What changed in this filing

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Item 1. Business

2025-03-28 compared with 2024-04-01 · 247 added, 175 removed, 92 unchanged (82% of the section changed)

ITEM 1 - BUSINESS

The new UNITE 50 4 K 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).

With 4 K video quality at 30 Hz, auto-focus capability, 4 x digital zoom, more than 8 megapixels of total resolution and an ultra-wide 110 -degree field of view, the UNITE 50 4 K AF ePTZ is equally capable of delivering incredible image quality from a home office as it is at capturing all participants in an office boardroom.

The camera can be controlled through an IR remote, further simplifying use and enabling real-time control of pan, tilt and zoom to provide greater control when capturing multi-person meeting environments.

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 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.

For a discussion of certain risks ap plicable to our business, results of operations, financial position, and liquidity, see the risk factors described in “Item 1 A, Risk Factors” below.

Our Business Strategy

The Company’s primary challenge is the loss of revenue and consequent reduction of cash flows due to operating losses.

Our current strategy consists of the following elements to overcome this adverse situation:

Continue our product innovation to bring to market products that are needed by our partners and end-users;

Increase margins of our products and reduce operational costs to improve profitability;

Focus on our core products and improve the quality, ease of use, and competitiveness of our products;

Develop products that have improved interoperability with products from other suppliers;

Provide continually improving levels of support to our channel partners.

We currently participate in the following markets:

All aspects of audio conferencing including installed professional audio conferencing through DSP mixers, and USB based speakerphones;

Professional microphones to support audio and video collaboration through patented beamforming microphone arrays, ceiling microphones and wireless microphones;

Visual collaboration including cameras, and Bring-Your-Own-Device systems;

Audio Visual Networking which includes sound reinforcement and audio distribution.

Our business goals are to:

Improve our global market share in the professional installed conferencing products segment;

Position ClearOne as the preferred AV channel partner uniquely offering a complete value-chain of solutions from audio to video maximizing AV channel partner profitability;

Extend total addressable market from our traditional stronghold of installed audio conferencing and microphones to adjacent complementary markets – video collaboration and AV networking;

Continue to leverage visual collaboration and AV networking technologies to enlarge our current market share;

Focus on the small and medium business market segment with appropriately scaled, lower cost and less complex products and solutions;

Capitalize on the growing influence of information technology channels in the audio-visual market and introduce more solutions to these channels;

Capitalize on the convergence of audio visual and information technology to meet enterprise and commercial communication needs for complete AV room solutions;

Improve the interoperability of our products to increase the ability of our products to work with wider range of other audio-visual products in the market;

Pursue certifications and partnerships to position our products favorably in the growing Microsoft Teams ecosystem;

Leverage software-based platforms across all our product lines;

Expand and strengthen our sales channels.

We will continue to focus on our core strengths, which include the following:

Providing a superior conferencing and collaboration experience;

Delivering the complete value chain for audio visual communication;

Extending our capabilities in product innovation in the areas of AV collaboration and AV networking;

Offering greater innovation, interoperability and value to our end-users and channel partners;

Leveraging and extending ClearOne technology, leadership and innovation;

Focusing on our core products and improving the quality of our products to attain higher levels of customer satisfaction;

Leveraging our strong domestic and international channels to distribute new products;

Strengthening existing end-user and channel partner relationships through dedicated and comprehensive support.

Our products can be broadly categorized into the following:

Audio-conferencing including installed DSP based professional audio conferencing and USB-based speakerphones;

Professional microphones consisting of patented beamforming microphone arrays, ceiling microphones and wireless microphones;

Video including video collaboration and AV networking products.

AUDIO CONFERENCING

Our full range of audio conferencing products include ( i ) professional installed DSP based audio conferencing and sound-reinforcement products used in enterprise, healthcare, education and distance learning, government, legal and finance organizations, (ii) mid-tier premium conferencing products for smaller rooms and small and medium businesses which interface with video and web conferencing systems, and (iii) affordable USB-based speakerphones that can be used with PCs, laptops, tablets, smartphones, and other portable devices.

Our audio-conferencing products feature our proprietary HDConference ® , Distributed Echo Cancellation ® and noise cancellation technologies to enhance communication during a conference call by eliminating echo and background noise.

Most of our products also feature some of our other HDConference proprietary audio processing technologies such as adaptive modeling and first-microphone priority, which combine to deliver clear, crisp and full-duplex audio.

These technologies enable natural and fatigue-free communication between distant conferencing participants.

Our audio-conferencing products contributed 37.7 % and 44.7 % of our conso lidated revenue in 2024 and 2023 , respectively.

