What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-31 compared with 2022-04-15 · 53 added, 285 removed, 235 unchanged (59% of the section changed)

ITEM 1 - BUSINESS

Best-in-class audio delivered through next-gen Acoustic Echo Cancellation and Noise Cancellation processing with Acoustic Intelligence, advanced microphone gating and built-in DARE™ feedback elimination.

Powerful architecture with smaller footprint – 12 Mic/line inputs per unit, built-in USB audio interface, built-in optional Dante™ for networked audio.

Daisy-chainable design to support up to 144 Mic/line inputs, C-Link expansion bus with 64 channels and P-Link bus for scalable connection of peripheral devices including any combination of ClearOne peripheral devices, such as the new Beamforming Microphone Array 2, USB Expander unit, GPIO Expander unit and/or the new DIALOG® 20 Wireless Microphone system.

Supports video conferencing, audio and web conferencing, Skype ® for Business meetings, in-room meetings, wireless presentation, and more.

Integration of VoIP or telephony, USB, and Dante™ for maximum functionality.

A new expansion bus that delivers increased audio-channel scalability to support large audio projects.

Ability to control local meeting rooms and audio distribution applications with flexible options – touch panel controller, BYOD dialer apps or 3rd party control modules.

Configure, manage, monitor and troubleshoot the entire system of auto-discovered devices with MatrixView™ and FlowView™ for visualized audio signal paths.

CONVERGE Pro 2 line of products is ably supported by a touch panel controller, a GPIO expansion box , a USB expansion box and a wall-mount Bluetooth Expander .

CONVERGE Pro 2 VoIP SKUs are certified to interoperate with Cisco, Avaya and ShoreTel SIP based VoIP systems and also interoperate with Microsoft Skype for Business.

During February 2020, we announced a new Touch-Panel Controller, a highly intuitive 10-inch touch-screen device, designed for ClearOne’s CONVERGE® Pro 2 audio DSP mixers as well as COLLABORATE Live video conferencing room systems.

Paired with CONVERGE Pro 2 DSP mixers, users can make and receive PSTN and/or VoIP conference calls, and multiparty calls with the easy-to-use on-screen dial pad.

When paired with COLLABORATE Live, users can make and receive video calls as well as manage content sharing options.

Duri ng September 2020, we shipped Conference Controller with 10-inch touch screen designed for easy control of ClearOne’s CONVERGE® Pro 2 audio DSP mixers as well as COLLABORATE® Live video conferencing room systems from a single device.

The Conference Controller functions can also be conveniently accessed from a personal mobile device, eliminating the need for touching shared surfaces by downloading the free mobile apps.

A perfect addition to ClearOne’s audio and video platforms, the Conference Controller can be paired with CONVERGE Pro 2 DSPs, allowing users to make and receive VoIP and/or PSTN conference calls and multiparty calls with the easy-to-use, on-screen dial pad.

When paired with COLLABORATE Live room video systems, users can make and receive video calls as well as manage content-sharing options.

A modern user interface makes controlling conferencing functions as intuitive and simple as familiar mobile and tablet devices.

The Conference Controller enables easy contact management with built-in search.

In addition, the slim and modern industrial design blends well with modern conference-room aesthetics.

Durin g October 2020, we announced the latest update of CONVERGENCE AV Network Manager software.

The new update now has an organizational portal for multiple user accounts with support for up to 2048 combined devices and users.

It also includes LDAP support and two levels of access — a secure administrator level for full access and a viewer level for monitoring with 256 -bit encrypted device and user password management.

CONVERGENCE software is a unified AV network management platform to monitor, control, and audit ClearOne Pro Audio and Video products and services.

Remote real-time system access provides at-a-glance and all-inclusive dashboard views with unlimited scalability designed to support organizations of any size.

The solution provides a powerful and elegant user interface on any browser from desktop to mobile.

Users can stay up to date with email status notifications and can search, sort, and filter to find what is needed quickly.

Efficient batch firmware updates can be performed on multiple audio or video devices at once.

Users can also download, back up, or resto re project files simultaneously for multiple CONVERGE® Pro 2 and Huddle DSP mixers, as well as their P-Link peripherals.

The software also offers many other features, such as:

provisioning CONVERGE Pro 2 VoIP lines and viewing VoIP registration status;

configuring and managing COLLABORATE® Live room codecs and COLLABORATE Space user accounts;

and downloading logs and reports for devices, users, histories, and calls.

CONVERGENCE supports integration with third-party management systems like IBM Cognos Analytics and Barco Overture via a RESTful web service interface.

ClearOne’s AV network management platform is available in twelve languages.

During May 2021, we announce d the immediate availability of CONVERGENCE AV Cloud, which significantly expands AV Practitioner recurring revenue opportunities for remote, real-time Management as a Service (MaaS).

CONVERGENCE Cloud software is a unified AV network management platform to monitor, control, and audit ClearOne Pro Audio and Video products and services.

Remote real-time system access provides at-a-glance and all-inclusive dashboard views with auto-discovery of Pro Audio devices and unlimited scalability designed to support organizations of any size.

With the new Cloud option, AV Practitioners can profit on value-added MaaS opportunities to easily support multiple clients and multiple networks with fully secure, real-time remote system access on a single multi-tenant platform.

The powerful and elegant user interface, in twelve languages, works on any browser and will allow full support of the AV Network with built-in video, audio, and chat tools for real-time communications as well as email and immediate SMS text alerts.

Relevant information is quickly found with search, sort, and filter options.

CONVERGENCE AV Cloud can be virtually partitioned for AV management by location such as building, floor, room, or any desired global topology.

Practitioners can easily manage accounts, assigning three levels of access with Owner, Administrator, and Monitor roles;

all housed on encrypted secure cloud servers.

Client tenant usage can be conveniently tracked for invoicing and optional auto-payment reminders.

ITEM 1 - BUSINESS

Mid-Tier Premium Conferencing

Our premium conferencing offerings consist of CONVERGE Huddle and INTERACT ® product line .

Premium conferencing solutions are mid-tier, lower cost, conferencing product solutions designed to meet the needs of our larger customers with smaller conferencing rooms as well as small and medium businesses.

CONVERGE Huddle is a versatile solution for multiple use huddle room environments at a price point that meets budget requirements for audio and video collaboration applications.

CONVERGE Huddle connects to ClearOne or third-party peripheral devices, such as microphones, speakers, cameras, and display screens and applications such as COLLABORATE Space ® , Skype ® for Business, GoToMeeting ™, WebEx ® through single clutter-free conn ection via USB 3.0 to laptop.

