Financial Performance - Q2 2024 revenue was $2.3 million, a 58% sequential decline and a 39% year-over-year decline from $5.5 million in Q2 2023[5] - GAAP gross profit in Q2 2024 was $(0.02) million, with a gross profit margin of -1%, down from 34% in Q2 2023[6] - Operating expenses in Q2 2024 were $2.9 million, a 9% decrease year-over-year from $3.2 million in Q2 2023[6] - GAAP net loss in Q2 2024 was $(2.8) million, or $(0.12) per share, compared to a net loss of $(1.0) million, or $(0.04) per share, in Q2 2023[7] - Non-GAAP net loss in Q2 2024 was $(2.7) million, or $(0.11) per share, compared to a Non-GAAP net loss of $(0.9) million, or $(0.04) per share, in Q2 2023[7] - Total revenue for the three months ended June 30, 2024, was $2,304,000, a decrease of 58% compared to $5,483,000 for the same period in 2023[18] - Gross profit for the three months ended June 30, 2024, was $(20,000), compared to a gross profit of $1,848,000 for the same period in 2023[18] - Operating loss for the three months ended June 30, 2024, was $(2,924,000), compared to an operating loss of $(1,355,000) for the same period in 2023[18] - Net loss for the three months ended June 30, 2024, was $(2,820,000), compared to a net loss of $(1,019,000) for the same period in 2023[18] - Basic loss per share for the three months ended June 30, 2024, was $(0.12), compared to $(0.04) for the same period in 2023[18] - Non-GAAP net loss for the three months ended June 30, 2024, was $(2,731,000), compared to $(865,000) for the same period in 2023[20] - Non-GAAP Adjusted EBITDA for the three months ended June 30, 2024, was $(2,660,000), compared to $(710,000) for the same period in 2023[20] Assets and Liabilities - Cash, cash equivalents, and investments as of June 30, 2024, were $4.9 million, down from $22.2 million as of December 31, 2023[10] - Total current assets decreased to $25,357,000 as of June 30, 2024, from $43,317,000 as of December 31, 2023, representing a decline of 41.5%[17] - Total liabilities decreased to $5,244,000 as of June 30, 2024, from $6,009,000 as of December 31, 2023, a reduction of 12.7%[17] - Shareholders' equity decreased to $25,552,000 as of June 30, 2024, from $44,685,000 as of December 31, 2023, a decline of 42.8%[17] Product Development and Market Activity - The company introduced the Versa Lite BMA 360D in Q2 2024, enhancing its product offerings for conferencing solutions[3] - Operating expenses improved by 10.1% sequentially and 9.33% year-over-year due to cost optimization initiatives[3] - The company captured 60% more sales leads at Infocomm USA 2024 compared to the previous year, indicating increased interest in its products[3] - The transition to a new distributor in the Middle East impacted sales, but the company anticipates continued growth in that region[2]

Revenue Performance - Overall revenue decreased to $2.3 million in Q2 2024, a 58% decline compared to $5.5 million in Q2 2023, primarily due to a 60.5% drop in audio conferencing revenue [45]. - Revenue from the Americas declined by 64% in Q2 2024, from Europe and Africa by 41%, and from Asia Pacific by 50% compared to Q2 2023 [53]. - Approximately 61% of revenue in the first half of 2024 came from operations outside North and South America [51]. Profitability and Loss - Gross profit margin fell to (0.9)% in Q2 2024 from 33.7% in Q2 2023, and to 19.1% in the first half of 2024 from 32.7% in the first half of 2023 [46]. - Net loss increased to $2.8 million in Q2 2024 from $1.0 million in Q2 2023, and to $4.7 million in the first half of 2024 from $1.9 million in the first half of 2023 [46]. - Inventory write-offs and price mark-downs could affect profitability due to long-term inventory of approximately $1.4 million in various products [58]. Operating Expenses - Total operating expenses decreased to $2.9 million in 2024-Q2 from $3.2 million in 2023-Q2, and $6.1 million in 2024-H1 compared to $6.7 million in 2023-H1 [59]. - Sales and marketing (S&M) expenses decreased to $1.2 million in 2024-Q2 from $1.3 million in 2023-Q2, while remaining consistent at $2.5 million for 2024-H1 compared to 2023-H1 [60]. - Research and development (R&D) expenses were consistent at $0.9 million in 2024-Q2 compared to 2023-Q2, but decreased to $1.8 million in 2024-H1 from $1.9 million in 2023-H1 [60]. - General