What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 104 added, 153 removed, 232 unchanged (53% of the section changed)

3 unchanged sentences

(Dollars in thousands, except par value)

September 30, 2024

March 31, 2025

December 31, 2024

1 unchanged sentence

Cash and cash equivalents

Current marketable securities

Patent cross license receivable

Receivables, net of allowance of $ 325

Receivables, net of allowance of $ 411 and $ 405

Inventories, net

2 unchanged sentences

Total current assets

Long-term marketable securities

Long-term inventories, net

23 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Cost of goods sold

8 unchanged sentences

Loss before income taxes

Provision for income taxes

Provision (benefit) for income taxes

Basic weighted average shares outstanding

10 unchanged sentences

(Dollars in thousands, except per share amounts)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Share-based compensation expense

Provision for doubtful accounts, net

Change of inventory to net realizable value

Gain on sale of capitalized assets

Gain on sale of marketable securities

Changes in operating assets and liabilities:

Legal settlement receivable

Prepaid expenses and other assets

9 unchanged sentences

Proceeds from maturities and sales of marketable securities

Proceeds from sale of capitalized assets

Purchases of marketable securities

1 unchanged sentence

Cash flows from financing activities:

Dividend payment

Net proceeds from equity-based compensation programs

Principal payments of debt

Net cash provided by (used in) financing activities

Proceeds from sale of shares

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

7 unchanged sentences

The following is a summary of supplemental cash flow activities:

Nine months ended September 30,

Three months ended March 31,

Cash paid for income taxes

8 unchanged sentences

The performance and simplicity of our advanced, comprehensive solutions offer unprecedented levels of functionality, reliability and scalability.

Going Concern:

As of March 31, 2025, our cash and cash equivalents were approximately $ 961 compared to $ 1,417 as of December 31, 2024.

Our working capital was $ 13,537 as of March 31, 2025.

Net cash used in operating activities was $ 1,439 for the three months ended March 31, 2025, a decrease of $ 1,796 compared to $ 433 of cash provided by operating activities for the three months ended March 31, 2024.

The decrease in cash is mainly due to a decrease in cash collected from receivables.

These and other conditions raise substantial doubt about continuing as a going concern.

We will need to complete one or more strategic transactions or raise additional working capital to continue our normal and planned operations.

We will need to generate and sustain significant revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.

In addition, as a public company, we will incur accounting, legal and other expenses.

These expenditures will make it necessary for us to continue to raise additional working capital.

Our efforts to grow our business may be costlier than we expect, and we may not be able to generate sufficient revenue to offset our increased operating expenses.

We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays and other unknown events.

Accordingly, substantial doubt exists about our ability to continue as a going concern and we cannot assure you that we will achieve sustainable operating profits as we continue to expand our business and otherwise implement our growth initiatives.

In February 2025, the Company raised $ 1,000 in a private placement transaction.

We may be unable to complete a strategic transaction within a reasonable timeframe, on attractive terms or at all, and market conditions, including the historical volatility in our common stock will likely limit our ability to raise capital on favorable terms, or at all, and the terms of any public or private offerings of debt or equity securities likely would be significantly dilutive to existing stockholders.

There is no set timetable for the overall process given the anticipated timelines for different strategic alternatives may vary, and there can be no assurance that this process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms or at all.

The Company’s ability to continue as a going concern is dependent on the outcome of these uncertainties.

As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date these consolidated financial statements are issued.

The consolidated financial statements as of March 31, 2025 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months after these financial statements are issued, and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

These Consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation:

4 unchanged sentences

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

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of September 30, 2024 and December 31, 2023 , the results of operations for the three and nine months ended September 30, 2024 and 2023 , and the cash flows for the nine months ended September 30, 2024 and 2023 .

The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results for a full-year period.

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of March 31, 2025 and December 31, 2024 , the results of operations for the three months ended March 31, 2025 and 2024 , and the cash flows for the three months ended March 31, 2025 and 2024 .

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for a full-year period.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Significant Accounting Policies:

The significant accounting policies were described in Note 1 to the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2024 .

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

There have been no changes to these policies during the quarter ended March 31, 2025 that are of significance or potential significance to the Company.

Recent accounting pronouncements:

ASU 2023 - 07 , Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 07 , Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The standard is effective for full year 2024 reporting, and for interim reporting beginning in 2025 .

The adoption of this ASU did not change the way the Company evaluates its reportable segments and, as a result, did not have a material impact on the Company’s segment-related disclosures.

ASU 2023 - 09 , Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023 - 09 “Income Taxes (Topic 740 ):

11 unchanged sentences

As a result, the Company has not yet determined the impact this new ASU will have on its disclosures.

ASU 2024 - 03 , Income Statement—Reporting Comprehensive Income (Topic 220 ):

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024 - 03 , "Income Statement—Reporting Comprehensive Income (Topic 220 ):

Disaggregation of Income Statement Expenses," which requires public business entities, such as the Company, to provide disaggregated disclosure of specific natural expense categories underlying certain income statement expense line items in the notes to the financial statements.