Professional installed audio-conferencing and sound reinforcement

We compete in the global professional installed audio-conferencing market.

We are a pioneer in the development of high-end, professional conferencing products and we have established strong brand recognition for these products worldwide.

Our installed professional conferencing products include the CONVERGE ® Pro 2 and CONVERGE Pro 2 SR product lines.

Our flagship CONVERGE Pro 2 product line leads our professionally installed audio products line.

The CONVERGE Pro 2 product line currently includes CONVERGE Pro 2 128 , CONVERGE Pro 2 128 VT , CONVERGE Pro 2 128 VTD, CONVERGE Pro 2 120 , CONVERGE Pro 2 012 , CONVERGE Pro 2 48 VT and CONVERGE Pro 2 48 VTD.

CONVERGE Pro 2 SR product line currently includes CONVERGE Pro 2 128 SR, and CONVERGE Pro 2 128 SRD.

CONVERGE Pro 2 and CONVERGE Pro 2 SR together offer various levels of integration and features to allow a commercial system integrator to optimize a system to fit diverse conferencing applications and environments.

The CONVERGE Pro 2 product line succeeded the original CONVERGE Pro product line, which is currently being phased out as our customers transition fully to the CONVERGE Pro 2 product line.

CONVERGE Pro 2 ’s broad DSP platform satisfies clients’ diverse audio needs with these features:

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 – Up to 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 150 channels and P-Link bus for scalable connection of peripheral devices including any combination of ClearOne peripheral devices, such as the BMA CT, BMA 360 , USB Expander, GPIO Expander and/or the DIALOG® 20 USB Wireless Microphone system;

Supports video conferencing, audio and web conferencing, in-room meetings, wireless presentation, and more;

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

Ability to control local meeting rooms and audio distribution applications with flexible options – BYOD dialer apps or 3 rd party control systems.

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

The CONVERGE Pro 2 line of products is ably supported by a GPIO expansion box and a USB expansion box.

CONVERGE Pro 2 products interoperate with Microsoft Teams, Zoom, Google Meet, and other popular collaboration applications.

Our 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 Cloud option, AV Practitioners can profit by offering value-added Management as a Service (“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 features 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.

CONVERGENCE also integrates with third-party monitoring solutions.

Mid-Tier Premium Conferencing

Our premium conferencing offering consists of the CONVERGE Huddle 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 Microsoft Teams, Zoom, Google Meet, GoToMeeting ™, and WebEx® through a single clutter-free USB 3.0 connection to a laptop.

It comes with professional quality Acoustic Echo Cancellation and Noise Cancellation algorithms and user-friendly CONSOLE® AI software.

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

CONVERGE Huddle can be easily connected to enterprise telephones, dedicated in-room systems like Microsoft Teams Room and Zoom Room systems and software-based video clients .

Speakerphones

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 the CHAT 50 SKU or as group speakerphones under CHAT 150, CHATAttach® 150, and CHAT 150 BT SKUs .

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

CHAT 150 group speakerphones are designed for small group use.

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

CHAT group speakerphones make it possible to introduce rich, crystal-clear conferencing capability without the need to introduce 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.

The CHAT® 150 BT group speakerphone with USB and Bluetooth connectivity enhances the conferencing experience for the ultimate in business class performance.

With simple, instant connection to personal computers, mobile devices or Bluetooth-enabled desk phones, the CHAT® 150 BT group speakerphone provides users with an affordable way to upgrade home offices, executive offices, and mid-size meeting rooms with BYOD convenience and superior audio clarity for audio conferences and video meetings.

The CHAT® 150 BT speakerphone also has an audio bridging feature that allows far end conference participants connected via a software conferencing application through USB, local users of the speakerphone, and far end callers on a mobile call connected through Bluetooth to all join the same call and hear each other clearly.

Featuring a steerable microphone array with first-mic priority, the CHAT® 150 BT speakerphone intelligently activates the microphone closest to the person speaking, reducing interference from ambient noise.

Like all ClearOne microphone products, the CHAT® 150 BT speakerphone is compatible with popular collaboration platforms including Microsoft® Teams, Zoom™, WebEx™, Google® Meet™, and many more.

The new BT model retains all the class-leading features of the original CHAT® 150 speakerphone, including Advanced Noise Cancellation, Full Duplex Distributed Echo Cancellation™ and Automatic Level Control algorithms, to ensure highly intelligible, natural audio capture and playback.

It also supports NFC tap-to-pair and includes a wired USB connection for compatibility with the full variety of modern devices .

PROFESSIONAL MICROPHONES

Our microphones contributed 45.6% and 41 .4 % of our conso lidated revenue in 2024 and 2023 , respectively.

