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Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Dec. 31, 2019	Mar. 25, 2020	Jun. 30, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	CLEARONE INC
Entity Central Index Key	0000840715
Trading Symbol	clro
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		16,650,725
Entity Public Float			$ 13.0
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 4,064	$ 11,211
Marketable securities	3,026	951
Receivables, net of allowance for doubtful accounts of $424 and $631, respectively	5,468	6,782
Inventories	11,441	13,228
Prepaid expenses and other assets	1,184	2,193
Total current assets	25,183	34,365
Long-term marketable securities	1,517	3,764
Long-term inventories, net	6,284	8,953
Property and equipment, net	1,044	1,388
Operating lease – right of use assets, net	2,459
Intangible assets, net	14,009	10,249
Other assets	4,614	196
Total assets	55,110	58,915
Current liabilities:
Accounts payable	2,871	3,729
Accrued liabilities	3,205	1,996
Deferred product revenue	173	283
Total current liabilities	6,249	6,008
Senior convertible notes	2,222
Deferred rent		135
Operating lease liability	2,021
Other long-term liabilities	140	571
Total liabilities	10,632	6,714
Shareholders’ equity:
Common stock, par value $0.001, 50,000,000 shares authorized, 16,650,725 and 16,630,597 shares issued and outstanding, respectively	17	17
Additional paid-in capital	58,520	57,840
Accumulated other comprehensive loss	(176)	(181)
Accumulated deficit	(13,883)	(5,475)
Total shareholders’ equity	44,478	52,201
Total liabilities and shareholders’ equity	$ 55,110	$ 58,915

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 424	$ 631
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	16,650,725	16,630,597
Common stock, shares outstanding (in shares)	16,650,725	16,630,597

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenue	$ 25,042	$ 28,156
Cost of goods sold	13,849	14,785
Gross profit	11,193	13,371
Operating expenses:
Sales and marketing	7,935	9,908
Research and product development	5,775	7,840
General and administrative	6,045	5,950
Total operating expenses	19,755	23,698
Operating loss	(8,562)	(10,327)
Other income, net	210	80
Loss before income taxes	(8,352)	(10,247)
Provision for income taxes	56	6,440
Net loss	$ (8,408)	$ (16,687)
Basic loss per common share (in dollars per share)	$ (0.51)	$ (1.87)
Diluted loss per common share (in dollars per share)	$ (0.51)	$ (1.87)
Basic weighted average shares outstanding (in shares)	16,638,580	8,942,629
Diluted weighted average shares outstanding (in shares)	16,638,580	8,942,629
Comprehensive loss:
Net loss	$ (8,408)	$ (16,687)
Other comprehensive income/loss:
Unrealized gain (loss) on available-for-sale securities, net of tax	68	(38)
Change in foreign currency translation adjustment	(63)	(78)
Comprehensive loss	$ (8,403)	$ (16,803)

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common stock and paid-in capital	Accumulated other comprehensive loss	Retained earnings (accumulated deficit)
Balance at Dec. 31, 2017		$ 47,472	$ (65)	$ 9,160
Issuance of common stock		9,883
Issuance of warrants and senior convertible notes
Share-based compensation expense		463
Proceeds from employee stock purchase plan		39
Unrealized gain (loss) on available-for-sale securities, net of tax			(38)
Foreign currency translation adjustment	$ (78)		(78)
Stock repurchased				(147)
Cash dividends, $0.07 per share				(583)
Net loss	(16,687)			(16,687)
Balance at Dec. 31, 2018	52,201	57,857	(181)	(5,475)
Impact on retained earnings for change in revenue recognition policy				2,782
Issuance of common stock
Issuance of warrants and senior convertible notes		440
Share-based compensation expense		217
Proceeds from employee stock purchase plan		23
Unrealized gain (loss) on available-for-sale securities, net of tax			68
Foreign currency translation adjustment	(63)		(63)
Stock repurchased
Cash dividends, $0.07 per share
Net loss	(8,408)			(8,408)
Balance at Dec. 31, 2019	$ 44,478	$ 58,537	$ (176)	(13,883)
Impact on retained earnings for change in revenue recognition policy

Consolidated Statements of Shareholders' Equity (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Retained earnings (accumulated deficit)
Cash dividends, per share (in dollars per share)		$ 0.07

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (8,408)	$ (16,687)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	1,914	1,590
Amortization of right of use of assets	561
Amortization of deferred rent		12
Stock-based compensation expense	217	463
Provision for doubtful accounts, net	(207)	159
Write-down of inventory to net realizable value	891	787
Loss on disposal of assets	34	1
Deferred income taxes		6,531
Changes in operating assets and liabilities:
Receivables	1,511	835
Inventories	3,565	155
Prepaid expenses and other assets	(4,148)	43
Accounts payable	(858)	(392)
Accrued liabilities	627	184
Income taxes payable	368	(258)
Deferred product revenue	(110)	(8)
Operating lease liabilities	(557)
Other long-term liabilities	(56)	(36)
Net cash used in operating activities	(4,656)	(6,621)
Cash flows from investing activities:
Capitalized patent defense costs	(5,086)	(4,698)
Purchase of property and equipment	(205)	(336)
Purchase of intangible assets	(76)	(101)
Proceeds from maturities and sales of marketable securities	9,243	10,516
Purchase of marketable securities	(9,003)	(2,230)
Net cash provided by (used in) investing activities	(5,127)	3,151
Cash flows from financing activities:
Issuance of common stock		9,883
Net proceeds from issuance of senior convertible notes	2,654
Net proceeds from equity-based compensation programs	23	39
Dividend payments		(583)
Payments for stock repurchases		(147)
Net cash provided by financing activities	2,677	9,192
Effect of exchange rate changes on cash and cash equivalents	(41)	(82)
Net increase (decrease) in cash and cash equivalents	(7,147)	5,640
Cash and cash equivalents at the beginning of the year	11,211	5,571
Cash and cash equivalents at the end of the year	4,064	11,211
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$ 1	$ 11

Business Description, Basis of Presentation and Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Business Description, Basis of Presentation and Significant Accounting Policies

Business Description, Basis of Presentation and Significant Accounting Policies

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

Basis of Presentation:

Fiscal Year – This report on Form 10-K includes consolidated balance sheets for the years ended December 31, 2019 and 2018 and the related consolidated statements of operations and comprehensive loss, shareholders' equity, and cash flows for each of the years 2019 and 2018.

Consolidation – These consolidated financial statements include the financial statements of ClearOne, Inc. and its wholly owned subsidiaries. All inter-Company accounts and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts receivable and product returns, provisions for obsolete inventory, potential impairment of goodwill and of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates.

Foreign Currency Translation – We are exposed to foreign currency exchange risk through our foreign subsidiaries. Other than our subsidiaries in India and Spain, all other foreign subsidiaries are U.S. dollar functional, for which gains and losses arising from remeasurement are included in earnings. Our Spanish subsidiary is Euro functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. Our Indian subsidiary is Indian Rupee functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. We translate and remeasure foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate revenue and expenses using average rates during the year.

Concentration Risk – We depend on an outsourced manufacturing strategy for our products. We outsource the manufacture of all of our products to third party manufacturers located in Asia. If any of these manufacturers experience difficulties in obtaining sufficient supplies of components, component prices significantly exceeding the anticipated costs, an interruption in their operations, or otherwise suffer capacity constraints, we would experience a delay in production and shipping of these products, which would have a negative impact on our revenues. Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantine or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption may have a material adverse effect on our business. Operating in the international environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations. Currently, we have no second source of manufacturing for a portion of our products.

Significant Accounting Policies:

Cash Equivalents – The Company considers all highly-liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company places its temporary cash investments with high-quality financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Marketable Securities - The Company has classified its marketable securities as available-for-sale securities. These debt securities are carried at estimated fair value with unrealized holding gains and losses included in other comprehensive income (loss) in shareholders’ 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.

A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against “Other income” when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary. These factors include, but are not limited to: (i) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during the years ended December 31, 2019 and 2018.

Accounts Receivable – Accounts receivable are recorded at the invoiced amount, net of expected returns and allowance for doubtful accounts. Generally, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company extends credit to customers who it believes have the financial strength to pay. The Company has in place credit policies and procedures, an approval process for sales returns and credit memos, and processes for managing and monitoring channel inventory levels.

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Management regularly analyzes accounts receivable including current aging, historical write-off experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We review customer accounts quarterly by first assessing accounts with aging over a specific duration and balance over a specific amount. We review all other balances on a pooled basis based on past collection experience. Accounts identified in our customer-level review as exceeding certain thresholds are assessed for potential allowance adjustment if we conclude the financial condition of that customer has deteriorated, adversely affecting their ability to make payments. Delinquent account balances are written off if the Company determines that the likelihood of collection is not probable. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods.

The Company’s allowance for doubtful accounts activity for the years ended December 31, 2019 and 2018 is as follows:

	Year Ended December 31,
	2019			2018
Balance at beginning of the year	$	631		$	472
Allowance increase		92			159
Write offs, net of recoveries		(299	)		—
Balance at end of the year	$	424		$	631

Inventories – Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out (“FIFO”) basis. In addition to the price of the product purchased, the cost of inventory includes the Company’s internal manufacturing costs, including warehousing, engineering, material purchasing, quality and product planning expenses and applicable overhead, not in excess of estimated realizable value. Consideration is given to obsolescence, excessive levels, deterioration, direct selling expenses, and other factors in evaluating net realizable value.

The inventory also includes advance replacement units (valued at cost) provided by the Company to end-users to service defective products under warranty. The value of advance replacement units included in the inventory was $102 and $184, as of December 31, 2019 and 2018, respectively.

The inventory consists of current inventory of $11,441 and long-term inventory of $6,284. 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.

Property and Equipment – Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Routine maintenance, repairs, and renewal costs are expensed as incurred. Gains or losses from the sale, trade-in, or retirement of property and equipment are recorded in current operations and the related book value of the property is removed from property and equipment accounts and the related accumulated depreciation and amortization accounts. Estimated useful lives are generally two to ten years. Depreciation and amortization are calculated over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvement amortization is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the related assets.

Intangible Assets – Intangible assets acquired in a purchase business combination are amortized over their useful lives unless these lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which are generally three to ten years. Intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized.

Impairment of Long-Lived Assets - Long-lived assets, such as property, equipment, and definite-lived intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change. Assets held for sale are reported at the lower of the carrying amount or fair value, less the estimated costs to sell.

Recent accounting standard related to leases: In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). This new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has adopted the requirements of ASU 2016-02 on January 1, 2019, the first day of fiscal year 2019, using the optional transition method. The Company elected to use certain practical expedient options, which allows an entity not to reassess whether any existing or expired contracts contain leases. There was an increase in assets of $2,966 and liabilities of $3,101 due to the recognition of the required right-of-use asset and corresponding liability for all lease obligations that are currently classified as operating leases with the difference of $135 related to existing deferred rent that reduced the ROU asset recorded. The standard did not have a material impact on our condensed consolidated statements of operations and comprehensive loss.

Change in accounting policy related to leases: We determine if an arrangement is a lease at inception. Operating leases are included in operating lease - right of use (“ROU”) assets, accrued liabilities, and operating lease liability in our consolidated balance sheets. As of adoption of ASC 842 and as of December 31, 2019 and December 31, 2018, the Company was not party to finance lease arrangements. ROU assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Under the available practical expedient, we account for the lease and non-lease components as a single lease component.

