Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 30, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | CLEARONE INC | ||
Entity Central Index Key | 0000840715 | ||
Trading Symbol | CLRO | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Common Stock, Shares Outstanding (in shares) | 23,955,767 | ||
Entity Public Float | $ 6.7 | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-33660 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 5225 Wiley Post Way, Suite 500 | ||
Entity Address, City or Town | Salt Lake City | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84116 | ||
Document Annual Report | true | ||
City Area Code | (801) | ||
Local Phone Number | 975-7200 | ||
Document Transition Report | false | ||
Entity Tax Identification Number | 87-0398877 | ||
Auditor Name | TANNER LLC | ||
Auditor Firm ID | 270 | ||
Auditor Location | Salt Lake City, Utah |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 984 | $ 1,071 |
Marketable securities | 0 | 1,790 |
Legal settlement receivable | 55,000 | 0 |
Receivables, net of allowance for doubtful accounts of $326 | 3,603 | 4,991 |
Inventories, net | 8,961 | 10,033 |
Income tax receivable | 1,071 | 7,535 |
Prepaid expenses and other assets | 7,808 | 4,021 |
Total current assets | 77,427 | 29,441 |
Long-term marketable securities | 0 | 1,220 |
Long-term inventories, net | 2,707 | 3,567 |
Property and equipment, net | 383 | 744 |
Operating lease – right of use assets, net | 1,047 | 1,537 |
Intangibles, net | 2,071 | 25,086 |
Other assets | 115 | 4,597 |
Total assets | 83,750 | 66,192 |
Current liabilities: | ||
Accounts payable | 1,284 | 5,388 |
Accrued liabilities | 3,041 | 2,549 |
Deferred product revenue | 63 | 54 |
Short-term debt | 3,732 | 3,481 |
Total current liabilities | 8,120 | 11,472 |
Long-term debt | 0 | 1,535 |
Operating lease liability, net of current | 492 | 1,026 |
Other long-term liabilities | 1,008 | 655 |
Total liabilities | 9,620 | 14,688 |
Shareholders’ equity: | ||
Common stock, par value $0.001, 50,000,000 shares authorized, 23,955,767 and 22,410,126 shares issued and outstanding, respectively | 24 | 22 |
Additional paid-in capital | 74,910 | 72,795 |
Accumulated other comprehensive loss | (288) | (241) |
Accumulated deficit | (516) | (21,072) |
Total shareholders’ equity | 74,130 | 51,504 |
Total liabilities and shareholders’ equity | $ 83,750 | $ 66,192 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 326 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 23,955,767 | 22,410,126 |
Common stock, shares outstanding (in shares) | 23,955,767 | 22,410,126 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 25,205 | $ 28,967 |
Cost of goods sold | 15,748 | 17,051 |
Gross profit | 9,457 | 11,916 |
Operating expenses: | ||
Sales and marketing | 5,517 | 6,736 |
Research and product development | 4,390 | 5,794 |
General and administrative | 6,772 | 6,881 |
Total operating expenses | 16,679 | 19,411 |
Operating loss | (7,222) | (7,495) |
Interest expense | (420) | (514) |
Other income, net | 35,102 | 32 |
Loss before income taxes | 27,460 | (7,977) |
Provision for (benefit from) income taxes | 6,904 | (283) |
Net income (loss) | $ 20,556 | $ (7,694) |
Basic income (loss) per common share (in dollars per share) | $ 0.86 | $ (0.39) |
Diluted income (loss) per common share (in dollars per share) | $ 0.83 | $ (0.39) |
Basic weighted average shares outstanding (in shares) | 23,937,962 | 19,859,817 |
Diluted weighted average shares outstanding (in shares) | 25,189,147 | 19,859,817 |
Comprehensive income (loss): | ||
Net income (loss) | $ 20,556 | $ (7,694) |
Other comprehensive income (loss): | ||
Unrealized loss on available-for-sale securities, net of tax | (2) | (28) |
Change in foreign currency translation adjustment | (45) | (27) |
Comprehensive income (loss) | $ 20,509 | $ (7,749) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Total | Common stock and paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
Balance at Dec. 31, 2020 | $ 63,378 | $ (186) | $ (13,378) | |
Issuance of common stock | 9,288 | |||
Share-based compensation expense | 136 | |||
Proceeds from employee stock purchase plan | 15 | |||
Unrealized loss on available-for-sale securities, net of tax | $ (28) | (28) | ||
Foreign currency translation adjustment | (27) | (27) | ||
Net income (loss) | (7,694) | (7,694) | ||
Balance at Dec. 31, 2021 | 51,504 | 72,817 | (241) | (21,072) |
Issuance of common stock | 2,000 | |||
Share-based compensation expense | 113 | |||
Proceeds from employee stock purchase plan | 4 | |||
Unrealized loss on available-for-sale securities, net of tax | (2) | (2) | ||
Foreign currency translation adjustment | (45) | (45) | ||
Net income (loss) | 20,556 | 20,556 | ||
Balance at Dec. 31, 2022 | $ 74,130 | $ 74,934 | $ (288) | $ (516) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 20,556 | $ (7,694) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization expense | 2,970 | 2,867 |
Amortization of right of use of assets | 597 | 611 |
Share-based compensation expense | 113 | 136 |
Change of inventory to net realizable value | 120 | 850 |
Loss on disposal of assets | 146 | 0 |
Gain recognized on Paycheck Protection Plan Loan forgiveness | (1,528) | 0 |
Gain on legal settlement proceeds, net of capitalized legal costs less amortization | (33,623) | 0 |
Changes in operating assets and liabilities: | ||
Receivables | 1,388 | 203 |
Inventories | 1,812 | 603 |
Prepaid expenses and other assets | 684 | (2,485) |
Accounts payable | (4,104) | 1,438 |
Accrued liabilities | 485 | 166 |
Income taxes receivable | 6,466 | (366) |
Deferred product revenue | 9 | (69) |
Operating lease liabilities | (623) | (631) |
Other long-term liabilities | 353 | (23) |
Net cash used in operating activities | (4,179) | (4,394) |
Cash flows from investing activities: | ||
Capitalized patent defense costs | (737) | (7,836) |
Purchase of property and equipment | (51) | (221) |
Purchase of intangibles | (137) | (290) |
Proceeds from maturities and sales of marketable securities | 3,010 | 4,004 |
Purchase of marketable securities | 0 | (4,164) |
Net cash used in investing activities | 2,085 | (8,507) |
Cash flows from financing activities: | ||
Gross proceeds from issuance of common stock and warrants | 0 | 10,000 |
Costs of issuance of common stock and warrants | 0 | (712) |
Proceeds from issuance of short-term notes | 2,000 | 2,000 |
Proceeds from Paycheck Protection Program loan | 767 | 0 |
Principal payments of long-term debt | (720) | (1,098) |
Proceeds from equity-based compensation programs | 4 | 15 |
Net cash provided by financing activities | 2,051 | 10,205 |
Effect of exchange rate changes on cash and cash equivalents | (44) | (36) |
Net increase (decrease) in cash and cash equivalents | (87) | (2,732) |
Cash and cash equivalents at the beginning of the year | 1,071 | 3,803 |
Cash and cash equivalents at the end of the year | 984 | 1,071 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 88 | 107 |
Cash paid for interest | 226 | 296 |
Supplemental disclosure of non-cash investing and financing activities | ||
Right-of-use assets obtained in exchange for lease obligations | 107 | 212 |
Issue of common stock in consideration of cancellation of debt | $ 2,000 | $ 0 |
Business Description, Basis of
Business Description, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Business Description, Basis of Presentation and Significant Accounting Policies | |
Business Description, Basis of Presentation and Significant Accounting Policies | 1. Business Description, Basis of Presentation and Significant Accounting Policies Business Description: ClearOne, Inc., together with its subsidiaries (collectively, “ClearOne” or the “Company”), is a global market leader enabling conferencing, collaboration, and network streaming solutions. The performance and simplicity of our advanced, comprehensive solutions offer unprecedented levels of functionality, reliability and scalability. Basis of Presentation: Fiscal Year – This report on Form 10-K includes consolidated balance sheets for t he years ended December 31, 2022 and 2021 and the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for each of the years ended December 31, 2022 and 2021 . Consolidation – These consolidated financial statements include the financial statements of ClearOne, Inc. and its wholly owned subsidiaries. All inter-Company accounts and transactions have been eliminated in consolidation. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts receivable and product returns, provisions for obsolete inventory, potential impairment of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates. Foreign Currency Translation – We are exposed to foreign currency exchange risk through our foreign subsidiaries. Other than our subsidiaries in India and Spain, all other foreign subsidiaries are U.S. dollar functional, for which gains and losses arising from remeasurement are included in earnings. Our Spanish subsidiary is Euro functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. Our Indian subsidiary is Indian Rupee functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. We translate and remeasure foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate revenue and expenses using average rates during the year. Concentration Risk – We depend on an outsourced manufacturing strategy for our products. We outsource the manufacture of all of our products to third party manufacturers located in Asia. If any of these manufacturers experience difficulties in obtaining sufficient supplies of components, component prices significantly exceeding the anticipated costs, an interruption in their operations, or otherwise suffer capacity constraints, we would experience a delay in production and shipping of these products, which would have a negative impact on our revenues. Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantine or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption may have a material adverse effect on our business. Operating in the international environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations. Currently, we have no second source of manufacturing for most of our products. Significant Accounting Policies: Cash Equivalents – The Company considers all highly-liquid investments with a maturity of three months Marketable Securities - The Company has classified its marketable securities as available-for-sale securities. These debt securities are carried at estimated fair value with unrealized holding gains and losses included in other comprehensive income (loss) in shareholders’ equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against “Other income” when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary. These factors include, but are not limited to: ( i ) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during t he years ended December 31, 2022 and 2021 . Accounts Receivable – Accounts receivable are recorded at the invoiced amount, net of expected returns and allowance for doubtful accounts. Generally, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company extends credit to customers who it believes have the financial strength to pay. The Company has in place credit policies and procedures, an approval process for sales returns and credit memos, and processes for managing and monitoring channel inventory levels. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Management regularly analyzes accounts receivable including current aging, historical write-off experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We review customer accounts quarterly by first assessing accounts with aging over a specific duration and balance over a specific amount. We review all other balances on a pooled basis based on past collection experience. Accounts identified in our customer-level review as exceeding certain thresholds are assessed for potential allowance adjustment if we conclude the financial condition of that customer has deteriorated, adversely affecting their ability to make payments. Delinquent account balances are written off if the Company determines that the likelihood of collection is not probable. