0001753926-24-000656 | 10-K | XBRL Viewer

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

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.

There were no financial instruments that were re-measured by the Company as of December 31, 2022. The following tables set forth the fair value of the financial instruments re-measured by the Company as of December 31, 2023.

	Level 1		Level 2		Level 3		Total
December 31, 2023
Mutual funds	$	1,505	$	—	$	—	$	1,505
US Treasury securities		—		1,803		—		1,803
Certificates of deposit		—		103		—		103
Corporate debt securities		—		985		—		985
Total	$	1,505	$	2,891	$	—	$	4,396

- 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 - Consolidated Income Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Domestic	$ 1,043	$ 28,754
Foreign	(1,169)	(1,294)
Income (loss) before income taxes	$ (126)	$ 27,460

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 32
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

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+ Details

Share-Based Payments (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payments

Schedule of valuation assumptions for applying the Black-Scholes methodology to the options granted under share-based payments

Risk free interest rate, average	3.91%
Expected option life, average	5 years
Expected price volatility, average	91.47%
Expected dividend yield	0%

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, 2021		831,071		$	6.47		4.10	$	—
Granted		—			—
Expired and canceled		(274,379	)		7.44
Forfeited prior to vesting		(68,215	)		2.50
Exercised		—			—
As of December 31, 2022		488,477		$	6.48		3.42	$	—
Granted		160,000			1.01
Expired and canceled		(35,457	)		7.29
Forfeited prior to vesting		(5,210	)		2.50
Exercised		—			—
As of December 31, 2023		607,810		$	5.03		3.32	$	—
Vested and Expected to Vest at December 31, 2022		488,477		$	6.48		3.42	$	—
Vested at December 31, 2022		373,612		$	7.72		3.22	$	—
Vested and Expected to Vest at December 31, 2023		607,810		$	5.03		3.32	$	—
Vested at December 31, 2023		403,365		$	6.90		2.51	$	—

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

	2023		2022
Shares purchased under ESPP plan		13,381		7,180
Plan compensation expense	$	3	$	1

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 17,835	$ 984
Marketable securities	3,480	0
Legal settlement receivable	4,000	55,000
Receivables, net of allowance for credit losses of $326	3,279	3,603
Inventories, net	10,625	8,961
Income tax receivable	36	1,071
Prepaid expenses and other assets	4,062	7,808
Total current assets	43,317	77,427
Long-term marketable securities	916	0
Long-term inventories, net	3,143	2,707
Property and equipment, net	530	383
Operating lease – right of use assets, net	990	1,047
Intangibles, net	1,689	2,071
Other assets	109	115
Total assets	50,694	83,750
Current liabilities:
Accounts payable	1,945	1,284
Accrued liabilities	2,290	3,041
Deferred product revenue	30	63
Short-term debt	0	3,732
Total current liabilities	4,265	8,120
Long-term debt	0	0
Operating lease liability, net of current	665	492
Other long-term liabilities	1,079	1,008
Total liabilities	6,009	9,620
Shareholders’ equity:
Common stock, par value $0.001, 50,000,000 shares authorized, 23,969,148 and 23,955,767 shares issued and outstanding, respectively	24	24
Additional paid-in capital	46,047	74,910
Accumulated other comprehensive loss	(310)	(288)
Accumulated deficit	(1,076)	(516)
Total shareholders’ equity	44,685	74,130
Total liabilities and shareholders’ equity	$ 50,694	$ 83,750

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income (loss)	$ (560)	$ 20,556
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense	941	2,970
Amortization of right of use of assets	397	597
Share-based compensation expense	109	113
Change of inventory to net realizable value	281	120
Loss on disposal of assets	(47)	146
Gain recognized on Paycheck Protection Plan Loan forgiveness	0	(1,528)
Gain on legal settlement proceeds, net of capitalized legal costs less amortization	(4,000)	(33,623)
Changes in operating assets and liabilities:
Receivables	324	1,388
Legal settlement receivable	55,000	0
Inventories	(2,381)	1,812
Prepaid expenses and other assets	3,752	684
Accounts payable	661	(4,104)
Accrued liabilities	(497)	485
Income taxes receivable	1,035	6,466
Deferred product revenue	(33)	9
Operating lease liabilities	(425)	(623)
Other long-term liabilities	71	353
Net cash provided by (used in) operating activities	54,628	(4,179)
Cash flows from investing activities:
Purchase of marketable securities	(10,298)	0
Purchase of property and equipment	(375)	(51)
Purchase of intangibles	(135)	(137)
Capitalized patent defense costs	0	(737)
Proceeds from maturities and sales of marketable securities	5,925	3,010
Net cash provided by (used in) investing activities	(4,883)	2,085
Cash flows from financing activities:
Dividend payment	(28,979)	0
Principal payments of long-term debt	(3,920)	(720)
Proceeds from issuance of short-term notes	0	2,000
Proceeds from Paycheck Protection Program loan	0	767
Proceeds from equity-based compensation programs	7	4
Net cash provided by (used in) financing activities	(32,892)	2,051
Effect of exchange rate changes on cash and cash equivalents	(2)	(44)
Net decrease in cash and cash equivalents	16,851	(87)
Cash and cash equivalents at the beginning of the year	984	1,071
Cash and cash equivalents at the end of the year	17,835	984
Supplemental disclosure of cash flow information:
Cash paid for income taxes	6,905	88
Cash paid for interest	343	226
Supplemental disclosure of non-cash investing and financing activities
Right-of-use assets obtained in exchange for lease obligations	0	107
Issue of common stock in consideration of cancellation of debt	$ 0	$ 2,000

Inventories (Details Textual) - USD ($) $ in Thousands	12 Months Ended
Inventories (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Inventories
Change of inventory to net realizable value	$ 281	$ 120

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

13. Income Taxes

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

	Year ended December 31,
	2023			2022
Domestic	$	1,043		$	28,754
Foreign		(1,169	)		(1,294	)
Total	$	(126	)	$	27,460

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

	Year ended December 31,
	2023			2022
Current:
Federal	$	(131	)	$	(6,753	)
State		(219	)		(98	)
Foreign		(84	)		(53	)
Total current		(434	)		(6,904	)
Deferred:
Federal		(43	)		1,132
State		78			(976	)
Foreign		293			165
Total		328			321
Change in valuation allowance		(328	)		(321	)
Total deferred		—			—
Tax provision	$	(434	)	$	(6,904	)

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

	Year ended December 31,
	2023			2022
Tax benefit (provision) at federal statutory rate	$	26		$	(5,768	)
State income tax benefit (provision), net of federal benefit		(10	)		(1,093	)
Research and development tax credits		66			457
Foreign earnings or losses taxed at different rates		(72	)		(68	)
Tax rate change		(116	)		(60	)
Other		—			(51	)
Change in valuation allowance		(328	)		(321	)
Tax benefit (provision)	$	(434	)	$	(6,904	)

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

	2023			2022
Deferred revenue	$	3		$	11
Basis difference in intangible assets		6,080			6,604
Inventory reserve		880			2,258
Net operating loss carryforwards		4,730			3,075
Research and development tax credits		115			48
Accrued expenses		108			120
Stock-based compensation		210			215
Allowance for sales returns and doubtful accounts		81			81
Difference in property and equipment basis		(108	)		(83	)
Convertible debt		(110	)		(110	)
Capitalized research expenditure		1,507			922
Other		337			364
Total net deferred income tax asset		13,833			13,505
Less: Valuation allowance		(13,833	)		(13,505	)
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, 2023, 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 does not meet 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 December 31, 2023.