Beamforming Microphone Array

All the innovations developed for our patented Beamforming Microphone Array Ceiling Tile (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 this functionality with zero consumption of analog I/O and signal processing in the DSP leaving those resources available for other needs.

Other members of our professional microphone products include the COLLABORATE Versa family of products.

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

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

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

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

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

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

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

The included 50-foot CAT6 cable connects the Versa USB Expander to the BMA CT.

Our BMA 360 , delivers 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 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.

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 - requiring fewer DSP 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 “homerun” connections via Ethernet.

ClearOne’s BMA technology is protected by at least a dozen patents .

In 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.

At Infocomm 2023, we unveiled the BMA 360D, the newest member of the world’s most advanced beamforming microphone array ceiling tile family.

The BMA 360D offers unrivaled audio performance and native compatibility with any Dante-enabled DSP.

The new Dante-compatible beamforming microphone array allows integrators and users to leverage ClearOne’s industry-leading microphone innovations in more projects and spaces than ever before.

The BMA 360D takes our groundbreaking product to the next level by leveraging standard IP networking infrastructure in an enterprise, empowering AV and IT practitioners to upgrade existing room solutions to use more powerful microphones and expanding flexibility that enables third-party DSP integrations in new system designs.

The added power and advanced beamforming also enhance the performance of critical modern functions such as voice lift and camera tracking.

Dante integration in the BMA 360D enhances the array’s functionality by delivering unprocessed beam audio on individual Dante transmit channels.

Additionally, a smart-switched output is delivered on a separate Dante channel to provide the optimal mix of active inputs while enabling ClearOne’s full suite of audio enhancements, which include echo cancellation, noise cancellation, and level control.

The BMA 360D incorporates the industry’s only ultra-wideband, frequency-invariant beamforming mic array technology with uniform gain response across all frequency bands.

With proprietary FiBeam™ and DsBeam™ technology, participants experience natural and full-fidelity audio across all beams and within a single beam.

DsBeam delivers superb clarity and intelligibility through unparalleled sidelobe depth below -40 dB, resulting in superior rejection of reverb and noise even in challenging environments.

Integrator setup is simplified by convenient preset beam patterns for common room layouts, while custom beam patterns can be created for unique floor plans.

Combined with adaptive steering that focuses audio pickup on active speakers, the adjustable beam patterns provide impeccable coverage of every meeting or conference participant.

The exceptional accuracy of ClearOne’s beamforming and adaptive steering technologies also enhance the performance of voice lift and camera tracking functions for any attached DSP.

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.

The Ceiling Microphone Array Analog-X series of ceiling microphones 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

ClearOne’s wireless microphone products include the WS 800 Wireless Microphone Systems, which are comprised of four types of wireless microphones/transmitters (Tabletop/boundary, Gooseneck, Handheld, Bodypack) and a base-station receiver with either 4 or 8 channels.

The base-station receivers easily connect to professional audio mixers.

Our portfolio of wireless microphone systems includes digital compressed and uncompressed versions, Dante-compatible versions and multiple frequency ranges catering to various international markets.

ClearOne’s wireless microphone product portfolio also includes the DIALOG ® 20 USB 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 USB has several advantages over fixed-frequency transmission.

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

While DIALOG 20 USB works seamlessly with all commercially available DSPs, it boasts additional features when natively interfacing with our CONVERGE Pro 2 products.

In January 2022 we introduced DIALOG® 10 USB, the industry’s only single-channel wireless microphone system offering professional-quality audio with USB connectivity.

Offering plug-and-play simplicity and wireless convenience, DIALOG 10 USB is an ideal solution for webcasting and cloud-based collaboration.

Setup is a breeze with the included USB Type C cable that connects to any PC for audio, power, and control.

With no external power source or additional audio cables required, DIALOG 10 USB is one of the easiest and fastest ways to enjoy high-quality audio in any application.

In June 2023 we introduced the DIALOG UVHF wireless microphone system that combines class-leading flexibility, Power over Ethernet (PoE) simplicity, Dante technology and up to 350 usable frequencies.

The DIALOG UVHF is a highly flexible wireless microphone system that delivers incredibly robust reception and more available spectrum on-demand than any other product in its class.

The system has the only wireless access point to offer antenna redundancy and antenna diversity.

Dual integral antennas with spatial and polarization diversity help to maintain high audio quality in harsh environments.

Our video products contributed 16.7% and 13.8% of our consolidated revenue in 2024 and 2023 , respectively.

Bring your own device and web conferencing

COLLABORATE Versa Pro CT, includes a Huddle DSP and the Huddle-compatible and patented BMA CT 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 Microsoft Teams, WebEx, Zoom, and more.