Adoption of New Revenue Standard: On January 1, 2018, as required, the Company adopted ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), ASU No. 2015-14 - Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), ASU No. 2016-08 - Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”), ASU No. 2016-10 - Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), ASU No. 2016-12 - Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”) and ASU No. 2016-20 - Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”) (collectively “the New Revenue Standard”). To conform to the New Revenue Standard, the Company modified its revenue recognition policy as described further below.

Change in Accounting Policy: On January 1, 2018, the Company adopted the New Revenue Standard using the modified retrospective method, applying the guidance to all open contracts and recognized an adjustment to increase retained earnings by $2,782 reduce deferred product revenue by $4,337 and reduce distributor channel inventories by $1,555 as of that date. The comparative financial information has not been restated and continues to be presented under the accounting standards in effect for the respective periods. The Company applied the practical expedient and has not disclosed the revenue allocated to future shipments of partially completed contracts.

Prior to our change in accounting policy, revenue from product sales to distributors was not recognized until the return privilege had expired or until it can be determined with reasonable certainty that the return privilege had expired, which approximated when the product was sold-through to customers of our distributors (dealers, system integrators, value-added resellers, and end-users), rather than when the product was initially shipped to a distributor. At each quarter-end, we evaluated the inventory in the distribution channel through information provided by our distributors. The level of inventory in the channel fluctuated up or down each quarter based upon our distributors’ individual operations. Accordingly, each quarter-end deferral of revenue and associated cost of goods sold were calculated and recorded based upon the actual channel inventory reported at quarter-end. Further, with respect to distributors and other channel partners not reporting the channel inventory, the revenue and associated cost of goods sold were deferred until we received payment for the product sales made to such distributors or channel partners.

After the change in the accounting policy, substantially all of the Company’s revenue is recognized following the transfer of control of the products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. During the 12 months ended December 31, 2018, revenue decreased by $1,252 due to the impact of the adoption of the New Revenue Standard.

Revenue Recognition Policy: The Company generates revenue from sales of its audio and video conferencing equipment to distributors, system integrators and value-added resellers. The Company also generates revenue, to a much lesser extent, from sale of software and licenses to distributors, system integrators, value-added resellers and end-users. The Company recognizes revenue when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. For sales agreements, the Company has identified the promise to transfer products, each of which are distinct, to be the performance obligation. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer.

Sales agreements with customers are renewable periodically and contain terms and conditions with respect to payment, delivery, warranty and supply, but typically do not require mandatory purchase commitments. In the absence of a sales agreement, the Company’s standard terms and conditions at the time of acceptance of purchase orders apply. The Company considers the customer purchase orders, governed by sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. The Company evaluates certain factors including the customer’s ability to pay (or credit risk).

In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. Sales to distributors, are typically made pursuant to agreements that provide return rights with respect to discontinued or slow-moving products, referred to as stock rotation. Sales to distributors can also be subject to price adjustment on certain products, primarily for distributors with drop-shipping rights. Although payment terms vary, most distributor agreements require payment within 45 days of invoicing.

The Company recognizes revenue when it satisfies a performance obligation. The Company recognizes revenue from sales agreements upon transferring control of a product to the customer. This typically occurs when products are shipped or delivered, depending on the delivery terms, or when products that are consigned at customer locations are sold to dealers or end users. Revenue recognized during the twelve months ended December 31, 2019 for equipment sales was $24,513, and for software, licenses, etc. was $529. Sales returns and allowances are estimated based on historical experience. Provisions for discounts and rebates to customers, estimated returns and allowances, ship and credit claims and other adjustments are provided for in the same period the related revenues are recognized, and are netted against revenues. For returns, the Company recognizes a related asset for the right to recover returned products with a corresponding reduction to cost of goods sold. The Company reviews warranty and related claims activity and records provisions, as necessary.

Frequently, the Company receives orders with multiple delivery dates that may extend across reporting periods. Since each delivery constitutes a performance obligation, the Company allocates the transaction price of the contract to each performance obligation based on the stand-alone selling price of the products. The Company invoices the customer for each delivery upon shipment and recognizes revenues in accordance with delivery terms. Although payment terms vary, distributors typically pay within 45 days of invoicing and dealers pay within 30 days of invoicing. As scheduled delivery dates are within one year, revenue allocated to future shipments of partially completed contracts are not disclosed.

The Company has elected to record freight and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost and include it in cost of revenues. Taxes assessed by government authorities on revenue-producing transactions, including value-added and excise taxes, are presented on a net basis (excluded from revenues) in the consolidated statements of operations and comprehensive income.

The details of deferred revenue and associated cost of goods sold and gross profit are as follows:

	As of December 31,
	2019		2018
Deferred revenue	$	173	$	283
Deferred cost of goods sold		—		—
Deferred gross profit	$	173	$	283

The Company offers rebates and market development funds to certain of its distributors, dealers/resellers, and end-users based upon the volume of product purchased by them. The Company records rebates as a reduction of revenue in accordance with GAAP.

The Company provides, at its discretion, advance replacement units to end-users on defective units of certain products under warranty. Since the purpose of these units is not revenue generating, the Company tracks the units due from the end-user, until the defective unit has been returned. Any amount due from the customer upon failure to return the products is accounted as receivable only after establishing customer's failure to return the products. The inventory due from the customer is accounted at cost or market value whichever is lower.

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

	Year Ended December 31
	2019		2018
Audio Conferencing	$	11,609	$	13,946
Microphones		8,818		9,012
Video products		4,615		5,198
	$	25,042	$	28,156

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

	Year Ended December 31,
	2019		2018
North and South America	$	14,040	$	16,534
Asia (including Middle East) and Australia		7,773		7,924
Europe and Africa		3,229		3,698
	$	25,042	$	28,156

Warranty Costs – The Company accrues for warranty costs based on estimated warranty return rates and estimated costs to repair. These reserve costs are classified as accrued liabilities on the consolidated balance sheets. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty returns, and repair cost. The Company reviews the adequacy of its recorded warranty accrual on a quarterly basis.

The details of changes in the Company’s warranty accrual are as follows:

	Year Ended December 31,
	2019			2018
Balance at the beginning of year	$	194		$	245
Accruals/additions		121			288
Usage/claims		(121	)		(339	)
Balance at end of year	$	194		$	194

Advertising – The Company expenses advertising costs as incurred. Advertising costs consist of trade shows, magazine advertisements, and other forms of media. Advertising expenses for the years ended December 31, 2019 and 2018 totaled $902 and $1,037, respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive loss.

Income Taxes – The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry-forwards. These temporary differences will result in deductible or taxable amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized. On a quarterly basis, the Company tests the value of deferred tax assets for impairment at the taxpaying-component level within each tax jurisdiction. Significant judgment and estimates are required in determining whether valuation allowances should be established as well as the amount of such allowances.

The valuation allowance is based on our estimates of future taxable income and the period over which we expect the deferred tax assets to be recovered. Our assessment of future taxable income is based on historical experience and current and anticipated market and economic conditions and trends. In 2018, as a result of negative evidence, principally three years of cumulative pre-tax operating losses, we concluded that it was more likely than not that net operating losses, tax credits and other deferred tax assets were not realizable and therefore, we recorded a full valuation allowance against those net deferred tax assets. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit.

As of December 31, 2019 the Company had no net deferred tax assets due to valuation allowances recorded to account for the consecutive quarters with losses before taxes.

Recent changes: The Company follows the provisions contained in ASC Topic 740, Income Taxes. The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

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

	Year Ended December 31,
	2019			2018
Numerator:
Net loss	$	(8,408	)	$	(16,687	)
Denominator:
Basic weighted average shares		16,638,580			8,942,629
Dilutive common stock equivalents using treasury stock method		—			—
Diluted weighted average shares		16,638,580			8,942,629

Basic loss per common share:	$	(0.51	)	$	(1.87	)
Diluted loss per common share:	$	(0.51	)	$	(1.87	)

Weighted average options outstanding		566,200			713,331
Anti-dilutive options not included in the computation		566,200			713,331

Share-Based Payment – We estimate the fair value of stock options using the Black-Scholes option-pricing model, which requires certain estimates, including an expected forfeiture rate and expected term of options granted. We also make decisions regarding the method of calculating expected volatilities and the risk-free interest rate used in the option-pricing model. The resulting calculated fair value of stock options is recognized as compensation expense over the requisite service period, which is generally the vesting period. When there are changes to the assumptions used in the option-pricing model, including fluctuations in the market price of our common stock, there will be variations in the calculated fair value of our future stock option awards, which results in variation in the compensation cost recognized.

Other recent accounting pronouncements: The Company has determined that other recently issued accounting standards will not have a material impact on its consolidated financial position, results of operations or cash flows.

Liquidity:

As of December 31, 2019, our cash and cash equivalents were approximately $4,064 compared to $11,211 as of December 31, 2018. Our working capital was $18,934 as of December 31, 2019 compared to $28,357 as of December 31, 2018. Net cash used in operating activities was $4,656 for the twelve months ended December 31, 2019, a decrease of cash used of $1,965 from $6,621 of cash used in operating activities in the twelve months ended December 31, 2018.

We are currently pursuing all available legal remedies to defend our strategic patents from infringement. We have already spent approximately $13,591 from 2016 through 2019 towards this litigation and may be required to spend more to continue our legal defense. We believe the recent decision by the U.S. District Court in August granting our request for a preliminary injunction to prevent our competitor from manufacturing, marketing, and selling its competing ceiling microphone array in an infringing configuration is an incredibly valuable ruling for ClearOne and its business. We believe that the decision validates the strength and importance of ClearOne’s intellectual property rights, recognizes ClearOne’s innovations in this space, and stops our competitor from further infringing our Graham patent (U.S. Patent No. 9,813,806) pending a full trial. We believe this ruling will help pave way for ClearOne’s recovery from the immense harm inflicted by our competitor's infringement of our valuable patents.

We have been actively engaged in preserving cash by suspending our dividend program, allowing our share repurchase program to expire and implementing company-wide cost reduction measures. We have also raised additional capital in 2018 by issuing common stock and in 2019 by issuing senior convertible notes. In addition, we expect to generate additional cash as our inventory levels are brought down to historical levels. We also believe that the measures taken by us will yield higher revenues in the future. We believe all of these and effective management of working capital will provide the liquidity needed to meet our operating needs through at least March 31, 2021. We also believe that our strong portfolio of intellectual property and our solid brand equity in the market will enable us to raise additional capital if and when needed to meet our short and long-term financing needs; however, there can be no assurance that, if needed, we will be successful in obtaining the necessary funds through equity or debt financing. If we need additional capital and are unable to secure financing, we may be required to further reduce expenses, delay product development and enhancement, or revise our strategy regarding ongoing litigation.