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods. The Company’s allowance for doubtful accounts activity for the years ended December 31, 2022 and 2021 is as follows: Year Ended December 31, 2022 2021 Balance at beginning of the year $ 326 $ 506 Allowance increase (decrease) — (180 ) Write offs, net of recoveries — — Balance at end of the year $ 326 $ 326 Inventories – Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out (“FIFO”) basis. In addition to the price of the product purchased, the cost of inventory includes the Company’s internal manufacturing costs, including warehousing, engineering, material purchasing, quality and product planning expenses and applicable overhead, not in excess of estimated realizable value. Consideration is given to obsolescence, excessive levels, deterioration, direct selling expenses, and other factors in evaluating net realizable value. The inventory also includes advance replacement units (valued at cost) provided by the Company to end-users to service defective products under warranty. The value of advance replacement units included i n the inventory was $ 193 and $130 , as of and 2021 , respectively. The inventory consists of current inventory of $ 8,961 and long-term inventory of $ 2,707 . Long term inventory represents inventory held in excess of our current (next 12 months) requirements based on our recent sales and forecasted level of sales. Property and Equipment – Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Routine maintenance, repairs, and renewal costs are expensed as incurred. Gains or losses from the sale, trade-in, or retirement of property and equipment are recorded in current operations and the related book value of the property is removed from property and equipment accounts and the related accumulated depreciation and amortization accounts. Estimated useful lives are generally two Intangible Assets – Intangible assets are amortized over their useful lives unless these lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which are generally three Impairment of Long-Lived Assets - Long-lived assets, such as property, equipment, and definite-lived intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change. Assets held for sale are reported at the lower of the carrying amount or fair value, less the estimated costs to sell. Leases: We determine if an arrangement is a lease at inception. Operating leases are included in operating lease - right of use (“ROU”) assets, accrued liabilities, and operating lease liability in our consolidated balance sheets. As of adoption of ASC and as of and , the Company was not party to finance lease arrangements. ROU assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Under the available practical expedient, we account for the lease and non-lease components as a single lease component. Revenue Recognition Policy: The Company generates revenue from sales of its audio and video conferencing equipment to distributors, system integrators and value-added resellers. The Company also generates revenue, to a much lesser extent, from sale of software and licenses to distributors, system integrators, value-added resellers and end-users. The Company recognizes revenue when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. For sales agreements, the Company has identified the promise to transfer products, each of which are distinct, to be the performance obligation. The Company applies a identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of Sales agreements with customers are renewable periodically and contain terms and conditions with respect to payment, delivery, warranty and supply, but typically do not require mandatory purchase commitments. In the absence of a sales agreement, the Company’s standard terms and conditions at the time of acceptance of purchase orders apply. The Company considers the customer purchase orders, governed by sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. The Company evaluates certain factors including the customer’s ability to pay (or credit risk). In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. Sales to distributors, are typically made pursuant to agreements that provide return rights with respect to discontinued or slow-moving products, referred to as stock rotation. Sales to distributors can also be subject to price adjustment on certain products, primarily for distributors with drop-shipping rights. Although payment terms vary, most distributor agreements require payment within 45 days of invoicing. The Company recognizes revenue when it satisfies a performance obligation. The Company recognizes revenue from sales agreements upon transferring control of a product to the customer. This typically occurs when products are shipped or delivered, depending on the delivery terms, or when products that are consigned at customer locations are sold to dealers or end users. Revenue recognized during the twelve months ended , and for software, licenses, . Sales returns and allowances are estimated based on historical experience. Provisions for discounts and rebates to customers, estimated returns and allowances, ship and credit claims and other adjustments are provided for in the same period the related revenues are recognized, and are netted against revenues. For returns, the Company recognizes a related asset for the right to recover returned products with a corresponding reduction to cost of goods sold. The Company reviews warranty and related claims activity and records provisions, as necessary. Frequently, the Company receives orders with multiple delivery dates that may extend across reporting periods. Since each delivery constitutes a performance obligation, the Company allocates the transaction price of the contract to each performance obligation based on the stand-alone selling price of the products. The Company invoices the customer for each delivery upon shipment and recognizes revenues in accordance with delivery terms. Although payment terms vary, distributors typically pay within As scheduled delivery dates are within The Company has elected to record freight and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost and include it in cost of revenues. Taxes assessed by government authorities on revenue-producing transactions, including value-added and excise taxes, are presented on a net basis (excluded from revenues) in the consolidated statements of operations and comprehensive income (loss). The details of deferred revenue and associated cost of goods sold As of 2022 2021 Deferred revenue $ 63 $ 54 Deferred cost of goods sold — — Deferred gross profit $ 63 $ 54 The Company offers rebates and market development funds to certain of its distributors, dealers/resellers, and end-users based upon the volume of product purchased by them. The Company records rebates as a reduction of revenue in accordance with GAAP. The Company provides, at its discretion, advance replacement units to end-users on defective units of certain products under warranty. Since the purpose of these units is not revenue generating, the Company tracks the units due from the end-user, until the defective unit has been returned. Any amount due from the customer upon failure to return the products is accounted as receivable only after establishing customer's failure to return the products. The inventory due from the customer is accounted at cost or market value whichever is lower. The following table disaggregates the Company’s revenue into primary product groups: Year Ended December 31, 2022 2021 Audio Conferencing $ 11,829 $ 11,568 Microphones 9,824 10,963 Video products 3,552 6,436 $ 25,205 $ 28,967 The following table disaggregates the Company’s revenue into major regions: Year Ended 2022 2021 North and South America $ 12,297 $ 14,042 Asia (including Middle East) and Australia 7,828 8,197 Europe and Africa 5,080 6,728 $ 25,205 $ 28,967 Warranty Costs The details of changes in the Company’s warranty accrual are as follows: Year Ended 2022 2021 Balance at the beginning of year $ 194 $ 194 Accruals/additions — — Usage/claims — — Balance at end of year $ 194 $ 194 Advertising he years ended December 31, 2022 2021 $ 572 and $ 508 , respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive income (loss). Income Taxes The valuation allowance is based on our estimates of future taxable income and the period over which we expect the deferred tax assets to be recovered. Our assessment of future taxable income is based on historical experience and current and anticipated market and economic conditions and trends. In , as a result of negative evidence, principally of cumulative pre-tax operating losses, we concluded that it was more likely than not that net operating losses, tax credits and other deferred tax assets were not realizable and therefore, we recorded a full valuation allowance against those net deferred tax assets. We continue to record full valuation against our net deferred tax assets. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit. As of Recent changes: There were no changes that had a material impact on the Company's consolidated financial position, results of operations or cash flows. Earnings Per Share Year Ended 2022 2021 Numerator: Net income (loss) $ 20,556 $ (7,694 ) Interest adjustment under if-converted method 285 — 20,841 (7,694 ) Denominator: Basic weighted average shares 23,937,962 19,859,817 Dilutive common stock equivalents using if-converted method 909,953 — Diluted weighted average shares 25,189,147 19,859,817 Basic income (loss) per common share: $ 0.86 $ (0.39 ) Diluted income (loss) per common share: $ 0.83 $ (0.39 ) Weighted average options, warrants and convertible portion of senior convertible notes outstanding 6,788,671 4,654,601 Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation 5,510,600 4,654,601 Share-Based Payment Other recent accounting pronouncements: Liquidity: As of December 31, 2022 984 1,071 December 31, 2021 69,307 December 31, 2022 17,969 December 31, 2021 4,179 215 4,394 In order to maintain liquidity, the Company has been actively engaged in preserving cash by implementing company-wide cost reduction measures and raising additional capital. The company raised additional capital in 2019 by issuing senior convertible notes, in The Company also believes that the Company's core strategies of product innovation and prudent cost management will bring the company back to profitability in the future. The Company believes, although there can be no assurance, that all of these measures and effective management of working capital, along with the current cash balance after the receipt of proceeds from legal settlement, will provide the liquidity needed to meet our operating needs through at least March 31, 2024. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2022 | |
Marketable Securities | |
Marketable Securities | 2 The Company has classified its marketable securities as available-for-sale securities. These debt securities are carried at estimated fair value with unrealized holding gains and losses included in accumulated other comprehensive income (loss) in shareholders’ equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of securities at December 31, 2021 were as follows: Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value December 31, 2021 Available-for-sale securities: Corporate bonds and notes $ 1,434 $ 8 $ (2) $ 1,440 Municipal bonds 1,573 — (3) 1,570 Total available-for-sale securities $ 3,007 $ 8 $ (5) $ 3,010 There were December 31, 2022 . |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Intangible Assets | 3 Intangibl e assets as of December 31, 2022 an d 2021 consisted of the following: Estimated useful lives As of December 31, (in years) 2022 2021 Tradename 5 to 7 $ 555 $ 555 Patents and techn ologic al know-ho 10 to 20 7,053 33,553 Proprietary software 3 to 15 2,981 2,981 Other 3 to 5 323 323 Total intangible assets, gross 10,912 37,412 Accumulated amortization (8,841 ) (12,326 ) Total intangible assets, net $ 2,071 $ 25,086 P atents and technological know-how as of December 31, 2021 include capitalized legal expenses, net of amortizati o n of $22,637 rela ted to The Company capitalized $ 737 7,836 December 31, 2022 2021 A gain of $33,623 was recognized and included under other income after deducting the entire capitalized legal costs amounting to $27,374 net of amortized costs of $5,997 from the one-time legal settlement amount of $55,000, which is included in the balance sheet under legal settlement receivable as of December 31, 2022. Please refer to Note 8 - Commitments and Contingencies for additional information. During t he years ended December 31, 2022 and 2021 , amortization of these intangible assets were $ 2,512 and $2,288 respectively. The estimated future amortization expense of intangible assets is as follows: Years ending December 31, 2022 $ 512 2023 249 2024 188 2025 187 2026 57 Thereafter 878 Total $ 2,071 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Inventories | 4 Inventories, net of reserves, consisted of the following: As of December 31, 2022 2021 Current: Raw materials $ 4,499 $ 4,085 Finished goods 4,462 5,948 Total $ 8,961 $ 10,033 Long-term: Raw materials $ 1,068 $ 1,980 Finished goods 1,639 1,587 Total $ 2,707 $ 3,567 Long-term inventory represents inventory held in excess of our current (next 12 months) requirements based on our recent sales and forecasted level of sales. We have developed programs to reduce the inventory to normal operating levels in the near future . We expect to sell the above inventory, net of reserves, at or above the stated cost and believe that no loss will be incurred on its sale. The losses incurred on valuation of inventory at the lower of cost or market value and write-off of obsolete inv entory amounted to $120 and $850 during t he years ended December 31, 2022 and 2021 , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Major classifications of property and equipment and estimated useful lives were as follows: Estimated useful lives As of December 31, in years 2022 2021 Office furniture and equipment 3 to 10 $ 66 $ 5,410 Leasehold improvements 2 to 7 121 1,610 Vehicles 5 to 10 41 206 Manufacturing and test equipment 2 to 10 1,146 2,846 1,374 10,072 Accumulated depreciation and amortization (991 ) (9,328 ) Property and equipment, net $ 383 $ 744 Depreciation expense on property and equipment for t he years ended December 31, 2022 and 2021 was $263 and $378, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 6 Rent expense is recognized on a straight-line basis over the period of the lease taking into account future rent escalation and holiday periods. Year ended December 31, 2022 2021 Rent expense $ 684 $ 719 W e occup y a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease that expires in February 2028 . The Gainesville facility is used primarily to support our research and development activities. We occupy a 21,443 , we will reduce our space to approximately 9,402 square feet. The facility supports our principal administrative, sales, marketing, customer support, and research and product development activities. We occupy a 6,175 s We occupy a 40,000 Supplemental cash flow information related to leases was as follows: Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 680 $ 685 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 107 $ 212 Supplemental balance sheet information related to leases was as follows: December 31, 2022 December 31, 2021 Operating lease right-of-use assets $ 1,047 $ 1,537 Current portion of operating lease liabilities, included in accrued liabilities $ 641 $ 623 Operating lease liabilities, net of current portion 492 1,026 Total operating lease liabilities $ 1,133 $ 1,649 Weighted average remaining lease term for operating leases (in years) 2.12 2.64 Weighted average discount rate for operating leases 5.93 % 5.87 % The following represents maturities of operating lease liabilities as of : Years ending December 31, 2023 $ 691 2024 367 2025 94 2026 26 2027 26 Thereafter 4 Total lease payments 1,208 Less: Imputed interest (75 ) Total $ 1,133 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities | |
Accrued Liabilities | 7 Accrued liabilities consist of the following: As of December 31, 2022 2021 Accrued salaries and other compensation $ 1,148 $ 733 Sales and marketing programs and customer credit balances 605 869 Product warranty 194 194 Current portion of operating lease liabilities 641 623 Other accrued liabilities 453 130 Total $ 3,041 $ 2,549 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8 We establish contingent liabilities when a particular contingency is both probable and estimable. The Company is not aware of any pending claims or assessments, other than as described below, which may have a material adverse impact on the Company’s financial position or results of operations. Outsource Manufacturers. We have manufacturing agreements with electronics manufacturing service (“EMS”) providers related to the outsourced manufacturing of our products. Certain manufacturing agreements establish annual volume commitments. We are also obligated to repurchase Company-forecasted but unused materials. The Company has non-cancellable, non-returnable, and long-lead time commitments with its EMS providers and certain suppliers for inventory components that will be used in production. The Company’s purchase commitments under such agreements is approximately $ 2,035 as of December 31, 2022 . Uncertain Tax Positions. As further discussed in Note 13 - Income Taxes 962 of uncertain tax positions as of December 31, 2022 . Due to the inherent uncertainty of the underlying tax positions, it is not possible to forecast the payment of this liability to any particular year. Legal Proceedings. Intellectual Property Litigation The Company (collectively, the “Litigations”) against Shure Incorporated (“Shure”) as more fully described in the Part I, Item 3 of the Company’s annual report on Form 10-K for the year ended December 31, 2021, as supplemented in Part II, Item 1 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2022. On December 9 , 2022, the Company and Shure entered into a confidential settlement and license agreement (the “Agreement”) . Under the terms of the Agreement: ● All of the Litigations between the parties were dismissed with prejudice and each of the Company and Shure released all claims against the other arising from or in connection with the matters that were subject to the Litigations; ● Shure made a one-time settlement payment to the Company in the amount of $55,000 within five days after the dismissal of the Litigations in accordance with the Agreement in January 2023; and ● The Company and Shure agreed to certain patent licenses and covenants not to sue. The Company capitalized $737 A gain of $33,623 was recognized and included under other income after deducting the entire capitalized legal costs amounting to $27,374 net of amortized costs of $5,997 In addition, the Company is also involved from time to time in various claims and legal proceedings which arise in the normal course of our business. Such matters are subject to many uncertainties and outcomes that are not predictable. However, based on the information available to us, we do not believe any such other proceedings will have a material adverse effect on our business, results of operations, financial position, or liquidity. Conclusion We believe there are no other items that will have a material adverse impact on the Company’s financial position or results of operations. Legal proceedings are subject to all of The Company believes it has adequately accrued for the aforementioned contingent |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Debt | 9 Senior Convertible Notes and Warrants On December 17, 2019, the Company completed the issuance and sale of $ aggregate principal amount of secured convertible notes of the Company (the “Notes”) and warrants (the “Warrants”) to purchase shares of common stock, par value $ per share of the Company (the “Common Stock”), in a private placement transaction. The Notes and Warrants were issued and sold to Edward D. Bagley, an affiliate of the Company, on the terms and conditions of a Note Purchase Agreement dated December 8, 2019 between the Company, certain subsidiary guarantors of the Company, and Mr. Bagley. Mr. Bagley is an affiliate of the Company and was the beneficial owner of approximately % of the Company’s issued and outstanding shares of Common Stock. The Notes mature on December 17, 2023 (the “Maturity Date”) and accrue interest at a variable rate adjusted on a quarterly basis and equal to two and one one The Warrants have an initial exercise price equal to $1.76, the closing price of the Common Stock on December 6, 2019 as reported on the Nasdaq Capital Market, and are exercisable until December 17, 2026. The Warrants must be exercised for cash, unless at the time of exercise there is not a then effective registration statement for the resale of the shares of Common Stock issuable upon exercise of the Warrants, in which case the Warrants may be exercised via a cashless exercise feature that provides for net settlement of the shares of Common Stock issuable upon exercise. Concurrent with the issuance of the Notes and Warrants pursuant to the Note Purchase Agreement, the Company, the Guarantors and Mr. Bagley entered into a Guaranty and Collateral Agreement (the “Collateral Agreement”) pursuant to which the Company and the Guarantors granted Mr. Bagley a first priority lien interest in all of the Company’s assets as security for the Company’s performance of its obligations under the Notes and Warrants. The net proceeds after original issue discount and issuance costs of $346 were approximately $2,654. The Company expects to use the proceeds from the sale of the Notes and Warrants for general corporate purposes and working capital. In accounting for the issuance of the Notes, the Company separated Notes and Warrants into liability and equity components. The carrying amount of Warrants, being an equity component, was first calculated using Black-Scholes method with the following assumptions: Risk-free interest rate 1.82% Expected life of Warrants (years) 7 Expected price volatility 49.94% Expected dividend yield 0% The carrying amount of the Notes was then determined by deducting the fair value of the Warrants from the principal amount of the Notes. The carrying amount of the Notes was further separated into equity and liability components after separating the value of the conversion feature into an equity component and leaving the remaining value as liability. The equity component is not The original issue discount and issuance costs are netted against the liability. The following table represents the carrying value of Notes and Warrants: December 31, 2022 December 31, 2021 Liability component: Principal $ 1,920 $ 2,640 Less: debt discount and issuance costs, net of amortization (188 ) (385 ) Net carrying amount $ 1,732 $ 2,255 Equity component ( 1 Warrants $ 318 $ 318 Conversion feature 122 122 Net carrying amount $ 440 $ 440 Current portion of liability component included under short-term debt $ 1,920 $ 720 Long-term portion of liability component included under long-term debt — 1,920 Liability component total $ 1,920 $ 2,640 (1) Recorded on the consolidated balance sheets as additional paid-in capital. Debt discount and issuance costs are amortized over the life of the note to interest expense using the effective interest method. During the twelve months December 31, 2022 amortization of debt discount and issuance costs were $197 and $196 respectively. Year ending December 31, Principal Amount Maturing 2023 1,920 Net carrying amount $ 1,920 2021 Short-term Bridge Loan On July 2, 2021, the Company obtained a bridge loan in the principal amount of $2,000 from Edward D. Bagley (the “2021 Bridge Loan”), an affiliate of the C ompany. The Bridge Loan is evidenced by a promissory note dated July 2, 2021 (the “Note”) issued by the Company to Mr. Bagley. The Note bears interests at a rate of 8.0% per annum, matures on the earlier to occur of (i) October 1 , 2021 or (ii) within two business days of the Company’s receipt of its expected U.S. federal income tax refund, and contains other customary covenants and even ts of default . On September 11, 2021, the Company amended and restated the terms of the 2021 Bridge Loan to extend the latest maturity date from October 1, 2021 to January 3, 2022. All other terms and conditions of the Bridge Loan remained the same. This Bridge Loan of $2,000 is included under short-term debt as of December 31, 2021. On January 4, 2022, the Company entered into a Securities Purchase Agreement with Edward D. Bagley, pursuant to which the Company issued and sold to Mr. Bagley, in a private placement 1,538,461 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, at a purchase price of $1.30 per share of Common Stock. The consideration for the Shares was the cancellation and termination of Mr. Bagley’s outstanding bridge loan to the Company in the principal amount of $2,000 originally issued on July 2, 2021 and amended and restated on September 11, 2021. Mr. Bagley is an affiliate of the Company and the Company’s single largest stockholder. Paycheck Protection Program Loan On April 18, 2020, the Company, entered into a loan agreement with U.S. Bank National Association Bank, which provided for a loan in the principal amount of $1,499 (“PPP Loan”) pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan had a two sixteen The Company's Paycheck Protection Program Loan ("PPP Loan") under the CARES Act was forgiven by Small Business Administration effective April 29, 2022. With this forgiveness, the Company is not required to repay the principal amount of $ 1,499 and the interest of $ 31 . The Company received $ 953 back that it had already paid towards principal and interest payments toward the PPP Loan. The Company treated the forgiveness as extinguishment of debt in this quarter ended September 30, 2022 and reported the entire principal amount forgiven of $ 1,499 along with interest already accounted for of $29 as a gain on extinguishment of debt included in other income. 2022 Bridge Loan On October 28, 2022 the Company obtained a bridge loan in the principal amount of $2,000 from Edward D. Bagley (the “2022 Bridge Loan”), an affiliate of the C ompany. The 2022 Bridge Loan is evidenced by a promi ssory note dated October 28, 2022 (the “ Note”) issued by the Company to Mr. Bagley. The Note bears interest at a rate of 12.0% per annum and matures on October 28, 2023 . Mr. Bagley is an affiliate of the Company and the Company’s single largest stockholder. This Bridge Loan of $ is included under short-term debt as of December 31, 2022. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payments | |
Share-Based Payments | 10 Employee Stock Option Plans The Company’s share-based incentive plan offering stock options is primarily through 2007 Equity Incentive Plan (the “2007 Plan”). Under this plan, one new share is issued for each stock option exercised. The plan is described below. The 2007 Plan was restated and approved by the shareholders on December 12, 2016. Provisions of the restated 2007 Plan include the granting of up to incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units. Options may be granted to employees, officers, non-employee directors All vesting schedules for options granted are based on 3 or 4-year vesting schedules, with either one-third or one-fourth vesting on the first anniversary and the remaining options vesting ratably over the remainder of the vesting term. Generally, directors and officers have 3-year vesting schedules and all other employees have 4-year vesting schedules. Additionally, in the event of a change in control or the occurrence of a corporate transaction, the Company’s Board of Directors has the authority to elect that all unvested options shall vest and become exercisable immediately prior to the event or closing of the transaction. As of , the Company had 245,977 options with contractual lives of ten years and 242,500 options with contractual lives of 6 years. As of As of The Company uses judgment in determining the fair value of the share-based payments on the date of grant using an option-pricing model with assumptions regarding a number of . The Company did not grant any options during the year ended December 31, 2022. In applying the Black-Scholes methodology to the 50,000 options granted during the year ended December 31, 2021, the Company used the following assumptions: Risk free interest rate, average 0.84% Expected option life, average 5 years Expected price volatility, average 69.74% Expected dividend yield 0% The risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of the grant, based on the expected life of the stock option. The expected life of the stock option is determined using historical data. The expected price volatility is determined using a weighted average of daily historical volatility of the Company’s stock price over the corresponding expected option life. Under guidelines of ASC Topic 718, the Company recognizes the associated compensation cost for only those awards expected to vest on a straight-line basis over the