What changed in this filing

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Item 1. Financial Statements

2021-08-10 compared with 2021-05-13 · 62 added, 59 removed, 342 unchanged (26% of the section changed)

3 unchanged sentences

(Dollars in thousands, except par value)

March 31, 2021

June 30, 2021

December 31, 2020

35 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of goods sold

14 unchanged sentences

Comprehensive loss:

Unrealized loss on available-for-sale securities, net of tax

Unrealized gain(loss) on available-for-sale securities, net of tax

Change in foreign currency translation adjustment

4 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization expense

11 unchanged sentences

Other long-term lia bilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

5 unchanged sentences

Net cash used in investing activities

Ca sh flows from financing activitie s:

Cash flows from financing activities:

Net proceeds from Paycheck Protection Program loan

Net proceeds from equity-based compensation programs

10 unchanged sentences

The following is a summary of supplemental cash flow activities:

Three months ended March 31,

Six months ended June 30,

Cash paid for income taxes

14 unchanged sentences

Certain information and footnote disclosures that are usually included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been either condensed or omitted in accordance with SEC rules and regulations.

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of March 31, 2021 and December 31, 2020 , the results of operations for the three months ended March 31, 2021 and 2020 , and the cash flows for the three months ended March 31, 2021 and 2020 .

The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results for a full-year period.

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of June 30, 2021 and December 31, 2020, the results of operations for the three and six months ended June 30, 2021 and 2020, and the cash flows for the six months ended June 30, 2021 and 2020.

The results of operations for the three and six months ended June 30, 2021 and 2020 are not necessarily indicative of the results for a full-year period.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC.

1 unchanged sentence

The significant accounting policies were described in Note 1 to the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2020.

There have been no changes to these policies during the three months ended March 31, 2021 that are of significance or potential significance to the Company.

There have been no changes to these policies during the six months ended June 30, 2021 that are of significance or potential significance to the Company.

Recent accounting pronouncements:

The Company has determined that recently issued accounting standards will not have a material impact on its consolidated financial position, results of operations or cash flows.

As of March 31, 2021 , our cash and cash equivalents were approximately $ 2,034 compared to $ 3,803 as of December 31, 2020 .

Our working capital was $ 19,520 as of March 31, 2021 .

Net cash used in operating activities was $ 13 for the three months ended March 31, 2021 , a decrease of $ 544 from $ 531 of cash provided by operating activities in the three months ended March 31, 2020 .

As of June 30, 2021 , our cash and cash equivalents were approximately $ 2,088 compared to $ 3,803 as of December 31, 2020.

Our working capital was $ 17,567 as of June 30, 2021 .

Net cash provided by operating activities was $ 985 for the six months ended June 30, 2021, an increase of $ 872 from $ 113 of cash provided by operating activities in the six months ended June 30, 2021.

We are currently pursuing all available legal remedies to defend our strategic patents from infringement.

We have already spent approximately $ 21,985 from 2016 through March 31, 2021 towards this litigation and may be required to spend more to continue our legal defense.

We have already spent approximately $ 23,559 from 2016 through June 30, 2021 towards this litigation and may be required to spend more to continue our legal defense.

We believe the decision by the U.S.

12 unchanged sentences

We also believe that the measures taken by us will yield higher revenues in the future.

We believe, although there can be no assurance, that all of these measures and effective management of working capital will provide the liquidity needed to meet our operating needs through at least May 14, 2022.

We also believe that our strong portfolio of intellectual property and our solid brand equity in the market will enable us to raise additional capital if and when needed to meet our short and long-term financing needs;

3 unchanged sentences

The following table disaggregates the Company’s revenue into primary product groups:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Audio conferencing

1 unchanged sentence

The following table disaggregates the Company’s revenue into major regions:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

North and South America

10 unchanged sentences

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

Three months ended March 31,

De nominato r:

Three months ended June 30,

Six months ended June 30,

Basic weighted average shares outstanding

12 unchanged sentences

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 March 31, 2021 and December 31, 2020 were as follows:

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 June 30, 2021 and December 31, 2020 were as follows:

Amortized cost

2 unchanged sentences

Estimated fair value

March 31, 2021

June 30, 2021

Available-for-sale securities:

7 unchanged sentences

Total available-for-sale securities

Maturities of marketable securities classified as available-for-sale securities were as follows at March 31, 2021 :

Maturities of marketable securities classified as available-for-sale securities were as follows at June 30, 2021:

Amortized cost

6 unchanged sentences

(Unaudited - Dollars in thousands, except per share amounts)

Debt securities in an unrealized loss position as of March 31, 2021 were not deemed impaired at acquisition and subsequent declines in fair value are not deemed attributed to declines in credit quality.

Debt securities in an unrealized loss position as of June 30, 2021 were not deemed impaired at acquisition and subsequent declines in fair value are not deemed attributed to declines in credit quality.

Management believes that it is more likely than not that the securities will receive a full recovery of par value, although there can be no assurance that such recovery will occur.