Marketable Securities

12 Months Ended

Dec. 31, 2019

Marketable Securities

Marketable Securities

2. 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 income(loss) in shareholders’ 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 security at December 31, 2019 and 2018 were as follows:

	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Estimated fair value
December 31, 2019
Available-for-sale securities:
Corporate bonds and notes	$	1,814		21		(3	)		1,832
Municipal bonds		2,707		5		(1	)		2,711
Total available-for-sale securities	$	4,521		26		(4	)		4,543

December 31, 2018
Available-for-sale securities:
Corporate bonds and notes	$	2,911	$	1	$	(31	)	$	2,881
Municipal bonds		1,849		—		(15	)		1,834
Total available-for-sale securities	$	4,760	$	1	$	(46	)	$	4,715

Maturities of marketable securities classified as available-for-sale securities were as follows at December 31, 2019:

	Amortized		Estimated
	cost		fair value

Due within one year	$	3,021		3,026
Due after one year through five years		1,500		1,517
Total available-for-sale securities	$	4,521		4,543

Debt securities in an unrealized loss position as of December 31, 2019 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. The available-for-sale marketable securities in a gross unrealized loss position as of December 31, 2019 are summarized as follows:

	Less than 12 months				More than 12 months				Total
	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, 2019
Corporate bonds and notes	$	194	$	3	$	—	$	—	$	194	$	3
Municipal bonds		2,003		1		—		—		2,003		1
	$	2,197	$	4	$	-	$	-	$	2,197	$	4

Intangible Assets

12 Months Ended

Dec. 31, 2019

Intangible Assets

Intangible Assets

3. Intangible Assets

Intangible assets as of December 31, 2019, and 2018 consisted of the following:

	Estimated useful lives				As of December 31,
	(in years)				2019			2018
Tradename		5	to	7	$	555		$	555
Patents and technological know-how			10			18,494			13,377
Proprietary software		3	to	15		2,981			2,981
Other		3	to	5		323			323
Total intangible assets, gross						22,353			17,236
Accumulated amortization						(8,344	)		(6,987	)
Total intangible assets, net					$	14,009		$	10,249

Intangible assets include capitalized legal expenses, net of amortization of $11,040 million related to our defense of patents from infringement by our competitors. Legal expenses have been capitalized upon satisfaction of two conditions: (a) a determination being made that a successful defense of this litigation is probable, and (b) that the monetary benefits arising out of such successful defense will be in excess of the costs for the defense. Please refer to Note 8 - Commitments and Contingencies for additional information.

During the years ended December 31, 2019 and 2018, amortization of these intangible assets were $1,402 and $1,093 respectively.

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

Years ending December 31,
2020	$	1,398
2021		1,396
2022		1,396
2023		1,389
2024		1,125
Thereafter		7,305
Total	$	14,009

Inventories

12 Months Ended

Dec. 31, 2019

Inventories

Inventories

4. Inventories

Inventories, net of reserves, consisted of the following:

	As of December 31,
	2019		2018
Current:
Raw materials	$	847	$	1,795
Finished goods		10,594		11,433
Total	$	11,441	$	13,228
Long-term:
Raw materials	$	1,915	$	2,165
Finished goods		4,369		6,788
Total	$	6,284	$	8,953

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 have developed programs to reduce the inventory to normal operating levels in the near future. 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.

The losses incurred on valuation of inventory at the lower of cost or market value and write-off of obsolete inventory amounted to $891 and $787 during the years ended December 31, 2019 and 2018, respectively.

Property and Equipment

12 Months Ended

Dec. 31, 2019

Property and Equipment

Property and Equipment

5. Property and Equipment

Major classifications of property and equipment and estimated useful lives were as follows:

	Estimated useful lives				As of December 31,
	in years				2019			2018
Office furniture and equipment		3	to	10	$	4,979		$	5,041
Leasehold improvements		2	to	10		1,609			1,570
Vehicles		5	to	10		206			206
Manufacturing and test equipment		2	to	10		2,779			2,633
						9,573			9,450
Accumulated depreciation and amortization						(8,529	)		(8,062	)
Property and equipment, net					$	1,044		$	1,388

Depreciation expense on property and equipment for the years ended December 31, 2019 and 2018 was $512 and $497, respectively. During the twelve months ended December 31, 2019 we recorded a loss of $34 for the disposal of fixed assets consisting of software, manufacturing equipment and furniture.

Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

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 the years ended December 31, 2019 and 2018 was as follows:

	Year ended
	December 31,
	2019		2018
Rent expense	$	804	$	1,053

We occupied a 5,000 square-foot facility in Gainesville, Florida under the terms of an operating lease that was terminated in January 2020. The Gainesville facility was used primarily to support our research and development activities. During January 2020 we entered into an operating lease for a 1,350 square-foot facility in Gainesville, Florida expiring in February 2023.

We currently occupy a 21,443 square-foot facility in Salt Lake City, Utah under the terms of an operating lease expiring in March 2024, with an option to extend for additional five years. The facility supports our principal administrative, sales, marketing, customer support, and research and product development activities.

We occupy a 950 square-foot facility in Austin, Texas - under the terms of an operating lease expiring in October 2022. This facility supports our sales, marketing, customer support, and research and development activities.

We occupy a 3,068 square-foot facility in Zaragoza, Spain under the terms of an operating lease expiring in March 2020. This office supports our research and development and customer support activities

We occupy a 6,175 square-foot facility in Chennai, India - under the terms of an operating lease expiring in August 2021. This facility supports our administrative, marketing, customer support, and research and product development activities.

We occupy 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 our primary inventory fulfillment and repair center.

Supplemental cash flow information related to leases was as follows:

	Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	708
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

Supplemental balance sheet information related to leases was as follows:

	December 31, 2019
Operating lease right-of-use assets	$	2,459

Current portion of operating lease liabilities, included in accrued liabilities	$	577
Operating lease liabilities, net of current portion		2,021
Total operating lease liabilities		2,598

Weighted average remaining lease term for operating leases (in years)		4.43
Weighted average discount rate for operating leases		6.1	%

The following represents maturities of operating lease liabilities as of December 31, 2019:

Years ending December 31,
2020	$	720
2021		665
2022		612
2023		606
2024		306
Thereafter		69
Total lease payments		2,978
Less: Imputed interest		(380)
Total	$	2,598

Accrued Liabilities

12 Months Ended

Dec. 31, 2019

Accrued Liabilities

Accrued Liabilities

7. Accrued Liabilities

Accrued liabilities consist of the following:

	As of December 31,
	2019		2018
Accrued salaries and other compensation	$	835	$	882
Sales and marketing programs		378		537
Product warranty		194		194
Current portion of operating lease liabilities		577		—
Accrued legal fees and costs		772		36
Other accrued liabilities		449		347
Total	$	3,205	$	1,996

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2019
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies We establish contingent liabilities when a particular contingency is both probable and estimable. The Company is not aware of any pending claims or assessments, other than as described below, which may have a material adverse impact on the Company’s financial position or results of operations. Outsource Manufacturers. We have manufacturing agreements with electronics manufacturing service (“EMS”) providers related to the outsourced manufacturing of our products. Certain manufacturing agreements establish annual volume commitments. We are also obligated to repurchase Company-forecasted but unused materials. The Company has non-cancellable, non-returnable, and long-lead time commitments with its EMS providers and certain suppliers for inventory components that will be used in production. The Company’s purchase commitments under such agreements is approximately $844 as of December 31, 2019. Uncertain Tax Positions. As further discussed in Note 12, we had $233 of uncertain tax positions as of December 31, 2019. Due to the inherent uncertainty of the underlying tax positions, it is not possible to forecast the payment of this liability to any particular year. Legal Proceedings. Intellectual Property Litigation The Company is involved in litigation against Shure Incorporated (“Shure”). Shure initiated this litigation on April 24, 2017, by filing a complaint in the U.S. District Court for the Northern District of Illinois seeking a declaratory judgment of non-infringement and invalidity of the Company’s U.S. Patent No. 9,635,186 (“’186 Patent”) and Patent No. 9,264,553 (“’553 Patent”). The matter is Shure Inc. v. ClearOne, Inc., Case No. 17-cv-03078 (the “2017 N.D. Illinois Matter”). In early 2018, Shure added a claim that the ’186 Patent is unenforceable. The Court dismissed Shure’s request for declaratory judgment relating to the ’553 Patent, which at the time in 2017, had not been threatened or asserted by the Company against Shure and had been submitted to the USPTO for reissue. The Company has filed counterclaims against Shure for willful infringement of the Company’s ’186 Patent and the Company’s U.S. Patent No. 9,813,806 (“’806 Patent”). On July 14, 2017, Shure filed a petition with Patent Trial and Appeals Board (“PTAB”) for inter partes review against the ’553 Patent. The matter is Shure Incorporated v. ClearOne, Inc., No. IPR2017-01785. On January 29, 2018, the PTAB instituted inter partes review of the ’553 Patent. On January 24, 2019, PTAB issued a final written decision confirming the patentability of all claims of the ‘553 Patent. Shure filed a request for a rehearing, which the PTAB denied on March 25, 2019. Shure appealed the PTAB’s decision to the U.S. Court of Appeals for the Federal Circuit, which issued a judgment affirming the PTAB’s decision on March 6, 2020. On August 6, 2017, the Company filed a motion seeking a preliminary injunction to enjoin Shure from continuing to infringe on the Company’s ’186 Patent. On March 16, 2018, the Court denied the Company’s motion for preliminary injunction regarding the ’186 Patent. On February 6, 2019, the Company filed a motion for reconsideration in light of the PTAB’s January 24, 2019, decision confirming the patentability of the related ’553 Patent. On August 25, 2019, the Court denied the Company’s motion for reconsideration. On April 17, 2018, the Company filed a motion seeking a preliminary injunction to enjoin Shure from continuing to infringe on the Company’s ’806 Patent. On August 6, 2019, the Court granted the Company’s motion for preliminary injunction regarding the ’806 Patent preventing Shure from manufacturing, marketing, and selling the Shure MXA910 Ceiling Array Microphone for use in its “drop-ceiling mounting configuration.” The Court determined that such sales are likely to infringe the ’806 Patent and that Shure had not raised a substantial question of the ’806 Patent validity. The Court’s order also prevents Shure from encouraging others to use the Shure MXA910 beamforming microphone array in the “drop-ceiling mounting configuration” and “applies to Shure’s officers, agents, servants, employees, and attorneys, as well as anyone who is in active concert or participation with those listed persons.” On August 20, 2019, the Company deposited $4,452 with the Court to satisfy a bond securing the preliminary injunction. On February 15, 2019, the Company filed a petition for inter partes review of Shure’s U.S. Patent No. 9,565,493 (“’493 Patent”), arguing that all claims of the ’493 Patent should be cancelled in light of several prior art references, including the ’806 Patent. The matter is ClearOne, Inc. v. Shure Acquisition Holdings, Inc., IPR2019-00683. Shure opposed the petition, but the PTAB instituted inter partes review on August 16, 2019. A final decision is expected by August 2020. On April 10, 2019, the Company filed a lawsuit against Shure in the United States District Court for the Northern District of Illinois alleging that Shure’s MXA910 and MXA310 infringes the ’553 Patent and that Shure has misappropriated ClearOne’s trade secrets. The matter is ClearOne, Inc. v. Shure Inc., 19-cv-02421 (the “2019 N.D. Illinois Matter”), and has been coordinated with the initial matter filed in 2017 for trial purposes. On December 16, 2019, the Court granted the Company’s motion for leave to amend its complaint to add claims against Shure for intentional interference with prospective economic advantage and trade libel. On January 13, 2020, Shure moved to dismiss the Company’s new claims. The Company opposed the motion, which is pending before the Court. On July 18, 2019, Shure, Inc. filed a lawsuit against the Company in the U.S. Court for the District of Delaware alleging that ClearOne’s BMA CT product, launched in February of 2019, infringes Shure’s ’493 Patent and that ClearOne engaged in unfair competition, tortious interference, deceptive trade practices, and false advertising. Shure is seeking monetary damages and injunctive relief. ClearOne successfully moved to stay Shure’s infringement claim relating to the ’493 Patent until August 2020 when the PTAB is set to issue a Final Written Decision on its inter partes review of the ’493 Patent. On November 19, 2019, the Court granted Shure’s request for leave to amend its complaint to add a claim of infringement of Shure’s recently issued U.S. Patent No. D865723 (the “Design Patent”) and additional claims of trade libel. ClearOne has moved to dismiss Shure’s claims or to transfer them to the Northern District of Illinois. Those motions are pending. The Company believes that the lawsuit is without merit and intends to vigorously defend itself. On November 4, 2019, the Company filed a lawsuit against Shure in the U.S. District Court for the Northern District of Illinois seeking a declaratory judgment of non-infringement of Shure’s Design Patent. The matter is ClearOne, Inc. v. Shure Inc., Case No. 19-cv-07825 (N.D. Ill.), and is stayed pending a decision on the Company’s motion to dismiss Shure’s claims in the Delaware Action. On February 21, 2020, the Company asked for a Court order that Shure has been manufacturing, marketing, and selling its redesigned MXA910, the MXA910W-A released in December 2019, in violation of a preliminary injunction issued on August 20, 2019. Under the law, that court-ordered injunction applied to Shure’s MXA910 as well as “colorable imitations” thereof. ClearOne’s filings assert that Shure has been willfully manufacturing, marketing, and selling its MXA910W-A in a way that “encourages or allows integrators to install it in a drop-ceiling mounting configuration.” The Company argues that the measurements of the MXA910W-A allow it to be installed securely in the prohibited configuration in the majority of U.S. drop-ceiling grids, and Shure’s marketing materials encourage such installation. In addition, ClearOne has found evidence that third parties are in fact installing the MXA910W-A in the prohibited configuration. ClearOne has asked the Court to order Shure to cease marketing and selling the MXA910W-A in the United States, notify all customers that the MXA910W-A violates the preliminary injunction and is thus subject to recall, award ClearOne its attorneys’ fees associated with the contempt motion, and for additional discovery relating to how Shure’s customers are installing the MXA910W-A. On March 9, 2020, Shure filed its opposition, arguing that it has fully complied with the preliminary injunction, its MXA910W-A is not subject to the preliminary injunction, and it instructs customers not to install the MXA910W-A in a drop ceiling mounting configuration. On March 10, the Court granted ClearOne leave to conduct limited additional discovery, and granted ClearOne leave to submit a reply in support of the motion by April 1, which was later extended to April 22 due to the COVID-19 crisis. The Company intends to continue to vigorously enforce and defend its intellectual property rights in these proceedings. The Company capitalized $5,085 and $4,698 of litigation expenses related to this matter during the twelve months ended December 31, 2019 and 2018, respectively. In addition, the Company is also involved from time to time in various claims and legal proceedings which arise in the normal course of our business. Such matters are subject to many uncertainties and outcomes that are not predictable. However, based on the information available to us, we do not believe any such other proceedings will have a material adverse effect on our business, results of operations, financial position, or liquidity. Conclusion We believe there are no other items that will have a material adverse impact on the Company’s financial position or results of operations. Legal proceedings are subject to all of the risks and uncertainties of legal proceedings and there can be no assurance as to the probable result of any legal proceedings. The Company believes it has adequately accrued for the aforementioned contingent liabilities. If adverse outcomes were to occur, our financial position, results of operations and cash flows could be negatively affected materially for the period in which the adverse outcomes are known.