underlying requisite service period. The Company estimated the forfeiture rates based on its historical experience and expectations about future forfeitures. The following table shows the stock option activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value As of December 31, 2020 843,446 $ 6.60 4.91 $ — Granted 50,000 2.30 Expired and canceled (34,875 ) 6.70 Forfeited prior to vesting (27,500 ) 2.50 Exercised — — As of December 31, 2021 831,071 $ 6.47 4.10 $ — Granted — — Expired and canceled (274,379 ) 7.44 Forfeited prior to vesting (68,215 ) 2.50 Exercised — — As of December 31, 2022 488,477 $ 6.48 3.42 $ — Vested and Expected to Vest at December 31, 2021 831,071 $ 6.47 4.10 $ — Vested at December 31, 2021 555,237 $ 8.46 3.64 $ — Vested and Expected to Vest at December 31, 2022 488,477 $ 6.48 3.42 $ — Vested at December 31, 2022 373,612 $ 7.72 3.22 $ — The total pre-tax compensation cost related to stock options recognized during the years ended December 31, 2022 and 2021 was $112 and $131, respectively. Tax benefit from compensation cost related to stock options during the years ended December 31, 2022 and 2021, respectively was $28 and $0. As of December 31, 2022, the total compensation cost related to stock options not yet recognized and before the effect of any forfeitures was $152, which is expected to be recognized over approximately the next 2.65 Employee Stock Purchase Plan During the years ended and , the Company issued shares to employees under the Company’s 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s shareholders on December 12, 2016. As of December 31, 2022, and , and 402,704 , respectively of the originally approved 500,000 shares were available for offerings under the ESPP. Offering periods under the ESPP commence on each Jan 1 and July 1 and continue for a duration of six months. The ESPP is available to all employees who do not own, or are deemed to own, shares of stock making up an excess of 5% of the combined voting power of the Company, its parent or subsidiary. During each offering period, each eligible employee may purchase shares under the ESPP after authorizing payroll deductions. Under the ESPP, each employee may purchase up to the lesser of 2,500 shares or $25 of fair market value (based on the established purchase price) of the Company’s stock for each offering period. Unless the employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase common stock on the last business day of the period at a price equal to 85% (or a 15% discount) of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Shares purchased and compensation expense associated with Employee Stock Purchase Plans were as follows: 2022 2021 Shares purchased under ESPP plan 7,180 11,164 Plan compensation expense $ 1 $ 5 Issuance of Common Stock and Warrants O n September 13 , 2020, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers named therein (the “Purchasers”), pursuant to which the Company issued and sold, in a registered direct offering 2,116,050 0.001 per share (the “Common Stock”) at an offering price of $ 2.4925 5,275 (4,764 net of issuance costs) In a concurrent private placement, the Company issued to the Purchasers who participated in the Registered Offering warrants exercisable for an aggregate of 1,058,025 2.43 five years On September 12, 2021, the Company entered into a securities purchase agreement with certain purchasers named therein, pursuant to which the Company issued shares of the Company's common stock, par value $0.001 |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers | |
Significant Customers | 11 There were no sales to significant customers that represented more than 10 percent of total revenues during the years ended December 31, 2022 and 2021. The following table summarizes the percentage of total gross receivables from significant customers that represented more than 10 percent of total gross accounts receivable: As December 31, 2022 2021 Customer A — % 10.9 % Customer B — % 10.6 % |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 12 The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: Level 1 - Quoted prices in active markets for identical assets and liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. This category generally includes U.S. Government and agency securities; municipal securities; mutual funds and securities sold and not yet settled. Level 3 - Unobservable inputs. The substantial majority of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. There were The following tables set forth the fair value of the financial instruments re-measured by the Company as of . Level 1 Level 2 Level 3 Total December 31, 2021 Corporate bonds and notes $ — $ 1,440 $ — $ 1,440 Municipal bonds — 1,570 — 1,570 Total $ — $ 3,010 $ — $ 3,010 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 13 Consolidated income (loss) before taxes for domestic and foreign operations consisted of the following: Year ended December 31, 2022 2021 Domestic $ 28,754 $ (6,201 ) Foreign (1,294 ) (1,776 ) Total $ 27,460 $ (7,977 ) The Company’s benefit from (provision for) income taxes consisted of the following: Year ended December 31, 2022 2021 Current: Federal $ (6,753 ) $ 373 State (98 ) (9 ) Foreign (53 ) (81 ) Total current (6,904 ) 283 Deferred: Federal 1,132 1,326 State (976 ) 398 Foreign 165 302 Total 321 2,026 Change in valuation allowance (321 ) (2,026 ) Total deferred — — Tax benefit (provision) $ (6,904 ) $ 283 The income tax benefit (provision) differs from that computed at the federal statutory corporate income tax rate as follows: Year ended December 31, 2022 2021 Tax benefit (provision) at federal statutory rate $ (5,768 ) $ 1,674 State income tax benefit (provision), net of federal benefit (1,093 ) 335 Research and development tax credits 457 361 Foreign earnings or losses taxed at different rates (68 ) (28 ) Tax rate change (60 ) (2 ) Other (51 ) (31 ) Change in valuation allowance (321 ) (2,026 ) Tax benefit (provision) $ (6,904 ) $ 283 The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following: 2022 2021 Deferred revenue $ 11 $ 9 Basis difference in intangible assets 6,604 1,319 Inventory reserve 2,258 2,377 Net operating loss carryforwards 3,075 7,121 Research and development tax credits 48 1,579 Accrued expenses 120 43 Stock-based compensation 215 308 Allowance for sales returns and doubtful accounts 81 83 Difference in property and equipment basis (83 ) (124 ) Convertible debt (110 ) (112 ) Capitalized research expenditure 922 — Other 364 581 Total net deferred income tax asset 13,505 13,184 Less: Valuation allowance (13,505 ) (13,184 ) Net deferred income tax asset (liability) $ — $ — The Company has not provided for foreig n withholding taxes on undistributed earnings of its non-U.S. subsidiaries since these earnings are intended to be reinvested indefinitely, in accordance with guidelines contained in ASC Topic , Accounting for Income Taxes . It is not practical to estimate the amount of additional taxes that might be payable on such undistributed earnings. The Company routinely evaluates the likelihood of realizing the benefit of its deferred tax assets and may record a valuation allowance if, based on all available evidence, it determines that it is more likely than not some portion of the tax benefit will not be realized. As of , the Company had an aggregate of approximately $13.5 million in deferred tax assets primarily related to intangible assets, net operating losses, tax credit ● sufficient taxable income within the allowed ● future reversals of existing taxable temporary differences, including any tax planning strategies that could be utilized; ● nature or character (e.g., ordinary vs. capital) of the deferred tax assets and liabilities; and ● future taxable income exclusive of reversing temporary differences and Based on the foregoing criteria, the Company determined that it does not meet the “more likely than not” threshold that net operating losses, tax credits and other deferred tax assets will be realized. Accordingly, the Company recorded a full valuation allowance at December 31, 2022 . As of December 31, 2022 the Company has federal net operating loss (“NOL”) carryforwards of approximately $ 0.4 million (pre-tax), state NOL carryforwards of approximately 0.8 million (pre-tax) and Spain NOL carryforwards of approximately $ 11.6 million (pre-tax). The federal NOL carryforward expires in 2029. T he Spain NOL carryforward does not expire. The state NOL carryforwards expire over various periods. Effective July 1, 2007, the Company adopted the accounting standards related to uncertain tax positions. This standard requires that tax positions be assessed using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities recorded as a result of this analysis must generally be recorded separately from any current or deferred income tax accounts. The total amount of unrecognized tax benefits at December 31, 2022 and 2021 , that would favorably impact our effective tax rate if recognized was $ and $ 895 , respectively. As of December 31, 2022 and 2021 , we accrued $ 44 and $ 16 , respectively, in interest and penalties related to unrecognized tax benefits. We account for interest expense and penalties for unrecognized tax benefits as part of our income tax provision. Although we believe our estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which we make such determination. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: Year ended 2022 2021 Balance - beginning of year $ 895 $ 861 Additions based on tax positions related to the current year 75 61 Additions for tax positions of prior years — — Reductions for tax positions of prior years — — Settlements — (20 ) Lapse in statutes of limitations (8) (7 ) Uncertain tax positions, ending balance $ 962 $ 895 The Company’s U.S. federal income tax returns for 2018 through are subject to examination. The Company's U.S. 2018 federal income tax return is currently under examination. The Company also files in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2017. |
Geographic Sales Information
Geographic Sales Information | 12 Months Ended |
Dec. 31, 2022 | |
Geographic Sales Information | |
Geographic Sales Information | 14 The United States was the only country to contribute more than 10 percent of total revenues in each fiscal year. The Company’s revenues are substantially denominated in U.S. dollars and are summarized geographically as follows: Year ended December 31, 2022 2021 Un ited States $ 12,096 $ 14,042 All other countries 13,109 14,925 Total $ 25,205 $ 28,967 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent events | |
Subsequent events | 15 . Subsequent events In January 2023, the 2022 Bridge loan of $2,000 along with applicable interest was repaid. The Company received $1,350 and recorded the settlement gain in March 2023 upon entering into an agreement with a service provider to settle a contract dispute arising on provision of software services to the Company. |
Business Description, Basis o_2
Business Description, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Business Description, Basis of Presentation and Significant Accounting Policies | |
Fiscal Year | Fiscal Year – This report on Form 10-K includes consolidated balance sheets for t he years ended December 31, 2022 and 2021 and the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for each of the years ended December 31, 2022 and 2021 . |
Consolidation | Consolidation – These consolidated financial statements include the financial statements of ClearOne, Inc. and its wholly owned subsidiaries. All inter-Company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts receivable and product returns, provisions for obsolete inventory, potential impairment of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates. |
Foreign Currency Translation | Foreign Currency Translation – We are exposed to foreign currency exchange risk through our foreign subsidiaries. Other than our subsidiaries in India and Spain, all other foreign subsidiaries are U.S. dollar functional, for which gains and losses arising from remeasurement are included in earnings. Our Spanish subsidiary is Euro functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. Our Indian subsidiary is Indian Rupee functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. We translate and remeasure foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate revenue and expenses using average rates during the year. |
Concentration Risk | Concentration Risk – We depend on an outsourced manufacturing strategy for our products. We outsource the manufacture of all of our products to third party manufacturers located in Asia. If any of these manufacturers experience difficulties in obtaining sufficient supplies of components, component prices significantly exceeding the anticipated costs, an interruption in their operations, or otherwise suffer capacity constraints, we would experience a delay in production and shipping of these products, which would have a negative impact on our revenues. Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantine or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption may have a material adverse effect on our business. Operating in the international environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations. Currently, we have no second source of manufacturing for most of our products. |
Cash Equivalents | Cash Equivalents – The Company considers all highly-liquid investments with a maturity of three months |
