clro-20210630.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period _______ to _______

Commission file number:001-33660

CLEARONE, INC.

(Exact name of registrant as specified in its charter)

Delaware		87-0398877
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

5225 Wiley Post Way, Suite 500, Salt Lake City, Utah		84116
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (801) 975-7200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001		CLRO		The NASDAQ Capital Market

Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Larger Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of ClearOne common stock outstanding as of August 10, 2021 was 18,779,781.

Table of Contents

CLEARONE, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021

INDEX


	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	2

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	2

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	4

	Unaudited Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CLEARONE, INC

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)

	June 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	2,088		$	3,803
Marketable securities		969			1,117
Receivables, net of allowance for doubtful accounts of $506		5,305			5,194
Inventories, net		9,203			10,463
Income tax receivable		7,220			7,169
Prepaid expenses and other assets		1,273			1,536
Total current assets		26,058			29,282
Long-term marketable securities		1,028			1,762
Long-term inventories, net		3,979			4,590
Property and equipment, net		753			906
Operating lease - right of use assets, net		1,645			1,936
Intangibles, net		21,547			19,248
Other assets		4,600			4,599
Total assets	$	59,610		$	62,323
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,046		$	3,950
Accrued liabilities		3,162			2,352
Deferred product revenue		56			123
Short-term debt		1,227			672
Total current liabilities		8,491			7,097
Long-term debt, net		2,609			3,245
Operating lease liability, net of current		1,214			1,489
Other long-term liabilities		678			678
Total liabilities		12,992			12,509

Shareholders' equity:
Common stock, par value $0.001, 50,000,000 shares authorized, 18,779,781 shares issued and outstanding		19			19
Additional paid-in capital		63,431			63,359
Accumulated other comprehensive loss		(213	)		(186	)
Accumulated deficit		(16,619	)		(13,378	)
Total shareholders' equity		46,618			49,814
Total liabilities and shareholders' equity	$	59,610		$	62,323

See accompanying notes

Table of Contents

CLEARONE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

(Dollars in thousands, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020
Revenue	$	7,735		$	6,357		$	14,773		$	12,091
Cost of goods sold		4,311			3,739			8,346			6,635
Gross profit		3,424			2,618			6,427			5,456

Operating expenses:
Sales and marketing		1,755			1,457			3,328			3,196
Research and product development		1,487			1,474			2,761			2,818
General and administrative		1,668			1,526			3,348			3,032
Total operating expenses		4,910			4,457			9,437			9,046

Operating loss		(1,486	)		(1,839	)		(3,010	)		(3,590	)

Interest expense		(107	)		(109	)		(219	)		(217	)
Other income (expense), net		15			16			10			51

Loss before income taxes		(1,578	)		(1,932	)		(3,219	)		(3,756	)

Provision for income taxes		8			5			22			28

Net loss	$	(1,586	)	$	(1,937	)	$	(3,241	)	$	(3,784	)

Basic weighted average shares outstanding		18,775,817			16,650,774			18,775,795			16,650,750
Diluted weighted average shares outstanding		18,775,817			16,650,774			18,775,795			16,650,750

Basic loss per share	$	(0.08	)	$	(0.12	)	$	(0.17	)	$	(0.23	)
Diluted loss per share	$	(0.08	)	$	(0.12	)	$	(0.17	)	$	(0.23	)

SEC Form 10-Q filed by ClearOne, Inc.