Senior Convertible Notes and Warrants

12 Months Ended

Dec. 31, 2019

Senior Convertible Notes and Warrants

Senior Convertible Notes and Warrants

9. Senior Convertible Notes and Warrants

On December 17, 2019, the Company completed the issuance and sale of $3,000 aggregate principal amount of secured convertible notes of the Company (the “Notes”) and warrants (the “Warrants”) to purchase 340,909 shares of common stock, par value $0.001 per share of the Company (the “Common Stock”), in a private placement transaction. The Notes and Warrants were issued and sold to Edward D. Bagley, an affiliate of the Company, on the terms and conditions of a Note Purchase Agreement dated December 8, 2019 between the Company, certain subsidiary guarantors of the Company, and Mr. Bagley. Mr. Bagley is an affiliate of the Company and was the beneficial owner of approximately 46.6% of the Company’s issued and outstanding shares of Common Stock.

The Notes will mature on December 17, 2023 (the “Maturity Date”) and will accrue interest at a variable rate adjusted on a quarterly basis and equal to two and one-half percent (2.5%) over the greater of (x) five and one-quarter percent (5.25%) and (y) the Prime Rate as published in the Wall Street Journal (New York edition) as of the beginning of such calendar quarter. The Notes may be converted into shares of the Company’s Common Stock at any time at the election of Mr. Bagley at an initial conversion price of $2.11 per share (the “Conversion Price”), or 120% of the closing price of the Common Stock on December 6, 2019 as reported on the Nasdaq Capital Market. Also, the Company can cause a mandatory conversion of the Notes if the volume weighted average closing price of the Common Stock over 90 consecutive trading days exceeds 200% of the Conversion Price. In addition, the Notes may be redeemed by the Company for cash at any time after December 17, 2020 upon payment of the outstanding principal balance of the Notes and any unpaid and accrued interest. The Company also is required to redeem the Notes upon the occurrence of a change in control of the Company.

The Warrants have an initial exercise price equal to $1.76, the closing price of the Common Stock on December 6, 2019 as reported on the Nasdaq Capital Market, and are exercisable until December 17, 2026. The Warrants must be exercised for cash, unless at the time of exercise there is not a then effective registration statement for the resale of the shares of Common Stock issuable upon exercise of the Warrants, in which case the Warrants may be exercised via a cashless exercise feature that provides for net settlement of the shares of Common Stock issuable upon exercise.

Concurrent with the issuance of the Notes and Warrants pursuant to the Note Purchase Agreement, the Company, the Guarantors and Mr. Bagley entered into a Guaranty and Collateral Agreement (the “Collateral Agreement”) pursuant to which the Company and the Guarantors granted Mr. Bagley a first priority lien interest in all of the Company’s assets as security for the Company’s performance of its obligations under the Notes and Warrants.

The net proceeds after original issue discount and issuance costs of $346 were approximately $2,654. The Company expects to use the proceeds from the sale of the Notes and Warrants for general corporate purposes and working capital.

In accounting for the issuance of the Notes, the Company separated Notes and Warrants into liability and equity components. The carrying amount of Warrants, being an equity component, was first calculated using Black-Scholes method with the following assumptions:

Risk-free interest rate	1.82%
Expected life of Warrants (years)	7
Expected price volatility	49.94%
Expected dividend yield	0%

The carrying amount of the Notes was then determined by deducting the fair value of the Warrants from the principal amount of the Notes. The carrying amount of the Notes was further separated into equity and liability components after separating the value of the conversion feature into an equity component and leaving the remaining value as liability. The equity component is not remeasured while the Notes and Warrants continue to meet the conditions for equity classification for equity components.

The original issue discount and issuance costs are netted against the liability. The following table represents the carrying value of Notes and Warrants:

	December 31, 2019			December 31, 2018
Liability component:
Principal	$	3,000		$	—
Less: debt discount and issuance costs, net of amortization		(778	)		—
Net carrying amount	$	2,222		$	—
Equity component⁽¹⁾:
Warrants	$	318		$	—
Conversion feature		122			—
Net carrying amount	$	440		$	—

(1) Recorded on the consolidated balance sheets as additional paid-in capital.

Debt discount and issuance costs are amortized over the life of the note to interest expense using the effective interest method. During the year ended December 31, 2019, amortization of debt discount and issuance costs was $8. The following table represents schedule of maturities of principal amount contained in the Notes as of December 31, 2019:

Year ending December 31,	Principal Amount Maturing
2020	$	—
2021		360
2022		720
2023		1,920
Net carrying amount	$	3,000

Share-Based Payments

12 Months Ended

Dec. 31, 2019

Share-Based Payments

Share-Based Payments

10. Share-Based Payments

Employee Stock Option Plans

The Company’s share-based incentive plan offering stock options is primarily through 2007 Equity Incentive Plan (the “2007 Plan”). Under this plan, one new share is issued for each stock option exercised. The plan is described below.

The 2007 Plan was restated and approved by the shareholders on December 12, 2016. Provisions of the restated 2007 Plan include the granting of up to 2,000,000 incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units. Options may be granted to employees, officers, non-employee directors and other service providers and may be granted upon such terms as the Compensation Committee of the Board of Directors determines in their sole discretion.

All vesting schedules for options granted are based on 3 or 4-year vesting schedules, with either one-third or one-fourth vesting on the first anniversary and the remaining options vesting ratably over the remainder of the vesting term. Generally, directors and officers have 3-year vesting schedules and all other employees have 4-year vesting schedules. Additionally, in the event of a change in control or the occurrence of a corporate transaction, the Company’s Board of Directors has the authority to elect that all unvested options shall vest and become exercisable immediately prior to the event or closing of the transaction. All options outstanding as of December 31, 2019 had contractual lives of ten years.

As of December 31, 2019, there were 544,647 options outstanding under the 2007 Plan. As of December 31, 2019, the 2007 Plan had 950,447 authorized unissued options.

The Company uses judgment in determining the fair value of the share-based payments on the date of grant using an option-pricing model with assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the risk-free interest rate of the awards, the expected life of the awards, the expected volatility over the term of the awards, and the expected dividends of the awards. 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.

The risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of the grant, based on the expected life of the stock option. The expected life of the stock option is determined using historical data.

The expected price volatility is determined using a weighted average of daily historical volatility of the Company’s stock price over the corresponding expected option life.

Under guidelines of ASC Topic 718, the Company recognizes the associated compensation cost for only those awards expected to vest on a straight-line basis over the underlying requisite service period. The Company estimated the forfeiture rates based on its historical experience and expectations about future forfeitures.

The Company did not grant any options during the years ended December 31, 2019 and 2018.

The following table shows the stock option activity:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
As of December 31, 2017		764,430		$	8.78		6.48	$	1,038
Granted		—			—
Expired and canceled		(106,108	)		7.56
Forfeited prior to vesting		(34,066	)		10.79
Exercised		—			—
As of December 31, 2018		624,256		$	8.87		5.28	$	—
Granted		—			—
Expired and canceled		(78,786	)		7.85
Forfeited prior to vesting		(823	)		11.97
Exercised		—			—
As of December 31, 2019		544,647		$	9.01		4.93	$	—
Vested and Expected to Vest at December 31, 2018		624,256		$	8.87		5.28	$	—
Vested at December 31, 2018		548,045		$	8.62		4.90	$	—
Vested and Expected to Vest at December 31, 2019		544,647		$	9.01		4.93	$	—
Vested at December 31, 2019		527,181		$	8.97		4.85	$	—

The total pre-tax compensation cost related to stock options recognized during the years ended December 31, 2019 and 2018 was $208 and $463, respectively. Tax benefit from compensation cost related to stock options during the years ended December 31, 2019 and 2018 was $0. As of December 31, 2019, the total compensation cost related to stock options not yet recognized and before the effect of any forfeitures was $51, which is expected to be recognized over approximately the next 0.38 year on a straight-line basis.

Employee Stock Purchase Plan

During the years ended December 31, 2019 and 2018, the Company issued shares to employees under the Company’s 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s shareholders on December 12, 2016. As of December 31, 2019, and December 31, 2018, 422,866 and 442,994, respectively of the originally approved 500,000 shares were available for offerings under the ESPP. Offering periods under the ESPP commence on each Jan 1 and July 1 and continue for a duration of six months. The ESPP is available to all employees who do not own, or are deemed to own, shares of stock making up an excess of 5% of the combined voting power of the Company, its parent or subsidiary.

During each offering period, each eligible employee may purchase shares under the ESPP after authorizing payroll deductions. Under the ESPP, each employee may purchase up to the lesser of 2,500 shares or $25 of fair market value (based on the established purchase price) of the Company’s stock for each offering period. Unless the employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase common stock on the last business day of the period at a price equal to 85% (or a 15% discount) of the fair market value of the common stock on the first or last day of the offering period, whichever is lower.