The system includes the Company’s BMA CT Beamforming Microphone Array Ceiling Tile with built-in AEC.

The COLLABORATE Versa Pro CT system also includes mic/line inputs with AEC, line outputs, 4 x 10 Watt power amps, USB audio, 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.

In April 2023 we announced the immediate market availability of the Versa UCS 2100 Collaboration Switcher Kit.

Designed for use in small to mid-sized meeting rooms, board rooms, and executive offices, the Versa UCS 2100 automatically detects HDMI and USB-C sources, such as a dedicated in-room PC or a Bring-Your-Own-Meeting (BYOM) laptop and offers the flexibility for users to access the same set of in-room AV peripherals, such as cameras and audio devices.

Its USB-C input provides up to 100watts charging and provides simultaneous 1 x HDMI output and 1 x HDBaseT output.

When combined with ClearOne UNITE series PTZ cameras, CONVERGE® Pro 2 , CONVERGE® HUDDLE, and CHAT series audio conferencing devices, the Versa UCS 2100 delivers guaranteed performance and a streamlined user experience that supports automatic source detection and switching and is controllable via RS- 232 , TCP/IP, or front panel buttons.

In October 2023 at Infocomm India we provided our integration partners and end user customers with added flexibility in system connectivity with the introduction of our new Versa USB 22 Dante adapter.

This new product enables users to directly connect any computer to a Dante network without first requiring software installation and can be used with any audio application for playback or capture and is thus ideal for a wide range of small to mid-sized meeting spaces.

The Versa USB 22 D delivers bit-perfect audio reproduction, super-low latency, and sample-accurate synchronization across the entire Dante network.

It connects any computer to the ClearOne BMA 360 D through a Dante network .

UNITE 150 is a professional-grade PTZ camera series supporting USB connectivity.

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

The UNITE 200 Pro PTZ HD Camera elevates video conferencing with professional grade 1080p60 Full HD resolution and precise pan, tilt, and 20x zoom functionality.

This camera supports simultaneous USB video and standards-based video streaming over an IP network for connection to a video conferencing system and local video playback at the same time.

It's designed for demanding environments that require superior video quality and control .

The UNITE 180 ePTZ professional camera 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 UNITE 180 camera provides six viewing mode options as well as panoramic view for the ultimate in camera flexibility.

Real-time stitching creates a seamless 180 -degree panoramic view of wide spaces by bringing the views of multiple lenses together as one complete image.

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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 4 K 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 Mediabar features a built-in 4 K 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.

From huddle spaces and small meeting rooms to executive offices and home offices, the compact Versa Mediabar delivers all the power and clarity needed for daily virtual communications.

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, 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 4 K 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.

Our UNITE® 60 camera is a wide angle 4 K 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 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 2 D and 3 D noise reduction to deliver excellent visuals across varied lighting conditions.

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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 4 K UHD performance with 12 x optical zoom capabilities, remote-controlled mechanical pan and tilt as well as AI-powered smart face tracking and auto framing.

Our UNITE 160 camera offers cutting-edge 4 K UHD performance with 12 x 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

On January 16, 2023, we introduced UNITE 260 Pro camera, a professional grade 4 K Ultra HD camera featuring both a 20 X optical zoom and 16 X digital zoom that allows users to capture every participant in all meeting, training, and learning environments it is deployed in.

Compatible with all popular meeting applications like Microsoft® Teams, Zoom™, WebEx™, and Google® Meet™, the new camera features an AI-based smart face tracking mode that keeps a selected presenter in the frame as they move about the room.

This 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 and a control system.

On January 16, 2023, we introduced the UNITE 260 Pro camera, a professional grade 4 K Ultra HD camera featuring both a 20 X optical zoom and 16 X digital zoom that allows users to capture every participant in all meeting, training, and learning environments it is deployed in.

Compatible with all popular meeting applications like Microsoft® Teams, Zoom™, WebEx™, and Google® Meet™, this camera features an AI-based smart face tracking mode that keeps a selected presenter in the frame as they move about the room.

Alternatively, the camera’s AI-based auto framing mode always keeps an entire group in perfect view.

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AV Networking

Our AV networking products are primarily sold under VIEW ® Pro and VIEW Lite brands and deliver the ultimate IP A/V experience by streaming time sensitive high definition audio and video and control over TCP/IP networks.

By combining audio and/or video content, meta-data and control signals into one digital stream in harmony with industry standards, its distributed, edge of the network architecture allows the hardware and the processing power to be distributed across any existing TCP/IP network.