and administrative (G&A) expenses decreased to $0.8 million in 2024-Q2 from $1.0 million in 2023-Q2, and to $1.9 million in 2024-H1 from $2.3 million in 2023-H1 [61]. Cash Flow and Liquidity - Cash and cash equivalents were approximately $2.5 million as of June 30, 2024, down from $17.8 million as of December 31, 2023 [65]. - Cash used in operating activities was approximately $2.7 million in the six months ended June 30, 2024, a decrease of approximately $55.6 million from $52.9 million in the same period of 2023 [65]. - Cash provided by investing activities was $1.8 million in the six months ended June 30, 2024, compared to $7.4 million used in the same period of 2023 [66]. Inventory and Purchases - As of June 30, 2024, total inventory was $16.4 million, up from $13.8 million as of December 31, 2023 [68]. - The company had open purchase orders of approximately $3.02 million mostly for inventory purchases as of June 30, 2024 [67]. Market Challenges - The company faced sales headwinds due to the lack of Microsoft Teams certification, impacting product demand despite functional compatibility [45]. - The company expects increased costs associated with electronic raw materials to continue through 2024 and 2025 [45]. New Product Launch - The DIALOG® 20 USB wireless microphone system launched on January 23, 2024, with a 319% increase in unique visitors at ISE 2024 compared to 2023 [44]. Interest Expense - Interest expense was $0 in 2024-Q2 and 2024-H1, down from $0.1 million and $0.4 million in 2023-Q2 and 2023-H1 respectively, due to repayment of all debts [62].

Revenue Performance - Q1 2024 revenue was $3.6 million, a decrease of 13% year over year from $4.2 million in Q1 2023[11] - Revenue for Q1 2024 was $3,622,000, a decrease of 13.3% compared to $4,178,000 in Q1 2023[25] - Microphone revenue increased by 31% year over year, while revenue from Asia, including India and the Middle East, rose by 18% year over year[2][3] Profitability and Loss - GAAP net loss for Q1 2024 was $(1.9) million, or $(0.08) per share, compared to a net loss of $(0.8) million, or $(0.03) per share in Q1 2023[7] - Non-GAAP net loss for Q1 2024 was $(1.8) million, or $(0.07) per share, an improvement from $(2.0) million, or $(0.09) per share in Q1 2023[13] - Net loss for Q1 2024 increased to $(1,898,000) compared to $(832,000) in Q1 2023, representing a year-over-year increase of 128.5%[25] - The company reported a comprehensive loss of $(1,878,000) for Q1 2024, compared to $(827,000) in Q1 2023[25] Operating Expenses - Operating expenses in Q1 2024 were reduced to $3.2 million, down 7.8% year over year from $3.5 million in Q1 2023[12] - Total operating expenses decreased to $3,229,000 in Q1 2024 from $3,504,000 in Q1 2023, a reduction of 7.8%[25] - The operating loss for Q1 2024 was $(2,078,000), slightly improved from $(2,189,000) in Q1 2023[25] Gross Profit and Margins - GAAP gross profit margin for Q1 2024 was 32%, a slight improvement from 31% in Q1 2023, but down from 38% in Q4 2023[6] - Gross profit for Q1 2024 was $1,151,000, down from $1,315,000 in Q1 2023, reflecting a gross margin of 31.8%[25] Cash and Investments - Cash, cash equivalents, and investments as of March 31, 2024, totaled $22.6 million, up from $22.2 million as of December 31, 2023[9] - A one-time special cash dividend of $0.50 per share was announced, payable on April 10, 2024[3] Compliance and Other Information - The company regained compliance with NASDAQ's minimum bid requirement[3] - Other income for Q1 2024 was $178,000, a significant decrease from $1,666,000 in Q1 2023[25] - GAAP diluted loss per share for Q1 2024 was $(0.08), compared to $(0.03) in Q1 2023[26] - Non-GAAP diluted loss per share for Q1 2024 was $(0.07), an improvement from $(0.09) in Q1 2023[26] Product Launch - The company launched the DIALOG® 20 USB wireless microphone system at ISE 2024, which saw a 319% increase in unique visitors compared to the previous year[3]

CLEARONE, INC. UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited - Dollars in thousands, except per share amounts) These accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and are not audited. Certain information and footnote disclosures that are usually included in financial statements prepared in accordance with generally accepted account ...