The standard identifies five required natural expense categories for disaggregation—employee compensation, depreciation, amortization, inventory expense, and other manufacturing expenses—along with a residual "other" category for remaining amounts within relevant expense captions (e.g., cost of sales, selling, general and administrative expenses).

ASU 2024 - 03 does not alter the expense captions presented on the face of the income statement but enhances footnote disclosures to improve transparency.

The standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted, and must be applied prospectively, though retrospective application is optional.

An update in ASU 2025 - 01 clarified that interim period disclosures are not required until annual periods beginning after December 15, 2027.

The Company is in the process of evaluating the impact of ASU 2024 - 03 on its consolidated financial statements.

We expect adoption to necessitate modifications to our financial reporting processes and systems to capture and disclose the required disaggregated expense information in the footnotes.

Management anticipates that this will enhance the granularity of expense disclosures but does not expect a material effect on our reported financial position or results of operations.

We are reviewing our current expense classification practices and data collection capabilities to ensure compliance with the new requirements upon adoption.

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

1 unchanged sentence

(Dollars in thousands, except per share amounts)

As of September 30, 2024 , our cash and cash equivalents were approximately $ 1,685 compared to $ 17,835 as of December 31, 2023 .

Our working capital was $ 19,712 as of September 30, 2024 .

Net cash used in operating activities was $ 4,575 for the nine months ended September 30, 2024 , a decrease of $ 55,718 compared to $ 51,143 of cash provided by operating activities for the nine months ended September 30, 2023 .

The decrease in cash is mainly due to payment of dividends $ 14,496 in April 2024 and $ 28,979 in May 2023.

These conditions raise substantial doubt about continuing as a going concern.

T he Company believes, although there can be no assurance, that the current cash position and effective management of working capital, will provide the liquidity needed to meet our operating needs through at least November 14, 2025 .

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

however, there can be no assurance that, if needed, the Company will be successful in obtaining the necessary funds through equity or debt financing on favorable terms or at all.

If the Company needs additional capital and is unable to secure financing, it may be required to further reduce expenses, or delay product development and enhancement.

Revenue Information

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

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Audio conferencing

1 unchanged sentence

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

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

North and South America

10 unchanged sentences

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

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Basic weighted average shares outstanding

Dilutive common stock equivalents using treasury stock method

Diluted weighted average shares outstanding

1 unchanged sentence

Diluted loss per common share

Weighted average options, warrants and convertible portion of senior convertible notes outstanding

Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Marketable Securities

The Company has classified its marketable securities as available-for-sale securities.

These securities are carried at estimated fair value with unrealized holding gains and losses included in accumulated other comprehensive loss in stockholders’ equity until realized.

Gains and losses on marketable security transactions are reported on the specific-identification method.

Dividend and interest income are recognized when earned.

The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of securities as of September 30, 2024 and December 31, 2023 were as follows:

Amortized cost

Gross unrealized holding gains

Gross unrealized holding losses

Estimated fair value

September 30, 2024

Available-for-sale securities:

Certificates of deposit

Total available-for-sale securities

Amortized cost

Gross unrealized holding gains

Gross unrealized holding losses

Estimated fair value

December 31, 2023

Available-for-sale securities:

US Treasury securities

Certificates of deposit

Corporate debt securities

Total available-for-sale securities

Amortized cost

Estimated fair value

Due within one year

Due after one year through five years

Total available-for-sale securities

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Debt securities in an unrealized loss position as of September 30, 2024 were not deemed impaired at acquisition and subsequent declines in fair value are not deemed attributed to declines in credit quality.

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

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

Less than 12 months

More than 12 months

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

As of September 30, 2024

Certificates of Deposit

Less than 12 months

More than 12 months

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

Estimated fair value

Gross unrealized holding losses

As of December 31, 2023

US Treasury securities

Certificates of Deposit

Corporate debt securities

Weighted average options and warrants outstanding

Anti-dilutive options and warrants not included in the computation

Intangible Assets

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

Intangible assets as of March 31, 2025 and December 31, 2024 consisted of the following:

Estimated useful lives (years)

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Total intangible assets, net

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

Three months ended September 30,

Nine months ended September 30,

The amortization of intangible assets for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

Amortization of intangible assets

4 unchanged sentences

2025 (Remainder)

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

September 30, 2024

Inventories, net of reserves, as of March 31, 2025 and December 31, 2024 consisted of the following:

March 31, 2025

December 31, 2024

5 unchanged sentences

We expect to sell the above inventory, net of reserves, at or above the stated cost and believe that no loss will be incurred on its sale, although there can be no assurance of the timing or amount of any sales.

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

Three months ended September 30,

Nine months ended September 30,

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

Net loss incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

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

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

Rent expense for three and nine months ended September 30, 2024 and 2023 was as follows:

Three months ended September 30,

Nine months ended September 30,

Rent expense for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

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

4 unchanged sentences

(Dollars in thousands, except per share amounts)

The Company occupies a 6,175 square-foot facility in Chennai, India under the terms of an operating lease which expired in August 2024.

