion as the accounting acquirer in accordance with Accounting
Standards Codification Topic 805 (“ASC 805”), Business Combinations. Under ASC
805, assets acquired and liabilities assumed in a business combination are to
be recognized and measured at their estimated acquisition date fair value.
Basis
of Pro Forma Presentation
The
Acquisition has been accounted for in the Unaudited Pro Forma Condensed Combined
Statements of Operations for the six months ended June 30, 2024, and the year
ended December 31, 2023, as if the Acquisition had been completed on January 1,
2023.
The pro forma
financial information excludes discontinued operations reported in BNED's
historical standalone financial statements, as well as other comprehensive
gains or losses reported in the Company's historical standalone financial
statements for periods presented.
A
pro forma balance sheet is not presented, as the Company’s most recent balance
sheet already reflects the Acquisition.
Immersion and BNED
have different fiscal year ends (December 31 and the Saturday closest to the
last day of April, respectively). For the purposes of the Unaudited Pro Forma Condensed
Combined Statements of Operations for the six months ended June 30, 2024, BNED’s
statements of operations were adapted by aggregating the quarterly statements
of operations from the period of October 28, 2023 through April 27, 2024. Immersion’s
statement of operations
for the six months ended June 30, 2024, and BNED’s statement of operations for
the twenty-six weeks ended April 27, 2024 were then combined in accordance with
Rule 11-02(c)(3) of Regulation S-X, which permits the combination of financial
information for companies whose fiscal years end within one fiscal quarter of
each other. For the purposes of the Unaudited Pro Forma Condensed Combined Statements
of Operations for the year ended December 31, 2023, BNED’s statements of operations
were adapted by aggregating the quarterly statements of operations from the
period of October 29, 2022 through October 28, 2023. Immersion’s statement of operations
for the year ended December 31, 2023, and BNED’s statement of operations for
the fifty-two weeks ended October 28, 2023 were then combined.
This
unaudited pro forma condensed combined financial information was based on and should
be read in conjunction with:
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The Company’s historical financial statements and accompanying notes in its Form 10-Q for the six months ended June 30, 2024; |
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The Company’s historical financial statements and accompanying notes in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023; |
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The historical financial information of BNED for the twenty-six weeks ended April 27, 2024, which have been derived from aggregating its financial statements included in its Quarterly Reports on Form 10-Q for the thirteen weeks ended January 27, 2024 and its financial statements included in its Annual Reports on Form 10-K for the fifty-two weeks ended April 27, 2024, adjusted to exclude its financial statements included in its Quarterly Report on Form 10-Q for the thirty-nine weeks ended January 27, 2024 and to exclude 20-days of BNED revenue and expenses, as Immersion’s historical financial information for the six months ended June 30, 2024, includes 20-days of BNED revenue and expenses. BNED’s revenues and net loss related to the 20-days of BNED activity excluded from the historical twenty-six weeks ended April 27, 2024, totaled $51.9 million and $6.0 million, respectively. BNED’s revenues and net loss for the thirty-nine weeks ended January 27, 2024 totaled $1,331.2 million and $35.0 million, respectively. |
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The historical financial information of BNED for the fifty-two weeks ended October 28, 2023, which have been derived from aggregating its financial statements included in its Quarterly Report on Form 10-Q for the thirteen weeks ended January 28, 2023, July 29, 2023 and October 28, 2023, and the historical financial information of BNED for the thirteen weeks ended April 29, 2023. The historical financial information of BNED for the thirteen weeks ended April 29, 2023 has been derived from its financial statements included in its Annual Report on Form 10-K for the fifty-two weeks ended April 29, 2023, adjusted to exclude its financial statements included in its Quarterly Report on Form 10-Q for the thirty-nine weeks ended January 28, 2023. BNED’s revenues and net loss for the thirty-nine weeks ended January 28, 2023 totaled $1,301.4 million and $48.3 million, respectively. |
The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of results that would have occurred had the Acquisition been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to be indicative of the future financial position or operating results of the combined entity. Moreover, Immersion does not expect to realize future cost savings, other cost synergies or revenue synergies as a result of combining Immersion with BNED, and the pro forma condensed combined financial information does not give effect to any cost savings or synergies.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note
1 — Basis of Presentation
The
Unaudited Pro Forma Condensed Combined Statements of Operations have been
prepared using, and should be read in conjunction with, the following:
·
The Company’s historical
financial statements and accompanying notes in its Quarterly Reports on Form
10-Q for the six months ended June 30, 2024;
·
The Company’s historical
financial statements and accompanying notes in its Annual Reports on Form 10-K
for the fiscal year ended December 31, 2023;
· BNED’s historical financial
statements and accompanying notes in its Annual Report on Form 10-K for the
fifty-two weeks ended April 27, 2024, and April 29, 2023, and Quarterly Report
on Form 10-Q for the thirteen weeks ended January 28, 2023, April 29, 2023,
July 29, 2023, October 28, 2023, and January 27, 2024, and for the thirty-nine
weeks ended January 28, 2023 and January 27, 2024.
Management
has made significant estimates and assumptions in its determination of the pro
forma adjustments (“Transaction Accounting Adjustments”). As the unaudited pro
forma condensed combined financial information has been prepared based on these
preliminary estimates, the final amounts recorded may differ materially from
the information presented.
The
following unaudited pro forma condensed combined financial information has been
prepared in accordance with Article 11 of Regulation S-X. The Transaction
Accounting Adjustments reflecting the Acquisition based on certain currently
available information and certain assumptions and methodologies that the Company
believes are reasonable under the circumstances. The Transaction Accounting Adjustments,
which are described in the accompanying notes, may be revised as additional
information becomes available and is evaluated. Therefore, it is likely that
the actual adjustments will differ from the Transaction Accounting Adjustments,
and it is possible such differences may be material. The Company believes that
these assumptions and methodologies provide a reasonable basis for presenting all
the significant effects of the Acquisition based on information available to
management at the time and that the Transaction Accounting Adjustments give
appropriate effect to those assumptions and are properly applied in the unaudited
pro forma condensed combined financial information.