It comes with the latest Acoustic Echo Cancellation and Noise Cancellation algorithms and a user-friendly CONSOLE® software.

It can be mounted easily under a table, behind a display, on a wall or in a rack.

The INTERACT product series is comprised of the INTERACT AT and the INTERACT Pro.

Both systems can be easily connected to enterprise telephones, analog POTS lines, existing HD video codecs and soft video clients.

These INTERACT systems also include a USB audio interface to connect to PCs, laptops and tablets, as well as to rich multimedia devices, such as video or web conferencing systems and emerging unified communication systems for enhanced collaboration.

Our CHAT® product line of speakerphones includes affordable and stylish USB based personal and group speakerphones.

CHAT speakerphones provide full-duplex and rich full bandwidth frequency response for superior audio clarity.

CHAT products are designed for a wide variety of applications and devices (fixed or portable) for greatly enhanced collaboration wherever and whenever needed.

CHAT speakerphones are offered either as personal speakerphones under CHAT 50, CHAT 60 or CHAT 70 SKUs or as group speakerphones under CHAT 150, CHAT 160 and CHAT 170 SKUs.

CHAT 50/60/70 personal speakerphones are approximately the size of a deck of cards, and connect to PCs and MACs for rich, clear, hands-free audio and playback.

CHAT 150 group speakerphones are designed for small group use.

These can also connect many of the same devices and applications as the CHAT personal speakerphones but feature three microphones in larger design for use by a larger number of participants.

CHAT 150/160/170 group speakerphones have the ability to add high-quality, full-duplex speakerphones to user enterprise telephone handsets such as Avaya and Cisco.

CHAT group speakerphones make it possible to introduce rich, crystal clear conferencing capability without the need for introducing a separate traditional conference phone.

CHATAttach ® is comprised of two CHAT 150 group speakerphones which can be daisy-chained together to function as a single conferencing system for much larger coverage than a single CHAT 150.

CHAT group speakerphones are integral to our media collaboration product line as our media collaboration products are tightly integrated with CHAT group speakerphones for high quality audio experience.

Tabletop Conferencing

Our tabletop conferencing product line offered under MAX® brand is comprised of the following product families:

MAX EX and MAXAttach ® wired conference phones;

MAX Wireless and MAXAttach Wireless conference phones;

and MAX IP and MAXAttach IP conferencing phones.

Designed for use in executive offices or small conference rooms with multiple participants, MAX Wireless can be moved from room to room within 150 feet of its base station.

MAXAttach Wireless was the industry’s first and remains the only dual-phone, completely wireless solution.

This system gives customers tremendous flexibility in covering larger conference room areas.

MAX EX and MAXAttach wired phones can be daisy chained together, up to a total of four phones.

This provides even distribution of microphones, loudspeakers, and controls for better sound quality and improved user access in medium to large conference rooms.

In addition, all MAXAttach wired phones can be used separately when they are not needed in a daisy-chain configuration.

MAX IP and MAXAttach IP are VoIP tabletop conference phones which are based on the industry-standard SIP signaling protocol.

These phones can also be daisy-chained together, up to a total of four phones.

PROFESSIONAL MICROPHONES

Our microphones contributed 38 % and 31 % of our conso lidated revenue in 2021 and 2020 , respectively.

ITEM 1 - BUSINESS

Beamforming Microphone Array

ClearOne began shipping the first generation Beamforming Microphone Array in March 2013.

This product works with CONVERGE Pro 2 and CONVERGE Pro products.

Beamforming Microphone Array 2, the next generation Beamforming Microphone Array started shipping in the last quarter of 2017 and affirmed ClearOne’s clear industry leadership with the following outstanding features:

Significantly enhanced and new echo cancellation, using direction of arrival determination for demanding acoustic environments.

Acoustic intelligence with adaptive ambience - faster convergence and better adaptation to changes in room acoustics, such as ambient noise from chairs moving, doors closing, chatter in the background, or any spikes in sound that alter the path of the audio, using separate acoustic echo cancellation for each fixed beam and inhibiting beam selection when the far end is active.

Dramatically better mic pickup, including using an augmenting microphone signal, sharpening the capability to detect softer voices.

Natural and clearly intelligible audio, even when two people speak at once.

Zero consumption of analog I/O and signal processing in the DSP mixer leaving those resources available for other needs.

Single cable for power, audio and control.

Two power options – P-Link and POE.

Daisy-chains with all ClearOne P-Link devices and works with CONVERGE Pro 2 DSP AEC mixers.

Easy configuration and management through CONSOLE software.

During the first quarter of 2019, the Company began shipping our patented Beamforming Microphone Array Ceiling Tile (BMA CT) to our partners.

All of the innovations developed for the BMA CT make the integrator’s job easier and more profitable.

The BMA CT dramatically transforms how integrators can approach system design for ceiling tile installations, allowing for multi-array setups that can utilize a single, low-channel count DSP mixer while maintaining ClearOne’s high level of performance and reliability.

Further simplification comes from the array’s built-in power amplifier, which allows each array to drive two 10-Watt, 8-Ohm loudspeakers.

The BMA CT also features ClearOne’s proprietary adaptive steering technology (think of it as smart switching).

This provides impeccable room coverage while eliminating the need to adjust individual beams.

Integrators can daisy chain ceiling tiles via P-Link ( ClearOne’s proprietary peripheral link) for larger conference setups – for simpler wiring and longer distances compared to networked home-run connections.

P-Link also allows integrators to daisy chain additional peripherals such as wireless mics, USB Expanders, and GPIO Expanders.

The system supports all of this functionality with zero consumption of analog I/O and signal processing in the DSP mixer leaving those resources available for other needs.

During the first quarter of 2020, we announced two new additions to our COLLABORATE Versa family of products.

COLLABORATE® Versa Room CT, provides all the equipment and accessories needed for exceptional room cloud-based conferencing.

At the heart of the system, is the USB audio-enabled Beamforming Mic Array Ceiling Tile (BMA CTH).

Thanks to its onboard processing, the BMA CTH performs acoustic echo cancellation, noise cancellation, and beam selection, so no external DSP mixer is required.

The array’s adaptive steering (think of it as smart switching) provides impeccable room coverage.

The Versa Room CT brings cost-effective professional conferencing audio to small and mid-sized meeting rooms.

COLLABORATE Versa Lite CT is a USB audio enabled BMA CTH room solution.

This solution dramatically enhances the audio experience for any cloud-collaboration application such as COLLABORATE Space, Zoom™, Microsoft® Teams, and Webex™, without the need for a DSP mixer.

The system can be easily and quickly configured using ClearOne’s CONSOLE® AI Lite software with Audio Intelligence™ and Auto Connect™.

A laptop or a desktop PC can be connected to the BMA CTH directly through the USB port on the USB Expander to share room audio.

The included 50 -foot CAT 6 cable connects the USB Expander to the BMA CTH.

During October 2020, we announced our new BMA 360 , the world’s most technologically advanced Beamforming Microphone Array Ceiling Tile, delivering unequaled audio performance and deployment ease.

The ClearOne BMA 360 is the world’s first truly wideband, frequency invariant beamforming mic array with uniform gain response across all frequency bands.

With FiBeam™ technology, conference participants will experience the ultimate in natural and full fidelity audio across all beams and within a single beam.

Deep sidelobe beamforming , DsBeam™ , provides unparalleled maximum sidelobe depth, below - 40 dB, resulting in superior rejection of reverberation and noise in difficult spaces for superb clarity and intelligibility.

ITEM 1 - BUSINESS

The BMA 360 is based on a dramatically new approach to beamforming that provides a new beam topology to easily achieve distortion-free, full 360-degree coverage of any room shape and any seating arrangement using ClearOne Audio Intelligence™.

Further advancements in adaptive steering (think of it as smart switching) provide impeccable coverage of each conference participant as well as support for camera tracking.

In addition to the advancements in beamforming technology, the 6G Acoustic Echo Cancellation (AEC) delivers unmatched per-beam full-duplex audio performance.

On-board audio algorithms, like noise reduction, filtering, and Automatic Level Control, eliminate the need for per-beam processing in a DSP mixer - requiring fewer DSP mixer resources.

Finally, robust built-in amplifiers, configurable as 4 x 15 Watt or 2 x 30 Watt, provide flexibility for driving loudspeakers.

ClearOne’s breakthrough technologies, FiBeam, DsBeam, and 6G AEC combine to create VividVoice™, a significant advancement for professional conferencing.

The integrated features in the BMA 360 significantly reduce system design complexity, simplify installation, consume less rack space, and lower system cost.

The BMA 360 also supports daisy-chaining of up to three ceiling tiles via P-Link for divisible rooms, or larger conference setups – for simpler wiring, longer distances, and lower-cost deployments compared to networked “home-run” connections via Ethernet.

ClearOne’s BMA technology is protected by at least a dozen patents and pending patent applications.

During February 2021, we expanded the applications for our BMA 360, Beamforming Microphone Array Ceiling Tile with the addition of a new Voice Lift feature that allows its impeccable audio to be locally amplified and heard throughout classrooms, lecture halls, and large meeting rooms.

ClearOne’s powerful breakthrough technologies, FiBeam™ and DsBeam™, already found on the BMA 360, enable exceptional new levels of Voice Lift performance.

FiBeam technology makes the BMA 360 the world’s first truly wideband, frequency-invariant beamforming mic array that provides the ultimate in natural and full-fidelity sound.

DsBeam provides unparalleled sidelobe depth below -40 dB, resulting in superior rejection of reverb and noise and providing superb clarity and intelligibility.

With the addition of the new Voice Lift feature, the BMA 360 offers everything desired in a beamforming microphone array ceiling tile—superior beamformed audio, echo cancellation, noise cancellation, auto-mixing, power amplifiers, and camera-tracking functions.

The ClearOne architecture offers easy setup and configuration for foolproof installation which benefits AV practitioners.

End-users also benefit from the BMA 360’s reduced overall system cost for maximum return on investment.

Each BMA 360 can have up to four Voice Lift zones to provide a simple and intuitive way to drive multiple speaker groups, allowing everyone to easily hear and be heard.

Built-in 4 channel power amplifiers make wiring simple, convenient, and provide a large cost savings.

ClearOne’s innovative combination of built-in power amplifiers and mix-minus zones makes the Voice Lift feature extremely simple to create and deploy.

The BMA 360, now with Voice Lift, sets another industry standard for exceptional mic pickup distance and system gain.

Ceiling Microphone Array

The ClearOne Ceiling Microphone Array enhances almost any professional conferencing application which demands high-quality audio.

The Ceiling Microphone Array is easily installed and combines affordability with exceptional audio quality.

With three wide-range microphones mounted together into a single unit array, the Ceiling Microphone Array provides the rich sound of three individual unidirectional microphones while maintaining full 360-degree coverage.

This product line was further strengthened in 2018 by the introduction of the Ceiling Microphone Array Analog-X series of ceiling microphones.

These products feature superior sound quality, adjustability for desired height from 0 to 7 feet and numbered microphone elements for easy identification .

This product line was further expanded with the introduction of Ceiling Microphone Array Dante, a tri-element ceiling microphone array with built-in Dante audio networking for conferencing and sound reinforcement applications .

Each Ceiling Microphone Array Dante utilizes three premium quality microphone elements to deliver 360-degree room coverage for boardrooms, conference rooms, telemedicine facilities and more.

Dante networking technology offers simple installation with CAT5 or CAT6 cabling, and delivers uncompressed, multi-channel audio with near-zero latency and sample accurate time synchronization throughout the network .

Wireless Microphones

In 2013, ClearOne introduced WS800 Wireless Microphone Systems, including four new models of wireless microphones/transmitters (Tabletop/boundary, Gooseneck, Handheld, Bodypack) and a base-station receiver with either 4 or 8 channels, which connect to professional audio mixers.

Since the Sabine acquisition in 2014, our portfolio of wireless microphone systems was enhanced by the introduction of digital compressed versions, Dante standard compatible versions and more frequency ranges catering to various international markets.

During 2017, we started shipping DIALOG ® 20, the two-channel wireless microphone system.

Leveraging the full power of ClearOne's robust, adaptive frequency-hopping "spread" spectrum technology within the 2.4 GHz unlicensed spectrum, DIALOG 20 has several advantages over fixed-frequency transmission.

DIALOG 20 incorporates flexible features and multiple options usually available only in much larger systems.

While DIALOG 20 works seamlessly with all commercially available mixers, it boasts additional features when natively interfacing with our new CONVERGE Pro 2 or new Beamforming Microphone Array 2.

ITEM 1 - BUSINESS

Our video products include video collaboration and AV networking products.

Our video products contributed 22 % and 31 % of our consolidated revenue in 2021 and 2020 , respectively.

