Good day everyone and welcome to the Immersion Corporation First Quarter 2016 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Jennifer Jarman. Please go ahead, ma’am.

Thank you, Shannon. Good afternoon, and thank you for joining us today on Immersion’s first quarter 2016 conference call. This call is also being broadcast live over the web and can be accessed from the Investor Relations section of the company’s website at www.immersion.com. With me on today’s call is Vic Viegas, President and CEO and Interim CFO. During this call, we may make forward-looking statements, which may include projected financial results or operating metrics, business strategies, litigation, anticipated future products, anticipated market demand or opportunities and other forward-looking topics. These statements are subject to risks, uncertainties and assumptions. Accordingly, actual results could differ materially. For a list of the risks that could cause this, please see our Forms 10-K filed with the SEC, as well as the factors identified in the press release we issued today after market closed. Additionally, please note that during this call, we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available in today’s press release. With that said, I will turn the call over to CEO, Vic Viegas. Vic?

Thanks, Jennifer, and thanks everyone for joining us this afternoon. I’m pleased with the results we achieved in the March quarter of 2016 in an otherwise challenging environment. Despite the lack of any revenue from Samsung in the first quarter, and our announcement earlier today about the filing of a second patent infringement complaint against Apple, AT&T and AT&T Mobility both of which I will address in a few minutes. Our business continues to be healthy with our revenue and bottom-line results in line with our previously articulated guidance. While we remain diligent in protecting and preserving our intellectual property, our business and our ecosystem of customers and partners, we also continue to light the way for new and expanded opportunities for haptics. During the quarter, we continue to see momentum in our business including the launch of new mobile devices featuring our TouchSense software, multiple haptically-enabled advertising campaign wins and the addition of new content gaming partners as we continue to expand our ever growing haptic ecosystem. In a few minutes, I will discuss our recent business developments and outlook but first I’ll discuss the details of our first quarter 2016 financial results. Revenues for the March quarter were $13.6 million, down 16% from revenues of $16.3 million in the year ago period. Revenues from royalties and licenses of $13.4 million were down 16% from royalty and license revenues of $16 million in the first quarter of 2015. Of these amounts in the first quarter of 2016, variable royalties based on shipping volumes and per unit prices totalled $8.5 million and fixed payment license fees totalled $4.9 million. This compares to variable royalties of $8.6 million and fixed licensees of $7.4 million in the prior year period. Excluding Samsung from a comparison, revenues would have grown 21% over the…

Thank you. [Operator Instructions] And our first question will comes from Charlie Anderson of Dougherty & Company.

Great, thanks for taking my questions. Hello Vic, I wanted to ask about the Samsung arbitration, I want to review any timelines on that that you would be able to share or just any general view of that would be helpful for everybody? And then in terms of the new Apple case just kind of roughly the strategy there, is it simply case of new infringing products or new IP, I mean just any more color on the strategy or adding another case will be helpful.

Sure, Charlie, very good question. So in the Samsung case we filed that action on March 4 of this year, they responded on April 12, we have a response that will also be filed on May 13, so it’s moving along quickly as appropriate in an arbitration filing and we’re looking for a result, a favourable result, let’s say, sometime later this year in the September time frame. So we’re confident in our position there and we think it will move quickly and we think that we will be collecting damages on that issue. The other issue with regards to Apple it is identified a number of our pressure based patents. We have essentially increased the products that we are targeting to include the Mac Book product line of products and are moving our filing I guess on that one was today and expect that to move through the ITC case hopefully at the same pace as the first filing which is we said in our prepared comments are moving quickly and we’re quite pleased with the progress there. Other than that I really don’t have too much help I can add to the Apple case.

And then just a quick follow up on that, Vic, as you added that was that already embedded in your thinking in the full year guide, I mean you are reiterating that, so I was just curious how that influences the expense line?

Yes I think we’re still feeling as we reiterated the annual guidance revenue and bottom line. We are still comfortable with the expense targets and litigation budgets that we initially identified and feel that it can handle the funding for these cases as well as others if need be.

Perfect. Thanks so much.

Thanks Charlie.

And our next question will come from Mark Argento of Lake Street Capital Markets.

Good morning ,Vic, or good afternoon I should say.

Hey Mark.

How are you doing?

I’m doing great.

First question on the medical, looks like you had a decent license in the quarter there, what was that all about and then I think you mentioned it was a one-time event?

Yes. sure, so as you probably noticed in the past periodically we get catch up payments certain option rights or other one-time events and that is what this falls into that category. It was from a medical customer and it was pursuant to an agreement that we had entered into a number of years ago. So they exercise a certain option and as a result we were able to report that revenue in the quarter.

Got it. And then going back to the legal, did you -- can you breakout or will you breakout for us in the quarter what you guys spent in terms of the legal dollars?

No, I’m not able to give that kind of detail. I can just say that our original guidance included $14 million to $16 million for the year, and we feel confident that that is the right target for the full year. We are on pace for that.

And then the venue that you’re arbitrating with Samsung, the international chamber of commerce, I’m not familiar with that venue maybe you could educate also little bit on the ICC?

Sure. So within the Samsung agreement that has now expired it does capture a conflict resolution process and that would be through arbitration and that is the venue that we’re using is the ICC. I believe it’s a venue that we’re comfortable with, we’re familiar with. Typically, we would identify an arbitrator, Samsung will identify an arbitrator and then those two arbitrators would select the third, it would go through a process of disclosures and information and we would expect that to be resolved as I said sometime in September of this year.