Marketable Securities | Marketable Securities - The Company has classified its marketable securities as available-for-sale securities. These debt securities are carried at estimated fair value with unrealized holding gains and losses included in other comprehensive income (loss) in shareholders’ equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against “Other income” when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary. These factors include, but are not limited to: ( i ) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during t he years ended December 31, 2022 and 2021 . |
Accounts Receivable | Accounts Receivable – Accounts receivable are recorded at the invoiced amount, net of expected returns and allowance for doubtful accounts. Generally, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company extends credit to customers who it believes have the financial strength to pay. The Company has in place credit policies and procedures, an approval process for sales returns and credit memos, and processes for managing and monitoring channel inventory levels. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Management regularly analyzes accounts receivable including current aging, historical write-off experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We review customer accounts quarterly by first assessing accounts with aging over a specific duration and balance over a specific amount. We review all other balances on a pooled basis based on past collection experience. Accounts identified in our customer-level review as exceeding certain thresholds are assessed for potential allowance adjustment if we conclude the financial condition of that customer has deteriorated, adversely affecting their ability to make payments. Delinquent account balances are written off if the Company determines that the likelihood of collection is not probable. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods. The Company’s allowance for doubtful accounts activity for the years ended December 31, 2022 and 2021 is as follows: Year Ended December 31, 2022 2021 Balance at beginning of the year $ 326 $ 506 Allowance increase (decrease) — (180 ) Write offs, net of recoveries — — Balance at end of the year $ 326 $ 326 |
Inventories | Inventories – Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out (“FIFO”) basis. In addition to the price of the product purchased, the cost of inventory includes the Company’s internal manufacturing costs, including warehousing, engineering, material purchasing, quality and product planning expenses and applicable overhead, not in excess of estimated realizable value. Consideration is given to obsolescence, excessive levels, deterioration, direct selling expenses, and other factors in evaluating net realizable value. The inventory also includes advance replacement units (valued at cost) provided by the Company to end-users to service defective products under warranty. The value of advance replacement units included i n the inventory was $ 193 and $130 , as of and 2021 , respectively. The inventory consists of current inventory of $ 8,961 and long-term inventory of $ 2,707 . Long term inventory represents inventory held in excess of our current (next 12 months) requirements based on our recent sales and forecasted level of sales. |
Property and Equipment | Property and Equipment – Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Routine maintenance, repairs, and renewal costs are expensed as incurred. Gains or losses from the sale, trade-in, or retirement of property and equipment are recorded in current operations and the related book value of the property is removed from property and equipment accounts and the related accumulated depreciation and amortization accounts. Estimated useful lives are generally two |
Intangible Assets | Intangible Assets – Intangible assets are amortized over their useful lives unless these lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which are generally three |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets - Long-lived assets, such as property, equipment, and definite-lived intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change. Assets held for sale are reported at the lower of the carrying amount or fair value, less the estimated costs to sell. |
New accounting pronouncements, policy | Leases: We determine if an arrangement is a lease at inception. Operating leases are included in operating lease - right of use (“ROU”) assets, accrued liabilities, and operating lease liability in our consolidated balance sheets. As of adoption of ASC and as of and , the Company was not party to finance lease arrangements. ROU assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Under the available practical expedient, we account for the lease and non-lease components as a single lease component. Revenue Recognition Policy: The Company generates revenue from sales of its audio and video conferencing equipment to distributors, system integrators and value-added resellers. The Company also generates revenue, to a much lesser extent, from sale of software and licenses to distributors, system integrators, value-added resellers and end-users. The Company recognizes revenue when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. For sales agreements, the Company has identified the promise to transfer products, each of which are distinct, to be the performance obligation. The Company applies a identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of Sales agreements with customers are renewable periodically and contain terms and conditions with respect to payment, delivery, warranty and supply, but typically do not require mandatory purchase commitments. In the absence of a sales agreement, the Company’s standard terms and conditions at the time of acceptance of purchase orders apply. The Company considers the customer purchase orders, governed by sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. The Company evaluates certain factors including the customer’s ability to pay (or credit risk). |
Revenue Recognition Policy | In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. Sales to distributors, are typically made pursuant to agreements that provide return rights with respect to discontinued or slow-moving products, referred to as stock rotation. Sales to distributors can also be subject to price adjustment on certain products, primarily for distributors with drop-shipping rights. Although payment terms vary, most distributor agreements require payment within 45 days of invoicing. The Company recognizes revenue when it satisfies a performance obligation. The Company recognizes revenue from sales agreements upon transferring control of a product to the customer. This typically occurs when products are shipped or delivered, depending on the delivery terms, or when products that are consigned at customer locations are sold to dealers or end users. Revenue recognized during the twelve months ended , and for software, licenses, . Sales returns and allowances are estimated based on historical experience. Provisions for discounts and rebates to customers, estimated returns and allowances, ship and credit claims and other adjustments are provided for in the same period the related revenues are recognized, and are netted against revenues. For returns, the Company recognizes a related asset for the right to recover returned products with a corresponding reduction to cost of goods sold. The Company reviews warranty and related claims activity and records provisions, as necessary. Frequently, the Company receives orders with multiple delivery dates that may extend across reporting periods. Since each delivery constitutes a performance obligation, the Company allocates the transaction price of the contract to each performance obligation based on the stand-alone selling price of the products. The Company invoices the customer for each delivery upon shipment and recognizes revenues in accordance with delivery terms. Although payment terms vary, distributors typically pay within As scheduled delivery dates are within The Company has elected to record freight and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost and include it in cost of revenues. Taxes assessed by government authorities on revenue-producing transactions, including value-added and excise taxes, are presented on a net basis (excluded from revenues) in the consolidated statements of operations and comprehensive income (loss). The details of deferred revenue and associated cost of goods sold As of 2022 2021 Deferred revenue $ 63 $ 54 Deferred cost of goods sold — — Deferred gross profit $ 63 $ 54 The Company offers rebates and market development funds to certain of its distributors, dealers/resellers, and end-users based upon the volume of product purchased by them. The Company records rebates as a reduction of revenue in accordance with GAAP. The Company provides, at its discretion, advance replacement units to end-users on defective units of certain products under warranty. Since the purpose of these units is not revenue generating, the Company tracks the units due from the end-user, until the defective unit has been returned. Any amount due from the customer upon failure to return the products is accounted as receivable only after establishing customer's failure to return the products. The inventory due from the customer is accounted at cost or market value whichever is lower. The following table disaggregates the Company’s revenue into primary product groups: Year Ended December 31, 2022 2021 Audio Conferencing $ 11,829 $ 11,568 Microphones 9,824 10,963 Video products 3,552 6,436 $ 25,205 $ 28,967 The following table disaggregates the Company’s revenue into major regions: Year Ended 2022 2021 North and South America $ 12,297 $ 14,042 Asia (including Middle East) and Australia 7,828 8,197 Europe and Africa 5,080 6,728 $ 25,205 $ 28,967 Warranty Costs The details of changes in the Company’s warranty accrual are as follows: Year Ended 2022 2021 Balance at the beginning of year $ 194 $ 194 Accruals/additions — — Usage/claims — — Balance at end of year $ 194 $ 194 Advertising he years ended December 31, 2022 2021 $ 572 and $ 508 , respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive income (loss). Income Taxes The valuation allowance is based on our estimates of future taxable income and the period over which we expect the deferred tax assets to be recovered. Our assessment of future taxable income is based on historical experience and current and anticipated market and economic conditions and trends. In , as a result of negative evidence, principally of cumulative pre-tax operating losses, we concluded that it was more likely than not that net operating losses, tax credits and other deferred tax assets were not realizable and therefore, we recorded a full valuation allowance against those net deferred tax assets. We continue to record full valuation against our net deferred tax assets. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit. |
Warranty Costs | Warranty Costs The details of changes in the Company’s warranty accrual are as follows: Year Ended 2022 2021 Balance at the beginning of year $ 194 $ 194 Accruals/additions — — Usage/claims — — Balance at end of year $ 194 $ 194 Advertising he years ended December 31, 2022 2021 $ 572 and $ 508 , respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive income (loss). Income Taxes |
Income Taxes | Income Taxes |
Earnings Per Share | Earnings Per Share Year Ended 2022 2021 Numerator: Net income (loss) $ 20,556 $ (7,694 ) Interest adjustment under if-converted method 285 — 20,841 (7,694 ) Denominator: Basic weighted average shares 23,937,962 19,859,817 Dilutive common stock equivalents using if-converted method 909,953 — Diluted weighted average shares 25,189,147 19,859,817 Basic income (loss) per common share: $ 0.86 $ (0.39 ) Diluted income (loss) per common share: $ 0.83 $ (0.39 ) Weighted average options, warrants and convertible portion of senior convertible notes outstanding 6,788,671 4,654,601 Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation 5,510,600 4,654,601 |
Share-Based Payment | Share-Based Payment |
Other recent accounting pronouncements | Other recent accounting pronouncements: |
Liquidity | As of December 31, 2022 984 1,071 December 31, 2021 69,307 December 31, 2022 17,969 December 31, 2021 4,179 215 4,394 In order to maintain liquidity, the Company has been actively engaged in preserving cash by implementing company-wide cost reduction measures and raising additional capital. The company raised additional capital in 2019 by issuing senior convertible notes, in The Company also believes that the Company's core strategies of product innovation and prudent cost management will bring the company back to profitability in the future. The Company believes, although there can be no assurance, that all of these measures and effective management of working capital, along with the current cash balance after the receipt of proceeds from legal settlement, will provide the liquidity needed to meet our operating needs through at least March 31, 2024. |
Business Description, Basis o_3
Business Description, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Description, Basis of Presentation and Significant Accounting Policies | |
Schedule of allowance for doubtful accounts activity | Year Ended December 31, 2022 2021 Balance at beginning of the year $ 326 $ 506 Allowance increase (decrease) — (180 ) Write offs, net of recoveries — — Balance at end of the year $ 326 $ 326 |
Schedule of deferred revenue and associated cost of goods sold and gross profit | As of 2022 2021 Deferred revenue $ 63 $ 54 Deferred cost of goods sold — — Deferred gross profit $ 63 $ 54 |
Schedule of disaggregates the Company’s revenue into primary product groups and major regions | Year Ended December 31, 2022 2021 Audio Conferencing $ 11,829 $ 11,568 Microphones 9,824 10,963 Video products 3,552 6,436 $ 25,205 $ 28,967 Year Ended 2022 2021 North and South America $ 12,297 $ 14,042 Asia (including Middle East) and Australia 7,828 8,197 Europe and Africa 5,080 6,728 $ 25,205 $ 28,967 |