As of December 31, 2023 the Company has federal net operating loss (“NOL”) carryforwards of approximately $5.8 million (pre-tax), state NOL carryforwards of approximately 6.3 million (pre-tax) and Spain NOL carryforwards of approximately $12.7 million (pre-tax). The federal NOL carryforward expires in 2029. The Spain NOL carryforward does 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, 2023 and 2022, that would favorably impact our effective tax rate if recognized was $1,034 and $976, respectively. As of December 31, 2023 and 2022, we accrued $111 and $44, 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,
	2023			2022
Balance - beginning of year	$	962		$	895
Additions based on tax positions related to the current year		18			75
Reductions for tax positions of prior years		(5	)		—
Lapse in statutes of limitations		(7	)		(8	)
Uncertain tax positions, ending balance	$	968		$	962

The Company’s U.S. federal income tax returns for 2018 through 2023 are subject to examination. The Company's U.S. 2018 federal income tax return is currently under 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 2017.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Fair Value Measurements - Fair Value of Financial Instruments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Assets:
Total	$ 4,396
Level 1 [Member]
Assets:
Total	1,505
Level 2 [Member]
Assets:
Total	2,891
Level 3 [Member]
Assets:
Total	0
Mutual funds [Member]
Assets:
Total	1,505
Mutual funds [Member] \| Level 1 [Member]
Assets:
Total	1,505
Mutual funds [Member] \| Level 2 [Member]
Assets:
Total	0
Mutual funds [Member] \| Level 3 [Member]
Assets:
Total	0
US Treasury securities [Member]
Assets:
Total	1,803
US Treasury securities [Member] \| Level 1 [Member]
Assets:
Total	0
US Treasury securities [Member] \| Level 2 [Member]
Assets:
Total	1,803
US Treasury securities [Member] \| Level 3 [Member]
Assets:
Total	0
Certificates of deposit [Member]
Assets:
Total	103
Certificates of deposit [Member] \| Level 1 [Member]
Assets:
Total	0
Certificates of deposit [Member] \| Level 2 [Member]
Assets:
Total	103
Certificates of deposit [Member] \| Level 3 [Member]
Assets:
Total	0
Corporate debt securities [Member]
Assets:
Total	985
Corporate debt securities [Member] \| Level 1 [Member]
Assets:
Total	0
Corporate debt securities [Member] \| Level 2 [Member]
Assets:
Total	985
Corporate debt securities [Member] \| Level 3 [Member]
Assets:
Total	$ 0

Share-Based Payments - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of shares, outstanding at beginning of period (in shares)	488,477	831,071
Number of shares, granted (in shares)	160,000	0
Number of shares, expired and canceled (in shares)	(35,457)	(274,379)
Number of shares, forfeited prior to vesting (in shares)	(5,210)	(68,215)
Number of shares, exercised (in shares)	0	0
Number of shares, outstanding at end of period (in shares)	607,810	488,477	831,071
Number of shares, vested and expected to vest at end of period (in shares)	607,810	488,477
Number of shares, vested at end of period (in shares)	403,365	373,612
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)	$ 6.48	$ 6.47
Weighted average exercise price, granted (in dollars per share)	1.01	0
Weighted average exercise price, expired and canceled (in dollars per share)	7.29	7.44
Weighted average exercise price, forfeited prior to vesting (in dollars per share)	2.5	2.5
Weighted average exercise price, exercised (in dollars per share)	0	0
Weighted average exercise price, end of period (in dollars per share)	5.03	6.48	$ 6.47
Weighted average exercise price, vested and expected to vest at end of period (in dollars per share)	5.03	6.48
Weighted average exercise price, vested at end of period (in dollars per share)	$ 6.9	$ 7.72
Weighted Average Remaining Contractual Term (Years)	3 years 3 months 25 days	3 years 5 months 1 day	4 years 1 month 6 days
Weighted average remaining contractual term, vested and expected to vest (Years)	3 years 3 months 25 days	3 years 5 months 1 day
Weighted average remaining contractual term, vested (Years)	2 years 6 months 3 days	3 years 2 months 19 days
Aggregate intrinsic value	$ 0	$ 0	$ 0
Aggregate intrinsic value, vested and expected to vest	0	0
Aggregate intrinsic value, vested	$ 0	$ 0

Intangible Assets

12 Months Ended

Dec. 31, 2023

Intangible Assets

Intangible Assets

3. Intangible Assets

Intangible assets as of December 31, 2023 and 2022 consisted of the following:

	Estimated useful lives				As of December 31,
	(in years)				2023			2022
Tradename		5	to	7	$	555		$	555
Patents and technological know-how		10	to	20		7,187			7,053
Proprietary software		3	to	15		2,981			2,981
Other		3	to	5		324			323
Total intangible assets, gross						11,047			10,912
Accumulated amortization						(9,358	)		(8,841	)
Total intangible assets, net					$	1,689		$	2,071

During the years ended December 31, 2023 and 2022, amortization of these intangible assets were $517 and $2,512 respectively.

A gain of $33,623 was recognized and included under other income after deducting the entire capitalized legal costs amounting to $27,374 net of amortized costs of $5,997 from the one-time legal settlement amount of $55,000, which is included in the balance sheet under legal settlement receivable as of December 31, 2022.

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

Years ending December 31,
2024	$	257
2025		196
2026		195
2027		65
2028		21
Thereafter		955
Total	$	1,689

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	$ 1,762	$ 1,374
Accumulated depreciation and amortization	(1,232)	(991)
Property and equipment, net	530	383
Office furniture and equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	70	66
Leasehold improvements
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	193	121
Vehicles
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	57	41
Manufacturing and test equipment
Major classifications of property and equipment and estimated useful lives
Property and equipment, gross	$ 1,442	$ 1,146
Minimum
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	2 years
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
Major classifications of property and equipment and estimated useful lives
Property and equipment, useful life (in years)	10 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)	7 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 - Supplemental balance sheet information (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases
Operating lease right-of-use assets	$ 990	$ 1,047
Current portion of operating lease liabilities, included in accrued liabilities	383	641
Operating lease liabilities, net of current portion	665	492
Total	$ 1,048	$ 1,133
Weighted average remaining lease term for operating leases (in years)	3 years 4 months 20 days	2 years 1 month 13 days
Weighted average discount rate for operating leases	6.47%	5.93%

Business Description, Basis of Presentation and Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Apr. 10, 2024	Mar. 11, 2024	Jun. 01, 2023	Jan. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Oct. 31, 2023
Business Description, Basis of Presentation and Significant Accounting Policies
Current inventory					$ 10,625	$ 8,961
Long-term inventory					3,143	2,707
Operating lease right-of-use assets					990	1,047
Operating lease liability, net of current					665	492
Decreased revenue due to the impact of the adoption of the New Revenue Standard					18,704	25,205
Advertising expenses					661	572
Net deferred tax assets					0
Cash and cash equivalents					17,835	984
Working capital					39,052	69,307
Net cash used in operating activities					54,628	(4,179)
Decrease of cash used in operating activities					58,807
Time Deposits, at or Above FDIC Insurance Limit					$ 17,251
Period of cumulative pre-tax operating losses					3 years
Payments of Dividends					$ 28,979	0
Foreign cash accounts not covered by Federal Deposit Insurance Corporation insurance					192
Short-Term Notes Payable
Business Description, Basis of Presentation and Significant Accounting Policies
Principal amount of loan obtained							$ 2,000
Litigation for Intellectual Property Infringement
Business Description, Basis of Presentation and Significant Accounting Policies
Litigation Settlement, Expense					27,374	27,374
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					18,576
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					$ 128
Common Stock
Business Description, Basis of Presentation and Significant Accounting Policies
Number of common stock issued for cancellation and termination of short-term notes				$ 2,000
Common Stock, Dividends, Per Share, Cash Paid		$ 500	$ 1,000
Payments of Dividends	$ 14,500		$ 28,979
Minimum
Business Description, Basis of Presentation and Significant Accounting Policies
Property and equipment, useful life (in years)					2 years
Intangible assets, estimated useful lives					3 years
Maximum
Business Description, Basis of Presentation and Significant Accounting Policies
Property and equipment, useful life (in years)					10 years
Intangible assets, estimated useful lives					10 years
Maturity period of highly-liquid investments classified as cash equivalents					3 months
Period of payment requirement from date of invoicing for distributor payment					45 days
Period of scheduled delivery date to customer					1 year
Period of payment requirement from date of invoicing for dealer payment					30 days
Replacement Parts
Business Description, Basis of Presentation and Significant Accounting Policies
Current inventory					$ 96	$ 193

Inventories (Tables)

12 Months Ended

Dec. 31, 2023

Inventories

Schedule of Inventories, net of reserves

	As of December 31,
	2023		2022
Current:
Raw materials	$	2,086	$	4,499
Finished goods		8,539		4,462
Total	$	10,625	$	8,961
Long-term:
Raw materials	$	1,789	$	1,068
Finished goods		1,354		1,639
Total	$	3,143	$	2,707