Great, that is it from me. Thanks.

Thanks Mark.

Our next question will come from Josh Nichols of B. Riley.

Yes hi Vic.

Hi Josh.

Yes, good to see the Sony [indiscernible] strength in the company’s plan portfolio regarding to the gaming stuff even for the legacy. Anything you could mention about materiality or any impact that that would have on our go forward basis with sales featured DualShock controllers in region?

So the dispute is on the Japanese sales of those controllers, I’m not able to give you a dollar amount but it’s a number that is large enough for us to go through the effort. I would kind of add to your comment about the importance of this. We have 2,200 patents and two of those patents were litigated many years ago but that is a very small fraction of our gaming patents and as a result, Sony argue that beyond those two patents they were going to agree or accept that they were valid or infringed and so that was the reason for the proceeding. We have in all of these markets whether it’s gaming, virtual reality, mobile devices, pressure based apps, we have a significant portfolio of which only a few patents have actually been identified and current actions or prior actions. So I think it’s important for us to defend the entire portfolio because it is a formidable haptic portfolio.

And then Apple and Samsung obviously watch each other pretty closely, do you think that there is intertwining between you have an expedited timeline maybe September for potential Samsung resolution at least as it pertains to unwind agreements any impact that you could have on Apple or how you mean those two play against each other potentially?

I’m really not able to speculate and I’m not sure I even have much of an opinion on it, I think the matters are quite different. In Samsung case it is really around a breach of contract and their continued shipment of products with our technology without paying. It’s just unacceptable and as a result we have refused to engage them in any renewal discussions until we resolve this matter. I don’t think that has anything to do with Apple. Maybe they feel a little more embolden because we are in litigation with Apple but I assure you we have to resolve the financial capability to manage multiple cases, some are going to be faster than others and we think it’s what we need to do to protect our business.

And then last question for me, I mean things in the AR and VR space seems to be going quite well and also content and media is kind of ramping, anything that you could add regarding timeline where some of the stuff might materialize into some pretty material revenue in the next year or so regarding mobile gaming and some of the other newer arenas that company is moving into?

I would say in all three areas the AR, VR content in general and mobile, mobile gaming in particular, I wouldn’t look to any of those to be substantial in 2016. We are getting all of the right indications in all those areas. We’re excited to see our own solution being recognized in the market as we provide demos and engage customers, we’re excited to see existing controllers utilizing technology that we believe is covered by our prior inventions in our IP, so we feel confident that there is a meaningful role for us to play in that space. And in the VR role the particular having have to create the Immersive experience is essential, it’s not enough just to have visual and audio you need the haptic cues as well. So feel really good about that the long-term. On the content side as we said in the prepared remarks lot of new campaigns, each of these campaigns starts to open up the industry’s awareness of the capability and these are campaigns by large companies. This is Lexus and Peugeot and Ford and a number of other. So it’s getting a lot of industry recognition and as a result it’s expedited some of the discussions that we have with those players. And then in the gaming it doesn’t get any bigger than Kowloon Wars and the Google category of games you can feel. So we feel like we are really accelerating those areas, we will and have been capturing some revenue within each of those discussions and relationships but I would say before it gets meaningful it is going to be at least another year.

Thanks Vic.

Yeah, thanks Josh.

[Operator Instructions] Our next question will come from Tony Stoss of Craig-Hallum Capital Group.

Hi, Tony.

Hey Vic, this is [indiscernible] for Tony Stoss.

Okay.

Yep, so quick question on could you add a little more color on how things are progressing with valid?

Very important account for us in China they are actively using our TouchSense technology, they see the value of advanced haptic capability and so we’ve got a team on site there on a pretty regular in frequent basis. It's also adding interest on the content side so, for the Chinese content community to see Huawei and others launching new phones, new with haptic capability it just sense them to support and grow the content business as well so, a great relationship and growing revenue opportunity for us.

Do you see them becoming a 10% customer in future?

Absolutely, that's a possibility, that’s our goal there a fast growing company and we want to grow beyond a handful of models and other and border line up of products and capture a larger percentage of their markets. So, yes we would love to have them as a greater than 10% customer.

Okay, thanks and then just outside of a mobile and gaming and medical, what type of interest are you seeing like on the auto side?

Well, the first thing was at the CES conference earlier this year and if you were there you would see that entire halls full automotive technology being showcased and haptics was quite prominent from a number of companies including Bosch, Continental who is a licensee of ours. So there is a growing recognition of what we have been promoting for years and that is that haptics enhances the user interface in a way that provides confirmation value and allows you to stay concentrated on the driving function and more quickly and more accurately engage your touch screen interface. So, I think people are raving around touch screens and touch pads on the automotive front and haptics is a key part of that implementation.

Great, thanks. That’s all I had.

Thank you.

And it does appear we have no further questions at this time. I’ll turn the conference back over to management for any additional or closing comments.

Well, thank you all for being on the call with us today and on a side note I will present at several upcoming conference during the month of May including the Jefferies TMT Conference in Miami. The B. Riley Annual Investor Conference in Hollywood and The Cowen SID display week event in San Francisco. In June I will also present at the annual Craig-Hallum conference in Minneapolis and the Cowen TMT conference in New York and I look forward to seeing and speaking with many of you at those conferences. Thank you and we look forward to updating you again on our next call. Have a great day.

And that does conclude today’s teleconference. We thank you all for your participation.