Schedule of changes in the warranty accrual | Year Ended 2022 2021 Balance at the beginning of year $ 194 $ 194 Accruals/additions — — Usage/claims — — Balance at end of year $ 194 $ 194 Advertising he years ended December 31, 2022 2021 $ 572 and $ 508 , respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive income (loss). Income Taxes |
Schedule of the computation of basic and diluted loss per common share | Year Ended 2022 2021 Numerator: Net income (loss) $ 20,556 $ (7,694 ) Interest adjustment under if-converted method 285 — 20,841 (7,694 ) Denominator: Basic weighted average shares 23,937,962 19,859,817 Dilutive common stock equivalents using if-converted method 909,953 — Diluted weighted average shares 25,189,147 19,859,817 Basic income (loss) per common share: $ 0.86 $ (0.39 ) Diluted income (loss) per common share: $ 0.83 $ (0.39 ) Weighted average options, warrants and convertible portion of senior convertible notes outstanding 6,788,671 4,654,601 Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation 5,510,600 4,654,601 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Marketable Securities | |
Schedule of amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of security | Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value December 31, 2021 Available-for-sale securities: Corporate bonds and notes $ 1,434 $ 8 $ (2) $ 1,440 Municipal bonds 1,573 — (3) 1,570 Total available-for-sale securities $ 3,007 $ 8 $ (5) $ 3,010 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Schedule of intangible assets and estimated useful lives | Estimated useful lives As of December 31, (in years) 2022 2021 Tradename 5 to 7 $ 555 $ 555 Patents and techn ologic al know-ho 10 to 20 7,053 33,553 Proprietary software 3 to 15 2,981 2,981 Other 3 to 5 323 323 Total intangible assets, gross 10,912 37,412 Accumulated amortization (8,841 ) (12,326 ) Total intangible assets, net $ 2,071 $ 25,086 |
Schedule of estimated future amortization expense of intangible assets | Years ending December 31, 2022 $ 512 2023 249 2024 188 2025 187 2026 57 Thereafter 878 Total $ 2,071 |
Disclosure - Inventories (Table
Disclosure - Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Schedule of Inventories, net of reserves | As of December 31, 2022 2021 Current: Raw materials $ 4,499 $ 4,085 Finished goods 4,462 5,948 Total $ 8,961 $ 10,033 Long-term: Raw materials $ 1,068 $ 1,980 Finished goods 1,639 1,587 Total $ 2,707 $ 3,567 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of major classifications of property and equipment and estimated useful lives | Estimated useful lives As of December 31, in years 2022 2021 Office furniture and equipment 3 to 10 $ 66 $ 5,410 Leasehold improvements 2 to 7 121 1,610 Vehicles 5 to 10 41 206 Manufacturing and test equipment 2 to 10 1,146 2,846 1,374 10,072 Accumulated depreciation and amortization (991 ) (9,328 ) Property and equipment, net $ 383 $ 744 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of Rent expense | Year ended December 31, 2022 2021 Rent expense $ 684 $ 719 |
Schedule of Supplemental cash flow and balance sheet information related to leases | Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 680 $ 685 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 107 $ 212 December 31, 2022 December 31, 2021 Operating lease right-of-use assets $ 1,047 $ 1,537 Current portion of operating lease liabilities, included in accrued liabilities $ 641 $ 623 Operating lease liabilities, net of current portion 492 1,026 Total operating lease liabilities $ 1,133 $ 1,649 Weighted average remaining lease term for operating leases (in years) 2.12 2.64 Weighted average discount rate for operating leases 5.93 % 5.87 % |
Schedule of maturities of operating lease liabilities | Years ending December 31, 2023 $ 691 2024 367 2025 94 2026 26 2027 26 Thereafter 4 Total lease payments 1,208 Less: Imputed interest (75 ) Total $ 1,133 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities | |
Schedule of Accrued Liabilities | As of December 31, 2022 2021 Accrued salaries and other compensation $ 1,148 $ 733 Sales and marketing programs and customer credit balances 605 869 Product warranty 194 194 Current portion of operating lease liabilities 641 623 Other accrued liabilities 453 130 Total $ 3,041 $ 2,549 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Schedule of Warrants, Valuation assumptions, Black-Scholes method | Risk-free interest rate 1.82% Expected life of Warrants (years) 7 Expected price volatility 49.94% Expected dividend yield 0% |
Schedule of carrying value of Notes and Warrants | December 31, 2022 December 31, 2021 Liability component: Principal $ 1,920 $ 2,640 Less: debt discount and issuance costs, net of amortization (188 ) (385 ) Net carrying amount $ 1,732 $ 2,255 Equity component ( 1 Warrants $ 318 $ 318 Conversion feature 122 122 Net carrying amount $ 440 $ 440 Current portion of liability component included under short-term debt $ 1,920 $ 720 Long-term portion of liability component included under long-term debt — 1,920 Liability component total $ 1,920 $ 2,640 (1) Recorded on the consolidated balance sheets as additional paid-in capital. |
Schedule of maturities of principal amount contained in the Notes | Year ending December 31, Principal Amount Maturing 2023 1,920 Net carrying amount $ 1,920 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payments | |
Schedule of valuation assumptions for applying the Black-Scholes methodology to the options granted under share-based payments | Risk free interest rate, average 0.84% Expected option life, average 5 years Expected price volatility, average 69.74% Expected dividend yield 0% |
Schedule of stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value As of December 31, 2020 843,446 $ 6.60 4.91 $ — Granted 50,000 2.30 Expired and canceled (34,875 ) 6.70 Forfeited prior to vesting (27,500 ) 2.50 Exercised — — As of December 31, 2021 831,071 $ 6.47 4.10 $ — Granted — — Expired and canceled (274,379 ) 7.44 Forfeited prior to vesting (68,215 ) 2.50 Exercised — — As of December 31, 2022 488,477 $ 6.48 3.42 $ — Vested and Expected to Vest at December 31, 2021 831,071 $ 6.47 4.10 $ — Vested at December 31, 2021 555,237 $ 8.46 3.64 $ — Vested and Expected to Vest at December 31, 2022 488,477 $ 6.48 3.42 $ — Vested at December 31, 2022 373,612 $ 7.72 3.22 $ — |
Schedule of shares purchased and compensation expense associated with Employee Stock Purchase Plans | 2022 2021 Shares purchased under ESPP plan 7,180 11,164 Plan compensation expense $ 1 $ 5 |
Significant Customers (Tables)
Significant Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers | |
Schedule of sales to significant customers that represented more than 10 percent of total revenues | The following table summarizes the percentage of total gross receivables from significant customers that represented more than 10 percent of total gross accounts receivable: As December 31, 2022 2021 Customer A — % 10.9 % Customer B — % 10.6 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Schedule of fair value of the financial instruments | Level 1 Level 2 Level 3 Total December 31, 2021 Corporate bonds and notes $ — $ 1,440 $ — $ 1,440 Municipal bonds — 1,570 — 1,570 Total $ — $ 3,010 $ — $ 3,010 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of consolidated income before taxes for domestic and foreign operations | Year ended December 31, 2022 2021 Domestic $ 28,754 $ (6,201 ) Foreign (1,294 ) (1,776 ) Total $ 27,460 $ (7,977 ) |
Schedule of components of (provision) for income taxes | Year ended December 31, 2022 2021 Current: Federal $ (6,753 ) $ 373 State (98 ) (9 ) Foreign (53 ) (81 ) Total current (6,904 ) 283 Deferred: Federal 1,132 1,326 State (976 ) 398 Foreign 165 302 Total 321 2,026 Change in valuation allowance (321 ) (2,026 ) Total deferred — — Tax benefit (provision) $ (6,904 ) $ 283 |
Schedule of income tax (provision) differs from that computed at the federal statutory corporate income tax rate | Year ended December 31, 2022 2021 Tax benefit (provision) at federal statutory rate $ (5,768 ) $ 1,674 State income tax benefit (provision), net of federal benefit (1,093 ) 335 Research and development tax credits 457 361 Foreign earnings or losses taxed at different rates (68 ) (28 ) Tax rate change (60 ) (2 ) Other (51 ) (31 ) Change in valuation allowance (321 ) (2,026 ) Tax benefit (provision) $ (6,904 ) $ 283 |
Schedule of tax effects of significant temporary differences representing net deferred tax assets and liabilities | 2022 2021 Deferred revenue $ 11 $ 9 Basis difference in intangible assets 6,604 1,319 Inventory reserve 2,258 2,377 Net operating loss carryforwards 3,075 7,121 Research and development tax credits 48 1,579 Accrued expenses 120 43 Stock-based compensation 215 308 Allowance for sales returns and doubtful accounts 81 83 Difference in property and equipment basis (83 ) (124 ) Convertible debt (110 ) (112 ) Capitalized research expenditure 922 — Other 364 581 Total net deferred income tax asset 13,505 13,184 Less: Valuation allowance (13,505 ) (13,184 ) Net deferred income tax asset (liability) $ — $ — |
Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions | Year ended 2022 2021 Balance - beginning of year $ 895 $ 861 Additions based on tax positions related to the current year 75 61 Additions for tax positions of prior years — — Reductions for tax positions of prior years — — Settlements — (20 ) Lapse in statutes of limitations (8) (7 ) Uncertain tax positions, ending balance $ 962 $ 895 |
Geographic Sales Information (T
Geographic Sales Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Geographic Sales Information | |
Schedule of revenues by geographical areas | Year ended December 31, 2022 2021 Un ited States $ 12,096 $ 14,042 All other countries 13,109 14,925 Total $ 25,205 $ 28,967 |
Business Description, Basis o_4
Business Description, Basis of Presentation and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2022 | |
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Current inventory | $ 8,961 | $ 10,033 | ||
Long-term inventory | 2,707 | 3,567 | ||
Operating lease right-of-use assets | 1,047 | 1,537 | ||
Operating lease liability, net of current | 492 | 1,026 | ||
Decreased revenue due to the impact of the adoption of the New Revenue Standard | 25,205 | 28,967 | ||
Advertising expenses | 572 | 508 | ||
Net deferred tax assets | 0 | |||
Cash and cash equivalents | 984 | 1,071 | ||
Working capital | 69,307 | 17,969 | ||
Net cash used in operating activities | 4,179 | 4,394 | ||
Decrease of cash used in operating activities | (215) | |||
Time Deposits, at or Above FDIC Insurance Limit | $ 564 | |||
Period of cumulative pre-tax operating losses | 3 years | |||
Short-Term Notes Payable | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Principal amount of loan obtained | $ 2,000 | |||
Litigation for Intellectual Property Infringement | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Litigation Settlement, Expense | $ 27,374 | |||
Equipment Sales | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Decreased revenue due to the impact of the adoption of the New Revenue Standard | 25,104 | |||
Software and Licenses | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Decreased revenue due to the impact of the adoption of the New Revenue Standard | $ 101 | |||
Common Stock | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Number of common stock issued for cancellation and termination of short-term notes | $ 2,000 | |||
Minimum | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Property and equipment, useful life (in years) | 2 years | |||
Intangible assets, estimated useful lives | 3 years | |||
Maximum | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Property and equipment, useful life (in years) | 10 years | |||
Intangible assets, estimated useful lives | 10 years | |||
Maturity period of highly-liquid investments classified as cash equivalents | 3 months | |||
Period of payment requirement from date of invoicing for distributor payment | 45 days | |||
Period of scheduled delivery date to customer | 1 year | |||
Period of payment requirement from date of invoicing for dealer payment | 30 days | |||
Replacement Parts | ||||
Business Description, Basis of Presentation and Significant Accounting Policies | ||||
Current inventory | $ 193 | $ 130 |
Business Description, Basis o_5
Business Description, Basis of Presentation and Significant Accounting Policies - Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for doubtful accounts activity | ||
Balance at beginning of the year | $ 326 | $ 506 |
Allowance increase (decrease) | 0 | (180) |
Write offs, net of recoveries | 0 | 0 |
Balance at end of the year | $ 326 | $ 326 |
Business Description, Basis o_6
Business Description, Basis of Presentation and Significant Accounting Policies - Deferred Revenue and Associated Costs of Goods Sold and Gross Profit (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Business Description, Basis of Presentation and Significant Accounting Policies | ||
Deferred revenue | $ 63 | $ 54 |
Deferred cost of goods sold | 0 | 0 |
Deferred gross profit | $ 63 | $ 54 |
Business Description, Basis o_7
Business Description, Basis of Presentation and Significant Accounting Policies - Revenue by Product Group (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | ||
Revenue | $ 25,205 | $ 28,967 |
North and South America | ||
Revenue | ||
Revenue | 12,297 | 14,042 |
Asia (including Middle East) and Australia | ||
Revenue | ||
Revenue | 7,828 | 8,197 |
Europe and Africa | ||
Revenue | ||
Revenue | 5,080 | 6,728 |
Audio Conferencing | ||
Revenue | ||
Revenue | 11,829 | 11,568 |
Microphones | ||
Revenue | ||
Revenue | 9,824 | 10,963 |