Shares purchased and compensation expense associated with Employee Stock Purchase Plans were as follows:

	2019		2018
Shares purchased under ESPP plan		20,128		23,789
Plan compensation expense	$	9	$	10

Cash Dividends

On February 21, 2018, the Company declared a cash dividend of $0.07 per share of ClearOne common stock. The dividend was paid on March 21, 2018 to shareholders of record as of March 7, 2018. On June 13, 2018, the Company announced the suspension of its dividend program.

Issuance of Common Stock

The Company raised additional capital through an oversubscribed subscription rights offering (the "Rights Offering") which closed on December 4, 2018 and which raised $9,883 (net of stock issuance costs). In the Rights Offering, we issued one subscription right to each of our shareholders for each share of our common stock that they held. Each subscription right entitled the shareholder to purchase one share of our common stock at a purchase price of $1.20 per share. At the closing, we sold 8,306,535 shares of our common stock and returned subscriptions for 754,868 shares that were oversubscribed after allocating oversubscribed shares on a pro-rata basis.

Significant Customers

12 Months Ended

Dec. 31, 2019

Significant Customers

Significant Customers

11. Significant Customers

Sales to significant customers that represented more than 10 percent of total revenues are as follows:

	Year ended December 31,
	2019			2018
Customer A		10.7	%		*

The following table summarizes the percentage of total gross accounts receivable from significant customers:

	As of December 31,
	2019			2018
Customer A		14.8	%		14.5	%
Customer B		*			11.8	%
Total		14.8	%		26.3	%

* Sales to Customer A in 2018 did not exceed 10% of the revenue.

* Accounts receivable from Customer B in 2019 did not exceed 10% of total gross accounts receivable.

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value Measurements

12. 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 substantial majority of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. The following tables set forth the fair value of the financial instruments re-measured by the Company as of December 31, 2019 and 2018:

	Level 1		Level 2		Level 3		Total
December 31, 2019
Corporate bonds and notes	$	—	$	1,832	$	—	$	1,832
Municipal bonds		—		2,711		—		2,711
Total	$	—	$	4,543	$	—	$	4,543
December 31, 2018
Corporate bonds and notes	$	—	$	2,881	$	—	$	2,881
Municipal bonds		—		1,834		—		1,834
Total	$	—	$	4,715	$	—	$	4,715

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes

Income Taxes

13. Income Taxes

Consolidated loss before taxes for domestic and foreign operations consisted of the following:

	Year ended December 31,
	2019			2018
Domestic	$	(6,207	)	$	(7,751	)
Foreign		(2,145	)		(2,496	)
Total	$	(8,352	)	$	(10,247	)

The Company’s provision for income taxes consisted of the following:

	Year ended December 31,
	2019			2018
Current:
Federal	$	26		$	(71	)
State		(23	)		37
Foreign		(59	)		117
Total current		(56	)		83
Deferred:
Federal		1,621			2,233
State		413			667
Foreign		393			495
Total		2,427			3,395
Change in valuation allowance		(2,427	)		(9,918	)
Total deferred		—			(6,523	)
Tax provision	$	(56	)	$	(6,440	)

The income tax (provision) differs from that computed at the federal statutory corporate income tax rate as follows:

	Year ended December 31,
	2019			2018
Tax benefit at federal statutory rate	$	1,754		$	2,152
State income tax benefit (provision), net of federal benefit		318			413
Research and development tax credits		290			250
Foreign earnings or losses taxed at different rates		(27	)		12
Tax rate change		(31	)		23
Other		67			628
Change in valuation allowance		(2,427	)		(9,918	)
Tax provision	$	(56	)	$	(6,440	)

The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following:

	2019			2018
Deferred revenue	$	36		$	50
Basis difference in intangible assets		3,157			3,283
Inventory reserve		2,247			2,235
Net operating loss carryforwards		6,438			4,067
Research and development tax credits		1,042			794
Accrued expenses		163			143
Stock-based compensation		322			362
Allowance for sales returns and doubtful accounts		107			160
Difference in property and equipment basis		(134	)		(185	)
Other		382			551
Total net deferred income tax asset		13,760			11,460
Less: Valuation allowance		(13,760	)		(11,460	)
Net deferred income tax asset (liability)	$	—		$	—

The Company has not provided for foreign withholding taxes on undistributed earnings of its non-U.S. subsidiaries since these earnings are intended to be reinvested indefinitely, in accordance with guidelines contained in ASC Topic 740, Accounting for Income Taxes. It is not practical to estimate the amount of additional taxes that might be payable on such undistributed earnings.

The Company routinely evaluates the likelihood of realizing the benefit of its deferred tax assets and may record a valuation allowance if, based on all available evidence, it determines that it is more likely than not some portion of the tax benefit will not be realized. As of December 31, 2019, the Company had an aggregate of approximately $13.8 million in deferred tax assets primarily related to intangible assets, net operating losses, tax credit carryforwards, and inventory basis differences. On a quarterly basis, the Company tests the value of deferred tax assets for impairment at the taxpaying-component level within each tax jurisdiction. Significant judgment and estimates are required in determining whether valuation allowances should be established as well as the amount of such allowances. When making such determination, consideration is given to, among other things, the following:

●	sufficient taxable income within the allowed carryback or carryforward periods;
●	future reversals of existing taxable temporary differences, including any tax planning strategies that could be utilized;
●	nature or character (e.g., ordinary vs. capital) of the deferred tax assets and liabilities; and
●	future taxable income exclusive of reversing temporary differences and carryforwards.

Based on the foregoing criteria, the Company determined that it no longer meets the “more likely than not” threshold that net operating losses, tax credits and other deferred tax assets will be realized. Accordingly, the Company recorded a full valuation allowance at September 30, 2018, and continues to be in a full valuation allowance position at December 31, 2019.

The Company has federal and state net operating loss (“NOL”) carryforwards of approximately $16.3 million (pre-tax), and Spain NOL carryforwards of approximately $8.6 million. The majority of the federal NOL carryforward and the Spain NOL carryforward do not expire. The state NOL carryforwards expire over various periods.

Effective July 1, 2007, the Company adopted the accounting standards related to uncertain tax positions. This standard requires that tax positions be assessed using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities recorded as a result of this analysis must generally be recorded separately from any current or deferred income tax accounts.

The total amount of unrecognized tax benefits at December 31, 2019 and 2018, that would favorably impact our effective tax rate if recognized was $298 and $679, respectively. As of December 31, 2019 and 2018, we accrued $9 and $14, respectively, in interest and penalties related to unrecognized tax benefits. We account for interest expense and penalties for unrecognized tax benefits as part of our income tax provision.

Although we believe our estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which we make such determination.

A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows:

	Year ended December 31,
	2019			2018
Balance - beginning of year	$	679		$	652
Additions based on tax positions related to the current year		50			58
Additions for tax positions of prior years		43			118
Reductions for tax positions of prior years		—			(53	)
Settlements		(375	)		—
Lapse in statutes of limitations		(99	)		(96	)
Uncertain tax positions, ending balance	$	298		$	679

The Company’s U.S. federal income tax returns for 2016 through 2019 are subject to examination. The Company also files in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2016. The Company completed its audit by the Internal Revenue Service (“IRS”) for its 2012 and 2013 tax returns in 2017. As a result of the audit by the IRS, there were no material adjustments made to the Company’s tax return.

The Inland Revenue Department of Hong Kong, a Special Administrative Region (the “IRD”), commenced an examination of the Company’s Hong Kong profits tax returns for 2009 through 2011 in the fourth quarter of 2012, which was completed subsequent to December 31, 2017. As a result of the audit, there were no material changes to the Company’s financial position. During the next twelve months, it is reasonably possible that the amount of the Company’s unrecognized income tax benefits could change significantly. These changes could be the result of our ongoing tax audits or the settlement of outstanding audit issues. However, due to the issues being examined, at the current time, an estimate of the range of reasonably possible outcomes cannot be made, beyond amounts currently accrued.

Geographic Sales Information

12 Months Ended

Dec. 31, 2019

Geographic Sales Information

Geographic Sales Information

14. Geographic Sales Information

The United States was the only country to contribute more than 10 percent of total revenues in each fiscal year. The Company’s revenues are substantially denominated in U.S. dollars and are summarized geographically as follows:

	Year ended December 31,
	2019		2018
United States	$	13,463	$	14,783
All other countries		11,579		13,373
Total	$	25,042	$	28,156

The Impact of Covid-19	12 Months Ended
The Impact of Covid-19	Dec. 31, 2019
The Impact of Covid-19
The Impact of Covid-19	15. The Impact of Covid-19 As of the time of this filing the Company’s operating activities have been curtailed by the impact of Covid-19. Government directives have suspended manufacturing and limited workplace activities beginning March 23, 2020. The Company has empowered its employees to work remotely wherever possible to minimize the disruption to Company operations. The Company has received no communications from customers that indicate cancellations or substantial change in delivery schedules. Public health directives from governments around the world are advising or prohibiting large gatherings to inhibit the spread of Covid-19. This has suspended the use of our products for much of our installed customer base. Continued restrictions and the positional behavioral changes resulting from the impact of Covid-19 may continue to influence the demand for our products which typically attract a large audience. Also, the ongoing impact of Covid-19 on the world’s economy could ultimately have material adverse consequences to the Company; however, as of now, the Company is unable to determine the likelihood or degree of such adverse consequences.

Business Description, Basis of Presentation and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Business Description, Basis of Presentation and Significant Accounting Policies

Fiscal Year

Consolidation

Use of Estimates

Foreign Currency Translation

Concentration Risk

Cash Equivalents

Marketable Securities

Accounts Receivable

The Company’s allowance for doubtful accounts activity for the years ended December 31, 2019 and 2018 is as follows:

	Year Ended December 31,
	2019			2018
Balance at beginning of the year	$	631		$	472
Allowance increase		92			159
Write offs, net of recoveries		(299	)		—
Balance at end of the year	$	424		$	631

Inventories

Property and Equipment

Intangible Assets

Impairment of Long-Lived Assets

New accounting pronouncements, policy

Revenue Recognition Policy

The details of deferred revenue and associated cost of goods sold and gross profit are as follows:

	As of December 31,
	2019		2018
Deferred revenue	$	173	$	283
Deferred cost of goods sold		—		—
Deferred gross profit	$	173	$	283

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

	Year Ended December 31
	2019		2018
Audio Conferencing	$	11,609	$	13,946
Microphones		8,818		9,012
Video products		4,615		5,198
	$	25,042	$	28,156

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

	Year Ended December 31,
	2019		2018
North and South America	$	14,040	$	16,534
Asia (including Middle East) and Australia		7,773		7,924
Europe and Africa		3,229		3,698
	$	25,042	$	28,156

Warranty Costs

The details of changes in the Company’s warranty accrual are as follows:

	Year Ended December 31,
	2019			2018
Balance at the beginning of year	$	194		$	245
Accruals/additions		121			288
Usage/claims		(121	)		(339	)
Balance at end of year	$	194		$	194

Advertising

Income Taxes

As of December 31, 2019 the Company had no net deferred tax assets due to valuation allowances recorded to account for the consecutive quarters with losses before taxes.

Earnings Per Share

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

	Year Ended December 31,
	2019			2018
Numerator:
Net loss	$	(8,408	)	$	(16,687	)
Denominator:
Basic weighted average shares		16,638,580			8,942,629
Dilutive common stock equivalents using treasury stock method		—			—
Diluted weighted average shares		16,638,580			8,942,629

Basic loss per common share:	$	(0.51	)	$	(1.87	)
Diluted loss per common share:	$	(0.51	)	$	(1.87	)

Weighted average options outstanding		566,200			713,331
Anti-dilutive options not included in the computation		566,200			713,331

Share-Based Payment

Other recent accounting pronouncements

Liquidity

Business Description, Basis of Presentation and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Business Description, Basis of Presentation and Significant Accounting Policies

Schedule of allowance for doubtful accounts activity

	Year Ended December 31,
	2019			2018
Balance at beginning of the year	$	631		$	472
Allowance increase		92			159
Write offs, net of recoveries		(299	)		—
Balance at end of the year	$	424		$	631

Schedule of deferred revenue and associated cost of goods sold and gross profit

	As of December 31,
	2019		2018
Deferred revenue	$	173	$	283
Deferred cost of goods sold		—		—
Deferred gross profit	$	173	$	283

Schedule of disaggregates the Company’s revenue into primary product groups and major regions

	Year Ended December 31,
	2019		2018
North and South America	$	14,040	$	16,534
Asia (including Middle East) and Australia		7,773		7,924
Europe and Africa		3,229		3,698
	$	25,042	$	28,156

	Year Ended December 31
	2019		2018
Audio Conferencing	$	11,609	$	13,946
Microphones		8,818		9,012
Video products		4,615		5,198
	$	25,042	$	28,156

Schedule of changes in the warranty accrual

	Year Ended December 31,
	2019			2018
Balance at the beginning of year	$	194		$	245
Accruals/additions		121			288
Usage/claims		(121	)		(339	)
Balance at end of year	$	194		$	194

Schedule of the computation of basic and diluted loss per common share

	Year Ended December 31,
	2019			2018
Numerator:
Net loss	$	(8,408	)	$	(16,687	)
Denominator:
Basic weighted average shares		16,638,580			8,942,629
Dilutive common stock equivalents using treasury stock method		—			—
Diluted weighted average shares		16,638,580			8,942,629

Basic loss per common share:	$	(0.51	)	$	(1.87	)
Diluted loss per common share:	$	(0.51	)	$	(1.87	)

Weighted average options outstanding		566,200			713,331
Anti-dilutive options not included in the computation		566,200			713,331

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2019

Marketable Securities

Schedule of 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 security

	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Estimated fair value
December 31, 2019
Available-for-sale securities:
Corporate bonds and notes	$	1,814		21		(3	)		1,832
Municipal bonds		2,707		5		(1	)		2,711
Total available-for-sale securities	$	4,521		26		(4	)		4,543

December 31, 2018
Available-for-sale securities:
Corporate bonds and notes	$	2,911	$	1	$	(31	)	$	2,881
Municipal bonds		1,849		—		(15	)		1,834
Total available-for-sale securities	$	4,760	$	1	$	(46	)	$	4,715

Schedule of maturities of marketable securities classified as available-for-sale securities

	Amortized		Estimated
	cost		fair value

Due within one year	$	3,021		3,026
Due after one year through five years		1,500		1,517
Total available-for-sale securities	$	4,521		4,543

Schedule of available-for-sale marketable securities in a gross unrealized loss position

	Less than 12 months				More than 12 months				Total
	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, 2019
Corporate bonds and notes	$	194	$	3	$	—	$	—	$	194	$	3
Municipal bonds		2,003		1		—		—		2,003		1
	$	2,197	$	4	$	-	$	-	$	2,197	$	4

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Intangible Assets

Schedule of intangible assets and estimated useful lives

	Estimated useful lives				As of December 31,
	(in years)				2019			2018
Tradename		5	to	7	$	555		$	555
Patents and technological know-how			10			18,494			13,377
Proprietary software		3	to	15		2,981			2,981
Other		3	to	5		323			323
Total intangible assets, gross						22,353			17,236
Accumulated amortization						(8,344	)		(6,987	)
Total intangible assets, net					$	14,009		$	10,249

Schedule of estimated future amortization expense of intangible assets

Years ending December 31,
2020	$	1,398
2021		1,396
2022		1,396
2023		1,389
2024		1,125
Thereafter		7,305
Total	$	14,009

Disclosure - Inventories (Tables)

12 Months Ended

Dec. 31, 2019

Inventories

Schedule of Inventories, net of reserves

	As of December 31,
	2019		2018
Current:
Raw materials	$	847	$	1,795
Finished goods		10,594		11,433
Total	$	11,441	$	13,228
Long-term:
Raw materials	$	1,915	$	2,165
Finished goods		4,369		6,788
Total	$	6,284	$	8,953

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property and Equipment

Schedule of major classifications of property and equipment and estimated useful lives

	Estimated useful lives				As of December 31,
	in years				2019			2018
Office furniture and equipment		3	to	10	$	4,979		$	5,041
Leasehold improvements		2	to	10		1,609			1,570
Vehicles		5	to	10		206			206
Manufacturing and test equipment		2	to	10		2,779			2,633
						9,573			9,450
Accumulated depreciation and amortization						(8,529	)		(8,062	)
Property and equipment, net					$	1,044		$	1,388

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases

Schedule of Rent expense

	Year ended
	December 31,
	2019		2018
Rent expense	$	804	$	1,053

Schedule of Supplemental cash flow and balance sheet information related to leases

	Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	708
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	51

	December 31, 2019
Operating lease right-of-use assets	$	2,459

Current portion of operating lease liabilities, included in accrued liabilities	$	577
Operating lease liabilities, net of current portion		2,021
Total operating lease liabilities		2,598

Weighted average remaining lease term for operating leases (in years)		4.43
Weighted average discount rate for operating leases		6.1	%

Schedule of maturities of operating lease liabilities

Years ending December 31,
2020	$	720
2021		665
2022		612
2023		606
2024		306
Thereafter		69
Total lease payments		2,978
Less: Imputed interest		(380)
Total	$	2,598

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Accrued Liabilities

Schedule of Accrued Liabilities

	As of December 31,
	2019		2018
Accrued salaries and other compensation	$	835	$	882
Sales and marketing programs		378		537
Product warranty		194		194
Current portion of operating lease liabilities		577		—
Accrued legal fees and costs		772		36
Other accrued liabilities		449		347
Total	$	3,205	$	1,996

Senior Convertible Notes and Warrants (Tables)

12 Months Ended

Dec. 31, 2019

Senior Convertible Notes and Warrants

Schedule of Warrants, Valuation assumptions, Black-Scholes method

Risk-free interest rate	1.82%
Expected life of Warrants (years)	7
Expected price volatility	49.94%
Expected dividend yield	0%

Schedule of carrying value of Notes and Warrants

	December 31, 2019			December 31, 2018
Liability component:
Principal	$	3,000		$	—
Less: debt discount and issuance costs, net of amortization		(778	)		—
Net carrying amount	$	2,222		$	—
Equity component⁽¹⁾:
Warrants	$	318		$	—
Conversion feature		122			—
Net carrying amount	$	440		$	—

Schedule of maturities of principal amount contained in the Notes

Year ending December 31,	Principal Amount Maturing
2020	$	—
2021		360
2022		720
2023		1,920
Net carrying amount	$	3,000

Share-based Payments (Tables)

12 Months Ended

Dec. 31, 2019

Share-Based Payments

Schedule of stock option activity

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
As of December 31, 2017		764,430		$	8.78		6.48	$	1,038
Granted		—			—
Expired and canceled		(106,108	)		7.56
Forfeited prior to vesting		(34,066	)		10.79
Exercised		—			—
As of December 31, 2018		624,256		$	8.87		5.28	$	—
Granted		—			—
Expired and canceled		(78,786	)		7.85
Forfeited prior to vesting		(823	)		11.97
Exercised		—			—
As of December 31, 2019		544,647		$	9.01		4.93	$	—
Vested and Expected to Vest at December 31, 2018		624,256		$	8.87		5.28	$	—
Vested at December 31, 2018		548,045		$	8.62		4.90	$	—
Vested and Expected to Vest at December 31, 2019		544,647		$	9.01		4.93	$	—
Vested at December 31, 2019		527,181		$	8.97		4.85	$	—

Schedule of shares purchased and compensation expense associated with Employee Stock Purchase Plans

	2019		2018
Shares purchased under ESPP plan		20,128		23,789
Plan compensation expense	$	9	$	10

Significant Customers (Tables)

12 Months Ended

Dec. 31, 2019

Significant Customers

Schedule of sales to significant customers that represented more than 10 percent of total revenues

	As of December 31,
	2019			2018
Customer A		14.8	%		14.5	%
Customer B		*			11.8	%
Total		14.8	%		26.3	%

	Year ended December 31,
	2019			2018
Customer A		10.7	%		*

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Schedule of fair value of the financial instruments

	Level 1		Level 2		Level 3		Total
December 31, 2019
Corporate bonds and notes	$	—	$	1,832	$	—	$	1,832
Municipal bonds		—		2,711		—		2,711
Total	$	—	$	4,543	$	—	$	4,543
December 31, 2018
Corporate bonds and notes	$	—	$	2,881	$	—	$	2,881
Municipal bonds		—		1,834		—		1,834
Total	$	—	$	4,715	$	—	$	4,715

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Schedule of consolidated income before taxes for domestic and foreign operations

	Year ended December 31,
	2019			2018
Domestic	$	(6,207	)	$	(7,751	)
Foreign		(2,145	)		(2,496	)
Total	$	(8,352	)	$	(10,247	)

Schedule of components of (provision) for income taxes

	Year ended December 31,
	2019			2018
Current:
Federal	$	26		$	(71	)
State		(23	)		37
Foreign		(59	)		117
Total current		(56	)		83
Deferred:
Federal		1,621			2,233
State		413			667
Foreign		393			495
Total		2,427			3,395
Change in valuation allowance		(2,427	)		(9,918	)
Total deferred		—			(6,523	)
Tax provision	$	(56	)	$	(6,440	)

Schedule of income tax (provision) differs from that computed at the federal statutory corporate income tax rate

	Year ended December 31,
	2019			2018
Tax benefit at federal statutory rate	$	1,754		$	2,152
State income tax benefit (provision), net of federal benefit		318			413
Research and development tax credits		290			250
Foreign earnings or losses taxed at different rates		(27	)		12
Tax rate change		(31	)		23
Other		67			628
Change in valuation allowance		(2,427	)		(9,918	)
Tax provision	$	(56	)	$	(6,440	)

Schedule of tax effects of significant temporary differences representing net deferred tax assets and liabilities

	2019			2018
Deferred revenue	$	36		$	50
Basis difference in intangible assets		3,157			3,283
Inventory reserve		2,247			2,235
Net operating loss carryforwards		6,438			4,067
Research and development tax credits		1,042			794
Accrued expenses		163			143
Stock-based compensation		322			362
Allowance for sales returns and doubtful accounts		107			160
Difference in property and equipment basis		(134	)		(185	)
Other		382			551
Total net deferred income tax asset		13,760			11,460
Less: Valuation allowance		(13,760	)		(11,460	)
Net deferred income tax asset (liability)	$	—		$	—

Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions

	Year ended December 31,
	2019			2018
Balance - beginning of year	$	679		$	652
Additions based on tax positions related to the current year		50			58
Additions for tax positions of prior years		43			118
Reductions for tax positions of prior years		—			(53	)
Settlements		(375	)		—
Lapse in statutes of limitations		(99	)		(96	)
Uncertain tax positions, ending balance	$	298		$	679

Geographic Sales Information (Tables)