This facility support s the Company's administrative, marketing, customer support, and research and product development activities.

The lease is currently operating on a month-to-month basis.

The Company is planning to renew the lease.

The Company occupies a 40,000 square-foot warehouse in Salt Lake City, Utah under the terms of an operating lease expiring in April 2025, which serves as the Company's primary inventory fulfillment center.

We occupy a 6,175 square-foot facility in Chennai, India under the terms of an operating lease expiring in September 2025.

This facility supports our administrative, marketing, customer support, and research and product development activities.

We occupied a 40,000 square-foot warehouse in Salt Lake City, Utah under the terms of an operating lease expiring in April 2025, which served as our primary inventory fulfillment center.

This lease was cancelled on January 31, 2025.

We entered into a new lease on December 1, 2024 to occupy a 2,590 square-foot warehouse in Salt Lake City Utah.

The lease is an operating lease expiring in February 2028.

This facility serves as our primary warranty and repair center.

Supplemental cash flow information related to leases was as follows:

Nine months ended September 30,

Three months ended March 31,

Cash paid for amounts included in the measurement of lease liabilities

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

Weighted average discount rate for operating leases

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

The following represents maturities of operating lease liabilities as of March 31, 2025 :

Years ending December 31,

5 unchanged sentences

Shareholders' Equity

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Common stock and additional paid-in capital

1 unchanged sentence

Dividends declared

Issuance of common stock, net

Share-based compensation expense

10 unchanged sentences

Total shareholders' equity

Issue of Common Stock a nd Warrants

On September 12, 2021, the Company entered into a securities purchase agreement with certain purchasers named therein, pursuant to which the Company issued 3,623,189 shares of the Company's common stock, par value $ 0.001 per share at an offering price of $ 2.76 per share.

The Company received gross proceeds of approximately $ 10,000 and net proceeds of $ 9,288 after deducting placement agent fees and related offering expenses.

In a concurring private placement the Company also issued to the same purchasers warrants exercisable for an aggregate of 3,623,189 shares of common stock at an exercise price of $ 2.76 per share.

Each warrant became immediately exercisable and will expire on March 15, 2027 .

On January 4, 2022, the Company entered into a Securities Purchase Agreement with Edward D.

Bagley, an affiliate of the Company, pursuant to which the Company agreed to issue and sell, in a private placement 1,538,461 shares (the “Shares”) of the Compan y’s common stock, par value $ 0.001 per share, at a purchase price of $ 1.30 per share of Common Stock.

The consideration for the Shares is the cancellation and termination of Mr.

Bagley’s outstanding bridge loan to the Company in the principal amount of $ 2,000 originally issued on July 2, 2021 and amended and restated on September 11, 2021 .

Issue of Common Stock

On February 26, 2025 the Company entered into a securities purchase agreement with Edward D.

Bagley, pursuant to which the Company agreed to issue and sell, in a private placement at-the-market offering of 2,000,000 shares of the Company’s common stock, par value $ 0.001 per share, at a purchase price of $ 0.50 per share of Common Stock.

The Company received $ 1,000 in cash in connection with the sale.

Bagley is an affiliate of the Company and the Company’s single largest stockholder

5 unchanged sentences

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

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

A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2025 , is as follows:

Number of shares

3 unchanged sentences

Canceled or expired

Options outstanding at September 30, 2024

Options exercisable at end of September 30, 2024

As of September 30, 2024 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 77 , which will be recognized over a weighted average period of 2.2 years.

Options outstanding at March 31, 2025

Options exercisable at end of March 31, 2025

As of March 31, 2025 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 88 , which will be recognized over a weighted average period of 1.35 years.

Share based compensation expense has been recorded as follows:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Cost of goods sold

6 unchanged sentences

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

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

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

Provision for income taxes for the three months ended March 31, 2025 mostly represents income tax expense (benefit) recorded for jurisdictions outside the United States.

The Company had approximately $ 969 of uncertain tax positions as of March 31, 2025 .

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

Fair Value Measurements

The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price).

The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:

Level 1 - Quoted prices in active markets for identical assets and liabilities.

Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

This category generally includes U.S.

Government and agency securities;

municipal securities;

mutual funds and securities sold and not yet settled.

Level 3 - Unobservable inputs.

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

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

September 30, 2024

Certificates of deposit

December 31, 2023

US Treasury securities

Certificates of deposit

Corporate debt securities

Operating Segment

The Company operates as one operating segment.

Operating segments are defined as components of an entity for which separate financial information is regularly evaluated by the chief operating decision maker ("CODM"), which is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance.

The Company's CODM evaluates financial information and resources and assesses the performance of these resources on a consolidated basis.

There is no expense or asset information that is supplemental to information disclosed within the consolidated financial statements, that is regularly provided to the CODM.

The allocation of resources and assessment of performance of the operating segment is based on consolidated net loss and functional expenses as reported on our consolidated statements of operations and comprehensive loss.

Because the Company operates as one operating segment, financial segment information, including expense and asset information, can be found in the consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements