Item 1. Business
ITEM 1 - BUSINESS
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:
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Continue our product innovation to bring to market products that are needed by our partners and end-users;
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Increase margins of our products and reduce operational costs to improve profitability;
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Focus on our core products and improve the quality, ease of use, and competitiveness of our products;
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Develop products that have improved interoperability with products from other suppliers; and
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Provide continually improving levels of support to our channel partners.
We currently participate in the following markets:
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All aspects of audio conferencing including installed professional audio conferencing through DSP mixers, and USB based speakerphones;
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Professional microphones to support audio and video collaboration through patented beamforming microphone arrays, ceiling microphones and wireless microphones;
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Visual collaboration including cameras, and Bring-Your-Own-Device systems; and
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Audio Visual Networking which includes sound reinforcement and audio distribution.
Our business goals are to:
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Improve our global market share in the professional installed conferencing products segment;
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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;
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Extend total addressable market from our traditional stronghold of installed audio conferencing and microphones to adjacent complementary markets – video collaboration and AV networking;
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Continue to leverage visual collaboration and AV networking technologies to enlarge our current market share;
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Focus on the small and medium business market segment with appropriately scaled, lower cost and less complex products and solutions;
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Capitalize on the growing influence of information technology channels in the audio-visual market and introduce more solutions to these channels;
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Capitalize on the convergence of audio visual and information technology to meet enterprise and commercial communication needs for complete AV room solutions;
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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;
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Pursue certifications and partnerships to position our products favorably in the growing Microsoft Teams ecosystem;
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Leverage software-based platforms across all our product lines; and
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Expand and strengthen our sales channels.
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We will continue to focus on our core strengths, which include the following:
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Providing a superior conferencing and collaboration experience;
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Delivering the complete value chain for audio visual communication;
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Extending our capabilities in product innovation in the areas of AV collaboration and AV networking;
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Offering greater innovation, interoperability and value to our end-users and channel partners;
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Leveraging and extending ClearOne technology, leadership and innovation;
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Focusing on our core products and improving the quality of our products to attain higher levels of customer satisfaction;
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Leveraging our strong domestic and international channels to distribute new products; and
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Strengthening existing end-user and channel partner relationships through dedicated and comprehensive support.
PRODUCTS
Our products can be broadly categorized into the following:
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Audio-conferencing including installed DSP based professional audio conferencing and USB-based speakerphones;
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Professional microphones consisting of patented beamforming microphone arrays, ceiling microphones and wireless microphones; and
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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:
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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;
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Powerful architecture – Up to 12 mic/line inputs per unit, built-in USB audio interface, built-in optional Dante™ for networked audio;
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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;
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Supports video conferencing, audio and web conferencing, in-room meetings, wireless presentation, and more;
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Integration of VoIP or telephony, USB, and Dante™ for maximum functionality;
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Ability to control local meeting rooms and audio distribution applications with flexible options – BYOD dialer apps or 3 rd party control systems.
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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 .
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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 .
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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 .
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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 .
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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.
VIDEO
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 .
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Cameras
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. Large classroom settings, training centers, or any wide conferencing area are all captured and presented with perfect clarity in any of the viewing mode options. A 4 x 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, and others.
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. 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.
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 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. With dual video outputs HDMI and IP, the UNITE 260 Pro Camera is an excellent choice for a hybrid environment: streaming content while simultaneously showing it live where the presentation is occurring.
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AV Networking
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 .
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MARKETING AND SALES
We use a two -tier channel model through which we sell our commercial products to a worldwide network of independent professional audiovisual, information technology and telecommunications distributors, who then sell our products to independent systems integrators, dealers, and value-added resellers, who in turn work directly with the end-users of our products for product fulfillment and installation, if needed. Our products are also specified and recommended by professional audio-visual consultants. We also sell our commercial products directly to certain dealers, systems integrators, value-added resellers, and end-users.
Our product sales generated in the United States and outside the United States for the years ended December 31 are as follows:
Revenue in millions
2024
2023
Revenue
%
Revenue
%
In the United States
$
3.8
33.3
%
$
8.2
43.9
%
Outside United States
7.6
66.7
%
10.5
56.1
%
$
11.4
100.0
%
$
18.7
100.0
%
We sell directly to our distributors and resellers in approximately 46 countries worldwide. We anticipate that the portion of our total product revenue from international sales will continue to be a significant portion of our total revenue as we further enhance our focus on developing new products, establishing new channel partners, strengthening our presence in key growth areas, complying with regional environmental regulatory standards, and improving product localization with country-specific product documentation and marketing materials.