Video products | ||
Revenue | ||
Revenue | $ 3,552 | $ 6,436 |
Business Description, Basis o_8
Business Description, Basis of Presentation and Significant Accounting Policies - Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Description, Basis of Presentation and Significant Accounting Policies | ||
Balance at the beginning of year | $ 194 | $ 194 |
Accruals/additions | 0 | 0 |
Usage/claims | 0 | 0 |
Balance at end of year | $ 194 | $ 194 |
Business Description, Basis o_9
Business Description, Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | ||
Net income (loss) | $ 20,556 | $ (7,694) |
Interest adjustment under if-converted method | 285 | 0 |
Net income (loss) available to common stockholders, diluted | $ 20,841 | $ (7,694) |
Denominator: | ||
Basic weighted average shares (in shares) | 23,937,962 | 19,859,817 |
Dilutive common stock equivalents using if-converted method (in shares) | 909,953 | 0 |
Diluted weighted average shares (in shares) | 25,189,147 | 19,859,817 |
Basic income (loss) per common share: (in dollars per share) | $ 0.86 | $ (0.39) |
Diluted income (loss) per common share: (in dollars per share) | $ 0.83 | $ (0.39) |
Weighted average options, warrants and convertible portion of senior convertible notes outstanding (in shares) | 6,788,671 | 4,654,601 |
Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation (in shares) | 5,510,600 | 4,654,601 |
Marketable Securities - Availab
Marketable Securities - Available-for-sale Securities by Major Security Type (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Marketable Securities | ||
Amortized cost | $ 3,007 | |
Gross unrealized holding gains | 8 | |
Gross unrealized holding losses | (5) | |
Estimated fair value | $ 0 | 3,010 |
Corporate bonds and notes | ||
Marketable Securities | ||
Amortized cost | 1,434 | |
Gross unrealized holding gains | 8 | |
Gross unrealized holding losses | (2) | |
Estimated fair value | 1,440 | |
Municipal bonds | ||
Marketable Securities | ||
Amortized cost | 1,573 | |
Gross unrealized holding gains | 0 | |
Gross unrealized holding losses | (3) | |
Estimated fair value | $ 1,570 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | ||
Amortization of intangible assets | $ 2,512 | $ 2,288 |
Litigation for Intellectual Property Infringement | ||
Intangible Assets | ||
Litigation expense, capitalized | 737 | 7,836 |
Litigation Settlement, Expense | 27,374 | |
Litigation settlement receivable, amortized costs | 5,997 | |
Litigation settlement receivable | 55,000 | |
Gain (loss) related to litigation settlement | $ 33,623 | |
Patents and Technological Know-how | ||
Intangible Assets | ||
Capitalized legal expenses, net of amortization | $ 22,637 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | ||
Total intangible assets, gross | $ 10,912 | $ 37,412 |
Accumulated amortization | (8,841) | (12,326) |
Total | $ 2,071 | 25,086 |
Minimum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 3 years | |
Maximum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 10 years | |
Tradenames | ||
Intangible Assets | ||
Total intangible assets, gross | $ 555 | 555 |
Tradenames | Minimum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 5 years | |
Tradenames | Maximum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 7 years | |
Patents and Technological Know-how | ||
Intangible Assets | ||
Total intangible assets, gross | $ 7,053 | 33,553 |
Patents and Technological Know-how | Minimum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 10 years | |
Patents and Technological Know-how | Maximum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 20 years | |
Proprietary software | ||
Intangible Assets | ||
Total intangible assets, gross | $ 2,981 | 2,981 |
Proprietary software | Minimum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 3 years | |
Proprietary software | Maximum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 15 years | |
Other | ||
Intangible Assets | ||
Total intangible assets, gross | $ 323 | $ 323 |
Other | Minimum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 3 years | |
Other | Maximum | ||
Intangible Assets | ||
Estimated useful lives (Year) | 5 years |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
2022 | $ 512 | |
2023 | 249 | |
2024 | 188 | |
2025 | 187 | |
2026 | 57 | |
Thereafter | 878 | |
Total | $ 2,071 | $ 25,086 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventories | ||
Change of inventory to net realizable value | $ 120 | $ 850 |
Inventories - Inventories (Deta
Inventories - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current: | ||
Raw materials | $ 4,499 | $ 4,085 |
Finished goods | 4,462 | 5,948 |
Total | 8,961 | 10,033 |
Long-term: | ||
Raw materials | 1,068 | 1,980 |
Finished goods | 1,639 | 1,587 |
Total | $ 2,707 | $ 3,567 |
Property and Equipment (Details
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment | ||
Depreciation expense | $ 263 | $ 378 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, gross | $ 1,374 | $ 10,072 |
Accumulated depreciation and amortization | (991) | (9,328) |
Property and equipment, net | 383 | 744 |
Office furniture and equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, gross | 66 | 5,410 |
Leasehold improvements | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, gross | 121 | 1,610 |
Vehicles | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, gross | 41 | 206 |
Manufacturing and test equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, gross | $ 1,146 | $ 2,846 |
Minimum | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 2 years | |
Minimum | Office furniture and equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 3 years | |
Minimum | Leasehold improvements | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 2 years | |
Minimum | Vehicles | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 5 years | |
Minimum | Manufacturing and test equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 2 years | |
Maximum | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 10 years | |
Maximum | Office furniture and equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 10 years | |
Maximum | Leasehold improvements | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 7 years | |
Maximum | Vehicles | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 10 years | |
Maximum | Manufacturing and test equipment | ||
Major classifications of property and equipment and estimated useful lives | ||
Property and equipment, useful life (in years) | 10 years |
Leases (Details Textual)
Leases (Details Textual) | Dec. 31, 2022 ft² |
Facility to support, research and development activity | Gainesville, Florida | |
Leases | |
Area of facility | 1,350 |
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity | Salt Lake City, Utah | |
Leases | |
Area of facility | 21,443 |
Area of Real Estate Property Reduced | 9,402 |
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity | Chennai, India | |
Leases | |
Area of facility | 6,175 |
Warehouse to support, primary inventory fulfillment and repair center | Salt Lake City, Utah | |
Leases | |
Area of facility | 40,000 |
Leases - Rent expense (Details)
Leases - Rent expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Rent expense | $ 684 | $ 719 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 680 | $ 685 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 107 | $ 212 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating lease right-of-use assets | $ 1,047 | $ 1,537 |
Current portion of operating lease liabilities | 641 | 623 |
Operating lease liabilities, net of current portion | 492 | 1,026 |
Total operating lease liabilities | $ 1,133 | $ 1,649 |
Weighted average remaining lease term for operating leases (in years) | 2 years 1 month 13 days | 2 years 7 months 20 days |
Weighted average discount rate for operating leases | 5.93% | 5.87% |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2023 | $ 691 | |
2024 | 367 | |
2025 | 94 | |
2026 | 26 | |
2027 | 26 | |
Thereafter | 4 | |
Total lease payments | 1,208 | |
Less: Imputed interest | (75) | |
Total operating lease liabilities | $ 1,133 | $ 1,649 |
Accrued Liabilities - Accrued L
Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities | ||
Accrued salaries and other compensation | $ 1,148 | $ 733 |
Sales and marketing programs and customer credit balances | 605 | 869 |
Product warranty | 194 | 194 |
Current portion of operating lease liabilities | 641 | 623 |
Other accrued liabilities | 453 | 130 |
Total | $ 3,041 | $ 2,549 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | |||
Purchase commitment, amount | $ 2,035 | ||
Uncertain tax positions | 962 | $ 895 | $ 861 |
Litigation for Intellectual Property Infringement | |||
Commitments and Contingencies | |||
Litigation Settlement, Expense | 27,374 | ||
Litigation expense, capitalized | 737 | $ 7,836 | |
Litigation settlement receivable | 55,000 | ||
Gain (loss) related to litigation settlement | 33,623 | ||
Litigation settlement receivable, amortized costs | 5,997 | ||
Litigation for Intellectual Property Infringement | Shure Incorporated (“Shure”) | |||
Commitments and Contingencies | |||
Litigation settlement receivable | $ 55,000 |
Debt (Details Textual)
Debt (Details Textual) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||
Oct. 28, 2022 USD ($) | Apr. 29, 2022 USD ($) | Jan. 04, 2022 USD ($) $ / shares shares | Jul. 02, 2021 USD ($) | Apr. 18, 2020 USD ($) | Dec. 17, 2019 USD ($) d $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Sep. 12, 2021 $ / shares shares | Sep. 13, 2020 $ / shares shares | |
Senior Convertible Notes and Warrants | ||||||||||
Common stock shares issued | shares | 3,623,189 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Proceeds from issuance of short-term notes | $ 2,000 | $ 2,000 | ||||||||
Proceeds of the Loan | 767 | 0 | ||||||||
Short-term debt | 3,732 | 3,481 | ||||||||
Offering price (Per share) | $ / shares | $ 2.76 | |||||||||
Principal and interest payments received as forgiveness | $ 953 | |||||||||
Bridge Loan | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Debt Instrument, Maturity Date | Oct. 01, 2021 | |||||||||
Short-term debt | $ 2,000 | |||||||||
Extended debt instrument maturity date | Jan. 03, 2022 | |||||||||
Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Common stock shares issued | shares | 1,058,025 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||
Warrants, Initial exercise price per share | $ / shares | 2.43 | |||||||||
Offering price (Per share) | $ / shares | $ 2.4925 | |||||||||
Beneficial owner | Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Beneficial owner of the Company’s issued and outstanding shares of Common Stock | 46.60% | |||||||||
Edward D. Bagley | Bridge Loan | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Principal amount of loan obtained | $ 2,000 | |||||||||
Promissory note issuance date | Jul. 02, 2021 | |||||||||
Debt Instrument Amended Date | Sep. 11, 2021 | |||||||||
Edward D. Bagley | Bridge Loan | Notes Payable | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Interest rate of the loan | 12% | 8% | ||||||||
Principal amount of loan obtained | $ 2,000 | $ 2,000 | ||||||||
Promissory note issuance date | Oct. 28, 2022 | Jul. 02, 2021 | ||||||||
Debt Instrument, Maturity Date | Oct. 28, 2023 | |||||||||
Short-term debt | $ 2,000 | |||||||||
Securities Purchase Agreement [Member] | Edward D. Bagley | Private Placement | Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Common stock shares issued | shares | 1,538,461 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||
Offering price (Per share) | $ / shares | $ 1.3 | |||||||||
Senior Convertible Notes and Warrants | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Issuance and sale of secured convertible notes | $ 3,000 | |||||||||
Original issue discount and issuance costs | 346 | |||||||||
Proceeds from issuance of short-term notes | $ 2,654 | |||||||||
Amortization of debt issuance costs and discounts | $ 197 | $ 196 | ||||||||
Senior Convertible Notes and Warrants | Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Warrants to purchase of common stock, shares | shares | 340,909 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||
Senior Convertible Notes | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Interest accrual at a variable rate adjusted on a quarterly basis, percent | 2.50% | |||||||||
Published in the Wall Street Journal (New York edition) as of the beginning of such calendar quarter | Prime Rate | |||||||||
Debt Instrument, Maturity Date | Dec. 17, 2023 | |||||||||
Senior Convertible Notes | Greater of | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Interest accrual at a variable rate adjusted on a quarterly basis, percent | 5.25% | |||||||||
Senior Convertible Notes | Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Senior Convertible Notes, Initial conversion price per share | $ / shares | $ 2.11 | |||||||||
Senior Convertible Notes, Threshold percentage of stock price trigger | 120% | |||||||||
Senior Convertible Notes, Threshold consecutive trading days | d | 90 | |||||||||
Senior Convertible Notes | Common Stock | Greater of | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Senior Convertible Notes, Threshold percentage of stock price trigger | 200% | |||||||||
Warrants | Common Stock | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Warrants, Initial exercise price per share | $ / shares | $ 1.76 | |||||||||
Paycheck Protection Program Loan | ||||||||||
Senior Convertible Notes and Warrants | ||||||||||
Loan term | 2 years | |||||||||
Interest rate of the loan | 1% | |||||||||
Principal amount of loan obtained | 1,499 | $ 1,499 | ||||||||
Debt Instrument, deferred period for periodic payments of principal and interest | 16 months | |||||||||
Interest amount of loan obtained | 31 | |||||||||
