8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2008

IMMERSION CORPORATION
(Exact name of registrant as specified in its charter)
______________

Delaware	000-27969	94-3180138
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

______________

801 Fox Lane

San Jose, California  95131

(Address of principal executive offices) (Zip Code)

______________

Registrant’s telephone number, including area code: (408) 467-1900


Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02     Results of Operations and Financial Condition.

The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 or 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying Exhibit 99.1 shall not be deemed to be incorporated by reference into any filing with the Securities and Exchange Commission (the "SEC") made by Immersion Corporation ("Immersion") whether before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

On February 28, 2008, Immersion issued a press release (the "Press Release") announcing Immersion’s financial results for the quarter and year ended December 31, 2007. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 4.02     Non-Reliance on Previously Issued Financial Statement or a Related Audit Report or Completed Interim Review.

(a)        On February 27, 2008, the management of Immersion concluded, and the Audit Committee of the Board of Directors agreed, that the previously filed condensed consolidated financial statements contained in Immersion’s Forms 10-Q for the quarterly periods ended March 31, 2007, June 30, 2007 and September 30, 2007 (the "Quarterly Financial Statements") should no longer be relied upon due to errors in the accounting of income taxes for 1) the release of deferred income tax valuation allowance related to stock option deductions for prior years and 2) utilization of an incorrect effective state tax rate. We have now determined that the release of the deferred income tax valuation allowance related to stock option deductions should have been recorded as an increase to additional paid in capital within stockholders’ equity rather than as a benefit to income tax expense. Further, Immersion concluded that the effective state income tax rate utilized in the determination of state income taxes should have been lower.

As a result of these errors, the provision for income taxes for the three, six and nine month periods ended March 31, 2007, June 30, 2007 and September 30, 2007, respectively, was understated by $6.6 million. The impact of the errors on the condensed consolidated balance sheets was to overstate income tax liabilities by $0.7 million, understate deferred tax assets by $0.3 million and understate stockholders’ equity by a net $1.0 million.

As a result, management concluded that the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows reported in Immersion’s Quarterly Financial Statements, and related discussion of provision for income taxes in Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be restated in order to correct these errors.

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The restatement will be reflected in the presentation of quarterly financial information in Immersion’s 2007 annual report on Form 10-K that is expected to be filed on March 17, 2008. Immersion plans to restate the 2007 first, second and third quarter condensed consolidated financial statements prospectively when it files the 2008 first, second and third quarter condensed consolidated financial statements. When Immersion files its annual report on Form 10-K for the year ended December 31, 2007 to effect the restatement described above, management expects Immersion to report the existence of a material weakness in Immersion’s internal control over financial reporting relating to its accounting for income taxes.

The restatements discussed above will not change Immersion’s previously reported revenue, operating income, or cash balances, for any of the aforementioned periods.

Management and the Audit Committee discussed these matters with Immersion’s independent registered public accounting firm, Deloitte & Touche LLP.

Item 9.01     Financial Statements and Exhibits.

 (d)      Exhibits.

Exhibit No.	Description
99.1	Press Release dated February 28, 2008 regarding financial information for Immersion for the quarter and year ended December 31, 2007.

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

		IMMERSION CORPORATION
Date:	February 28, 2008	By:	/s/ Stephen M. Ambler
			Stephen M. Ambler
			Chief Financial Officer and Vice President,
			Finance

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated February 28, 2008 regarding financial information for Immersion for the quarter and year ended December 31, 2007.

EX-99.1

Exhibit 99.1

Immersion Corporation Reports Fourth Quarter 2007 Financial Results

SAN JOSE, Calif.--(BUSINESS WIRE)--Immersion Corporation (NASDAQ:IMMR), a leading developer and licensor of touch feedback technology, today announced its fourth quarter 2007 financial results. Revenues were $9.9 million for the quarter ended December 31, 2007 or 15 percent higher when compared to revenues of $8.6 million for the fourth quarter of 2006.

Net income for the fourth quarter was $0.5 million compared to a net loss of $(2.0) million for the fourth quarter of 2006. Diluted earnings per share were $0.02 for the quarter compared to $(0.08) loss per share for the fourth quarter of 2006.

Revenues were $34.7 million for the year ended December 31, 2007 compared to revenues of $27.9 million for the year ended December 31, 2006, an increase of 25 percent. Net income for the year ended December 31, 2007 was $117.0 million, or $3.71 diluted earnings per share, compared to a net loss of $(10.4) million, or $(0.42) loss per share, for the year ended December 31, 2006.

As of December 31, 2007, Immersion had cash, cash equivalents, and short-term investments totaling $138.1 million compared to $137.2 million as of September 30, 2007.

“In 2007, Immersion achieved revenue growth of 25 percent and profitability in each of the four quarters,” said Victor Viegas, Immersion CEO, president, and chairman of the board. “We have substantial organic growth opportunities in our medical, mobility, and touch interface products businesses. We have a strong balance sheet that allows us to increase investment in new product development and in sales and marketing to drive a faster pace of customer adoption of our products and technologies worldwide.”

The Company has determined that a correction is needed to the previously issued financial reports for the three months ended March 31, 2007 and for the six and nine months ended June 30, 2007 and September 30, 2007, respectively. The Company has determined that in the March 31, 2007 quarter, it understated income tax expense by $6.6 million. The net correction was the result of overestimating state income tax expense, offset by an error in releasing valuation allowance to income tax expense related to stock option deductions for prior years. This correction has no effect on revenue, operating income, or cash balances. The impact of these corrections is to increase previously reported income tax expense by $6.6 million, reduce income tax liability by $0.7 million, increase deferred tax assets by $0.3 million, and increase stockholders’ equity by a net $1.0 million. Please refer to the Form 8-K filed with the Securities and Exchange Commission today for details on the correction. The Company’s consolidated financial statements as of and for the year ended December 31, 2007 reflect the impact of the correction described in the Form 8-K.