This leverages many of the advantages of using TCP/IP over traditional analog systems and other centrally controlled IP-based systems.

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 to meet the home office market demand for professional audio and video collaboration solutions that match the quality found in a traditional corporate office.

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

Our AV networking products deliver the ultimate IP A/V experience by streaming time sensitive high definition audio and video and control over IP networks.

By combining audio and/or video content, meta-data and control signals into one digital stream in harmony with industry standards, they leverage the advantages of using IP over traditional analog systems.

For those needing a powerful yet adaptable solution with support for Dante and AES67 network audio, the CONVERGE Pro 2 128SRD is a top-of-the-line audio distribution and sound reinforcement solution.

This model supports 12 analog input channels and 8 analog output channels plus 16x16 Dante or AES67 digital audio channels and provides advanced audio management and routing options, making it perfect for complex audio environments.

The CONVERGE Pro 2 012 is a versatile and scalable solution for sound reinforcement, offering 12 channels of high-quality audio outputs.

Its compact design makes it suitable for smaller venues or as a component in larger systems, providing clear and accurate sound reproduction across diverse applications.

The Versa USB22D lets you connect any computer to a Dante network with no software installation and can be used with any audio application for playback or capture, making it ideal for conference rooms, classrooms, and lecture halls.

It supports two input channels and two output channels of audio, allowing PCs and mobile devices to play and capture audio with Dante-enabled devices over a standard IP network.

The Versa USB22D provides a convenient and reliable audio solution for your BYOD setup.

Our LS5WT wall speakers and LS6CT ceiling speakers are designed to provide high-quality audio in small and large meeting spaces .

MARKETING AND SALES

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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.

We maintain close working relationships with all our reseller partners and offer them education and training on all of our products.

We maintain close working relationships with all our reseller partners and offer them education and training on all our products.

Much of our marketing effort is conducted in conjunction with our channel partners who provide leverage for us in reaching existing and prospective customers worldwide.

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These trade shows provide exposure for our brand and products to a wide audience.

We market our ClearOne-branded commercial products on our website www.clearone.com.

We market our ClearOne-branded commercial products on our website at www.clearone.com.

We also conduct public relations initiatives to get press coverage and product reviews in industry and non-industry publications alike.

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Our customers are distributors and value-added resellers.

During the years ended December 31, 2023 and 2022 no distributor accounted for more than 10 % of our total consolidated revenue.

ITEM 1 - BUSINESS

During the year ended December 31, 2024 one of our distributors accounted for 17% of total revenue.

For the year ended December 31, 2023 no distributor accounted for more than 10% of our total consolidated revenue .

As of December 31, 2024, customer A accounted for 30% and customer B accounted for 12% of trade account receivables.

No customer accounted for more than 10% of receivables as of December 31, 2023

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.

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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.

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

In the microphones market, our primary competitors include AKG, Audio Technica, Audix, Avlex/Mipro, Beyerdynamic, Biamp, Clock Audio, Lectrosonics, Nureva, Mediavision/Taiden, Poly, Sennheiser, Shure, TeachLogic, TOA, Yamaha and Vaddio and any OEM partners.

Our video conferencing products face tremendous competition from well established players as well as emerging players, including Acano/CISCO, Adobe Connect, Amazon Chime, Avaya (Radvision), Aver, Barco, Blackboard Collaborate, Cisco, Citrix, Fuze, Huawei, InFocus, Kramer, LifeSize, Magor, Pexip, Poly, Microsoft, Starleaf, UNIFY, Vidyo, Yealink, Zoom and ZTE.

ITEM 1 - BUSINESS

Our video products face tremendous competition from well established players as well as emerging players, including Acano/CISCO, Adobe Connect, Amazon Chime, Avaya (Radvision), Aver, Barco, Blackboard Collaborate, Cisco, Citrix, Fuze, Huawei, InFocus, Kramer, LifeSize, Magor, Pexip, Poly, Microsoft, Starleaf, UNIFY, Vidyo, Yealink, Zoom and ZTE.

Sources and Availability of Raw Materials

We manufacture our products through electronics manufacturing services (“EMS”) providers, who are generally responsible for sourcing and procuring required raw materials and components.

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

During 2020 and 2021, 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.

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

During 2023, we experienced a revenue decline partially due to our inability to source adequate inventory to meet the demand for professional audio products and BMA due to the transition of manufacturing of our products from China to Singapore by our electronics manufacturing services provider .

The challenges with the manufacturing transition from China to Singapore was successfully resolved in the fourth quarter of 2023 .

Extended lead times for component purchases and component cost increases persisted throughout 2021 and 2022.

Lead times shortened for many components in 2023, and although component costs moderated somewhat in 2022 and 2023 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.