Much of our marketing effort is conducted in conjunction with our channel partners who provide leverage for us in reaching existing and prospective customers worldwide. We also regularly attend industry forums and exhibit our products at multiple regional and international trade shows, often with our channel partners. These trade shows provide exposure for our brand and products to a wide audience. We market our ClearOne-branded commercial products on our website www.clearone.com. We also conduct public rel ...

ClearOne (NASDAQ:CLRO) stock is on the rise Tuesday after the video and voice network streaming solutions company announced a special dividend.ClearOne is paying out a special one-time cash dividend of 50 cents per share to investors. This dividend is payable April 10, 2024 to shareholders on record April 2, 2024.However, shareholders who sell shares before the April 10 payment date won’t receive the special dividend. This is due to it being more than 25% of the value of CLRO stock.ClearOne CEO Derek Graham ...

SALT LAKE CITY--(BUSINESS WIRE)--ClearOne (NASDAQ: CLRO) today announced that its Board of Directors has declared a one-time special cash dividend of $0.50 per share of ClearOne common stock, payable on April 10, 2024 to shareholders of record on April 2, 2024. Because the special cash dividend exceeds twenty-five percent (25%) of the value of the Company’s common stock, in accordance with FINRA UPC (Uniform Practice Code) Rule 11140, a stockholder of the Company that sells shares of the Company’s common st ...

SALT LAKE CITY--(BUSINESS WIRE)--ClearOne, Inc. (NASDAQ: CLRO) (“ClearOne” or the "Company"), a global provider of audio and visual communication solutions, is providing a review of its 2023 operational and financial progress, along with several recent 2024 highlights. “ 2023 represented a key transition year for ClearOne,” said Derek Graham, CEO of ClearOne. “ Since my appointment as permanent CEO last January, we have focused on recovering from our multi-year litigation process and navigating the transit ...

ClearOne’s Versa® USB22D Dante® USB Adapter, enabling computers to connect to Dante networks seamlessly and offering compatibility with any audio application, will be on display at booth #2N150. (Photo: Business Wire)ClearOne’s all-new DIALOG® 20 USB Wireless Microphone System is the solution for hybrid meetings with less than four milliseconds of audio latency and a full range of microphone options. (Photo: Business Wire)ClearOne’s all-new DIALOG® 20 USB Wireless Microphone System is the solution for hybri ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) The company presents its unaudited condensed consolidated financial statements as of September 30, 2023 [Note 1. Business Description, Basis of Presentation and Significant Accounting Policies](index=7&type=section&id=1.%20Business%20Description%2C%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) The company outlines its business as a global AV solutions provider and the basis of its financial reporting - The company is a global market leader in conferencing, collaboration, and AV streaming solutions for voice and visual communications[5](index=5&type=chunk) - The financial statements are interim, unaudited, and prepared pursuant to SEC rules, containing all necessary normal recurring adjustments for a fair presentation[7](index=7&type=chunk) - In Q1 2023, the Company adopted ASU 2016-13 (Financial Instruments - Credit Losses), which **did not have a material impact** on the results of operations[9](index=9&type=chunk) [Note 2. Revenue Information](index=8&type=section&id=2.%20Revenue%20Information) Revenue declined in Q3 and YTD 2023, with decreases observed across most product groups and regions Revenue by Product Group (in thousands) | Product Group | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Audio conferencing | $1,867 | $3,201 | $6,484 | $9,655 | | Microphones | $2,355 | $2,475 | $6,239 | $8,525 | | Video products | $667 | $588 | $1,827 | $3,004 | | **Total** | **$4,889** | **$6,264** | **$14,550** | **$21,184** | Revenue by Region (in thousands) | Region | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | North and South America | $2,400 | $3,251 | $7,353 | $10,211 | | Asia Pacific | $2,058 | $2,018 | $5,426 | $6,560 | | Europe and Africa | $431 | $995 | $1,771 | $4,413 | | **Total** | **$4,889** | **$6,264** | **$14,550** | **$21,184** | [Note 3. Loss Per Share](index=9&type=section&id=3.