Marketable Securities - Maturities of Available-for-sale Securities (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Marketable Securities
Due within one year, amortized cost	$ 3,497
Due after one year through five years, amortized cost	915
Total available-for-sale securities, amortized cost	4,412
Due within one year, estimated fair value	3,480
Due after one year through five years, estimated fair value	916
Total available-for-sale securities, estimated fair value	$ 4,396

Geographic Sales Information (Details 1 - Textual)	12 Months Ended
Geographic Sales Information (Details 1 - Textual)	Dec. 31, 2023
Total revenues \| Geographic Concentration Risk [Member] \| United States \| Minimum
Geographic Sales Information
Concentration risk, percentage	10.00%

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

12 Months Ended

Dec. 31, 2023

Business Description, Basis of Presentation and Significant Accounting Policies

Schedule of allowance for doubtful accounts activity

	Year Ended December 31,
	2023		2022
Balance at beginning of the year	$	326	$	326
Allowance increase (decrease)		—		—
Write offs, net of recoveries		—		—
Balance at end of the year	$	326	$	326

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

	As of December 31,
	2023		2022
Deferred revenue	$	30	$	63
Deferred cost of goods sold		—		—
Deferred gross profit	$	30	$	63

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

	Year Ended December 31,
	2023		2022
Audio Conferencing	$	8,366	$	11,829
Microphones		7,749		9,824
Video products		2,589		3,552
	$	18,704	$	25,205

	Year Ended December 31,
	2023		2022
North and South America	$	9,047	$	12,297
Asia (including Middle East) and Australia		7,338		7,828
Europe and Africa		2,319		5,080
	$	18,704	$	25,205

Schedule of changes in the warranty accrual

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

	Year Ended December 31,
	2023		2022
Balance at the beginning of year	$	194	$	194
Accruals/additions		—		—
Usage/claims		—		—
Balance at end of year	$	194	$	194

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

	Year Ended December 31,
	2023			2022
Numerator:
Net income (loss)	$	(560	)	$	20,556
Interest adjustment under if-converted method		—			285
		(560	)		20,841

Denominator:
Basic weighted average shares		23,958,184			23,937,962
Dilutive common stock equivalents using if-converted method		—			1,251,185
Diluted weighted average shares		23,958,184			25,189,147

Basic income (loss) per common share:	$	(0.02	)	$	0.86
Diluted income (loss) per common share:	$	(0.02	)	$	0.83

Weighted average options, warrants and convertible portion of senior convertible notes outstanding		6,258,917			6,788,671
Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation		6,258,917			5,510,600

Subsequent events (Details Textual) - Subsequent Event - Dividend Declared [Member] $ / shares in Units, $ in Thousands	Mar. 10, 2024 USD ($) $ / shares
Subsequent events
Cash dividends on common stock \| $ / shares	$ 0.5
Dividends payable \| $	$ 14,500

Inventories

12 Months Ended

Dec. 31, 2023

Inventories

Inventories

4. Inventories

Inventories, net of reserves, consisted of the following:

	As of December 31,
	2023		2022
Current:
Raw materials	$	2,086	$	4,499
Finished goods		8,539		4,462
Total	$	10,625	$	8,961
Long-term:
Raw materials	$	1,789	$	1,068
Finished goods		1,354		1,639
Total	$	3,143	$	2,707

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 $281 and $120 during the years ended December 31, 2023 and 2022, respectively.

Geographic Sales Information - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenues
Revenue	$ 18,704	$ 25,205
United States
Revenues
Revenue	8,186	12,096
All other countries
Revenues
Revenue	$ 10,518	$ 13,109

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Business Description, Basis of Presentation and Significant Accounting Policies - Warranty Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Business Description, Basis of Presentation and Significant Accounting Policies
Balance at the beginning of year	$ 194	$ 194
Accruals/additions	0	0
Usage/claims	0	0
Balance at end of year	$ 194	$ 194

Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 492	$ 680
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 397	$ 107

Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets
Total intangible assets, gross	$ 11,047	$ 10,912
Accumulated amortization	(9,358)	(8,841)
Total	$ 1,689	2,071
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
Total intangible assets, gross	$ 7,187	7,053
Patents and Technological Know-how \| Minimum
Intangible Assets
Estimated useful lives (Year)	10 years
Patents and Technological Know-how \| Maximum
Intangible Assets
Estimated useful lives (Year)	20 years
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	$ 324	$ 323
Other \| Minimum
Intangible Assets
Estimated useful lives (Year)	3 years
Other \| Maximum
Intangible Assets
Estimated useful lives (Year)	5 years

Leases - Rent expense (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Rent expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases
Rent expense	$ 480	$ 684

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

12 Months Ended

Dec. 31, 2023

Business Description, Basis of Presentation and Significant Accounting Policies

Fiscal Year

Fiscal Year – This report on Form 10-K includes consolidated balance sheets for the years ended December 31, 2023 and 2022 and the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for each of the years ended December 31, 2023 and 2022.

Consolidation

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

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 long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates.

Foreign Currency Translation

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

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 most of our products.

Cash Equivalents

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. As of December 31, 2023, there were three cash accounts in the United States that exceeded federally insured limits, in the amount of $17,251. In addition, there were foreign cash accounts in the amount of $192 that were not covered by Federal Deposit Insurance Corporation insurance.

Marketable Securities

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, 2023 and 2022.

Accounts Receivable

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 credit losses 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 credit losses 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, 2023 and 2022 is as follows:

	Year Ended December 31,
	2023		2022
Balance at beginning of the year	$	326	$	326
Allowance increase (decrease)		—		—
Write offs, net of recoveries		—		—
Balance at end of the year	$	326	$	326

Inventories

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 $96 and $193, as of December 31, 2023 and 2022, respectively.

The inventory consists of current inventory of $10,625 and long-term inventory of $3,143. 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 – 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 – Intangible assets 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

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.

Leases

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, 2023 and December 31, 2022, 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.

Revenue Recognition Policy

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, 2023 for equipment sales was $18,576, and for software, licenses, etc. was $128. 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 (loss).

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

	As of December 31,
	2023		2022
Deferred revenue	$	30	$	63
Deferred cost of goods sold		—		—
Deferred gross profit	$	30	$	63

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,
	2023		2022
Audio Conferencing	$	8,366	$	11,829
Microphones		7,749		9,824
Video products		2,589		3,552
	$	18,704	$	25,205

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

	Year Ended December 31,
	2023		2022
North and South America	$	9,047	$	12,297
Asia (including Middle East) and Australia		7,338		7,828
Europe and Africa		2,319		5,080
	$	18,704	$	25,205

Warranty Costs

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,
	2023		2022
Balance at the beginning of year	$	194	$	194
Accruals/additions		—		—
Usage/claims		—		—
Balance at end of year	$	194	$	194

Advertising

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, 2023 and 2022 totaled $661 and $572, respectively, and are included in sales and marketing on the consolidated statements of operations and comprehensive income (loss).

Income Taxes

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. We continue to record full valuation against our net deferred tax assets. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit.

As of December 31, 2023 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

Recent changes: There were no changes that had a material impact on the Company's consolidated financial position, results of operations or cash flows.

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,
	2023			2022
Numerator:
Net income (loss)	$	(560	)	$	20,556
Interest adjustment under if-converted method		—			285
		(560	)		20,841

Denominator:
Basic weighted average shares		23,958,184			23,937,962
Dilutive common stock equivalents using if-converted method		—			1,251,185
Diluted weighted average shares		23,958,184			25,189,147

Basic income (loss) per common share:	$	(0.02	)	$	0.86
Diluted income (loss) per common share:	$	(0.02	)	$	0.83

Weighted average options, warrants and convertible portion of senior convertible notes outstanding		6,258,917			6,788,671
Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation		6,258,917			5,510,600

Share-Based Payment

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

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

Liquidity:

As of December 31, 2023, cash and cash equivalents were approximately $17,835 compared to $984 as of December 31, 2022. Our working capital was $39,052 as of December 31, 2023 compared to $69,307 as of December 31, 2022. Net cash provided by operating activities was $54,628 for the twelve months ended December 31, 2023, an increase in cashflows of $58,807 from $4,179 of cash used in operating activities in the twelve months ended December 31, 2022.