Video Collaboration :

Our Media Collaboration suite of products is led by our comprehensive portfolio of industry-leading COLLABORATE® branded videoconferencing and collaboration solutions.

COLLABORATE Live 300 includes a free 90-day COLLABORATE Space web conferencing subscription, a Skype for Business client, SIP/H.323 video conferencing, wireless presentation and interactive whiteboard capabilities — along with one CHAT 150 speakerphone and one UNITE 150 PTZ camera with 1080p30, 12x optical zoom.

COLLABORATE Live 600 is a video collaboration system that delivers crystal-clear, full-duplex audio for medium-sized conference room environments.

It offers the same suite of built-in video conferencing capabilities, the UNITE 200 1080p60 PTZ camera with 12x optical zoom, an ultra-friendly user interface that’s as simple and familiar as the interface found on a tablet or mobile device, and a 90-day free COLLABORATE Space trial subscription.

For audio, the system features two ClearOne CHAT ® 150 speakerphones that daisy chain with CHATAttach ® for crystal-clear audio quality.

Rounding out ClearOne’s new COLLABORATE Live product line is COLLABORATE Live 200, a new video collaboration system with ultra- wide angle video capture, which is critical for viewing all conference participants in huddle spaces and smaller room environments.

Designed specifically to meet huddle space budgets, COLLABORATE Live 200 features the UNITE 50 EPTZ 1080p30 camera with 3x digital zoom and a 120-degree wide-angle field of view.

Other features are similar to those found in the COLLABORATE Live 300 system, including the free 90-day COLLABORATE Space subscription.

Our Media Collaboration series also include COLLABORATE Space, a suite of solutions that unifies messaging, calls, meetings and, perhaps most importantly, minds in a way that will energize workflows and increase productivity for everyone involved in the enterprise.

Designed as a persistent, user-friendly collaboration suite, COLLABORATE Space contains many powerful UCC capabilities, as well as the seamless ability to make calls outside the network.

By adding phone credits on the account, customers can reach anyone in the world on a standard landline or mobile phone with the system’s integrated phone dialer.

ITEM 1 - BUSINESS

With COLLABORATE Space, users can work together one-on-one, or in groups of hundreds, with integrated file sharing, searchable archives, and user presence information.

They can connect with colleagues and contacts, via audio and video, with the most intuitive collaboration tools.

Users can meet immediately or schedule a meeting and access a full suite of collaboration features, including file sharing, whiteboarding, annotation, chat, and meeting minutes.

Team members wishing to move from email can also create searchable private and public channels, organized by topic, which can be accessed from anywhere.

They can also search, access and store agendas, notes, messages, documents, whiteboards, session recordings, and more.

Finally, COLLABORATE Space runs on any device, from desktop to mobile, and on any standards-based video endpoint.

COLLABORATE Space Enterprise has all the functionality people have come to expect from a full-featured cloud collaboration app, with the increased security and full, enterprise control associated with on-premise platforms .

In addition to “Enterprise” platform, COLLABORATE Space is available in cloud-based “Basic” and “Pro” versions .

COLLABORATE Space was preceded by Spontania cloud video, audio and web conferencing service that can be deployed on-premises or in the cloud.

Spontania offer ed all sorts of collaboration tools such as screen sharing, application sharing, whiteboard, annotation over presentation, recording, hand-raise and chat.

The service is targeted for any workspace including mobile, desktop and rooms of any size;

and multiple use cases including meetings, classrooms and training sessions.

COLLABORATE Space, our powerful cloud-based collaboration solution, added two new valuable features in 2020 - webinar hosting and Web RTC.

COLLABORATE Space Pro and Enterprise meeting plans can be upgraded to include the new Webinar feature allowing session hosts to conduct video and audio presentations for up to 1000 participants.

The new Web RTC feature works with all popular browsers including Microsoft Edge, Google Chrome, Safari and Mozilla Firefox.

The new Web RTC feature enables users to easily join full-featured COLLABORATE Space audio and video meetings using a browser with no downloads or plug-ins required.

Users can accept meeting, webinar, and classroom invitations and join with a single click;

easily sharing and viewing content within a browser window.

COLLABORATE Space also added a feature where Microsoft Teams users can now enjoy a richer collaboration than that available within the Teams environment today.

This richer collaboration experience includes better video quality, support for multiple cameras, support for multiple displays, and a persistent meeting space where chats, audio and video recordings, documents, meeting minutes, whiteboard sessions, and more can be shared in private or public channels for later access.

Users can easily initiate a Space video meeting or join an existing Space video meeting within the MS Teams environment.

Bring your own video and web conferencing – COLLABORATE Versa series offer a USB PTZ camera, a speakerphone and a central hub that connects the laptop to the meeting room peripherals via single USB 3.0 connectivity.

COLLABORATE Versa, compatible with Cisco WebEx ® , Google Hangouts ® , Microsoft Skype for Business ® and more, is also bundled with 90-days subscription of Spontania cloud video, audio and web conferencing.

This solution is targeted at huddle spaces and medium conference rooms.

COLLABORATE Versa 50 features a ClearOne UNITE® 50 EPTZ 3x zoom 1080p30 camera to capture all participants in the room;

a central hub for connecting to dual displays, cameras, audio endpoints, networks and other peripherals;

a CHAT ® 150 speakerphone with advanced audio processing for a rich conferencing experience;

and a compl imentary 90-day trial of COLLABORATE Space, ClearOne’s powerful cloud-based audio and video conferencing applications.

The COLLABORATE Versa Pro 50 a ddresses today’s AV collaboration needs for COLLABORATE Space, MS Teams, Skype ® for Business, Zoom, WebEx , GoToMeeting and Spontania with a complete huddle space solution.

It features a CONVERGE ® Huddle audio DSP mixer for a professional audio experience, a ClearOne UNITE ® 50 EPTZ 3x zoom 1080p30 camera, a c eiling microphone array with 360-degree coverage reducing reverberation and noise, and a complimentary 90-day trial of ClearOne COLLABORATE Space.

Customers purchasing the COLLABORATE Versa Pro 150 get upgraded to a 1080p30 UNITE® 150 PTZ camera with 12x optical zoom.

COLLABORATE Versa Pro CT, includes a Huddle DSP mixer and the Huddle-compatible and patented BMA CTH that is a perfect fit for small-to medium-sized rooms.

The COLLABORATE Versa Pro CT is a great room solution for Bring Your Own Device (BYOD) collaboration using any cloud-based service .

such as COLLABORATE® Space, Microsoft® Teams, WebEx ® , Zoom ® , and more.