Most of our EMS providers and their vendors are duly qualified by our corporate quality assurance process.

We work with our EMS providers to ensure that raw materials and components conform to our specifications.

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

However, the past few years have presented significant supply chain challenges.

During 2020 and 2021, we experienced a notable tightening of the electronics market, with demand for electronic products—particularly semiconductors such as memories and processors—far outpacing supply, compounded by surging inflation that drove price increases and extended fulfillment cycles.

The COVID-19 pandemic further disrupted the entire supply chain, exacerbating these lengthy lead times.

Ongoing tariff tensions between the U.S.

and China have continued to create uncertainty around pricing, impacting supply chain dynamics.

In 2023, we faced a revenue decline partly due to insufficient inventory to meet demand for professional audio products and BMA, stemming from the transition of manufacturing from China to Singapore by our EMS provider.

This transition was successfully completed in the fourth quarter of 2023, stabilizing production capabilities.

However, in 2024, we continued to face challenges from the lingering effects of these disruptions.

The prior inventory shortages led to delays in fulfilling customer orders, causing some customers to turn to competitors and resulting in damage to our distribution channel.

While lead times for many components improved in 2023 and stabilized further in 2024, and component cost increases moderated compared to their peak in 2021, the shift in customer relationships has required us to intensify efforts to rebuild channel confidence and recapture market share.

We remain proactive in addressing these challenges.

We collaborate closely with our EMS providers to identify alternative sources for components and raw materials, ensuring competitive pricing and improved quality.

Most of our EMS providers and their vendors are thoroughly vetted through our corporate quality assurance process, and we work diligently to ensure that all raw materials and components meet our specifications.

These efforts underscore our commitment to restoring supply chain reliability and meeting customer demand effectively moving forward .

Manufacturing

Currently, all of our products are manufactured by EMS providers.

Our primary EMS provider is Flextronics.

Our primary EMS provider is Flex (formerly, Flextronics).

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

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Our research and product development expenditures were approximately $3.3 million and $ 3.7 million during the years ended December 31, 2024 and 2023 , 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.

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 media streaming technologies, ( c) video technologies, and (d) cloud technologies.

We also have expertise in wireless technologies, VoIP, software and network system development.

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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.

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

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

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

We are dependent on our intellectual property.

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We also hire contractors with specific skill sets to meet our operational needs.

Investors should carefully consider the risks described below.

The risks described below are not the only ones we face and there are risks that we are not presently aware of or that we currently believe are immaterial that may also impair our business operations.

Any of these risks could harm our business.

The trading price of our common stock could decline significantly due to any of these risks, and investors may lose all or part of their investment.

In assessing these risks, investors should also refer to the other information contained or incorporated by reference in this annual report on Form 10-K, including our consolidated financial statements and related notes.

Risks Relating to Our Business

We face intense competition in all markets for our products and services and our operating results will be adversely affected if we cannot compete effectively against other companies.

The markets for our products and services are characterized by intense competition, pricing pressures and rapid technological change.

Our competitive landscape continues to rapidly evolve, in particular with respect to our video-related services and products, as we move into new markets for video collaboration such as mobile, social and cloud-delivered video.

We compete with businesses having substantially greater financial, research and product development, manufacturing, marketing, and other resources than we do.

In addition, many of our current competitors, as well as many of our potential competitors, are private companies not subject to the costs and disclosure requirements applicable to us as a public company, have longer operating histories, significantly greater resources to invest in new technologies and more substantial experience in new product development, regulatory expertise, manufacturing capabilities and the distribution channels to deliver products to customers.

If we are not able to continually design, manufacture, and successfully introduce new or enhanced products or services that are comparable or superior to those provided by our competitors and at comparable or better prices, we could experience pricing pressures and reduced sales, gross profit margins, profits, and market share, each of which could have a materially adverse effect on our business.

Difficulties in estimating customer demand in our products segment could harm our profit margins.

Orders from our distributors and other distribution participants are based on demand from end-users.

Prospective end-user demand is difficult to measure.

This means that our revenue during any fiscal quarter could be adversely impacted by low end-user demand, which could in turn negatively affect orders we receive from distributors and dealers.

Our expectations for both short and long-term future net revenues are based on our own estimates of future demand.

Revenue for any particular time period is difficult to predict with any degree of certainty.

We typically ship products within a short time after we receive an order;

consequently, unshipped backlog has not historically been a good indicator of future revenue.

We believe that the level of backlog is dependent in part on our ability to forecast revenue mix and plan our manufacturing accordingly.

A significant portion of our customers’ orders are received during the last month of the quarter.