In order to maintain liquidity, the Company has been actively engaged in preserving cash by implementing company-wide cost reduction measures and raising additional capital. The company raised additional capital in 2019 by issuing senior convertible notes, in 2020 by borrowing through the CARES Act Paycheck Protection Program and issuing common stock and warrants and in 2021 by issuing short-term notes and issuing common stock and warrants. In January 2022, the Company issued $2,000 in common stock as consideration for the cancellation and termination of the short-term notes. In October 2022, the Company issued short term notes to raise $2,000. The Company paid a special one-time cash dividend of $1.00 per share of ClearOne common stock or the eligible warrants on June 1, 2023 amounting to $28,979. On March 11, 2024 the Company's Board of Directors declared another special dividend of $0.50 per share of the Company's stock and eligible warrants amounting to estimated $14,500 to be paid on April 10, 2024. The Company also believes that the Company's core strategies of product innovation and prudent cost management will bring the company back to profitability in the future. The Company believes, although there can be no assurance, that all of these measures and effective management of working capital, along with the current cash balance, will provide the liquidity needed to meet our operating needs through at least April 1, 2025.

Share-Based Payments - Black-scholes Assumptions (Details)	12 Months Ended
	Dec. 31, 2023
Share-Based Payments
Risk-free interest rate, average	3.91%
Expected option life, average (Year)	5 years
Expected price volatility, average	91.47%
Expected dividend yield	0.00%

Business Description, Basis of Presentation and Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

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:

Significant Accounting Policies:

The Company’s allowance for doubtful accounts activity for the years ended December 31, 2023 and 2022 is as follows:

	Year Ended December 31,
	2023		2022
Balance at beginning of the year	$	326	$	326
Allowance increase (decrease)		—		—
Write offs, net of recoveries		—		—
Balance at end of the year	$	326	$	326

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

	As of December 31,
	2023		2022
Deferred revenue	$	30	$	63
Deferred cost of goods sold		—		—
Deferred gross profit	$	30	$	63

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

	Year Ended December 31,
	2023		2022
Audio Conferencing	$	8,366	$	11,829
Microphones		7,749		9,824
Video products		2,589		3,552
	$	18,704	$	25,205

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

	Year Ended December 31,
	2023		2022
North and South America	$	9,047	$	12,297
Asia (including Middle East) and Australia		7,338		7,828
Europe and Africa		2,319		5,080
	$	18,704	$	25,205

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

	Year Ended December 31,
	2023		2022
Balance at the beginning of year	$	194	$	194
Accruals/additions		—		—
Usage/claims		—		—
Balance at end of year	$	194	$	194

As of December 31, 2023 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: There were no changes that had a material impact on the Company's consolidated financial position, results of operations or cash flows.

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

	Year Ended December 31,
	2023			2022
Numerator:
Net income (loss)	$	(560	)	$	20,556
Interest adjustment under if-converted method		—			285
		(560	)		20,841

Denominator:
Basic weighted average shares		23,958,184			23,937,962
Dilutive common stock equivalents using if-converted method		—			1,251,185
Diluted weighted average shares		23,958,184			25,189,147

Basic income (loss) per common share:	$	(0.02	)	$	0.86
Diluted income (loss) per common share:	$	(0.02	)	$	0.83

Weighted average options, warrants and convertible portion of senior convertible notes outstanding		6,258,917			6,788,671
Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation		6,258,917			5,510,600

Liquidity:

Intangible Assets (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets
Amortization of intangible assets	$ 517	$ 2,512
Litigation settlement receivable	4,000
Litigation for Intellectual Property Infringement
Intangible Assets
Gain (loss) related to litigation settlement	33,623	33,623
Litigation Settlement, Expense	27,374	27,374
Litigation settlement receivable, amortized costs	5,997	5,997
Litigation settlement receivable	$ 55,000	$ 55,000

Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands		12 Months Ended
	Dec. 09, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies
Purchase commitment, amount		$ 3,596
Uncertain tax positions		968	$ 962	$ 895
Litigation settlement receivable		4,000
Litigation for Intellectual Property Infringement
Commitments and Contingencies
Litigation Settlement, Expense		27,374	27,374
Litigation expense, capitalized		0	737
Litigation settlement receivable		55,000	55,000
Gain (loss) related to litigation settlement		33,623	33,623
Litigation settlement receivable, amortized costs		$ 5,997	$ 5,997
Litigation for Intellectual Property Infringement \| Shure Incorporated (“Shure”)
Commitments and Contingencies
Litigation settlement receivable	$ 55,000

Leases - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases
2024	$ 439
2025	272
2026	210
2027	216
2028	37
Thereafter	0
Total lease payments	1,174
Less: Imputed interest	(126)
Total	$ 1,048	$ 1,133

Property and Equipment

12 Months Ended

Dec. 31, 2023

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				2023			2022
Office furniture and equipment		3	to	10	$	70		$	66
Leasehold improvements		2	to	7		193			121
Vehicles		5	to	10		57			41
Manufacturing and test equipment		2	to	10		1,442			1,146
						1,762			1,374
Accumulated depreciation and amortization						(1,232	)		(991	)
Property and equipment, net					$	530		$	383

Depreciation expense on property and equipment for the years ended December 31, 2023 and 2022 was $238 and $263, respectively.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes

Schedule of consolidated income before taxes for domestic and foreign operations

	Year ended December 31,
	2023			2022
Domestic	$	1,043		$	28,754
Foreign		(1,169	)		(1,294	)
Total	$	(126	)	$	27,460

Schedule of components of (provision) for income taxes

	Year ended December 31,
	2023			2022
Current:
Federal	$	(131	)	$	(6,753	)
State		(219	)		(98	)
Foreign		(84	)		(53	)
Total current		(434	)		(6,904	)
Deferred:
Federal		(43	)		1,132
State		78			(976	)
Foreign		293			165
Total		328			321
Change in valuation allowance		(328	)		(321	)
Total deferred		—			—
Tax provision	$	(434	)	$	(6,904	)

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

	Year ended December 31,
	2023			2022
Tax benefit (provision) at federal statutory rate	$	26		$	(5,768	)
State income tax benefit (provision), net of federal benefit		(10	)		(1,093	)
Research and development tax credits		66			457
Foreign earnings or losses taxed at different rates		(72	)		(68	)
Tax rate change		(116	)		(60	)
Other		—			(51	)
Change in valuation allowance		(328	)		(321	)
Tax benefit (provision)	$	(434	)	$	(6,904	)

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

	2023			2022
Deferred revenue	$	3		$	11
Basis difference in intangible assets		6,080			6,604
Inventory reserve		880			2,258
Net operating loss carryforwards		4,730			3,075
Research and development tax credits		115			48
Accrued expenses		108			120
Stock-based compensation		210			215
Allowance for sales returns and doubtful accounts		81			81
Difference in property and equipment basis		(108	)		(83	)
Convertible debt		(110	)		(110	)
Capitalized research expenditure		1,507			922
Other		337			364
Total net deferred income tax asset		13,833			13,505
Less: Valuation allowance		(13,833	)		(13,505	)
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,
	2023			2022
Balance - beginning of year	$	962		$	895
Additions based on tax positions related to the current year		18			75
Reductions for tax positions of prior years		(5	)		—
Lapse in statutes of limitations		(7	)		(8	)
Uncertain tax positions, ending balance	$	968		$	962

Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt

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, 2023		December 31, 2022
Liability component:
Principal	$	—	$	1,920
Less: debt discount and issuance costs, net of amortization		—		(188	)
Net carrying amount	$	—	$	1,732
Equity component⁽¹⁾:
Warrants	$	—	$	318
Conversion feature		—		122
Net carrying amount	$	—	$	440

Current portion of liability component included under short-term debt	$	—	$	1,920
Long-term portion of liability component included under long-term debt		—		—
Liability component total	$	—	$	1,920

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

Intangible Assets - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets
2024	$ 257
2025	196
2026	195
2027	65
2028	21
Thereafter	955
Total	$ 1,689	$ 2,071

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Measurements

Schedule of fair value of the financial instruments

	Level 1		Level 2		Level 3		Total
December 31, 2023
Mutual funds	$	1,505	$	—	$	—	$	1,505
US Treasury securities		—		1,803		—		1,803
Certificates of deposit		—		103		—		103
Corporate debt securities		—		985		—		985
Total	$	1,505	$	2,891	$	—	$	4,396

Significant Customers

12 Months Ended

Dec. 31, 2023

Significant Customers

Significant Customers

11. Significant Customers

There were no sales to significant customers that represented more than 10 percent of total revenues during the years ended December 31, 2023 and 2022.

