What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-17 · 64 added, 69 removed, 327 unchanged (29% of the section changed)

3 unchanged sentences

(Dollars in thousands, except par value)

March 31, 2024

June 30, 2024

December 31, 2023

16 unchanged sentences

Accounts payable

Dividends payable

Accrued liabilities

5 unchanged sentences

Shareholders' equity:

Common stock, par value $ 0.001 , 50,000,000 shares authorized, 23,969,148 shares issued and outstanding

Common stock, par value $ 0.001 , 50,000,000 shares authorized, 23,969,148 and 23,969,148 shares issued and outstanding, respectively

Additional paid-in capital

8 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

Gross profit/(loss)

Operating expenses:

7 unchanged sentences

Loss before income taxes

Provision (benefit) for income taxes

Provision for income taxes

Basic weighted average shares outstanding

10 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Change of inventory to net realizable value

Gain on disposal of assets and sale of marketable securities

Gain on sale of marketable securities

Changes in operating assets and liabilities:

6 unchanged sentences

Operating lease liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

5 unchanged sentences

Cash flows from financing activities:

Dividend payment

Net proceeds from equity-based compensation programs

2 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

5 unchanged sentences

The following is a summary of supplemental cash flow activities:

Three months ended March 31,

Cash (refund)/paid for income taxes

Six months ended June 30,

Cash paid for income taxes

Cash paid for interest

Supplemental disclosure of non-cash financing and investing activities:

Three months ended March 31,

Dividends payable

See accompanying notes

12 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, 2024 and December 31, 2023 , the results of operations for the three months ended March 31, 2024 and 2023 , and the cash flows for the three months ended March 31, 2024 and 2023 .

The results of operations for the three months ended March 31, 2024 and 2023 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, 2024 and December 31, 2023 , the results of operations for the three and six months ended June 30, 2024 and 2023 , and the cash flows for the six months ended June 30, 2024 and 2023 .

The results of operations for the three and six months ended June 30, 2024 and 2023 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, 2023 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, 2023 .

There have been no changes to these policies during the quarter ended March 31, 2024 that are of significance or potential significance to the Company.

There have been no changes to these policies during the quarter ended June 30, 2024 that are of significance or potential significance to the Company.

Recent accounting pronouncements:

15 unchanged sentences

(Dollars in thousands, except per share amounts)

As of March 31, 2024 , our cash and cash equivalents were approximately $ 18,544 compared to $ 17,835 as of December 31, 2023 .

Our working capital was $ 21,395 as of March 31, 2024 .

Net cash provided by operating activities was $ 433 for the three months ended March 31, 2024 , a decrease of $ 59,888 compared to $ 60,321 of cash was provided by operating activities for the three months ended March 31, 2023.

The Company believes, although there can be no assurance, that the current cash position and effective management of working capital, will provide the liquidity needed to meet our operating needs through at least May 17, 2025 .

As of June 30, 2024 , our cash and cash equivalents were approximately $ 2,450 compared to $ 17,835 as of December 31, 2023 .

Our working capital was $ 21,707 as of June 30, 2024 .

Net cash used in operating activities was $ 2,722 for the six months ended June 30, 2024 , a decrease of $ 55,642 compared to $ 52,920 of cash provided by operating activities for the six months ended June 30, 2023 .

The decrease in cash is mainly due to payment of dividends $ 14,490 in April 2024 and $ 28,979 in May 2023.These conditions raise substantial doubt about continuing as a going

concern , but substantial doubt is alleviated because t he Company believes, although there can be no assurance, that the current cash position and effective management of working capital, will provide the liquidity needed to meet our operating needs through at least August 14, 2025 .

The Company also believes that its strong portfolio of intellectual property and its solid brand equity in the market will enable it to raise additional capital if and when needed to meet its 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

6 unchanged sentences

Stock options, warrants and the convertible portion of senior convertible notes are considered to be potential common stock.

The computation of diluted earnings (loss) per share does not assume exercise or conversion of securities that would have an anti-dilutive effect.

Basic earnings (loss) per common share is the amount of net earnings (loss) for the period available to each weighted-average share of common stock outstanding during the reporting period.

Diluted earnings (loss) per common share is the amount of earnings (loss) for the period available to each weighted-average share of common stock outstanding during the reporting period and to each share of potential common stock outstanding during the period, unless inclusion of potential common stock would have an anti-dilutive effect.

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

Three months ended March 31,

The computation of diluted loss per share does not assume exercise or conversion of securities that would have an anti-dilutive effect.

Basic loss per common share is the amount of net loss for the period available to each weighted-average share of common stock outstanding during the reporting period.

Diluted loss per common share is the amount of loss for the period available to each weighted-average share of common stock outstanding during the reporting period and to each share of potential common stock outstanding during the period, unless inclusion of potential common stock would have an anti-dilutive effect.