12 Months Ended

Dec. 31, 2019

Geographic Sales Information

Schedule of revenues by geographical areas

	Year ended December 31,
	2019		2018
United States	$	13,463	$	14,783
All other countries		11,579		13,373
Total	$	25,042	$	28,156

Business Description, Basis of Presentation and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	12 Months Ended		48 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Jan. 01, 2018	Dec. 31, 2017
Business Description, Basis of Presentation and Significant Accounting Policies
Current inventory	$ 11,441	$ 13,228	$ 11,441
Long-term inventory	6,284	8,953	6,284
Operating lease right-of-use assets	2,459		2,459
Operating lease liability	2,021		2,021
Deferred rent		135
Deferred product revenue	173	283	173
Decreased revenue due to the impact of the adoption of the New Revenue Standard	25,042	28,156
Advertising expenses	902	1,037
Net deferred tax assets	0		0
Cash and cash equivalents	4,064	11,211	4,064		$ 5,571
Working capital	18,934	28,357	18,934
Net cash used in operating activities	4,656	6,621
Decrease of cash used in operating activities	1,965
Litigation for Intellectual Property Infringement
Business Description, Basis of Presentation and Significant Accounting Policies
Litigation Settlement, Expense			13,591
Equipment Sales
Business Description, Basis of Presentation and Significant Accounting Policies
Decreased revenue due to the impact of the adoption of the New Revenue Standard	24,513
Software and Licenses
Business Description, Basis of Presentation and Significant Accounting Policies
Decreased revenue due to the impact of the adoption of the New Revenue Standard	529
Retained Earnings
Business Description, Basis of Presentation and Significant Accounting Policies
Change in Accounting Policy, recognized an adjustment to increase retained earnings		2,782
Accounting Standards Update 2014-09 \| Difference between Revenue Guidance in Effect before and after Topic 606
Business Description, Basis of Presentation and Significant Accounting Policies
Deferred product revenue				$ (4,337)
Distributor channel inventories				(1,555)
Decreased revenue due to the impact of the adoption of the New Revenue Standard		1,252
Accounting Standards Update 2014-09 \| Retained Earnings \| Difference between Revenue Guidance in Effect before and after Topic 606
Business Description, Basis of Presentation and Significant Accounting Policies
Change in Accounting Policy, recognized an adjustment to increase retained earnings				$ 2,782
Accounting Standards Update 2016-02
Business Description, Basis of Presentation and Significant Accounting Policies
Operating lease right-of-use assets		2,966
Operating lease liability		3,101
Deferred rent		135
Minimum
Business Description, Basis of Presentation and Significant Accounting Policies
Intangible assets, estimated useful lives	3 years
Maximum
Business Description, Basis of Presentation and Significant Accounting Policies
Intangible assets, estimated useful lives	10 years
Replacement Parts
Business Description, Basis of Presentation and Significant Accounting Policies
Current inventory	$ 102	$ 184	$ 102

Business Description, Basis of Presentation and Significant Accounting Policies - Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Allowance for doubtful accounts activity
Balance at beginning of the year	$ 631	$ 472
Allowance increase (decrease)	92	159
Write offs, net of recoveries	(299)
Balance at end of the year	$ 424	$ 631

Business Description, Basis of Presentation and Significant Accounting Policies - Deferred Revenue and Associated Costs of Goods Sold and Gross Profit (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Business Description, Basis of Presentation and Significant Accounting Policies
Deferred revenue	$ 173	$ 283
Deferred cost of goods sold
Deferred gross profit	$ 173	$ 283

Business Description, Basis of Presentation and Significant Accounting Policies - Revenue by Product Group (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue
Revenue	$ 25,042	$ 28,156
North and South America
Revenue
Revenue	14,040	16,534
Asia (including Middle East) and Australia
Revenue
Revenue	7,773	7,924
Europe and Africa
Revenue
Revenue	3,229	3,698
Audio Conferencing
Revenue
Revenue	11,609	13,946
Microphones
Revenue
Revenue	8,818	9,012
Video products
Revenue
Revenue	$ 4,615	$ 5,198

Business Description, Basis of Presentation and Significant Accounting Policies - Warranty Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Business Description, Basis of Presentation and Significant Accounting Policies
Balance at the beginning of year	$ 194	$ 245
Accruals/additions	121	288
Usage/claims	(121)	(339)
Balance at end of year	$ 194	$ 194

Business Description, Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Business Description, Basis of Presentation and Significant Accounting Policies
Net loss	$ (8,408)	$ (16,687)
Basic weighted average shares (in shares)	16,638,580	8,942,629
Dilutive common stock equivalents using treasury stock method (in shares)
Diluted weighted average shares (in shares)	16,638,580	8,942,629
Basic loss per common share: (in dollars per share)	$ (0.51)	$ (1.87)
Diluted loss per common share: (in dollars per share)	$ (0.51)	$ (1.87)
Weighted average options outstanding (in shares)	566,200	713,331
Anti-dilutive options not included in the computation (in shares)	566,200	713,331

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Marketable Securities - Available-for-sale Securities by Major Security Type (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Marketable Securities
Amortized cost	$ 4,521	$ 4,760
Gross unrealized holding gains	26	1
Gross unrealized holding losses	(4)	(46)
Estimated fair value	4,543	4,715
Corporate bonds and notes
Marketable Securities
Amortized cost	1,814	2,911
Gross unrealized holding gains	21	1
Gross unrealized holding losses	(3)	(31)
Estimated fair value	1,832	2,881
Municipal bonds
Marketable Securities
Amortized cost	2,707	1,849
Gross unrealized holding gains	5
Gross unrealized holding losses	(1)	(15)
Estimated fair value	$ 2,711	$ 1,834

Marketable Securities - Maturities of Available-for-sale Securities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Marketable Securities
Due within one year, amortized cost	$ 3,021
Due after one year through five years, amortized cost	1,500
Total available-for-sale securities, amortized cost	4,521
Due within one year, estimated fair value	3,026
Due after one year through five years, estimated fair value	1,517
Total available-for-sale securities, estimated fair value	$ 4,543

Marketable Securities - Available-for-sale Marketable Securities in Gross Unrealized Loss Position (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	$ 2,197
Gross unrealized holding losses, less than 12 months	4
Estimated fair value, more than 12 months
Gross unrealized holding losses, more than 12 months
Estimated fair value	2,197
Gross unrealized holding losses	4
Corporate bonds and notes
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	194
Gross unrealized holding losses, less than 12 months	3
Estimated fair value, more than 12 months
Gross unrealized holding losses, more than 12 months
Estimated fair value	194
Gross unrealized holding losses	3
Municipal bonds
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	2,003
Gross unrealized holding losses, less than 12 months	1
Estimated fair value, more than 12 months
Gross unrealized holding losses, more than 12 months
Estimated fair value	2,003
Gross unrealized holding losses	$ 1

Business Combinations, Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets
Capitalized legal expenses, net of amortization	$ 11,040,000
Amortization of intangible assets	$ 1,402	$ 1,093

Business Combinations, Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets
Total intangible assets, gross	$ 22,353	$ 17,236
Accumulated amortization	(8,344)	(6,987)
Total	$ 14,009	10,249
Minimum
Intangible Assets
Estimated useful lives (Year)	3 years
Maximum
Intangible Assets
Estimated useful lives (Year)	10 years
Tradenames
Intangible Assets
Total intangible assets, gross	$ 555	555
Tradenames \| Minimum
Intangible Assets
Estimated useful lives (Year)	5 years
Tradenames \| Maximum
Intangible Assets
Estimated useful lives (Year)	7 years
Patents and Technological Know-how
Intangible Assets
Estimated useful lives (Year)	10 years
Total intangible assets, gross	$ 18,494	13,377
Proprietary software
Intangible Assets
Total intangible assets, gross	$ 2,981	2,981
Proprietary software \| Minimum
Intangible Assets
Estimated useful lives (Year)	3 years
Proprietary software \| Maximum
Intangible Assets
Estimated useful lives (Year)	15 years
Other
Intangible Assets
Total intangible assets, gross	$ 323	$ 323
Other \| Minimum
Intangible Assets
Estimated useful lives (Year)	3 years
Other \| Maximum
Intangible Assets
Estimated useful lives (Year)	5 years

Business Combinations, Goodwill and Intangible Assets - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets
2020	$ 1,398
2021	1,396
2022	1,396
2023	1,389
2024	1,125
Thereafter	7,305
Total	$ 14,009	$ 10,249

Inventories (Details Textual) - USD ($) $ in Thousands	12 Months Ended
Inventories (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Inventories
Write-down of inventory to net realizable value	$ 891	$ 787

Inventories - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current:
Raw materials	$ 847	$ 1,795
Finished goods	10,594	11,433
Total	11,441	13,228
Long-term:
Raw materials	1,915	2,165
Finished goods	4,369	6,788
Total	$ 6,284	$ 8,953

Property and Equipment (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment
Depreciation expense	$ 512	$ 497
Disposal of fixed assets	$ 34

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	$ 9,573	$ 9,450
Accumulated depreciation and amortization	(8,529)	(8,062)
Property and equipment, net	1,044	1,388
Office furniture and equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	4,979	5,041
Leasehold improvements
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	1,609	1,570
Vehicles
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	206	206
Manufacturing and test equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	$ 2,779	$ 2,633
Minimum \| Office furniture and equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	3 years
Minimum \| Leasehold improvements
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	2 years
Minimum \| Vehicles
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	5 years
Minimum \| Manufacturing and test equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	2 years
Maximum \| Office furniture and equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	10 years
Maximum \| Leasehold improvements
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	10 years
Maximum \| Vehicles
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	10 years
Maximum \| Manufacturing and test equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	10 years

Leases (Details Textual)	Jan. 31, 2020 ft²	Dec. 31, 2019 a ft²
Facility to support, research and development activity \| Gainesville, Florida
Leases
Area of facility		5,000
Facility to support, research and development activity \| Gainesville, Florida \| Subsequent Event
Leases
Area of facility	1,350
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity \| Salt Lake City, Utah
Leases
Area of facility		21,443
Operating lease, term (in years)		5 years
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity \| Austin, Texas
Leases
Area of facility		950
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity \| Zaragoza, Spain
Leases
Area of facility \| a		3,068
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity \| Chennai, India
Leases
Area of facility \| a		6,175
Warehouse to support, primary inventory fulfillment and repair center \| Salt Lake City, Utah
Leases
Area of facility		40,000

Leases - Rent expense (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Rent expense (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases
Rent Expense	$ 804	$ 1,053

Leases - Supplemental cash flow information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 708
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 51

Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases
Operating lease – right of use assets, net	$ 2,459
Current portion of operating lease liabilities, included in accrued liabilities	577
Operating lease liabilities, net of current portion	2,021
Total operating lease liabilities	$ 2,598
Weighted average remaining lease term for operating leases (in years)	4 years 5 months 5 days
Weighted average discount rate for operating leases	6.10%

Leases - Maturities of operating lease liabilities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases
2020	$ 720
2021	665
2022	612
2023	606
2024	306
Thereafter	69
Total lease payments	2,978
Less: Imputed interest	(380)
Total operating lease liabilities	$ 2,598

Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accrued Liabilities
Accrued salaries and other compensation	$ 835	$ 882
Sales and marketing programs	378	537
Product warranty	194	194
Current portion of operating lease liabilities	577
Accrued legal fees and costs	772	36
Other accrued liabilities	449	347
Total	$ 3,205	$ 1,996

Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands		12 Months Ended		48 Months Ended
	Aug. 20, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2017
Commitments and Contingencies
Purchase commitment, amount		$ 844
Uncertain tax positions		233	$ 679	$ 233	$ 652
Litigation for Intellectual Property Infringement
Commitments and Contingencies
Litigation settlement	$ 4,452
Litigation Settlement, Expense				$ 13,591
Litigation expense, capitalized		$ 5,085	$ 4,698

Senior Convertible Notes and Warrants (Details Textual)		12 Months Ended
Senior Convertible Notes and Warrants (Details Textual)	Dec. 17, 2019 USD ($) d $ / shares shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares
Senior Convertible Notes and Warrants
Common stock, par value (in dollars per share) \| $ / shares		$ 0.001	$ 0.001
Net proceeds after original issue discount and issuance costs \| $		$ 2,654,000
Common Stock \| Beneficial owner
Senior Convertible Notes and Warrants
Beneficial owner of the Company’s issued and outstanding shares of Common Stock	46.60%
Senior Convertible Notes and Warrants
Senior Convertible Notes and Warrants
Issuance and sale of secured convertible notes \| $	$ 3,000
Original issue discount and issuance costs \| $	346,000
Net proceeds after original issue discount and issuance costs \| $	$ 2,654,000
Senior Convertible Notes and Warrants \| Common Stock
Senior Convertible Notes and Warrants
Warrants to purchase of common stock, shares \| shares	340,909
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001
Senior Convertible Notes
Senior Convertible Notes and Warrants
Interest accrual at a variable rate adjusted on a quarterly basis, percent	2.50%
Published in the Wall Street Journal (New York edition) as of the beginning of such calendar quarter	Prime Rate
Senior Convertible Notes \| Greater of
Senior Convertible Notes and Warrants
Interest accrual at a variable rate adjusted on a quarterly basis, percent	5.25%
Senior Convertible Notes \| Common Stock
Senior Convertible Notes and Warrants
Senior Convertible Notes, Initial conversion price per share \| $ / shares	$ 2.11
Senior Convertible Notes, Threshold percentage of stock price trigger	120.00%
Senior Convertible Notes, Threshold consecutive trading days \| d	90
Senior Convertible Notes \| Common Stock \| Greater of
Senior Convertible Notes and Warrants
Senior Convertible Notes, Threshold percentage of stock price trigger	200.00%
Warrants \| Common Stock
Senior Convertible Notes and Warrants
Warrants, Initial exercise price per share \| $ / shares	$ 1.76

Senior Convertible Notes and Warrants (Schedule Of Warrants Valuation Assumptions) (Details)	Dec. 31, 2019
Risk-free interest rate
Warrants, Valuation assumptions, Black-Scholes method
Warrants, assumptions rate	1.82%
Expected life of Warrants (years)
Warrants, Valuation assumptions, Black-Scholes method
Expected life of Warrants (years)	7 years
Expected price volatility
Warrants, Valuation assumptions, Black-Scholes method
Warrants, assumptions rate	49.94%
Expected dividend yield
Warrants, Valuation assumptions, Black-Scholes method
Warrants, assumptions rate	0.00%

Senior Convertible Notes and Warrants (Schedule of carrying value of Notes and Warrants) (Details) - USD ($)
$ in Thousands

Dec. 31, 2019

Dec. 31, 2018

Liability component:

Principal

$ 3,000

Less: debt discount and issuance costs, net of amortization

(778)

Net carrying amount

2,222

Equity component:

Warrants

^[1]

318

Conversion feature

^[1]

122

Net carrying amount

^[1]

$ 440

[1]	Recorded on the consolidated balance sheets as additional paid-in capital.

Senior Convertible Notes and Warrants (Schedule of maturities of principal amount contained in the Notes) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Senior Convertible Notes, Principal Amount Maturing
2020
2021	360
2022	720
2023	1,920
Net carrying amount	$ 3,000

Share-based Payments (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Dec. 04, 2018	Feb. 21, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 12, 2016
Share-Based Payments
Stock options, expiration period (years)			10 years
Number of options, outstanding			544,647	624,256	764,430
Share based compensation recognized			$ 208	$ 463
Tax benefit from compensation cost			0	0
Total compensation cost related to stock options not yet recognized			$ 51
Compensation cost related to stock options expected to be recognized (in years)			4 months 17 days
Cash dividends on common stock		$ 0.07
Issuance of common stock	$ 9,883			$ 9,883
Shares Issued, Price Per Share	$ 1.20
Number of shares oversubscribed	754,868
Dividends paid, date		Mar. 21, 2018
Dividends paid, recorded date		Mar. 07, 2018
Common Stock
Share-Based Payments
Number of shares issued	8,306,535
Directors and officers
Share-Based Payments
Options vesting period (years)			3 years
Other employees
Share-Based Payments
Options vesting period (years)			4 years
2007 Equity Incentive Plan
Share-Based Payments
Number of shares authorized						2,000,000
Number of options, outstanding			544,647
Number of authorized unissued options			950,447
2007 Equity Incentive Plan \| Minimum
Share-Based Payments
Options vesting period (years)			3 years
2007 Equity Incentive Plan \| Maximum
Share-Based Payments
Options vesting period (years)			4 years
Employee Stock Purchase Plan
Share-Based Payments
Number of shares authorized			500,000
Number of shares available for grant			422,866	442,994
Percentage of voting rights			5.00%
Shares purchased under ESPP plan			20,128	23,789
Purchase price of common stock, percentage			85.00%
Discount on purchase price of common stock, percentage			15.00%
Employee Stock Purchase Plan \| Maximum
Share-Based Payments
Shares purchased under ESPP plan			2,500
Proceeds from employee stock purchase plan			$ 25

Share-based Payments - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of shares, outstanding at beginning of period (in shares)	624,256	764,430
Number of shares, granted (in shares)
Number of shares, expired and canceled (in shares)	(78,786)	(106,108)
Number of shares, forfeited prior to vesting (in shares)	(823)	(34,066)
Number of shares, exercised (in shares)
Number of shares, outstanding at end of period (in shares)	544,647	624,256	764,430
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price, beginning of period (in dollars per share)	$ 8.87	$ 8.78
Weighted average exercise price, granted (in dollars per share)
Weighted average exercise price, expired and canceled (in dollars per share)	7.85	7.56
Weighted average exercise price, forfeited prior to vesting (in dollars per share)	11.97	10.79
Weighted average exercise price, exercised (in dollars per share)
Weighted average exercise price, end of period (in dollars per share)	$ 9.01	$ 8.87	$ 8.78
Weighted average remaining contractual term (Year)	4 years 11 months 5 days	5 years 3 months 11 days	6 years 5 months 23 days
Aggregate intrinsic value			$ 1,038
Number of shares, vested and expected to vest (in shares)	544,647	624,256
Weighted average exercise price, vested and expected to vest (in dollars per share)	$ 9.01	$ 8.87
Weighted average remaining contractual term, vested and expected to vest (Year)	4 years 11 months 5 days	5 years 3 months 11 days
Aggregate intrinsic value, vested and expected to vest
Number of shares, vested at end of period (in shares)	527,181	548,045
Weighted average exercise price, vested at end of period (in dollars per share)	$ 8.97	$ 8.62
Weighted average remaining contractual term, vested (Year)	4 years 10 months 6 days	4 years 10 months 24 days
Aggregate intrinsic value, vested

Share-based Payments - Employee Stock Purchase Plans (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Employee Stock Purchase Plans
Shares purchased under ESPP plan	20,128	23,789
Plan compensation expense	$ 9	$ 10

Significant Customers - Concentration Risk by Risk Factor of Sales Revenue and Accounts Receivable (Details) - Customer Concentration Risk

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Sales Revenue, Net | Customer A

Significant customers

Concentration risk, percentage

10.70%

Accounts Receivable

Significant customers

Concentration risk, percentage

14.80%

26.30%

Accounts Receivable | Customer A

Significant customers

Concentration risk, percentage

14.80%

14.50%

Accounts Receivable | Customer B

Significant customers

Concentration risk, percentage

^[1]

11.80%

[1]	Accounts receivable from Customer B in 2019 did not exceed 10% of total gross accounts receivable.

Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets:
Total	$ 4,543	$ 4,715
Level 1
Assets:
Total
Level 2
Assets:
Total	4,543	4,715
Level 3
Assets:
Total
Corporate bonds and notes
Assets:
Total	1,832	2,881
Corporate bonds and notes \| Level 1
Assets:
Total
Corporate bonds and notes \| Level 2
Assets:
Total	1,832	2,881
Corporate bonds and notes \| Level 3
Assets:
Total
Municipal bonds
Assets:
Total	2,711	1,834
Municipal bonds \| Level 1
Assets:
Total
Municipal bonds \| Level 2
Assets:
Total	2,711	1,834
Municipal bonds \| Level 3
Assets:
Total

Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Deferred tax assets	$ 13,760	$ 11,460
Unrecognized tax benefits impacting effective tax rate	298	679
Unrecognized tax benefits, interest and penalties	9	$ 14
Domestic tax authority \| Internal revenue service (IRS)
Income Taxes
Net operating loss carryforwards	16,300
State and local jurisdiction
Income Taxes
Net operating loss carryforwards	16,300
Foreign tax authority \| Tax authority, spain
Income Taxes
Net operating loss carryforwards	$ 8,600
Foreign tax authority \| Inland revenue, hong Kong \| Earliest tax year
Income Taxes
Years of tax examination	2009
Foreign tax authority \| Inland revenue, hong Kong \| Latest tax year
Income Taxes
Years of tax examination	2011

Income Taxes - Consolidated Income Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Domestic	$ (6,207)	$ (7,751)
Foreign	(2,145)	(2,496)
Loss before income taxes	$ (8,352)	$ (10,247)

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 26	$ (71)
State	(23)	37
Foreign	(59)	117
Total current	(56)	83
Deferred:
Federal	1,621	2,233
State	413	667
Foreign	393	495
Total	2,427	3,395
Change in valuation allowance	(2,427)	(9,918)
Total deferred		(6,523)
Benefit/(provision) for income taxes	$ (56)	$ (6,440)

Income Taxes - Income Tax (Provision) for Federal Statutory Corporate Income Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Tax (provision) at federal statutory rate	$ 1,754	$ 2,152
State income tax benefit (provision), net of federal benefit	318	413
Research and development tax credits	290	250
Foreign earnings or losses taxed at different rates	(27)	12
Tax rate change	(31)	23
Other	67	628
Change in valuation allowance	(2,427)	(9,918)
Benefit/(provision) for income taxes	$ (56)	$ (6,440)

Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Deferred revenue	$ 36	$ 50
Basis difference in intangible assets	3,157	3,283
Inventory reserve	2,247	2,235
Net operating loss carryforwards	6,438	4,067
Research and development tax credits	1,042	794
Accrued expenses	163	143
Stock-based compensation	322	362
Allowance for sales returns and doubtful accounts	107	160
Difference in property and equipment basis	(134)	(185)
Other	382	551
Total net deferred income tax asset	13,760	11,460
Less: Valuation allowance	(13,760)	(11,460)
Net deferred income tax asset (liability)

Income Taxes - Reconciliation of Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance - beginning of year	$ 679	$ 652
Additions based on tax positions related to the current year	50	58
Additions for tax positions of prior years	43	118
Reductions for tax positions of prior years		(53)
Settlements	(375)
Lapse in statutes of limitations	(99)	(96)
Uncertain tax positions, ending balance	$ 233	$ 679

Geographic Sales Information - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenues
Revenue	$ 25,042	$ 28,156
United States
Revenues
Revenue	13,463	14,783
All other countries
Revenues
Revenue	$ 11,579	$ 13,373