The system includes the Company’s new BMA CTH Beamforming Microphone Array Ceiling Tile with built-in AEC, providing the same impeccable room coverage as the BMA CT using adaptive steering (think of it as smart switching).

The COLLABORATE Versa Pro CT system also includes mic/line inputs with AEC, line outputs, 4x10 Watt power amps, USB audio, mobile phone jack, and HDMI.

The system comes preloaded with a project file ready for the most common room configuration.

Or it can be further configured using CONSOLE ® AI software, now with enhanced visualization and Audio Intelligence.

ITEM 1 - BUSINESS

Additionally, both COLLABORATE Versa Pro 50 and Versa Pro 150 solutions feature a CONVERGE® Huddle audio DSP mixer for a professional audio experience, a Ceiling Microphone Array with 360-degree coverage that reduces reverberation and noise;

and an optional clutter-free CONVERGE Huddle VESA mount.

UNITE 200/150 is a professional-grade PTZ camera series supporting USB, HDMI and IP connectivity.

It delivers 1080p HD resolution, 12X optical zoom and is compatible with PC-based and Pro-AV applications, supporting wide range of meeting spaces.

UNITE 50 4K camera is p lug-and-play ready with 120-degree field-of-view, digital zoom and pair s easily with any microphone/speaker combination .

The UNITE 50 4K camera’s ultra-wide-angle field-of-view is ideally suited for PC-based video conferencing, web conferencing and unified communications, and other collaboration experiences in huddle spaces and small conference rooms.

The camera also supports the USB Video Class (UVC) 1.1 standard for maximum compatibility with a wide variety of cloud and room-based solutions .

Along with 4K30 resolution, the autofocus camera features 3x digital zoom and a full-function USB 3.0 interface for video and power.

Its wide dynamic range provides support for optimal image capture — critical for all video conferencing.

During April 2020, we introduced UNITE 20 Pro Webcam, which easily mounts on a PC or laptop to provide full 1080p30 image with an ultra wide-angle field-of-view up to 120 °.

A super-high signal-to-noise ratio and advanced 2 D and 3 D noise reduction provides superior desktop camera video quality.

During the first quarter of 2021, we announced two new powerful cameras that enhance the ease and visual quality of online collaboration beyond the capabilities of integrated laptop and PC cameras.

With the new ClearOne UNITE® 10, the Company’s most affordable camera ever, and the feature-rich ClearOne UNITE 50 4K AF that includes Auto-Framing technology for automatic single- or multi-person capture, everyone can take on the new year with the confidence provided by stunning video that puts them in the best possible light.

We recognized that millions of people were expected to use video collaboration tools, for the first time, and the rapid societal shift to home-based and remote work left a lot of people desiring higher quality video solutions to ensure they make a good impression and enjoy reliable, clear and efficient communication.

For users who want to upgrade from the basic camera included in their laptop or PC, ClearOne has lowered the barrier of entry with its most affordable webcam ever, the UNITE 10.

The small, powerful webcam supports up to 1080p video quality and offers autofocus.

The UNITE 10 can capture five-megapixel images with a field of view up to 87 degrees, while major competitors at this price point only achieve 78-degree field of view.

The UNITE 10 attaches to any PC or laptop with a simple mounting bracket, and a 1.5m USB-A cable ensures simple connection to most modern computers.

The UNITE 10 is also available to dealers and distributors in 20 packs for commercial sale.

The new UNITE 50 4K AF camera is a major upgrade over traditional webcams and introduces ClearOne’s new Auto-Framing technology that automatically frames meeting participants to maximize screen use through intelligent image algorithms and ePTZ automation (electronic pan, tilt and zoom).

2 unchanged sentences

A standard damping mount ensures fast, easy installation, while an included USB 3.0 cable provides both power and video.

Both new ClearOne cameras enable life-like video quality to web-based conferencing applications including ClearOne’s COLLABORATE® Space, WebEx™, Google Meet, Zoom™, GoToMeeting™, and Microsoft® Teams.

During July 2021 we introduced UNITE 180 ePTZ professional camera that provides a full 180-degree panoramic field-of-view with “real-time stitching” to achieve a variety of useful viewing modes for any application and environment.

Both new ClearOne cameras enable life-like video quality to web-based conferencing applications including Microsoft Teams , WebEx, Google Meet, Zoom, and GoToMeeting.

During July 2021 we introduced the UNITE 180 ePTZ professional camera that provides a full 180-degree panoramic field-of-view with “real-time stitching” to achieve a variety of useful viewing modes for any application and environment.

Designed for professional-quality visual collaboration, conferencing, UC applications, distance learning, and more, the new UNITE 180 camera provides six viewing mode options as well as panoramic view for the ultimate in camera flexibility.

2 unchanged sentences

A 4x zoom further enhances the UNITE 180 feature set.

The UNITE 180 is compatible with all popular cloud-based video collaboration applications including Microsoft Teams, Zoom, WebEx, Google Meet, ClearOne’s COLLABORATE Space and others.

ITEM 1 - BUSINESS

During July 2021 we also announced the market introduction of Versa Mediabar, the Company’s first professional quality all-in-one audio and video capture device that combines the elegance and simplicity of a soundbar with the power of ClearOne’s intelligent audio capture and 4K camera technologies.

The UNITE 180 is compatible with all popular cloud-based video collaboration applications including Microsoft Teams, Zoom, WebEx, Google Meet, and others.

During July 2021 we also announced the market introduction of the Versa Mediabar™ video soundbar, the Company’s first professional quality all-in-one audio and video capture device that combines the elegance and simplicity of a soundbar with the power of ClearOne’s intelligent audio capture and 4K camera technologies.

Versa Mediabar provides high-quality visual collaboration, audio conferencing, and UC applications from a single integrated device, offering the simplest solution available for offices, conference rooms and home offices with virtually no setup required.

With a compact design that can be mounted on a wall or attached to a video display, the Versa Mediabar connects via a single USB cable to elevate the soundbar concept into a powerful tool for virtual collaboration that includes AI-enabled auto-framing and people tracking.

The Versa All-In-One Mediabar features a built-in 4K Ultra HD camera with a 110-degree ultra wide-angle field of view and a four-element microphone array with 360-degree voice pickup and intelligent DSP that provides acoustic echo cancellation (AEC) and automatic noise reduction to ensure crystal clear audio capture.

The Versa Mediabar features a built-in 4K Ultra HD camera with a 110-degree ultra wide-angle field of view and a four-element microphone array with 360-degree voice pickup and intelligent DSP that provides acoustic echo cancellation (AEC) and automatic noise reduction to ensure crystal clear audio capture.