We budget the amount of our expenses based on our revenue estimates.

If our estimates of sales are not accurate and we experience unforeseen variability in our revenue and operating results, we may be unable to adjust our expense levels accordingly and our gross profit and results of operations will be adversely affected.

Higher inventory levels or stock shortages may also result from difficulties in estimating customer demand.

If we are unable to protect our intellectual property rights or have insufficient proprietary rights, our business would be materially impaired.

We currently rely primarily on a combination of trade secrets, copyrights, trademarks, patents, patents pending, and nondisclosure agreements to establish and protect our proprietary rights in our products.

Our success is dependent in part on obtaining, maintaining and enforcing our intellectual property rights.

If we are unable to obtain, maintain and enforce intellectual property legal protection covering our products, then no assurances can be given that others will not independently develop technologies similar to ours, or duplicate or design around aspects of our technology.

In addition, we cannot assure that any patent or registered trademark owned by us will not be invalidated, circumvented or challenged, or that the rights granted thereunder will provide competitive advantages to us.

Costly litigation may be necessary to enforce our intellectual property rights.

We believe our products and other proprietary rights do not infringe upon any proprietary rights of third parties;

however, we cannot ensure that third parties will not assert infringement claims in the future.

We currently hold only a limited number of patents.

To the extent that we have patentable technology that is material to our business and for which we have not filed patent applications, others may be able to use such technology or even gain priority over us by patenting such technology themselves, which could have a material adverse effect on our business.

With respect to any patent application we have filed, we cannot ensure that a patent will be awarded.

ITEM 1 A - RISK FACTORS

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 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.

The complexity of the technology involved, and the uncertainty of intellectual property litigation increase these risks.

See Part I, Item 3 .

Legal Proceedings and Note 8 – Commitments and Contingencies of the Notes to Consolidated Financial Statements (Part II, Item 8 ) for information regarding current legal proceedings involving our intellectual property rights.

Our sales depend to a certain extent on government funding and regulation.

In the audio conferencing products market, the revenue generated from sales of our audio conferencing products for distance learning and courtroom facilities depends on government funding.

In the event government funding for such initiatives was reduced or became unavailable, our sales could be negatively impacted.

Additionally, many of our products are subject to governmental regulations.

New regulations could impact sales in a materially adverse manner.

Environmental laws and regulations subject us to a number of risks and could result in significant costs and impact on revenue.

Regulations regarding the materials used in manufacturing, the process of disposing of electronic equipment and the efficient use of energy require us to take additional time to obtain regulatory approvals of new products in international markets.

Such regulations may impact our ability to expand our sales in a timely and cost-effective manner and, as a result, our business could be harmed.

A material weakness was identified in our internal control over financial reporting.

If we fail to maintain effective internal control over financial reporting in the future, we may be unable to report our financial results accurately on a timely basis, investors could lose confidence in our reported financial information, the trading price of our common shares could decline and our access to the capital markets or other financing sources could become limited.

In connection with the audit of our consolidated financial statements as of December 31, 2017, our independent registered public accounting firm identified deficiencies in our system of internal control over financial reporting that it considered to be a material weakness related to the accurate and timely reporting of our financial results and disclosures for the fiscal year ended December 31, 2017 and our testing and assessment of the design and operating effectiveness of internal controls over financial reporting in a timely manner.

The Public Company Accounting Oversight Board's Auditing Standard No.

5 defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

See Part II, Item 9 A, “Controls and Procedures.”

We initiated remedial measures and conducted an evaluation of the effectiveness of our internal control over financial reporting for the years 2019 , 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, and concluded that remediation of the material weakness identified during the 2017 audit has been completed.

We also concluded under this evaluation that our internal control over financial reporting was effective as of December 31, 2022 and December 31, 2023, 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.

If we fail to implement and maintain effective internal control over financial reporting, or if additional material weaknesses or any significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements, and we could be required to restate our financial results.

In addition, if we are unable to successfully remediate future material weakness and if we are unable to produce accurate and timely financial statements, our stock price may be materially adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements.

ITEM 1 A - RISK FACTORS

We have identified two significant deficiencies in internal control over financial reporting, and if we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

We are req uired to establish and maint ain appropriate internal controls over financial reporting.

Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operation s.

Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial fraud.

In the course of completing its assessment of internal control over financial reporting as of December 31, 2021, management did not identify any material weaknesses but did identify the continued existence of two significant deficiencies in the lack of end user segregation in our accounting system and a failure to perform user access audits for certain system applications.

Specifically, management believes that we may not be able to adequately segregate responsibility over financial transaction processing and reporting.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting, that is less severe than a material weakness yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.