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

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 as of March 31, 2024 and December 31, 2023 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 as of June 30, 2024 and December 31, 2023 were as follows:

Amortized cost

2 unchanged sentences

Estimated fair value

March 31, 2024

June 30, 2024

Available-for-sale securities:

21 unchanged sentences

(Dollars in thousands, except per share amounts)

Debt securities in an unrealized loss position as of March 31, 2024 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, 2024 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.

8 unchanged sentences

Gross unrealized holding losses

As of March 31, 2024

As of June 30, 2024

US Treasury securities

14 unchanged sentences

Intangible Assets

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

Intangible assets as of June 30, 2024 and December 31, 2023 consisted of the following:

Estimated useful lives (years)

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Total intangible assets, net

The amortization of intangible assets for the three months ended March 31, 2024 and 2023 was as follows:

Three months ended March 31,

The amortization of intangible assets for three and six months ended June 30, 2024 and 2023 was as follows:

Three months ended June 30,

Six months ended June 30,

Amortization of intangible assets

4 unchanged sentences

2024 (Remainder)

Inventories, net of reserves, as of March 31, 2024 and December 31, 2023 consisted of the following:

March 31, 2024

Inventories, net of reserves, as of June 30, 2024 and December 31, 2023 consisted of the following:

June 30, 2024

December 31, 2023

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 three months ended March 31, 2024 and 2023 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

Net loss incurred on valuation of inventory at lower of cost or market value and write-off of obsolete inventory for three and six months ended June 30, 2024 and 2023 was as follows:

Three months ended June 30,

Six months ended June 30,

Net loss (gain) 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 three months ended March 31, 2024 and 2023 was as follows:

Three months ended March 31,

Rent expense for three and six months ended June 30, 2024 and 2023 was as follows:

Three months ended June 30,

Six months ended June 30,

The Company occup ies a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease expiring in F ebruary 2028 .

9 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, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Weighted average discount rate for operating leases

The following represents maturities of operating lease liabilities as of March 31, 2024 :

The following represents maturities of operating lease liabilities as of June 30, 2024 :

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

1 unchanged sentence

Dividends declared

Issuance of common stock and warrants, net

Share-based compensation expense

23 unchanged sentences

Share-based Compensation

A s of March 31, 2024 , the Company had 217,810 options with contractual lives of ten years and 370,000 options with contractual lives of six years offered under the Company’s 2007 Equity Incentive Plan (the “ 2007 Plan”), which was restated and approved by the shareholders on December 12, 2015.

As of March 31, 2024 , the 2007 Plan had 857,044 authorized unissued options.

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 highly complex and subjective variables.

1 unchanged sentence

The Company uses the Black-Scholes option pricing model to determine the fair value of share-based payments granted under the guidelines of ASC Topic 718 .

In applying the Black-Scholes methodology to 160,000 options gr anted in June 2023 , the Company used the following assumptions:

Risk free interest rate, average

Expected option life, average

Expected price volatility, average

Expected dividend yield

A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2024 , is as follows:

A summary of the stock option activity under the Company’s plans for the six months ended June 30, 2024 , is as follows:

Number of shares

3 unchanged sentences

Canceled or expired

Options outstanding at March 31, 2024

Options exercisable at end of March 31, 2024

As of March 31, 2024 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 120 , which will be recognized over a weighted average period of 2.24 year s .

Share-based compensation expense has been recorded as follows:

Three months ended March 31,

Options outstanding at June 30, 2024

Options exercisable at end of June 30, 2024

As of June 30, 2024 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 97 , which will be recognized over a weighted average period of 2.21 years.

Three months ended June 30,

Six months ended June 30,

Cost of goods sold

6 unchanged sentences

The full domestic valuation allowance was recorded as management concluded that it is more likely than not that these deferred tax assets are not realizable due to the Company's recent pre-tax losses and other sources of negative evidence.

Provision for income taxes for the three months ended March 31, 2024 mostly represents income tax expense (benefit) recorded for jurisdictions outside the United States.

The Company had approximately $ 968 of uncertain tax positions as of March 31, 2024 .

Provision for income taxes for the six months ended June 30, 2024 mostly represents income tax expense (benefit) recorded for jurisdictions outside the United States.

The Company had approximately $ 1,079 of uncertain tax positions as of June 30, 2024 .

Due to the inherent uncertainty of the underlying tax positions, it is not possible to forecast the payment of this liability for any particular year, therefore, it is reflected in other long-term liabilities.

12 unchanged sentences

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, 2024 :

March 31, 2024

The following table sets forth the fair value of the financial instruments re-measured by the Company as of June 30, 2024 :

June 30, 2024

US Treasury securities

5 unchanged sentences

Corporate debt securities

Subsequent events

Declared Cash Dividends

On March 11 , 2024 , the Company announced that the Company’s Board of Directors had declared a special one -time cash dividend of $ 0.50 per share of the Company’s common stock and eligible warrants to holders of record as of April 2, 2024 and paid $ 11,984 of cash dividends to shareholders and $ 2,511 to warrant holders on April 10, 2024 .

This dividend of 14,496 has been accrued as of March 31, 2024.

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