Distributors, Resellers and Independent Integrators
We sold our products directly to approximately 202 distributors and direct resellers throughout the world during 2024 . Distributors and resellers purchase our products at a discount from list price and resell them worldwide to hundreds of independent systems integrators, telephony value-added resellers, IT value-added resellers, and PC dealers on a non-exclusive basis. Our distributors maintain their own inventory and accounts receivable and are required to provide technical and non-technical support for our products to the next level of distribution participants. We work with our distributors and resellers to establish appropriate inventory stocking levels. We also work with our distributors and resellers to maintain relationships with our existing systems integrators, dealers, and other value-added resellers.
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. We maintain close working relationships with all our reseller partners and offer them education and training on all our products.
Marketing
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. We also regularly attend industry forums and exhibit our products at multiple regional and international trade shows, often with our channel partners. These trade shows provide exposure for our brand and products to a wide audience. 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.
Customers
Since we sell through distributors and value-added resellers, we do not have comprehensive information on end-users who ultimately use our products. As a result, we do not know whether any end-user accounted for more than 10 % of our total revenue during any of the periods reported in this Annual Report. Our customers are distributors and value-added resellers. 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
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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 $17 thousand and $ 30 thousand as of December 31, 2024 and 2023 , respectively. We had a backlog of unfulfilled orders of app roximately $0.3 million and $ 0.4 million as of December 31, 2024 and 2023 , respectively.
Competition
The audio-visual product markets are characterized by intense competition, rapidly evolving technology, and increased business consolidation. We compete with businesses having substantially greater financial, research and product development, manufacturing, marketing, and other resources. If we are not able to continually design, manufacture, and successfully market 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. Our competitors vary within each product category. We believe we are able to differentiate ourselves and therefore successfully compete as a result of the high audio quality of our products resulting from a combination of proprietary and highly advanced audio signal processing technologies and networking technology in the form of trade secrets and patented intellectual property, technical and channel support services, and the strength of our channels and brands. It is critical for our success to be able to defend our intellectual property including trademarks, trade secrets and patents from our competitors who have far more resources.
We believe the following principal factors drive our sales:
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Quality, features and functionality, and ease of use of the products;
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Broad and deep global channel partnerships;
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Brand name recognition and acceptance;
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Effective sales and marketing;
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Quality of sales and technical support services; and
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Significant established history of successful worldwide installations for diverse vertical markets.
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, 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 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.
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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 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 Flex (formerly, Flextronics).
Seasonality
We do not recognize a consistent pattern between the quarters to identify seasonality.
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 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 media streaming technologies, ( c) video technologies, and (d) cloud technologies. We also have expertise in wireless technologies, VoIP, software and network system development. We believe that continued investment in our core technological competencies is vital to developing new products and to enhancing existing products.
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Intellectual Property and Other Proprietary Rights
We believe that our success depends in part on our ability to protect our proprietary rights. We rely on a combination of patent, copyright, trademark, and trade secret laws and confidentiality agreements and processes to protect our proprietary rights.
As of December 31, 2024 , we had approximately 79 patents and 5 pending patent applications, including foreign counterpart patents and foreign applications. Our patents and pending patent applications cover a wide range of our products and services including, but not limited to acoustic echo cancellation, beamforming microphone arrays, systems that enable streaming media over IP networks, algorithms for video processing, wireless conferencing systems, spatial audio, and technologies for the Internet of Things. The durations of our patents are determined by the laws of the country of issuance. For the U.S., patents may be 17 years from the date of issuance of the patent or 20 years from the date of its filing, depending upon when the patent application was filed. In addition, we hold numerous U.S. trademarks. The laws of foreign countries may not protect our intellectual property to the same degree as the laws of the United States.
We will obtain patents and other intellectual property rights used in connection with our business when practicable and appropriate. Our intellectual property policy is to protect our products, technology and processes by asserting our intellectual property rights where appropriate and prudent. 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 was involved in patent infringement lawsuits against Shure Inc . (" Shure "). 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. If we are not able to protect our proprietary rights or if those rights are invalidated or circumvented, our business may be adversely affected. We may be subject to litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our products or services. For more information concerning the risks related to patents, trademarks, and other intellectual property, please see “Risk Factors-Risks Related to our Business.”
We generally require our employees, certain customers and partners to enter into confidentiality and non-disclosure agreements before we disclose any confidential aspect of our technology, services, or business. In addition, our employees are required to assign to us any proprietary information, inventions, or other technology created during the term of their employment with us. However, these precautions may not be sufficient to protect us from misappropriation or infringement of our intellectual property.
Employees
As of December 31, 2024 , we had 80 full-time e mployees. Of these employees, 4 0 were located in the U.S. and 40 in locations outside the U.S. None of our employees are subject to a collective bargaining agreement and we believe our relationship with our employees is good. We also hire contractors with specific skill sets to meet our operational needs.
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