Extinguishment of debt | 1,499 | |||||||||
Gain on extinguishment of debt | $ 29 |
Debt (Schedule Of Warrants Valu
Debt (Schedule Of Warrants Valuation Assumptions) (Details) | Dec. 31, 2022 |
Risk-free interest rate | |
Warrants, Valuation assumptions, Black-Scholes method | |
Warrants, assumptions rate | 1.82% |
Expected life of Warrants (years) | |
Warrants, Valuation assumptions, Black-Scholes method | |
Expected life of Warrants (years) | 7 years |
Expected price volatility | |
Warrants, Valuation assumptions, Black-Scholes method | |
Warrants, assumptions rate | 49.94% |
Expected dividend yield | |
Warrants, Valuation assumptions, Black-Scholes method | |
Warrants, assumptions rate | 0% |
Debt (Schedule of carrying valu
Debt (Schedule of carrying value of Notes and Warrants) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity component: | |||
Warrants | [1] | $ 318 | $ 318 |
Conversion feature | [1] | 122 | 122 |
Net carrying amount | [1] | 440 | 440 |
Secured convertible notes | |||
Liability component: | |||
Principal | 1,920 | 2,640 | |
Less: debt discount and issuance costs, net of amortization | (188) | (385) | |
Net carrying amount | 1,732 | 2,255 | |
Equity component: | |||
Current portion of liability component included under short-term debt | 1,920 | 720 | |
Long-term portion of liability component included under long-term debt | 0 | 1,920 | |
Liability component total | $ 1,920 | $ 2,640 | |
[1] Recorded on the consolidated balance sheets as additional paid-in capital. |
Debt (Schedule of maturities of
Debt (Schedule of maturities of principal amount contained in the Notes) (Details) - Secured convertible notes - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Senior Convertible Notes, Principal Amount Maturing | ||
2023 | $ 1,920 | |
Net carrying amount | $ 1,920 | $ 2,640 |
Share-Based Payments (Details T
Share-Based Payments (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Sep. 12, 2021 | Sep. 13, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 12, 2016 | |
Share-Based Payments | ||||||
Number of options, outstanding | 488,477 | 831,071 | 843,446 | |||
Share based compensation recognized | $ 112 | $ 131 | ||||
Tax benefit from compensation cost | 28 | $ 0 | ||||
Total compensation cost related to stock options not yet recognized | $ 152 | |||||
Compensation cost related to stock options expected to be recognized (in years) | 2 years 7 months 24 days | |||||
Number of shares available for grant | 50,000 | |||||
Number fo shares were agreed to issue and sell in a registered direct offering | 3,623,189 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Offering price (Per share) | $ 2.76 | |||||
Proceeds from issuance of common stock, gross | $ 10,000 | |||||
Proceeds from issuance of common stock, net of issuance costs | $ 9,288 | |||||
Common stock shares issued | 3,623,189 | |||||
Common Stock | ||||||
Share-Based Payments | ||||||
Number fo shares were agreed to issue and sell in a registered direct offering | 2,116,050 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||
Offering price (Per share) | $ 2.4925 | |||||
Proceeds from issuance of common stock, gross | $ 5,275 | |||||
Proceeds from issuance of common stock, net of issuance costs | $ 4,764 | |||||
Common stock shares issued | 1,058,025 | |||||
Exercise price of warrants | $ 2.43 | |||||
Expiry term of warrants | 5 years | |||||
Directors and officers | ||||||
Share-Based Payments | ||||||
Options vesting period (years) | 3 years | |||||
Other employees | ||||||
Share-Based Payments | ||||||
Options vesting period (years) | 4 years | |||||
2007 Equity Incentive Plan | ||||||
Share-Based Payments | ||||||
Number of shares authorized | 2,000,000 | |||||
Number of options, outstanding | 488,477 | |||||
Number of authorized unissued options | 976,377 | |||||
Number of shares issued | 1 | |||||
2007 Equity Incentive Plan | Minimum | ||||||
Share-Based Payments | ||||||
Options vesting period (years) | 3 years | |||||
2007 Equity Incentive Plan | Maximum | ||||||
Share-Based Payments | ||||||
Options vesting period (years) | 4 years | |||||
Employee Stock Purchase Plan | ||||||
Share-Based Payments | ||||||
Number of shares authorized | 500,000 | |||||
Stock options, expiration period (years) | 10 years | |||||
Number of options, outstanding | 245,977 | |||||
Number of shares available for grant | 395,524 | 402,704 | ||||
Percentage of voting rights | 5% | |||||
Shares purchased under ESPP plan | 7,180 | 11,164 | ||||
Purchase price of common stock, percentage | 85% | |||||
Discount on purchase price of common stock, percentage | 15% | |||||
Employee Stock Purchase Plan | Maximum | ||||||
Share-Based Payments | ||||||
Shares purchased under ESPP plan | 2,500 | |||||
Proceeds from employee stock purchase plan | $ 25 | |||||
Employee Stock Purchase Plan, Two | ||||||
Share-Based Payments | ||||||
Stock options, expiration period (years) | 6 years | |||||
Number of options, outstanding | 242,500 |
Share-Based Payments - Black-sc
Share-Based Payments - Black-scholes Assumptions (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Share-Based Payments | |
Risk-free interest rate, average | 0.84% |
Expected option life, average (Year) | 5 years |
Expected price volatility, average | 69.74% |
Expected dividend yield | 0% |
Share-Based Payments - Stock Op
Share-Based Payments - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of shares, outstanding at beginning of period (in shares) | 831,071 | 843,446 | |
Number of shares, granted (in shares) | 0 | 50,000 | |
Number of shares, expired and canceled (in shares) | (274,379) | (34,875) | |
Number of shares, forfeited prior to vesting (in shares) | (68,215) | (27,500) | |
Number of shares, exercised (in shares) | 0 | 0 | |
Number of shares, outstanding at end of period (in shares) | 488,477 | 831,071 | 843,446 |
Number of shares, vested and expected to vest at end of period (in shares) | 488,477 | 831,071 | |
Number of shares, vested at end of period (in shares) | 373,612 | 555,237 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted average exercise price, beginning of period (in dollars per share) | $ 6.47 | $ 6.6 | |
Weighted average exercise price, granted (in dollars per share) | 0 | 2.3 | |
Weighted average exercise price, expired and canceled (in dollars per share) | 7.44 | 6.7 | |
Weighted average exercise price, forfeited prior to vesting (in dollars per share) | 2.5 | 2.5 | |
Weighted average exercise price, exercised (in dollars per share) | 0 | 0 | |
Weighted average exercise price, end of period (in dollars per share) | 6.48 | 6.47 | $ 6.6 |
Weighted average exercise price, vested and expected to vest at end of period (in dollars per share) | 6.48 | 6.47 | |
Weighted average exercise price, vested at end of period (in dollars per share) | $ 7.72 | $ 8.46 | |
Weighted Average Remaining Contractual Term (Years) | 3 years 5 months 1 day | 4 years 1 month 6 days | 4 years 10 months 28 days |
Weighted average remaining contractual term, vested and expected to vest (Years) | 3 years 5 months 1 day | 4 years 1 month 6 days | |
Weighted average remaining contractual term, vested (Years) | 3 years 2 months 19 days | 3 years 7 months 20 days | |
Aggregate intrinsic value | $ 0 | $ 0 | $ 0 |
Aggregate intrinsic value, vested and expected to vest | 0 | 0 | |
Aggregate intrinsic value, vested | $ 0 | $ 0 |
Share-Based Payments - Employee
Share-Based Payments - Employee Stock Purchase Plans (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Purchase Plans | ||
Shares purchased under ESPP plan | 7,180 | 11,164 |
Plan compensation expense | $ 1 | $ 5 |
Significant Customers (Details
Significant Customers (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Significant customers | ||
Revenue | $ 25,205,000 | $ 28,967,000 |
Sales Revenue, Net | Customer Concentration Risk | ||
Significant customers | ||
Revenue | $ 0 | $ 0 |
Sales Revenue, Net | Customer Concentration Risk | Customers | ||
Significant customers | ||
Concentration risk, percentage | 10% | 10% |
Significant Customers - Concent
Significant Customers - Concentration Risk by Risk Factor of Sales Revenue and Accounts Receivable (Details) - Accounts Receivable - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A | ||
Significant customers | ||
Concentration risk, percentage | 0% | 10.90% |
Customer B | ||
Significant customers | ||
Concentration risk, percentage | 0% | 10.60% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Total | $ 0 | $ 3,010 |
Level 1 | ||
Assets: | ||
Total | 0 | |
Level 2 | ||
Assets: | ||
Total | 3,010 | |
Level 3 | ||
Assets: | ||
Total | 0 | |
Corporate bonds and notes | ||
Assets: | ||
Total | 1,440 | |
Corporate bonds and notes | Level 1 | ||
Assets: | ||
Total | 0 | |
Corporate bonds and notes | Level 2 | ||
Assets: | ||
Total | 1,440 | |
Corporate bonds and notes | Level 3 | ||
Assets: | ||
Total | 0 | |
Municipal bonds | ||
Assets: | ||
Total | 1,570 | |
Municipal bonds | Level 1 | ||
Assets: | ||
Total | 0 | |
Municipal bonds | Level 2 | ||
Assets: | ||
Total | 1,570 | |
Municipal bonds | Level 3 | ||
Assets: | ||
Total | $ 0 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Taxes | ||
Deferred tax assets | $ 13,505 | $ 13,184 |
Unrecognized tax benefits impacting effective tax rate | 976 | 895 |
Unrecognized tax benefits, interest and penalties | 44 | $ 16 |
Domestic tax authority | Internal revenue service (IRS) | ||
Income Taxes | ||
Net operating loss carryforwards | 400 | |
State and local jurisdiction | ||
Income Taxes | ||
Net operating loss carryforwards | 800 | |
Foreign tax authority | Tax authority, spain | ||
Income Taxes | ||
Net operating loss carryforwards | $ 11,600 |
Income Taxes - Consolidated Inc
Income Taxes - Consolidated Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Domestic | $ 28,754 | $ (6,201) |
Foreign | (1,294) | (1,776) |
Loss before income taxes | $ 27,460 | $ (7,977) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ (6,753) | $ 373 |
State | (98) | (9) |
Foreign | (53) | (81) |
Total current | (6,904) | 283 |
Deferred: | ||
Federal | 1,132 | 1,326 |
State | (976) | 398 |
Foreign | 165 | 302 |
Total | 321 | 2,026 |
Change in valuation allowance | (321) | (2,026) |
Total deferred | 0 | 0 |
Tax benefit (provision) | $ (6,904) | $ 283 |
Income Taxes - Income Tax (Prov
Income Taxes - Income Tax (Provision) for Federal Statutory Corporate Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Tax benefit (provision) at federal statutory rate | $ (5,768) | $ 1,674 |
State income tax benefit (provision), net of federal benefit | (1,093) | 335 |
Research and development tax credits | 457 | 361 |
Foreign earnings or losses taxed at different rates | (68) | (28) |
Tax rate change | (60) | (2) |
Other | (51) | (31) |
Change in valuation allowance | (321) | (2,026) |
Tax benefit (provision) | $ (6,904) | $ 283 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Taxes | ||
Deferred revenue | $ 11 | $ 9 |
Basis difference in intangible assets | 6,604 | 1,319 |
Inventory reserve | 2,258 | 2,377 |
Net operating loss carryforwards | 3,075 | 7,121 |
Research and development tax credits | 48 | 1,579 |
Accrued expenses | 120 | 43 |
Stock-based compensation | 215 | 308 |
Allowance for sales returns and doubtful accounts | 81 | 83 |
Difference in property and equipment basis | (83) | (124) |
Convertible debt | (110) | (112) |
Capitalized research expenditure | 922 | 0 |
Other | 364 | 581 |
Total net deferred income tax asset | 13,505 | 13,184 |
Less: Valuation allowance | (13,505) | (13,184) |
Net deferred income tax asset (liability) | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance - beginning of year | $ 895 | $ 861 |
Additions based on tax positions related to the current year | 75 | 61 |
Additions for tax positions of prior years | 0 | 0 |
Reductions for tax positions of prior years | 0 | 0 |
Settlements | 0 | (20) |
Lapse in statutes of limitations | (8) | (7) |
Uncertain tax positions, ending balance | $ 962 | $ 895 |
Geographic Sales Information (D
Geographic Sales Information (Details 1 - Textual) | 12 Months Ended |
Dec. 31, 2022 | |
Total revenues | Geographic Concentration Risk [Member] | United States | Minimum | |
Geographic Sales Information | |
Concentration risk, percentage | 10% |
Geographic Sales Information -
Geographic Sales Information - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | ||
Revenue | $ 25,205 | $ 28,967 |
United States | ||
Revenues | ||
Revenue | 12,096 | 14,042 |
All other countries | ||
Revenues | ||
Revenue | $ 13,109 | $ 14,925 |
Subsequent events (Details Text
Subsequent events (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||||
Jan. 04, 2022 | Mar. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 12, 2021 | Sep. 13, 2020 | |
Subsequent events | |||||||
Common stock shares issued | 3,623,189 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Purchase price (in dollars per share) | $ 2.76 | ||||||
Common Stock | |||||||
Subsequent events | |||||||
Common stock shares issued | 1,058,025 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||||
Purchase price (in dollars per share) | $ 2.4925 | ||||||
Edward D. Bagley | Bridge Loan | |||||||
Subsequent events | |||||||
Principal amount of loan obtained | $ 2,000 | ||||||
Bridge loan issuance date | Jul. 02, 2021 | ||||||
Securities Purchase Agreement | Edward D. Bagley | Private Placement | Common Stock | |||||||
Subsequent events | |||||||
Common stock shares issued | 1,538,461 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||||
Purchase price (in dollars per share) | $ 1.3 | ||||||
Subsequent Event | Software and Licenses | |||||||
Subsequent events | |||||||
Litigation settlement receivable | $ 1,350 | ||||||
Subsequent Event | Bridge Loan | |||||||
Subsequent events | |||||||
Bridge loan, payment | $ 2,000 |