The camera combines electronic pan, tilt and zoom functions (ePTZ) with artificial intelligence to enable auto-framing and people tracking that keeps the speaker in view even if they move around the room.

1 unchanged sentence

In addition to its professional-quality audio and video capture, the Versa Mediabar also features a powerful built-in speaker with Bluetooth connectivity that allows it to serve double duty as a fully-featured conferencing solution or a Bluetooth speaker for impromptu calls using any Bluetooth device.

These attributes make the Versa Mediabar perfect for popular cloud-based collaboration applications such as Microsoft Teams, Zoom, WebEx, Google Meet, and ClearOne’s COLLABORATE® Space.

These attributes make the Versa Mediabar perfect for popular cloud-based collaboration applications such as Microsoft Teams, Zoom, WebEx, and Google Meet.

The Versa Mediabar supports standard UVC commands for control, making it a great addition to existing systems, while dual wall and display mounting options deliver freedom of placement and movement.

At the end of October 2022, we announced the introduction of the UNITE® 60 camera, a new wide angle 4K USB camera featuring AI-powered smart face and voice tracking, along with electronic PTZ (pan/tilt/zoom) capabilities.

With a 120-degree field of view, and a plug-and-play USB 3.0 connection for video, control, and power, the new UNITE 60 camera is ideally suited for rooms such as executive offices, huddle rooms, or smaller conference rooms.

The UNITE 60 camera leverages a wide dynamic range and super-high SNR with advanced 2D and 3D noise reduction to deliver excellent visuals across varied lighting conditions.

In addition to the AI auto-tracking feature, the camera can also be controlled via IR remote or UVC protocol.

The camera can be paired with a wide variety of microphones and speakers.

In November 2022, we announced the introduction of UNITE 160, a new camera that offers cutting-edge 4K UHD performance with 12x optical zoom capabilities, remote-controlled mechanical pan and tilt as well as AI-powered smart face tracking and auto framing.

This camera is designed to capture all participants in large rooms while enabling automated focus on a moving presenter, making it ideal for larger spaces including board rooms, training centers, conference rooms and classrooms.

This new camera offers an integrated AI-based camera tracking solution for rooms that are a fit for ClearOne's Versa Lite CT and a single camera.

This new lower-cost camera tracking configuration eliminates the need for a DSP mixer and a control system.

ITEM 1 - BUSINESS

AV Networking

4 unchanged sentences

A user can activate and control a single audio source or combination of audio sources, video sources, security systems, HVAC systems, lighting, and other room or facility monitoring functions such as paging or security access by just a single touch to its attractive touch screens.

Alternatively, any PC, laptop, tablet, iPod, or other device with a built-in web browser can control the equipment connected to the system.

Alternatively, any PC, laptop, tablet, or other device with a built-in web browser can control the equipment connected to the system.

VIEW Pro systems have no limits on the numbers of sources, displays, or amplifiers in a project and can be used in venues from high-end residential homes to large-scale commercial projects.

The number of devices could be determined by the network bandwidth availability, number of media streams and its bandwidth requirements.

Converting an audio or video signal to TCP/IP preserves the digital quality of the signal across the network.

Unlike analog systems, which lose quality over long distances, TCP/IP packets are decoded to retain the same digital quality as when they were encoded.

The addition of Digital Encoder and Digital Decoder products with DVI/HDMI input and output enhances the flexibility of complete AV distribution system and makes it as easy to use as analog devices.

VIEW Pro solution provides 1080p60, H.264 high definition HDMI video-audio, 4:4:4 true-color, 24 bit per pixel video output.

It comes with dual inputs encoder, single input encoder and single output decoder with balanced audio, general purpose control ports and clock synchronized video output.

VIEW Pro system also provides PANORAMA TM , a multi-view video composition and video-wall software application using its built-in video processing engine, without using external expensive hardware video processors.

Transporting an audio or video signal via IP (Internet Protocol) packets preserves the digital quality of the signal across the network.

Unlike analog systems, which lose quality over long distances, IP packets are decoded to retain the same digital quality as when they were encoded.

The addition of Digital Encoder and Digital Decoder products with DVI/HDMI input and output enhances the flexibility of the complete AV distribution system and makes it as easy to use as analog devices.

The VIEW Pro solution provides 1080p60, H.264 high definition HDMI video-audio, 4:4:4 true-color, 24 bit per pixel video output.

It comes with a dual input encoder, single input encoder and single output decoder with balanced audio, general purpose control ports and clock synchronized video output.

The VIEW Pro system also provides PANORAMA TM , a multi-view video composition and video-wall software application using its built-in video processing engine, without using external expensive hardware video processors.

This continues to be truly differentiated in the professional market by offering complete AV streaming and distribution systems that can scale to fulfill projects of any size and complexity, from light commercial to the very largest environments.

VIEW Pro products include E110 and E120 encoders and D110, D210 and D310 decoders.

VIEW Pro solution also comes with multiple license options including audio mixing, video composition, video wall, multicast RTSP and local playback.

The VIEW Pro solution also comes with multiple features including audio mixing, video composition, video wall, multicast RTSP and local playback.

VIEW CONSOLE software gives integrators a comprehensive platform from which to configure, manage, monitor, and control VIEW Pro system installation using an easy, modern interface.

The new toolset, which spotlights the latest in advanced software development technologies, works across ClearOne’s full line of VIEW Pro products.

In 2017, we released an updated version of VIEW CONSOLE and PANORAMA software applications.

The VIEW Lite series includes an encoder, a decoder and a controller, provide essential functionality that meets the full needs of simple AV over IP applications while simultaneously delivering superb price-to-performance value.

ITEM 1 - BUSINESS

The toolset, which incorporates advanced software technologies, works across ClearOne’s full line of VIEW Pro products.

The VIEW Lite series includes an encoder, a decoder and a controller, that provide essential functionality that meets the full needs of simple AV over IP applications while simultaneously delivering superb price-to-performance value.

PROFESSIONAL AUDIO AND VIDEO HOME OFFICE SOLUTIONS

During November 2020, we introduced Aura™, a comprehensive range of Good, Better and Best packages of enterprise quality audio, video, audio-video options and a free COLLABORATE® Space lifetime subscription, the award-winning video collaboration app to meet the growing home office market demand for professional audio and video collaboration solutions that match the quality found in a traditional corporate office.

COVID 19 pandemic had brought long lasting changes to the workplace.

During November 2020, we introduced Aura™, a comprehensive range of Good, Better and Best packages of enterprise quality audio, video, audio-video options to meet the home office market demand for professional audio and video collaboration solutions that match the quality found in a traditional corporate office.

The COVID 19 pandemic brought long lasting changes to the workplace.

Home has become the new office for tens of millions of professionals who now need a work environment every bit as productive as their corporate office.

1 unchanged sentence

For homeowners, prospective homebuyers, builders, architects and designers, the purpose-built home office is rapidly replacing the home theater in importance.

Aura solutions are geared for high performance professionals across multiple industries.

Aura solutions are designed for high performance professionals across multiple industries.

Aura meets this growing need for easy to purchase and install commercial quality solutions that deliver HDConference® audio and true-to-life video technology through a variety of professional microphone, audioconferencing, videoconferencing, camera and collaboration component choices that optimize home office acoustic and aesthetic aspirations.

Designed to be easily installed by both homeowners and installers, Aura owners are also supported by a dedicated sales and support team that is available 24/7.

Aura solutions are designed to be easily installed by both homeowners and installers.

With the post-pandemic demand for work from home and learn from home markets plateauing, we have decided to deemphasize the Aura product line and continue our focus on our core product lines and our key channels including the professional audiovisual channel.

ITEM 1 - BUSINESS

MARKETING AND SALES

14 unchanged sentences

We also work with our distributors and resellers to maintain relationships with our existing systems integrators, dealers, and other value-added resellers.

ITEM 1 - BUSINESS

While dealers, resellers, and system integrators all sell our products directly to the end-users, system integrators typically add significant value to each sale by combining our products with products from other manufacturers as part of an integrated system solution.

While dealers, resellers, and system integrators all sell our products directly to end-users, system integrators typically add significant value to each sale by combining our products with products from other manufacturers as part of an integrated system solution.

Commercial dealers and value-added resellers usually purchase our products from distributors and may bundle our products with products from other manufacturers for resale to the end-user.

8 unchanged sentences

Our customers are distributors and value-added resellers.

During the years ended December 31, 2021 no distributor accounted for more than 10% of our total consolidated revenue.

During the years ended December 31, 2022 and 2021 no distributor accounted for more than 10% of our total consolidated revenue.

ITEM 1 - BUSINESS

As discussed above, distributors facilitate product sales to a large number of independent systems integrators, dealers, and value-added resellers, and subsequently to their end-users.

The loss of one or more distributors could reduce revenue and have a material adverse effect on our business and results of operations.

Our orders fulfilled on which we had not recognized re venue were $0.1 million and $0.1 million as of December 31, 2021 and 2020 , respectively.

Our orders fulfilled on which we had not recognized re venue were $63 thousand and $ 54 thousand as of December 31, 2022 and 2021 , respectively.

We had a backlog of unfulfilled orders of app roximately $2.9 million and $ 1.4 million as of December 31, 2022 and 2021 , respectively.

12 unchanged sentences

Significant established history of successful worldwide installations for diverse vertical markets.

ITEM 1 - BUSINESS

In the professional audio conferencing system and sound reinforcement markets our main competitors include AcousticMagic , Biamp, BOSE, Crestron, Extron, Harman (Samsung), Peavey, Phoenix Audio, Poly, QSC, Shure, Symetrix , Vaddio and Yamaha and any original equipment manufacturing (OEM) partners, along with several other companies potentially poised to enter the market.

Our primary competitors in the USB-based speakerphones market are Jabra, Logitech, Phoenix Audio, Plantronics, Poly, Sennheiser, Yamaha and Yealink and any OEM partners.

In the tabletop conference phones, we face significant competition from Avaya/ Konftel , Phoenix Audio, Poly, Yamaha and Yealink, and from any OEM partnerships.

In the professional audio conferencing system and sound reinforcement markets our main competitors include AcousticMagic, Biamp, BOSE, Crestron, Extron, Harman (Samsung), Peavey, Poly, QSC, Shure, Symetrix, Vaddio, Xilica, and Yamaha and any original equipment manufacturing (OEM) partners, along with several other companies potentially poised to enter the market.

Our primary competitors in the USB-based speakerphones market are Jabra, Logitech, Poly, Sennheiser, Yamaha and Yealink and any OEM partners.

In the tabletop conference phones, we face significant competition from Avaya/ Konftel , Poly, Yamaha and Yealink, and from any OEM partnerships.

A significant portion of the tabletop market is covered by sales through OEM partnerships.

3 unchanged sentences

We believe that our software based patented technology delivers superior audio and video streaming performance and flexibility and provides us with a competitive edge over other industry players.

ITEM 1 - BUSINESS

Sources and Availability of Raw Materials

1 unchanged sentence

Most of the components that our EMS providers require for manufacturing our products are readily available from a number of sources .

During 2020 and after, we witnessed a significant tightening of the electronics market with demand for electronic products especially for semiconductors which include memories and processors, far exceeding the supply along with surging inflation caused price increases and longer fulfillment cycles.

During 2020 and after, we witnessed a significant tightening of the electronics market with demand for electronic products especially for semiconductors which include memories and processors, far exceeding the supply along with surging inflation that caused price increases and longer fulfillment cycles.

COVID-19 completely disrupted the entire supply chain and extended the already lengthy fulfillment cycles.

Continued tariff wars between USA and China created more uncertainty with respect to pricing and consequently affected the supply chain.

Extended lead times for component purchases and component cost increases persisted throughout 2021.

Lead times shortened for many components in 2022, and although component costs moderated somewhat in 2022 compared to 2021, several component suppliers have made cost increases permanent.

We continually work with our EMS providers to seek alternative sources for all our components and raw material requirements to ensure higher quality and better pricing.

5 unchanged sentences

We do not recognize a consistent pattern between the quarters to identify seasonality.

ITEM 1 - BUSINESS

Research and Product Development

We are committed to research and product development and view our continued investment in research and product development as a key ingredient to our long-term business success.

Our research and product development expenditures were app roximately $5.8 million and $5.5 million during t he years ended December 31, 2021 and 2020 , respectively.

Our research and product development expenditures were approximately $4.4 million and $5.8 million during the years ended December 31, 2022 and 2021, respectively.

Our core competencies in research and product development include (a) many audio technologies, including acoustic echo cancellation, noise cancellation and other advanced adaptive digital signal processing technologies, (b) networking and multimedia streaming technologies, ( c) video technologies, and (d) cloud technologies.

10 unchanged sentences

The laws of foreign countries may not protect our intellectual property to the same degree as the laws of the United States.