Although we are unable to remediate the end user segregation significant deficiency with current personnel, we are mitigating its potential impact, primarily through a review of all employee’s access rights in our accounting system.

In addition, management’s assessment of internal controls over financial reporting may identify additional weaknesses and conditions that need to be addressed or other potential matters that may raise concerns for investors.

Any actual or perceived weaknesses and conditions that need to be addressed in o ur internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

Our profitability may be adversely affected by our continuing dependence on our distribution channels.

We market our products primarily through a network of distributors who in turn sell our products to value-added resellers.

All of our agreements with such distributors and other distribution participants are non-exclusive, terminable at will by both parties, and generally short-term.

No assurances can be given that any or all such distributors or other distribution participants will continue their relationship with us.

Distributors and, to a lesser extent, value-added resellers cannot easily be replaced and any loss of revenues from these and other sources or our inability to reduce expenses to compensate for such loss of revenue could adversely affect our net revenue and profit margins.

Although we rely on our distribution channels to sell our products, our distributors and other distribution participants are not obligated to devote any specified amount of time, resources, or efforts to the marketing of our products, or to sell a specified number of our products.

There are no prohibitions on distributors or other resellers offering products that are competitive with our products, and some do offer competitive products.

The support of our products by distributors and other distribution participants may depend on the competitive strength of our products and the price incentives we offer for their support.

If our distributors and other distribution participants are not committed to our products, our revenue and profit margins may be adversely affected.

Additionally, we offer our distributors price protection on their inventory of our products.

If we reduce the list price of our products, we will compensate our distributors for the respective products that remain in their inventory on the date the price adjustment becomes effective, provided that they have been providing inventory reports consistently and the inventory was bought within the six months preceding the price adjustment date.

Our net revenue and profit margins could be adversely affected if we reduce product prices significantly or distributors happen to have significant on-hand inventory of the affected product at the time of a price reduction.

Further, if we do not have sufficient cash resources to compensate distributors on terms satisfactory to them or us, our price protection obligations may prevent us from reacting quickly to changing market conditions.

We are substantially dependent on our sales force to effectively execute our sales, pricing and business strategies.

We believe that there is significant competition for skilled sales personnel with technical knowledge.

Our ability to grow our business depends on our success in recruiting, training, and retaining sales personnel to support our sales.

We periodically adjust our sales organization and our compensation programs to optimize our sales operations, to increase revenue, and to support our business model.

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.

We have in the past experienced, and may again experience, technical difficulties and delays with the development and introduction of new products.

Many of the products we develop contain sophisticated and complicated circuitry, software and components and utilize manufacturing techniques involving new technologies.

Potential difficulties in the development process that we may experience include the following:

(a) meeting required specifications and regulatory standards;

(b) hiring and keeping a sufficient number of skilled developers;

(d) obtaining prototype products at anticipated cost levels;

(e) having the ability to identify problems or product defects in the development cycle;

and (f) achieving necessary manufacturing efficiencies.

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.

Once new products reach the market, they may have defects, or may be met by unanticipated new competitive products, which could adversely affect market acceptance of these products and our reputation.

Other factors that may affect our success include properly addressing the complexities associated with compatibility issues, channel partner and sales strategies, sales force integration and training, technical and sales support, and field support.

As a result, it is possible that investments that we are making in developing new products and technologies may not yield the planned financial results.

If we are not able to manage and minimize such potential difficulties, our business and results of operations could be negatively affected.

We depend on an outsourced manufacturing strategy, and we may face increased risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions, which could negatively impact our product availability and revenues.

We outsource the manufacturing of all of our products to electronics manufacturing services (“EMS”) providers located outside the U.S.

If any of these EMS providers experience (i) difficulties in obtaining sufficient supplies of components, (ii) difficulties in obtaining adequate skilled labor, (iii) component prices significantly exceeding anticipated costs, (iv) an interruption in their operations, or (v) otherwise suffers capacity constraints, we could experience a delay in production and shipping of these products, which would have a negative impact on our revenue.

Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantines or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption could have a material adverse effect on our business.

Operating in the international outsourcing environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations.

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

Switching from one EMS provider to another or switching from one location of manufacturing to another location similar to our recent 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 , 2022 and 2023 due to switching of manufacturing from one location to another.

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 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 .

We may be forced to purchase supplies and materials in larger quantities or in advance of when we would typically purchase them.

This may cause us to require use of capital sooner than anticipated.

Alternatively, we may also be forced to seek new third-party suppliers or contractors, whom we have not worked with in the past, and it is uncertain whether these new suppliers will be able to adequately meet our materials or labor needs.

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.

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