clro-20250331.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period _______ to _______

Commission file number:001-33660

CLEARONE, INC.

(Exact name of registrant as specified in its charter)

Delaware		87-0398877
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

5225 Wiley Post Way, Suite 500, Salt Lake City, Utah		84116
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (801) 975-7200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001		CLRO		The NASDAQ Capital Market

Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Larger Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Yes ☐ No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of ClearOne common stock outstanding as of May 15, 2025 was 25,992,995.

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CLEARONE, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

INDEX


	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	3

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 2024	4

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	5

	Unaudited Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

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PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CLEARONE, INC

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)

	March 31, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	961		$	1,417
Receivables, net of allowance of $411 and $405		1,909			2,208
Inventories, net		9,866			11,224
Income tax receivable		27			10
Prepaid expenses and other assets		4,324			3,894
Total current assets		17,087			18,753
Long-term inventories, net		4,905			4,920
Property and equipment, net		442			500
Operating lease - right of use assets, net		672			750
Intangibles, net		1,500			1,539
Other assets		73			82
Total assets	$	24,679		$	26,544
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,910		$	1,804
Accrued liabilities		1,628			1,724
Deferred product revenue		12			17
Total current liabilities		3,550			3,545
Operating lease liability, net of current		460			514
Other long-term liabilities		1,155			1,154
Total liabilities		5,165			5,213

Shareholders' equity:
Common stock, par value $0.001, 50,000,000 shares authorized, 25,992,995 and 23,992,995 shares issued and outstanding, respectively		26			24
Additional paid-in capital		32,700			31,672
Accumulated other comprehensive loss		(319	)		(306	)
Accumulated deficit		(12,893	)		(10,059	)
Total shareholders' equity		19,514			21,331
Total liabilities and shareholders' equity	$	24,679		$	26,544

See accompanying notes

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CLEARONE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

(Dollars in thousands, except per share amounts)

	Three months ended March 31,
	2025			2024
Revenue	$	2,313		$	3,622
Cost of goods sold		2,192			2,471
Gross profit		121			1,151

Operating expenses:
Sales and marketing		1,116			1,312
Research and product development		691			894
General and administrative		1,160			1,023
Total operating expenses		2,967			3,229

Operating loss		(2,846	)		(2,078	)

Interest income (expense)		—			—
Other income, net		12			178

Loss before income taxes		(2,834	)		(1,900	)

Provision (benefit) for income taxes		—			(2	)

Net loss	$	(2,834	)	$	(1,898	)

Basic weighted average shares outstanding		24,748,551			23,969,148
Diluted weighted average shares outstanding		24,748,551			23,969,148

Basic loss per share	$	(0.11	)	$	(0.08	)
Diluted loss per share	$	(0.11	)	$	(0.08	)

Comprehensive loss:
Net loss	$	(2,834	)	$	(1,898	)
Unrealized gain on available-for-sale securities, net of tax		—			22
Change in foreign currency translation adjustment		(13	)		(2	)
Comprehensive loss	$	(2,847	)	$	(1,878	)

See accompanying notes

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CLEARONE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per share amounts)

	Three months ended March 31,
	2025			2024
Cash flows from operating activities:
Net loss	$	(2,834	)	$	(1,898	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		125			167
Amortization of right-of-use assets		78			92
Share-based compensation expense		23			26
Provision for doubtful accounts, net		6			—
Change of inventory to net realizable value		272			193
Gain on sale of capitalized assets		(9	)		—
Gain on sale of marketable securities		—			(47	)
Changes in operating assets and liabilities:
Receivables		293			4,485
Inventories		1,101			(2,020	)
Prepaid expenses and other assets		(421	)		61
Accounts payable		105			(211	)
Accrued liabilities		(75	)		(321	)
Income taxes receivable		(18	)		9
Deferred product revenue		(5	)		(4	)
Operating lease liabilities		(80	)		(99	)
Net cash provided by (used in) operating activities		(1,439	)		433

Cash flows from investing activities:
Purchase of property and equipment		(17	)		(69	)
Purchase of intangibles		(13	)		(36	)
Proceeds from maturities and sales of marketable securities		—			2,325
Proceeds from sale of capitalized assets		12			—
Purchases of marketable securities		—			(1,947	)
Net cash provided by (used in) investing activities		(18	)		273

Cash flows from financing activities:
Net proceeds from equity-based compensation programs		7			7
Proceeds from sale of shares		1,000			—
Net cash provided by financing activities		1,007			7

Effect of exchange rate changes on cash and cash equivalents		(6	)		(4	)

Net increase (decrease) in cash and cash equivalents		(456	)		709
Cash and cash equivalents at the beginning of the period		1,417			17,835
Cash and cash equivalents at the end of the period	$	961		$	18,544

See accompanying notes

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CLEARONE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per share amounts)

The following is a summary of supplemental cash flow activities:

	Three months ended March 31,
	2025		2024
Cash paid for income taxes	$	—	$	(12	)
Cash paid for interest		—		—

See accompanying notes

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CLEARONE, INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited - Dollars in thousands, except per share amounts)

1. Business Description, Basis of Presentation and Significant Accounting Policies

Business Description:

ClearOne, Inc., together with its subsidiaries (collectively, “ClearOne” or the “Company”), is a global market leader enabling conferencing, collaboration, and AV streaming solutions for voice and visual communications. 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:

The fiscal year for ClearOne is the twelve months ending on December 31. The condensed consolidated financial statements include the accounts of ClearOne and its subsidiaries. All significant inter-company accounts and transactions have been eliminated.

These accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are not audited. Certain information and footnote disclosures that are usually included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been either condensed or omitted in accordance with SEC rules and regulations. The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of March 31, 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.

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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 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): Improvements to Income Tax Disclosures” on the topic of income taxes. The standard requires additional disclosure for income taxes. These requirements include: (i) requiring a public entity to disclose specific categories in the rate reconciliation; (ii) disclosure of additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate); (iii) annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; (iv) annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received); (v) annual disclosure of income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and (vi) annual disclosure of income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. For public entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company will adopt this guidance in fiscal 2025 and is in the process of evaluating the new requirements. 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.

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UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

2. Revenue Information

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

	Three months ended March 31,
	2025		2024
Audio conferencing	$	953	$	1,523
Microphones		1,118		1,571
Video products		242		528
	$	2,313	$	3,622

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

	Three months ended March 31,
	2025		2024
North and South America	$	960	$	1,094
Asia Pacific (includes Middle East, India and Australia)		1,188		2,000
Europe and Africa		165		528
	$	2,313	$	3,622

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UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited - Dollars in thousands, except per share amounts)

3. Loss Per Share

Loss per common share is computed based on the weighted-average number of common shares outstanding and, when appropriate, dilutive potential common stock outstanding during the period. Stock options, warrants and the convertible portion of senior convertible notes are considered to be potential common stock. The computation of diluted loss per share does not assume exercise or conversion of securities that would have an anti-dilutive effect.

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

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

	Three months ended March 31,
	2025			2024
Numerator:
Net loss	$	(2,834	)	$	(1,898	)
Denominator:
Basic weighted average shares outstanding		24,748,551			23,969,148
Dilutive common stock equivalents using treasury stock method		—			—
Diluted weighted average shares outstanding		24,748,551			23,969,148

Basic loss per common share	$	(0.11	)	$	(0.08	)
Diluted loss per common share	$	(0.11	)	$	(0.08	)

Weighted average options and warrants outstanding		5,591,139			6,420,553
Anti-dilutive options and warrants not included in the computation		5,591,139			6,420,553

4. Intangible Assets

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

	Estimated useful lives (years)			March 31, 2025			December 31, 2024
Tradename	5	to	7	$	555		$	555
Patents and technological know-how	10	to	20		7,309			7,298
Proprietary software	3	to	15		2,981			2,981
Other	3	to	5		323			323
Total intangible assets					11,168			11,157
Accumulated amortization					(9,668	)		(9,618	)
Total intangible assets, net				$	1,500		$	1,539

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

	Three months ended March 31,
	2025		2024
Amortization of intangible assets	$	50	$	110

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UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The estimated future amortization expense of intangible assets is as follows:

Years ending December 31,	Amount
2025 (Remainder)	$	154
2026		205
2027		75
2028		30
2029		30
Thereafter		1,006
Total	$	1,500

5. Inventories

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

	March 31, 2025		December 31, 2024
Current:
Raw materials	$	2,279	$	2,424
Finished goods		7,587		8,800
	$	9,866	$	11,224

Long-term:
Raw materials	$	1,248	$	1,112
Finished goods		3,657		3,808
	$	4,905	$	4,920

Long-term inventory represents inventory held in excess of our current (next 12 months) requirements based on our recent sales and forecasted level of sales. 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 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,
	2025		2024
Net loss incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory	$	272	$	193

6. Leases

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

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

	Three months ended March 31,
	2025		2024
Rent expense	$	112	$	109

The Company occupies a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease expiring in February 2028. The Gainesville facility is used primarily to support the Company's research and development activities.

The Company occupies a 9,402 square-foot facility in Salt Lake City, Utah under the terms of an operating lease expiring in February 2028. The facility supports the Company's principal administrative, sales, marketing, customer support, and research and product development activities.

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UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

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:

	Three months ended March 31,
	2025			2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(92	)	$	(115	)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	—

Supplemental balance sheet information related to leases was as follows:

	March 31, 2025			December 31, 2024
Operating lease right-of-use assets	$	672		$	750

Current portion of operating lease liabilities, included in accrued liabilities	$	231		$	257
Operating lease liabilities, net of current portion		460			514
Total operating lease liabilities	$	691		$	771

Weighted average remaining lease term for operating leases (in years)		2.84			2.99
Weighted average discount rate for operating leases		6.65	%		6.59	%

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

Years ending December 31,
2025 (Remainder)	$	208
2026		251
2027		259
2028		44
2029		—
Total lease payments		762
Less: Imputed interest		71
Total	$	691

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UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited - Dollars in thousands, except per share amounts)

7. Shareholders' Equity

SEC Form 10-Q filed by ClearOne Inc. (DE)