Debt (Schedule Of Warrants Valuation Assumptions) (Details)	Dec. 31, 2023
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
Expected life of Warrants (years)	0 years

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common stock and paid-in capital	Accumulated other comprehensive loss	Accumulated deficit
Balance at Dec. 31, 2021		$ 72,817	$ (241)	$ (21,072)
Issuance of common stock		2,000
Dividends paid		0
Share-based compensation expense		113
Proceeds from employee stock purchase plan		4
Unrealized loss on available-for-sale securities, net of tax	$ (2)		(2)
Foreign currency translation adjustment	(45)		(45)
Net income (loss)	20,556			20,556
Balance at Dec. 31, 2022	74,130	74,934	(288)	(516)
Issuance of common stock		0
Dividends paid		(28,979)
Share-based compensation expense		109
Proceeds from employee stock purchase plan		7
Unrealized loss on available-for-sale securities, net of tax	(15)		(15)
Foreign currency translation adjustment	(7)		(7)
Net income (loss)	(560)			(560)
Balance at Dec. 31, 2023	$ 44,685	$ 46,071	$ (310)	$ (1,076)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-8

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-9

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

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+ Details

Debt (Details Textual) $ / shares in Units, $ in Thousands							1 Months Ended	12 Months Ended
Debt (Details Textual) $ / shares in Units, $ in Thousands	Oct. 28, 2022 USD ($)	Apr. 29, 2022 USD ($)	Jan. 04, 2022 USD ($) $ / shares shares	Jul. 02, 2021 USD ($)	Apr. 18, 2020 USD ($)	Dec. 17, 2019 USD ($) d $ / shares shares	Jan. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) $ / shares	Dec. 31, 2022 USD ($) $ / shares	Sep. 12, 2021 $ / shares shares	Sep. 13, 2020 $ / shares shares
Senior Convertible Notes and Warrants
Common stock, par value (in dollars per share) \| $ / shares								$ 0.001	$ 0.001
Proceeds from issuance of short-term notes								$ 0	$ 2,000
Proceeds of the Loan								0	767
Short-term debt								0	3,732
Principal and interest payments received as forgiveness		$ 953
Bridge Loan
Senior Convertible Notes and Warrants
Debt Instrument, Maturity Date				Oct. 01, 2021
Extended debt instrument maturity date				Jan. 03, 2022
Beneficial owner \| Common Stock
Senior Convertible Notes and Warrants
Beneficial owner of the Company’s issued and outstanding shares of Common Stock						46.60%
Edward D. Bagley \| Bridge Loan
Senior Convertible Notes and Warrants
Principal amount of loan obtained			$ 2,000
Promissory note issuance date			Jul. 02, 2021
Debt Instrument Amended Date			Sep. 11, 2021
Edward D. Bagley \| Bridge Loan \| Notes Payable
Senior Convertible Notes and Warrants
Repayments of short-term debt							$ 2,000
Interest rate of the loan	12.00%			8.00%
Principal amount of loan obtained	$ 2,000			$ 2,000					2,000
Promissory note issuance date	Oct. 28, 2022			Jul. 02, 2021
Debt Instrument, Maturity Date	Oct. 28, 2023
Securities Purchase Agreement [Member] \| Common Stock
Senior Convertible Notes and Warrants
Common stock shares issued \| shares										3,623,189	1,058,025
Common stock, par value (in dollars per share) \| $ / shares										$ 0.001	$ 0.001
Warrants, Initial exercise price per share \| $ / shares										2.64	2.43
Offering price (Per share) \| $ / shares										$ 2.76	$ 2.4925
Securities Purchase Agreement [Member] \| Edward D. Bagley \| Private Placement \| Common Stock
Senior Convertible Notes and Warrants
Common stock shares issued \| shares			1,538,461
Common stock, par value (in dollars per share) \| $ / shares			$ 0.001
Offering price (Per share) \| $ / shares			$ 1.3
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
Proceeds from issuance of short-term notes						$ 2,654
Amortization of debt issuance costs and discounts								$ 188	$ 197
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
Debt Instrument, Maturity Date						Dec. 17, 2023
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
Paycheck Protection Program Loan
Senior Convertible Notes and Warrants
Loan term					2 years
Interest rate of the loan					1.00%
Principal amount of loan obtained		1,499			$ 1,499
Debt Instrument, deferred period for periodic payments of principal and interest					16 months
Interest amount of loan obtained		31
Extinguishment of debt		1,499
Gain on extinguishment of debt		$ 29

Marketable Securities - Available-for-sale Securities by Major Security Type (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Marketable Securities
Amortized cost	$ 4,412
Gross unrealized holding gains	7
Gross unrealized holding losses	(23)
Estimated fair value	4,396
US Treasury Securities [Member]
Marketable Securities
Amortized cost	1,804
Gross unrealized holding gains	0
Gross unrealized holding losses	(1)
Estimated fair value	1,803
Mutual Fund [Member]
Marketable Securities
Amortized cost	1,498
Gross unrealized holding gains	7
Gross unrealized holding losses	0
Estimated fair value	1,505
Certificates of Deposit [Member]
Marketable Securities
Amortized cost	103
Gross unrealized holding gains	0
Gross unrealized holding losses	0
Estimated fair value	103
Corporate debt securities [Member]
Marketable Securities
Amortized cost	1,007
Gross unrealized holding gains	0
Gross unrealized holding losses	(22)
Estimated fair value	$ 985

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Accrued Liabilities

Schedule of Accrued Liabilities

	As of December 31,
	2023		2022
Accrued salaries and other compensation	$	632	$	1,148
Sales and marketing programs and customer credit balances		640		605
Product warranty		194		194
Current portion of operating lease liabilities		383		641
Other accrued liabilities		441		453
Total	$	2,290	$	3,041

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property and Equipment

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

	Estimated useful lives				As of December 31,
	in years				2023			2022
Office furniture and equipment		3	to	10	$	70		$	66
Leasehold improvements		2	to	7		193			121
Vehicles		5	to	10		57			41
Manufacturing and test equipment		2	to	10		1,442			1,146
						1,762			1,374
Accumulated depreciation and amortization						(1,232	)		(991	)
Property and equipment, net					$	530		$	383

Marketable Securities

12 Months Ended

Dec. 31, 2023

Marketable Securities

Marketable Securities

2. 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 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 securities at December 31, 2023 were as follows:

	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Estimated fair value
December 31, 2023
Available-for-sale securities:
US Treasury securities	$	1,804	$	—	$	(1	)	$	1,803
Mutual funds		1,498		7		—			1,505
Certificates of deposit		103		—		—			103
Corporate debt securities		1,007		—		(22	)		985
Total available-for-sale securities	$	4,412	$	7	$	(23	)	$	4,396

Maturities of marketable securities classified as available-for-sale securities were as follows at December 31, 2023:

	Amortized cost		Estimated fair value
Due within one year	$	3,497	$	3,480
Due after one year through five years		915		916
Total available-for-sale securities	$	4,412	$	4,396

There were no available-for sale securities as of December 31, 2022.