%20Loss%20Per%20Share) The company reports a net loss for Q3 and YTD 2023, with basic and diluted loss per share detailed Loss Per Share Calculation (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(1,351) | $(1,248) | $(3,202) | $(3,472) | | Basic weighted average shares | 23,960,313 | 23,952,555 | 23,957,311 | 23,933,033 | | **Basic & Diluted Loss Per Share** | **$(0.06)** | **$(0.05)** | **$(0.13)** | **$(0.15)** | [Note 4. Marketable Securities](index=10&type=section&id=4.%20Marketable%20Securities) The company held $6.28 million in available-for-sale marketable securities as of September 30, 2023 Available-for-Sale Securities as of September 30, 2023 (in thousands) | Security Type | Amortized Cost | Estimated Fair Value | | :--- | :--- | :--- | | US Treasury securities | $3,281 | $3,278 | | Mutual funds | $1,169 | $1,171 | | Certificates of deposit | $859 | $859 | | Corporate bonds and notes | $989 | $973 | | **Total** | **$6,298** | **$6,281** | [Note 5. Intangible Assets](index=11&type=section&id=5.%20Intangible%20Assets) Net intangible assets decreased, and amortization expense was significantly lower in 2023 compared to 2022 Net Intangible Assets (in thousands) | Date | Net Intangible Assets | | :--- | :--- | | September 30, 2023 | $1,794 | | December 31, 2022 | $2,071 | Amortization of Intangible Assets (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three months ended Sep 30 | $141 | $686 | | Nine months ended Sep 30 | $388 | $2,038 | [Note 6. Inventories](index=12&type=section&id=6.%20Inventories) Total inventories remained stable, with a portion classified as long-term assets Inventory Breakdown (in thousands) | Inventory Type | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Current | $8,664 | $8,961 | | Long-term | $2,870 | $2,707 | | **Total** | **$11,534** | **$11,668** | [Note 7. Leases](index=12&type=section&id=7.%20Leases) The company details its operating lease liabilities and associated rent expenses, which have decreased year-over-year Lease Liabilities and Assets (in thousands) | Balance Sheet Item | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $1,081 | $1,047 | | Total operating lease liabilities | $1,145 | $1,133 | Rent Expense (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three months ended Sep 30 | $110 | $169 | | Nine months ended Sep 30 | $369 | $518 | [Note 8. Shareholders' Equity](index=14&type=section&id=8.%20Shareholders'%20Equity) Shareholders' equity decreased significantly due to a special cash dividend payment of $29.0 million - On May 8, 2023, the Board of Directors declared a **special one-time cash dividend of $1.00 per share**, resulting in a payment of **$28.98 million** on May 31, 2023[52](index=52&type=chunk) - On August 1, 2023, the company received a **delisting notification from Nasdaq** because its common stock closing bid price was below $1.00 for 30 consecutive trading days[54](index=54&type=chunk) [Note 9. Debt](index=15&type=section&id=9.%20Debt) The company holds senior convertible notes maturing in December 2023 and repaid a bridge loan in January 2023 - The company has senior convertible notes with a principal amount of **$1.245 million maturing on December 17, 2023**[57](index=57&type=chunk)[62](index=62&type=chunk) - In January 2023, a **$2.0 million bridge loan** obtained in October 2022 from affiliate Edward D. Bagley was **repaid in full**, including applicable interest[63](index=63&type=chunk) [Note 10. Share-based Compensation](index=17&type=section&id=10.%20Share-based%20Compensation) Share-based compensation expense remained consistent, with $186 thousand in unrecognized costs remaining Share-based Compensation Expense (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three months ended Sep 30 | $33 | $24 | | Nine months ended Sep 30 | $80 | $89 | - As of September 30, 2023, the total remaining unrecognized compensation cost for non-vested stock options was approximately **$186 thousand**, to be recognized over a weighted average period of 2.42 years[66](index=66&type=chunk) [Note 11. Income Taxes](index=18&type=section&id=11.%20Income%20Taxes) The company recorded a full valuation allowance against its deferred tax assets due to recent pre-tax losses - The company recorded a **full valuation allowance** against expected tax benefits from its current year loss, concluding it was more likely than not that its deferred tax assets were not realizable[68](index=68&type=chunk) - As of September 30, 2023, the company had approximately **$962 thousand of uncertain tax positions**[69](index=69&type=chunk) [Note 12. Fair Value Measurements](index=18&type=section&id=12.