Immersion will host a conference call with company management on Thursday, February 28, 2007 at 5:00 p.m. Eastern time to discuss operating results for the fourth quarter ended December 31, 2007. A question and answer session will follow. To listen to the call, dial +1 800.374.2366 approximately five minutes prior to the start of the call and enter confirmation number 29315103. The call will be archived and available for replay until March 7, 2008, by dialing +1 800.642.1687 and entering confirmation number 29315103. The call will also be simulcast on the Internet through Immersion Corporation’s Web site, http://www.immersion.com. An audio replay of the call will be archived and available at www.immersion.com for replay until February 28, 2009.

About Immersion (www.immersion.com)

Founded in 1993, Immersion Corporation is a recognized leader in developing, licensing, and marketing digital touch technology and products. Using Immersion’s advanced touch feedback technology (www.immersion.com/corporate/products/), electronic user interfaces can be made more productive, compelling, entertaining, or safer. Immersion’s technology is deployed across automotive, entertainment, industrial controls, medical training, mobility, and three-dimensional simulation markets. Immersion’s patent portfolio includes over 700 issued or pending patents in the U.S. and other countries.

Forward-Looking Statements

This press release contains “forward-looking statements” that involve risks and uncertainties as well as assumptions that, if they never materialize or prove incorrect, could cause the results of Immersion Corporation and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements.

All statements, other than the statements of historical fact, are statements that may be deemed forward-looking statements, including any projections of earnings, revenues, profitability targets or other financial matters; any statements of the plans, strategies, and objectives of management for future operations; any statements relating to Immersion’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures; any statements regarding consumer or market acceptance of touch feedback products in general; future development of force feedback products; proposed products or services; any statements regarding future economic conditions or performance; and statements of belief or assumptions underlying any of the foregoing. Immersion’s actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with Immersion’s business, which include but are not limited to delay in or failure to achieve commercial demand for Immersion’s expanded technology offerings; a delay in or failure to achieve the acceptance of force feedback as a critical user experience in new and existing markets for our business segments; and risks and uncertainties associated with ongoing and prospective litigation.

For a more detailed discussion of these factors and other factors that could cause Immersion’s actual results to vary materially, interested parties should review the risk factors listed in Immersion’s most current Form 10-Q, which is on file with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release reflect Immersion’s beliefs and predictions as of the date of this release. Immersion disclaims any obligation to update these forward-looking statements as a result of financial, business, or any other developments occurring after the date of this release.

Immersion and the Immersion logo are trademarks of Immersion Corporation in the U.S. and other countries.

Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
		December 31,		December 31,
		2007		2006
		(Unaudited)		(1)
ASSETS
Cash and cash equivalents		$	86,493	$	32,012
Short-term investments			51,619		-
Accounts receivable, net			5,494		5,153
Inventories, net			3,674		2,639
Deferred income taxes			3,351		-
Prepaid expenses and other current assets			3,036		1,179
	Total current assets		153,667		40,983
Property and equipment, net			2,112		1,647
Deferred tax assets, net			4,031		-
Intangibles and other assets, net			8,558		7,385
TOTAL ASSETS		$	168,368	$	50,015
LIABILITIES
Accounts payable		$	1,657	$	2,334
Accrued compensation			1,828		1,526
Income taxes payable			534		-
Other accrued liabilities			2,095		1,750
Deferred revenue and customer advances			4,478		1,716
	Total current liabilities		10,592		7,326
Long-term debt			-		18,122
Long-term liabilities and deferred revenue			15,989		32,559
Long-term customer advance from Microsoft			-		15,000
	Total liabilities		26,581		73,007
STOCKHOLDERS’ EQUITY (DEFICIT)			141,787		(22,992	)
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)		$	168,368	$	50,015
(1) Derived from Immersion’s annual audited consolidated financial statements.

Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
		Three Months						Years
		Ended December 31,						Ended December 31,
			2007			2006			2007			2006
Revenues:
	Royalty and license	$	4,019		$	2,356		$	11,881		$	7,304
	Product sales		4,242			5,539			18,541			17,083
	Development contracts and other		1,629			714			4,280			3,466
	Total revenues		9,890			8,609			34,702			27,853
Costs and expenses:
	Cost of product sales (exclusive of amortization of intangibles shown separately below)		2,275			2,056			8,808			7,193
	Sales and marketing		2,935			3,455			11,493			12,609
	Research and development		2,518			2,184			10,056			7,609
	General and administrative		3,405			2,506			12,567			10,076
	Amortization of intangibles		263			313			1,002			969
	Litigation conclusions and patent license		-			(300	)		(134,900	)		(1,650	)
	Total costs and expenses		11,396			10,214			(90,974	)		36,806
Operating income (loss)			(1,506	)		(1,605	)		125,676			(8,953	)
Interest and other income (expense), net			1,817			(364	)		4,830			(1,327	)
Income (loss) before provision for income taxes			311			(1,969	)		130,506			(10,280	)
Benefit (provision) for income taxes			200			(13	)		(13,488	)		(144	)
Net income (loss)		$	511		$	(1,982	)	$	117,018		$	(10,424	)
Basic net income (loss) per share		$	0.02		$	(0.08	)	$	4.23		$	(0.42	)
Shares used in calculating basic net income (loss) per share			30,253			24,662			27,662			24,556
Fully diluted net income (loss) per share		$	0.02		$	(0.08	)	$	3.71		$	(0.42	)
Shares used in calculating fully diluted net income (loss) per share			32,488			24,662			31,667			24,556

CONTACT:
Immersion Corporation
Stephen Ambler, +1-408-467-1900
invest@immersion.com