Debt securities in an unrealized loss position as of December 31, 2023 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, 2023 are summarized as follows:

	Less than 12 months					More than 12 months				Total
	Estimated		Gross			Estimated		Gross		Estimated		Gross
	fair value		unrealized			fair value		unrealized		fair value		unrealized
			holding					holding				holding
			losses					losses				losses
As of December 31, 2023
US Treasury Securities	$	1,803	$	(1	)		-	$	-	$	1,803	$	(1	)
Mutual Funds		1,505		-			-		-		1,505		-
Certificates of Deposit		103		-			-		-		103		-
Corporate Debt securities		985		(22	)		-		-		985		(22	)
	$	4,396	$	(23	)	$	-	$	-	$	4,396	$	(23	)

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

Dec. 31, 2023

Dec. 31, 2022

Equity component:

Warrants

^[1]

$ 0

$ 318

Conversion feature

^[1]

122

Net carrying amount

^[1]

440

Secured convertible notes

Liability component:

Principal

1,920

Less: debt discount and issuance costs, net of amortization

(188)

Net carrying amount

1,732

Equity component:

Current portion of liability component included under short-term debt

1,920

Long-term portion of liability component included under long-term debt

Liability component total

$ 0

$ 1,920

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

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases

Schedule of Rent expense

	Year ended
	December 31,
	2023		2022
Rent expense	$	480	$	684

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

	Year ended December 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	492	$	680
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	397	$	107

	December 31, 2023				December 31, 2022
Operating lease right-of-use assets	$	990		$	1,047

Current portion of operating lease liabilities, included in accrued liabilities	$	383		$	641
Operating lease liabilities, net of current portion		665			492
Total operating lease liabilities	$	1,048		$	1,133

Weighted average remaining lease term for operating leases (in years)		3.39			2.12
Weighted average discount rate for operating leases		6.47	%		5.93	%

Schedule of maturities of operating lease liabilities

Years ending December 31,
2024	$	439
2025		272
2026		210
2027		216
2028		37
Thereafter		—
Total lease payments		1,174
Less: Imputed interest		(126	)
Total	$	1,048

Subsequent events	12 Months Ended
Subsequent events	Dec. 31, 2023
Subsequent events
Subsequent events	15. Subsequent events On March 10, 2024 the Company's Board of Directors declared a special dividend of $0.50 per share of the Company's stock and eligible warrants to be paid on April 10, 2024. This is expected to result in a cash outflow of approximately $14,500.

Geographic Sales Information

12 Months Ended

Dec. 31, 2023

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,
	2023		2022
United States	$	8,186	$	12,096
All other countries		10,518		13,109
Total	$	18,704	$	25,205

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
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+ Details

Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Deferred revenue	$ 3	$ 11
Basis difference in intangible assets	6,080	6,604
Inventory reserve	880	2,258
Net operating loss carryforwards	4,730	3,075
Research and development tax credits	115	48
Accrued expenses	108	120
Stock-based compensation	210	215
Allowance for sales returns and doubtful accounts	81	81
Difference in property and equipment basis	(108)	(83)
Convertible debt	(110)	(110)
Capitalized research expenditure	1,507	922
Other	337	364
Total net deferred income tax asset	13,833	13,505
Less: Valuation allowance	(13,833)	(13,505)
Net deferred income tax asset (liability)	$ 0	$ 0

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current:
Federal	$ (131)	$ (6,753)
State	(219)	(98)
Foreign	(84)	(53)
Total current	(434)	(6,904)
Deferred:
Federal	(43)	1,132
State	78	(976)
Foreign	293	165
Total	328	321
Change in valuation allowance	(328)	(321)
Total deferred	0	0
Tax benefit (provision)	$ (434)	$ (6,904)

Income Taxes (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Deferred tax assets	$ 13,833	$ 13,505
Unrecognized tax benefits impacting effective tax rate	1,034	976
Unrecognized tax benefits, interest and penalties	111	$ 44
Domestic tax authority \| Internal revenue service (IRS)
Income Taxes
Net operating loss carryforwards	5,800
State and local jurisdiction
Income Taxes
Net operating loss carryforwards	6,300
Foreign tax authority \| Tax authority, spain
Income Taxes
Net operating loss carryforwards	$ 12,700

Document And Entity Information - USD ($) $ in Thousands	12 Months Ended
Document And Entity Information - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 29, 2024	Jun. 30, 2023
Cover [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)		23,969,148
Entity Public Float			$ 17,930
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2023
Document Fiscal Year Focus	2023
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
Entity File Number	001-33660
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	5225 Wiley Post Way, Suite 500
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84116
Document Annual Report	true
City Area Code	(801)
Local Phone Number	975-7200
Document Transition Report	false
Entity Tax Identification Number	87-0398877
Auditor Name	TANNER LLC
Auditor Firm ID	270
Auditor Location	Salt Lake City, Utah
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false

Business Description, Basis of Presentation and Significant Accounting Policies - Revenue by Product Group (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenue
Revenue	$ 18,704	$ 25,205
North and South America
Revenue
Revenue	9,047	12,297
Asia (including Middle East) and Australia
Revenue
Revenue	7,338	7,828
Europe and Africa
Revenue
Revenue	2,319	5,080
Audio Conferencing
Revenue
Revenue	8,366	11,829
Microphones
Revenue
Revenue	7,749	9,824
Video products
Revenue
Revenue	$ 2,589	$ 3,552

- Definition

+ References

+ Details

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 326	$ 326
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)	23,969,148	23,955,767
Common stock, shares outstanding (in shares)	23,969,148	23,955,767

Marketable Securities - Available-for-sale Marketable Securities in Gross Unrealized Loss Position (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	$ 4,396
Gross unrealized holding losses, less than 12 months	(23)
Estimated fair value, more than 12 months	0
Gross unrealized holding losses, more than 12 months	0
Estimated fair value	4,396
Gross unrealized holding losses	(23)
US Treasury Securities [Member]
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	1,803
Gross unrealized holding losses, less than 12 months	(1)
Estimated fair value, more than 12 months	0
Gross unrealized holding losses, more than 12 months	0
Estimated fair value	1,803
Gross unrealized holding losses	(1)
Mutual Fund [Member]
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	1,505
Gross unrealized holding losses, less than 12 months	0
Estimated fair value, more than 12 months	0
Gross unrealized holding losses, more than 12 months	0
Estimated fair value	1,505
Gross unrealized holding losses	0
Certificates of Deposit [Member]
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	103
Gross unrealized holding losses, less than 12 months	0
Estimated fair value, more than 12 months	0
Gross unrealized holding losses, more than 12 months	0
Estimated fair value	103
Gross unrealized holding losses	0
Corporate debt securities [Member]
Available-for-sale marketable securities in a gross unrealized loss position
Estimated fair value, less than 12 months	985
Gross unrealized holding losses, less than 12 months	(22)
Estimated fair value, more than 12 months	0
Gross unrealized holding losses, more than 12 months	0
Estimated fair value	985
Gross unrealized holding losses	$ (22)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Revenue	$ 18,704	$ 25,205
Cost of goods sold	12,347	15,748
Gross profit	6,357	9,457
Operating expenses:
Sales and marketing	4,897	5,517
Research and product development	3,671	4,390
General and administrative	4,561	6,772
Total operating expenses	13,129	16,679
Operating loss	(6,772)	(7,222)
Interest expense	(537)	(420)
Other income, net	7,183	35,102
Income (loss) before income taxes	(126)	27,460
Provision for income taxes	434	6,904
Net income (loss)	$ (560)	$ 20,556
Basic income (loss) per common share (in dollars per share)	$ (0.02)	$ 0.86
Diluted income (loss) per common share (in dollars per share)	$ (0.02)	$ 0.83
Basic weighted average shares outstanding (in shares)	23,958,184	23,937,962
Diluted weighted average shares outstanding (in shares)	23,958,184	25,189,147
Comprehensive income (loss):
Net income (loss)	$ (560)	$ 20,556
Other comprehensive income (loss):
Unrealized loss on available-for-sale securities, net of tax	(15)	(2)
Change in foreign currency translation adjustment	(7)	(45)
Comprehensive income (loss)	$ (582)	$ 20,509

Income Taxes - Reconciliation of Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance - beginning of year	$ 962	$ 895
Additions based on tax positions related to the current year	18	75
Reductions for tax positions of prior years	(5)	0
Lapse in statutes of limitations	(7)	(8)
Uncertain tax positions, ending balance	$ 968	$ 962

Property and Equipment (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property and Equipment
Depreciation expense	$ 238	$ 263

Income Taxes - Income Tax (Provision) for Federal Statutory Corporate Income Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Tax benefit (provision) at federal statutory rate	$ 26	$ (5,768)
State income tax benefit (provision), net of federal benefit	(10)	(1,093)
Research and development tax credits	66	457
Foreign earnings or losses taxed at different rates	(72)	(68)
Tax rate change	(116)	(60)
Other	0	(51)
Change in valuation allowance	(328)	(321)
Tax benefit (provision)	$ (434)	$ (6,904)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Leases

12 Months Ended

Dec. 31, 2023

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, 2023 and 2022 was as follows:

	Year ended
	December 31,
	2023		2022
Rent expense	$	480	$	684

We occupy a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease that expires in February 2028. The Gainesville facility is used primarily to support our research and development activities.