ITEM 1 - BUSINESS

We will obtain patents and other intellectual property rights used in connection with our business when practicable and appropriate.

1 unchanged sentence

From time to time, assertions of infringement of certain patents or other intellectual property rights of others have been made against us.

In addition, t he Company is involved in patent infringement lawsuits against Shure Inc .

In addition, t he Company was involved in patent infringement lawsuits against Shure Inc .

See Note 8 – Commitments and Contingencies – Legal Proceedings – Intellectual Property Litigation for a discussion of these legal proceedings.

48 unchanged sentences

ITEM 1A - RISK FACTORS

We are currently subject to patent litigation, including claims challenging the validity and enforceability of some of our patents, which could cause us to incur significant expenses or prevent us from protecting our products or services against competing products.

We may be subject to patent litigation, including claims challenging the validity and enforceability of some of our patents, which could cause us to incur significant expenses or prevent us from protecting our products or services against competing products.

Our industry is characterized by vigorous protection of intellectual property rights.

We have initiated litigation to enforce our intellectual property rights, which has resulted in our adversaries in such litigation challenging the validity, scope, and/or enforceability of our intellectual property.

We previously were involved in litigation to enforce our intellectual property rights and we may be involved in litigation in the future, which has resulted and could result in our adversaries in such litigation challenging the validity, scope, and/or enforceability of our intellectual property.

Irrespective of the merits of these claims, any resulting litigation could be costly and time consuming and could divert the attention of management and key personnel from other business issues.

17 unchanged sentences

We initiated remedial measures and conducted an evaluation of the effectiveness of our internal control over financial reporting for the years 2019, 2020, 2021 and 2022 based on the framework set forth in Internal Control - Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and concluded that remediation of the material weakness identified during the 2017 audit has been completed.

We conducted an evaluation of the effectiveness of our internal control over financial reporting for years 2020 and 2021 based on the framework set forth in Internal Control - Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission, concluding that our internal control over financial reporting was effective as of December 31, 2020 and December 31, 2021, respectively.

We also concluded under this evaluation that our internal control over financial reporting was effective as of December 31, 2021 and December 31, 2022, respectively.

However, there can be no assurance that these actions, as well as further actions we may take, will allow us to prevent any material weakness in the future and provide a solid foundation to meet our reporting obligations under the Exchange Act.

30 unchanged sentences

If we have not structured our sales organization or compensation for our sales personnel in a way that properly supports our business objectives, or if we fail to make changes in a timely fashion or do not effectively manage changes, our performance and results of operations could be adversely affected.

ITEM 1 A - RISK FACTORS

Product development delays or defects could harm our competitive position and reduce our revenue.

8 unchanged sentences

and (f) achieving necessary manufacturing efficiencies.

ITEM 1 A - RISK FACTORS

The success of our new product introductions depends on a number of factors, including proper new product definition, product cost, infrastructure for services and cloud delivery, timely completion and introduction of new products, proper positioning and pricing of new products in relation to our total product portfolio and their relative pricing, differentiation of new products from those of our competitors and other products in our own portfolio, market acceptance of these products and the ability to sell our products.

9 unchanged sentences

Currently, we have no second source of manufacturing for a large portion of our products.

Switching from one EMS provider to another is an expensive, difficult and a time-consuming process, with serious risks to our ability to successfully transfer our manufacturing operations.

Our operations, and consequently our revenues and profitability, could be materially adversely affected if we are forced to switch from any of our EMS providers to another EMS provider due to any of a number of factors, including financial difficulties faced by the manufacturer, disagreements in pricing negotiations between us and the manufacturer or organizational changes in the manufacturer.

Switching from one EMS provider to another or switching from one location of manufacturing to another location similar to our current transition from China to Singapore, is an expensive, difficult and a time-consuming process, with serious risks to our ability to successfully transfer our manufacturing operations.

Our operations, and consequently our revenues and profitability, were impacted materially in 2021 and 2022 due to switching of manufacturing from one location to another and we expect this adverse condition to continue at least through the first half of 2023.

Our operations, and consequently our revenues and profitability could be materially adversely affected in the future if we are forced to switch from any of our EMS providers to another EMS provider due to any of a number of factors, including financial difficulties faced by the manufacturer, disagreements in pricing negotiations between us and the manufacturer or organizational changes in the manufacturer.

If our EMS providers experience disruptions in their operations, it is uncertain whether we would be able to source the essential commodities, supplies, materials, and skilled labor timely or at all without incurring significant costs or delays, particularly during times of economic uncertainty resulting from events outside of our control, including, but not limited to, effects of COVID-19.

3 unchanged sentences

In addition, we may be unable to compete with entities that may have more favorable relationships with their suppliers and contractors or greater access to the required raw materials and skilled labor.

The cost of delivered product from our EMS providers is a direct function of their ability to buy components at a competitive price and to realize efficiencies and economies of scale within their overall business structures.

Recent news reports have noted that currently there is a worldwide shortage of semiconductor, memory and other electronic components affecting many industries, from automotive to technology providers.

This shortage has impacted our EMS providers significantly.

If our EMS providers are unsuccessful in obtaining component parts at efficient costs or at all, our delivered costs could rise or we may not be able to fulfill orders on time or at all, affecting our gross margins, profitability and ability to compete.

In addition, if the EMS providers are unable to achieve greater operational efficiencies, delivery schedules for new product development and current product delivery could be negatively impacted.

EMS providers often require long range forecasts to help them plan their operations as well as to allocate their resources.

We are tied to these forecasts through contracts as well as to maintain harmony in business relationships.

Our ability to react to actual demand from our customers and order optimum levels of inventory is severely limited due to these forecasts provided to the EMS providers.

Our inability to accurately forecast our future demands could lead to either excess inventory causing potential inventory obsolescence and cashflow problems or shortage in inventory causing potential loss of revenue.

Additionally, the sourcing and availability of raw materials necessary for our EMS providers to manufacture certain of our products, including "conflict minerals" has been and could continue to be significantly constrained, which is likely to result in continued elevated price levels.

Furthermore, compliance with SEC disclosure and reporting requirements in the future regarding the use of "conflict minerals" mined from the Democratic Republic of Congo and adjoining countries could adversely affect the sourcing, supply and pricing of materials used in our products.

As a result, we may not be able to obtain the materials necessary to manufacture our products, which could force us to cease production or search for alternative supply sources, possibly at a higher cost.

Such disruptions may have a material adverse effect on our business, financial condition, results of operations and cash flows.

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-K

Item 1. Business