%20Fair%20Value%20Measurements) The company's financial instruments, valued at $6.28 million, are categorized under Level 1 and Level 2 fair value hierarchies Fair Value of Financial Instruments as of Sep 30, 2023 (in thousands) | Asset Type | Level 1 | Level 2 | Total | | :--- | :--- | :--- | :--- | | Mutual funds | $1,171 | $— | $1,171 | | US Treasury securities | $— | $3,278 | $3,278 | | Certificates of deposit | $— | $859 | $859 | | Corporate bonds and notes | $— | $973 | $973 | | **Total** | **$1,171** | **$5,110** | **$6,281** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes the Q3 2023 revenue decline, margin contraction, and improved cash position from legal settlements [Business Overview](index=19&type=section&id=Business%20Overview) The company launched several new products in 2023 but faced a 22% year-over-year revenue decrease in Q3 - The company introduced several new products in 2023, including the **CHAT® 150 BT speakerphone**, **UNITE 260 Pro camera**, **DIALOG® UVHF wireless microphone system**, and **BMA 360D Dante-compatible microphone array**[77](index=77&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - Overall revenue **decreased by 22% in Q3 2023** compared to Q3 2022, attributed to a significant decrease in audio conferencing revenues and manufacturing transition issues[88](index=88&type=chunk) - Gross profit margin **decreased to 33.1% in Q3 2023 from 41.0% in Q3 2022**, mainly due to increased overhead costs and a change in product revenue mix[89](index=89&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q3 2023 revenue and gross profit declined, widening the operating loss, though YTD net loss improved slightly Consolidated Statements of Operations Summary (in thousands) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,889 | $6,264 | $14,550 | $21,184 | | Gross Profit | $1,616 | $2,570 | $4,779 | $8,193 | | Operating Loss | $(1,489) | $(1,130) | $(5,033) | $(4,632) | | Net Loss | $(1,351) | $(1,248) | $(3,202) | $(3,472) | - Q3 2023 revenue **decreased by 22% YoY**, driven by a **42% decline in audio conferencing** and a 5% decline in microphones, partially offset by a 14% increase in video products[102](index=102&type=chunk) - Total operating expenses **decreased by 16% in Q3 2023** and 23% YTD, primarily due to reduced General & Administrative expenses[110](index=110&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Other income for the nine months ended Sep 30, 2023 included **$1.34 million from a one-time legal settlement** and **$1.0 million of interest income**[121](index=121&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's cash position improved significantly due to legal settlements, despite large dividend and debt payments Cash and Working Capital (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $13.7 | $1.0 | | Working capital | $36.7 | $69.3 | - Net cash provided by operating activities was **$51.1 million** in the first nine months of 2023, primarily due to **$55 million in receipts from legal settlements**[124](index=124&type=chunk) - Net cash used in financing activities was **$31.7 million**, mainly comprising **$29.0 million in dividend distributions** and repayment of a **$2.0 million bridge loan**[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is marked as not applicable in the report - The report states this item is **not applicable**[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of September 30, 2023 - Based on an evaluation as of September 30, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures are effective** at a reasonable assurance level[138](index=138&type=chunk) - There were **no changes** in the Company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[139](index=139&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company reports that there were no legal proceedings during the period - None[141](index=141&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20RISK%20FACTORS) The company reports no new risk factors to supplement its most recent annual report - None[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reports no unregistered sales of equity securities during the period - None[143](index=143&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports no defaults upon senior securities - None[36](index=36&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including required certifications and XBRL data - The exhibits filed with this report include Section 302 and 906 certifications for the CEO and Principal Financial Officer, as well as various XBRL instance and taxonomy documents[29](index=29&type=chunk)