We occupy a 9,402 square-foot facility in Salt Lake City, Utah under the terms of an operating lease, which expires in February 2028. The facility supports our principal administrative, sales, marketing, customer support, and research and product development activities.

We occupy a 6,175 square-foot facility in Chennai, India under the terms of an operating lease expiring in August 2024. 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 center.

Supplemental cash flow information related to leases was as follows:

	Year ended December 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	492	$	680
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	397	$	107

Supplemental balance sheet information related to leases was as follows:

	December 31, 2023				December 31, 2022
Operating lease right-of-use assets	$	990		$	1,047

Current portion of operating lease liabilities, included in accrued liabilities	$	383		$	641
Operating lease liabilities, net of current portion		665			492
Total operating lease liabilities	$	1,048		$	1,133

Weighted average remaining lease term for operating leases (in years)		3.39			2.12
Weighted average discount rate for operating leases		6.47	%		5.93	%

The following represents maturities of operating lease liabilities as of December 31, 2023:

Years ending December 31,
2024	$	439
2025		272
2026		210
2027		216
2028		37
Thereafter		—
Total lease payments		1,174
Less: Imputed interest		(126	)
Total	$	1,048

Leases (Details Textual)	Dec. 31, 2023 ft²
Facility to support, research and development activity \| Gainesville, Florida
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	9,402
Facility to support, principal administrative, sales, marketing, customer support, and research and product development activity \| Chennai, India
Leases
Area of facility	6,175
Warehouse to support, primary inventory fulfillment and repair center \| Salt Lake City, Utah
Leases
Area of facility	40,000

Significant Customers (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Significant customers
Revenue	$ 18,704	$ 25,205
Sales Revenue, Net \| Customer Concentration Risk
Significant customers
Revenue	$ 0	$ 0
Sales Revenue, Net \| Customer Concentration Risk \| Customers
Significant customers
Concentration risk, percentage	10.00%

- Definition

+ References

+ Details

Share-Based Payments

12 Months Ended

Dec. 31, 2023

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. As of December 31, 2023, the Company had 217,810 options with contractual lives of ten years and 390,000 options with contractual lives of six years.

As of December 31, 2023, there were 607,810 options outstanding under the 2007 Plan. As of December 31, 2023, the 2007 Plan had 857,044 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 Company did not grant any options during the year ended December 31, 2022.

In applying the Black-Scholes methodology to the 160,000 options granted during the year ended December 31, 2023, the Company used the following assumptions:

Risk free interest rate, average	3.91%
Expected option life, average	5 years
Expected price volatility, average	91.47%
Expected dividend yield	0%

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 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, 2021		831,071		$	6.47		4.10	$	—
Granted		—			—
Expired and canceled		(274,379	)		7.44
Forfeited prior to vesting		(68,215	)		2.50
Exercised		—			—
As of December 31, 2022		488,477		$	6.48		3.42	$	—
Granted		160,000			1.01
Expired and canceled		(35,457	)		7.29
Forfeited prior to vesting		(5,210	)		2.50
Exercised		—			—
As of December 31, 2023		607,810		$	5.03		3.32	$	—
Vested and Expected to Vest at December 31, 2022		488,477		$	6.48		3.42	$	—
Vested at December 31, 2022		373,612		$	7.72		3.22	$	—
Vested and Expected to Vest at December 31, 2023		607,810		$	5.03		3.32	$	—
Vested at December 31, 2023		403,365		$	6.90		2.51	$	—

The total pre-tax compensation cost related to stock options recognized during the years ended December 31, 2023 and 2022 was $106 and $112, respectively. Tax benefit from compensation cost related to stock options during the years ended December 31, 2023 and 2022, respectively was $27 and $28. As of December 31, 2023, the total compensation cost related to stock options not yet recognized and before the effect of any forfeitures was $157, which is expected to be recognized over approximately the next 2.32 years on a straight-line basis.

Employee Stock Purchase Plan

During the years ended December 31, 2023 and 2022, 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, 2023, and December 31, 2022, 382,143 and 395,524, 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:

	2023		2022
Shares purchased under ESPP plan		13,381		7,180
Plan compensation expense	$	3	$	1

Issuance of Common Stock and Warrants

On September 13, 2020, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers named therein (the “Purchasers”), pursuant to which the Company issued and sold, in a registered direct offering 2,116,050 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at an offering price of $2.4925 per share, (the “Registered Offering”). The Company received gross proceeds of approximately $5,275 (4,764 net of issuance costs) in connection with the Registered Offering, before deducting placement agent fees and related offering expenses. In a concurrent private placement, the Company issued to the Purchasers who participated in the Registered Offering warrants exercisable for an aggregate of 1,058,025 shares of common stock at an exercise price of $2.43 per share. Each warrant became immediately exercisable and had an expiry term of five years from the issuance date.

On September 12, 2021, the Company entered into a securities purchase agreement with certain purchasers named therein, pursuant to which the Company issued 3,623,189 shares of the Company's common stock, par value $0.001 per share at an offering price of $2.76 per share. The Company received gross proceeds of approximately $10,000 and net proceeds of $9,288 after deducting placement agent fees and related offering expenses. In a concurring private placement the Company also issued to the same purchasers warrants exercisable for an aggregate of 3,623,189 shares of common stock at an exercise price of $2.64 per share. Each warrant became immediately exercisable and will expire on March 15, 2027.

Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accrued Liabilities
Accrued salaries and other compensation	$ 632	$ 1,148
Sales and marketing programs and customer credit balances	640	605
Product warranty	194	194
Current portion of operating lease liabilities	383	641
Other accrued liabilities	441	453
Total	$ 2,290	$ 3,041

Share-Based Payments (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Sep. 12, 2021	Sep. 13, 2020	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 12, 2016
Share-Based Payments
Number of options, outstanding			607,810	488,477	831,071
Share based compensation recognized			$ 106	$ 112
Tax benefit from compensation cost			27	$ 28
Total compensation cost related to stock options not yet recognized			$ 157
Compensation cost related to stock options expected to be recognized (in years)			2 years 3 months 25 days
Number of shares available for grant			160,000
Common stock, par value (in dollars per share)			$ 0.001	$ 0.001
Directors and officers
Share-Based Payments
Options vesting period (years)			3 years
Other employees
Share-Based Payments
Options vesting period (years)			4 years
Securities Purchase Agreement \| Common Stock
Share-Based Payments
Number fo shares were agreed to issue and sell in a registered direct offering	3,623,189	2,116,050
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Offering price (Per share)	$ 2.76	$ 2.4925
Proceeds from issuance of common stock, gross	$ 10,000	$ 5,275
Proceeds from issuance of common stock, net of issuance costs	$ 9,288	$ 4,764
Common stock shares issued	3,623,189	1,058,025
Exercise price of warrants	$ 2.64	$ 2.43
Expiry term of warrants		5 years
2007 Equity Incentive Plan
Share-Based Payments
Number of shares authorized						2,000,000
Number of options, outstanding			607,810
Number of authorized unissued options			857,044
Number of shares issued			1
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
Stock options, expiration period (years)			10 years
Number of options, outstanding			217,810
Number of shares available for grant			382,143	395,524
Percentage of voting rights			5.00%
Shares purchased under ESPP plan			13,381	7,180
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
Employee Stock Purchase Plan, Two
Share-Based Payments
Stock options, expiration period (years)			6 years
Number of options, outstanding			390,000

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Intangible Assets

Schedule of intangible assets and estimated useful lives

	Estimated useful lives				As of December 31,
	(in years)				2023			2022
Tradename		5	to	7	$	555		$	555
Patents and technological know-how		10	to	20		7,187			7,053
Proprietary software		3	to	15		2,981			2,981
Other		3	to	5		324			323
Total intangible assets, gross						11,047			10,912
Accumulated amortization						(9,358	)		(8,841	)
Total intangible assets, net					$	1,689		$	2,071

Schedule of estimated future amortization expense of intangible assets

Years ending December 31,
2024	$	257
2025		196
2026		195
2027		65
2028		21
Thereafter		955
Total	$	1,689

Business Description, Basis of Presentation and Significant Accounting Policies - Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Allowance for doubtful accounts activity
Balance at beginning of the year	$ 326	$ 326
Allowance increase (decrease)	0	0
Write offs, net of recoveries	0	0
Balance at end of the year	$ 326	$ 326

Accrued Liabilities

12 Months Ended

Dec. 31, 2023

Accrued Liabilities

Accrued Liabilities

7. Accrued Liabilities

Accrued liabilities consist of the following:

	As of December 31,
	2023		2022
Accrued salaries and other compensation	$	632	$	1,148
Sales and marketing programs and customer credit balances		640		605
Product warranty		194		194
Current portion of operating lease liabilities		383		641
Other accrued liabilities		441		453
Total	$	2,290	$	3,041

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

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 $3,596 as of December 31, 2023.

Uncertain Tax Positions. As further discussed in Note 13 - Income Taxes, we had $968 of uncertain tax positions as of December 31, 2023. 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 was involved in several litigation proceedings (collectively, the “Litigations”) against Shure Incorporated (“Shure”). On December 9, 2022, the Company and Shure entered into a confidential settlement and license agreement (the “Agreement”). Under the terms of the Agreement:

●	All of the Litigations between the parties were dismissed with prejudice and each of the Company and Shure released all claims against the other arising from or in connection with the matters that were subject to the Litigations;
●	Shure made a one-time settlement payment to the Company in the amount of $55,000 within five days after the dismissal of the Litigations in accordance with the Agreement in January 2023; and
●	The Company and Shure agreed to certain patent licenses and covenants not to sue.

The Company capitalized $0 and $737 of litigation expenses related to this matter during the twelve months ended December 31, 2023 and 2022, respectively.

The Company also settled another intellectual property matter by entering into a cross licensing agreement in December 2023 and accepting a one-time payment of $4,000 in March 2024. The amount is recognized and included under other income in the consolidated statement of operations and in the consolidated balance sheet under legal settlement receivable as of December 31, 2023.

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.

Insider Trading Arrangements	12 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted [Flag]	false
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false

Inventories - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current:
Raw materials	$ 2,086	$ 4,499
Finished goods	8,539	4,462
Total	10,625	8,961
Long-term:
Raw materials	1,789	1,068
Finished goods	1,354	1,639
Total	$ 3,143	$ 2,707

Share-Based Payments - Employee Stock Purchase Plans (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Employee Stock Purchase Plans
Shares purchased under ESPP plan	13,381	7,180
Plan compensation expense	$ 3	$ 1

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2023

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, 2023
Available-for-sale securities:
US Treasury securities	$	1,804	$	—	$	(1	)	$	1,803
Mutual funds		1,498		7		—			1,505
Certificates of deposit		103		—		—			103
Corporate debt securities		1,007		—		(22	)		985
Total available-for-sale securities	$	4,412	$	7	$	(23	)	$	4,396

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

	Amortized cost		Estimated fair value
Due within one year	$	3,497	$	3,480
Due after one year through five years		915		916
Total available-for-sale securities	$	4,412	$	4,396

Schedule of available-for-sale marketable securities with continuous gross unrealized loss position

	Less than 12 months					More than 12 months				Total
	Estimated		Gross			Estimated		Gross		Estimated		Gross
	fair value		unrealized			fair value		unrealized		fair value		unrealized
			holding					holding				holding
			losses					losses				losses
As of December 31, 2023
US Treasury Securities	$	1,803	$	(1	)		-	$	-	$	1,803	$	(1	)
Mutual Funds		1,505		-			-		-		1,505		-
Certificates of Deposit		103		-			-		-		103		-
Corporate Debt securities		985		(22	)		-		-		985		(22	)
	$	4,396	$	(23	)	$	-	$	-	$	4,396	$	(23	)

Business Description, Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income (loss)	$ (560)	$ 20,556
Interest adjustment under if-converted method	0	285
Net income (loss) available to common stockholders, diluted	$ (560)	$ 20,841
Denominator:
Basic weighted average shares (in shares)	23,958,184	23,937,962
Dilutive common stock equivalents using if-converted method (in shares)	0	1,251,185
Diluted weighted average shares (in shares)	23,958,184	25,189,147
Basic income (loss) per common share: (in dollars per share)	$ (0.02)	$ 0.86
Diluted income (loss) per common share: (in dollars per share)	$ (0.02)	$ 0.83
Weighted average options, warrants and convertible portion of senior convertible notes outstanding (in shares)	6,258,917	6,788,671
Anti-dilutive options, warrants and convertible portion of senior convertible notes not included in the computation (in shares)	6,258,917	5,510,600

Geographic Sales Information (Tables)

12 Months Ended

Dec. 31, 2023

Geographic Sales Information

Schedule of revenues by geographical areas

	Year ended December 31,
	2023		2022
United States	$	8,186	$	12,096
All other countries		10,518		13,109
Total	$	18,704	$	25,205

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, 2023	Dec. 31, 2022
Business Description, Basis of Presentation and Significant Accounting Policies
Deferred revenue	$ 30	$ 63
Deferred cost of goods sold	0	0
Deferred gross profit	$ 30	$ 63

Debt

12 Months Ended

Dec. 31, 2023

Debt

Debt

9. Debt

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 matured on December 17, 2023 (the “Maturity Date”) and accrued 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 Notes were fully repaid as per the terms of the Note on December 17, 2023. No part of the Note was converted into a common stock.

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, 2023		December 31, 2022
Liability component:
Principal	$	—	$	1,920
Less: debt discount and issuance costs, net of amortization		—		(188	)
Net carrying amount	$	—	$	1,732
Equity component⁽¹⁾:
Warrants	$	—	$	318
Conversion feature		—		122
Net carrying amount	$	—	$	440

Current portion of liability component included under short-term debt	$	—	$	1,920
Long-term portion of liability component included under long-term debt		—		—
Liability component total	$	—	$	1,920

(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 twelve months December 31, 2023 amortization of debt discount and issuance costs were $188 and $197 respectively.

Paycheck Protection Program Loan

On April 18, 2020, the Company, entered into a loan agreement with U.S. Bank National Association Bank, which provided for a loan in the principal amount of $1,499 (“PPP Loan”) pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan had a two-year term and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for approximately sixteen months after the date of disbursement.

The Company's Paycheck Protection Program Loan ("PPP Loan") under the CARES Act was forgiven by Small Business Administration effective April 29, 2022. With this forgiveness, the Company is not required to repay the principal amount of $1,499 and the interest of $31. The Company received $953 back that it had already paid towards principal and interest payments toward the PPP Loan. The Company treated the forgiveness as extinguishment of debt in this quarter ended September 30, 2022 and reported the entire principal amount forgiven of $1,499 along with interest already accounted for of $29 as a gain on extinguishment of debt included in other income.

Short-term Bridge Loans

On July 2, 2021, the Company obtained a bridge loan in the principal amount of $2,000 from Edward D. Bagley (the “2021 Bridge Loan”), an affiliate of the Company. The Bridge Loan was evidenced by a promissory note dated July 2, 2021 (the “Note”) issued by the Company to Mr. Bagley. The Note bore interest at a rate of 8.0% per annum. On September 11, 2021, the Company amended and restated the terms of the Bridge Loan to extend the latest maturity date from October 1, 2021 to January 3, 2022. All other terms and conditions of the Bridge Loan remained the same. On January 4, 2022, the Company entered into a Securities Purchase Agreement with Edward D. Bagley, pursuant to which the Company issued and sold to Mr. Bagley, in a private placement 1,538,461 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, at a purchase price of $1.30 per share of Common Stock. The consideration for the Shares was the cancellation and termination of Mr. Bagley’s outstanding bridge loan to the Company in the principal amount of $2,000 originally issued on July 2, 2021 and amended and restated on September 11, 2021. Mr. Bagley is an affiliate of the Company and the Company’s single largest stockholder.

On October 28, 2022 the Company obtained a bridge loan in the principal amount of $2,000 from Edward D. Bagley (the “2022 Bridge Loan”), an affiliate of the Company. The 2022 Bridge Loan was evidenced by a promissory note dated October 28, 2022 (the “2022 Note”) issued by the Company to Mr. Bagley. The 2022 Note bore interest at a rate of 12.0% per annum and had a maturity date of October 28, 2023. Mr. Bagley is an affiliate of the Company and the Company’s single largest stockholder. This Bridge Loan of $2,000 is included under short-term debt as of December 31, 2022. In January 2023, the 2022 Bridge loan of $2,000 along with applicable interest was repaid in full.