The available-for-sale marketable securities with continuous gross unrealized loss position for less than 12 months and 12 months or greater and their related fair values were as follows:

Less than 12 months

More than 12 months

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

As of March 31, 2021

Corporate bonds and notes

Municipal bonds

There were no available-for-sale marketable securities with gross unrealized loss position.

Intangible Assets

Intangible assets as of March 31, 2021 and December 31, 2020 consisted of the following:

Intangible assets as of June 30, 2021 and December 31, 2020 consisted of the following:

Estimated useful lives (years)

March 31, 2021

June 30, 2021

December 31, 2020

4 unchanged sentences

Total intangible assets, net

The amortization of intangible assets for the three months ended March 31, 2021 and 2020 was as follows:

Three months ended March 31,

The amortization of intangible assets for the three months ended June 30, 2021 and 2020 was as follows:

Three months ended June 30,

Six months ended June 30,

Amortization of intangible assets

4 unchanged sentences

(Unaudited - Dollars in thousands, except per share amounts)

Inventories, net of reserves, as of March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021

Inventories, net of reserves, as of June 30, 2021 and December 31, 2020 consisted of the following:

June 30, 2021

December 31, 2020

5 unchanged sentences

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, although there can be no assurance of the timing or amount of any sales.

Net loss incurred on valuation of inventory at lower of cost or market value and write-off of obsolete inventory for the three months ended March 31, 2021 and 2020 was as follows:

Three months ended March 31,

Net loss incurred on valuation of inventory at lower of cost or market value and write-off of obsolete inventory for the three and six months ended June 30, 2021 and 2020 was as follows:

Three months ended June 30,

Six months ended June 30,

Net loss incurred on valuation of inventory at lower of cost or market value and write-off of obsolete inventory

Rent expense is recognized on a straight-line basis over the period of the lease taking into account future rent escalation and holiday periods.

Rent expense for the three months ended March 31, 2021 and 2020 was as follows:

Three months ended March 31,

Rent expense for the three and six months ended June 30, 2021 and 2020 was as follows:

Three months ended June 30,

Six months ended June 30,

W e occup y a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease expiring in F ebruary 2023 .

12 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three months ended March 31,

Six months ended June 30,

Cash paid for amounts included in the measurement of lease liabilities

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

March 31, 2021

June 30, 2021

December 31, 2020

5 unchanged sentences

Weighted average discount rate for operating leases

The following represents maturities of operating lease liabilities as of March 31, 2021 :

The following represents maturities of operating lease liabilities as of June 30, 2021:

Years ending December 31,

5 unchanged sentences

Shareholders' Equity

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Common stock and additional paid-in capital

46 unchanged sentences

(Dollars in thousands, except share and per share amounts)

March 31, 2021

June 30, 2021

December 31, 2020

Liab ility compo nent:

Liability component:

debt discount and issuance costs, net of amortization

8 unchanged sentences

Debt discount and issuance costs are amortized over the life of the note to interest expense using the effective interest method.

During the three months ended March 31, 2021 and March 31, 2020 , amortization of debt discount and issuance costs was $ 49 and $ 49 , respectively.

The following table represents schedule of maturities of principal amount contained in the Notes as of March 31, 2021 :

During the three and six months ended June 30, 2021, amortization of debt discount and issuance costs was $ 49 and $ 98 , respectively and for the three and six months ended June 30, 2020, amortization of debt discount and issuance costs was $ 49 and $ 98 , respectively.

The following table represents schedule of maturities of principal amount contained in the Notes as of June 30, 2021:

Year ending December 31,

11 unchanged sentences

The Company intends to use the entire PPP Loan amount for qualifying expenses and to apply for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.

March 31, 2021

June 30, 2021

December 31, 2020

16 unchanged sentences

Level 3 - Unobservable inputs.

The substantial majority of the Company’s financial instruments are valued using observable inputs.

The following table sets forth the fair value of the financial instruments re-measured by the Company as of March 31, 2021 and December 31, 2020 :

March 31, 2021

The Company’s financial instruments are valued using observable inputs.

The following table sets forth the fair value of the financial instruments re-measured by the Company as of June 30, 2021 and December 31, 2020:

June 30, 2021

Corporate bonds and notes

5 unchanged sentences

The valuation allowance was recorded as we concluded that it was more likely than not that our deferred tax assets were not realizable primarily due to the Company's recent pre-tax losses.

Provision for income taxes for the three months ended March 31, 2021 represents income tax expense recorded for jurisdictions outside the United States.

Provision for income taxes for the six months ended June 30, 2021 represents income tax expense recorded for jurisdictions outside the United States.

Subsequent events

On July 2, 2021, the Company obtained a bridge loan in the principal amount of $ 2,000,000 from Edward D.

Bagley (the “Bridge Loan”).

Bagley is an affiliate of the C ompany and i s the beneficial owner of approximately 46.7 % of the Company’s issued and outstanding shares of c ommon s tock.

The Bridge Loan is evidenced by a promissory note dated July 2, 2021 (the “Note”) issued by the Company to Mr.

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 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements