Utah
|
|
87-0398877
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. employer identification number)
|
5225 Wiley Post Way, Suite 500, Salt Lake City, Utah
|
|
84116
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(801) 975-7200
|
||
(Registrant’s telephone number, including area code)
|
Larger Accelerated Filer [ ]
|
Accelerated Filer [ ]
|
Non-Accelerated Filer [ ] (Do not check if a smaller reporting company)
|
Smaller Reporting Company [x]
|
|
PART I – FINANCIAL INFORMATION
|
|
|
||
|
||
|
||
|
||
|
PART II – OTHER INFORMATION
|
|
Item 1.
|
FINANCIAL STATEMENTS
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
Unaudited
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,649
|
|
|
$
|
17,192
|
|
Marketable securities
|
4,734
|
|
|
3,200
|
|
||
Receivables, net of allowance for doubtful accounts of $102 and $129, respectively
|
8,849
|
|
|
9,378
|
|
||
Inventories
|
11,063
|
|
|
10,758
|
|
||
Distributor channel inventories
|
1,578
|
|
|
1,520
|
|
||
Deferred income taxes
|
3,325
|
|
|
3,325
|
|
||
Prepaid expenses and other assets
|
7,050
|
|
|
2,693
|
|
||
Total current assets
|
44,248
|
|
|
48,066
|
|
||
Long-term marketable securities
|
21,645
|
|
|
22,326
|
|
||
Long-term inventories, net
|
575
|
|
|
551
|
|
||
Property and equipment, net
|
2,209
|
|
|
1,825
|
|
||
Intangibles, net
|
6,816
|
|
|
3,710
|
|
||
Goodwill
|
9,872
|
|
|
3,472
|
|
||
Deferred income taxes
|
980
|
|
|
1,024
|
|
||
Other assets
|
91
|
|
|
87
|
|
||
Total assets
|
$
|
86,436
|
|
|
$
|
81,061
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,324
|
|
|
$
|
2,730
|
|
Accrued liabilities
|
2,627
|
|
|
1,761
|
|
||
Deferred product revenue
|
4,107
|
|
|
4,158
|
|
||
Total current liabilities
|
10,058
|
|
|
8,649
|
|
||
Deferred rent
|
246
|
|
|
286
|
|
||
Other long-term liabilities
|
2,363
|
|
|
1,791
|
|
||
Total liabilities
|
12,667
|
|
|
10,726
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common stock, par value $0.001, 50,000,000 shares authorized, 9,309,529 and 8,986,080 shares issued and outstanding
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
44,182
|
|
|
41,311
|
|
||
Accumulated other comprehensive income
|
96
|
|
|
23
|
|
||
Retained earnings
|
29,482
|
|
|
28,992
|
|
||
Total shareholders' equity
|
73,769
|
|
|
70,335
|
|
||
Total liabilities and shareholders' equity
|
$
|
86,436
|
|
|
$
|
81,061
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
12,708
|
|
|
$
|
11,293
|
|
Cost of goods sold
|
5,006
|
|
|
4,294
|
|
||
Gross profit
|
7,702
|
|
|
6,999
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
2,736
|
|
|
2,267
|
|
||
Research and product development
|
2,241
|
|
|
1,866
|
|
||
General and administrative
|
1,964
|
|
|
1,797
|
|
||
Total operating expenses
|
6,941
|
|
|
5,930
|
|
||
|
|
|
|
||||
Operating income
|
761
|
|
|
1,069
|
|
||
Other income (expense), net
|
81
|
|
|
(14
|
)
|
||
Income before income taxes
|
842
|
|
|
1,055
|
|
||
Provision for income taxes
|
352
|
|
|
324
|
|
||
Net income
|
$
|
490
|
|
|
$
|
731
|
|
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.05
|
|
|
$
|
0.08
|
|
Diluted earnings per common share
|
$
|
0.05
|
|
|
$
|
0.08
|
|
|
|
|
|
||||
Basic weighted average shares outstanding
|
9,082,546
|
|
|
9,152,859
|
|
||
Diluted weighted average shares outstanding
|
9,558,941
|
|
|
9,394,181
|
|
||
|
|
|
|
||||
Comprehensive income:
|
|
|
|
||||
Net income
|
$
|
490
|
|
|
$
|
731
|
|
Other comprehensive income:
|
|
|
|
||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
96
|
|
|
—
|
|
||
Comprehensive income
|
$
|
586
|
|
|
$
|
731
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
490
|
|
|
$
|
731
|
|
Adjustments to reconcile net income to net cash provided by (used in) operations:
|
|
|
|
||||
Depreciation and amortization expense
|
319
|
|
|
323
|
|
||
Amortization of deferred rent
|
(21
|
)
|
|
(15
|
)
|
||
Stock-based compensation expense
|
84
|
|
|
59
|
|
||
Provision for (recoveries of) doubtful accounts, net
|
(27
|
)
|
|
27
|
|
||
Inventory valuation reserve adjustments
|
416
|
|
|
(34
|
)
|
||
Loss on disposal of assets
|
2
|
|
|
—
|
|
||
Tax benefit from exercise of stock options
|
(87
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
853
|
|
|
434
|
|
||
Inventories
|
40
|
|
|
(555
|
)
|
||
Deferred income taxes
|
44
|
|
|
—
|
|
||
Prepaid expenses and other assets
|
886
|
|
|
(138
|
)
|
||
Accounts payable
|
178
|
|
|
1,410
|
|
||
Accrued liabilities
|
210
|
|
|
(144
|
)
|
||
Income taxes payable
|
235
|
|
|
(15,066
|
)
|
||
Deferred product revenue
|
(51
|
)
|
|
599
|
|
||
Net cash provided by (used in) operating activities
|
3,571
|
|
|
(12,369
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Payment towards business acquisitions
|
(13,048
|
)
|
|
—
|
|
||
Purchase of property and equipment
|
(249
|
)
|
|
(62
|
)
|
||
Purchase of Patents
|
(90
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
(780
|
)
|
|
—
|
|
||
Net cash (used in) investing activities
|
(14,167
|
)
|
|
(62
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the exercise of stock options
|
1,021
|
|
|
76
|
|
||
Tax benefits from stock options
|
87
|
|
|
—
|
|
||
Stock registration costs
|
(55
|
)
|
|
—
|
|
||
Treasury stock purchased
|
—
|
|
|
(574
|
)
|
||
Net cash provided by (used in) financing activities
|
1,053
|
|
|
(498
|
)
|
||
|
|
|
|
||||
Net (decrease) in cash and cash equivalents
|
(9,543
|
)
|
|
(12,929
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
17,192
|
|
|
55,509
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
7,649
|
|
|
$
|
42,580
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
29
|
|
|
$
|
15,346
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Issuance of common stock in connection with acquisition of business
|
$
|
1,679
|
|
|
$
|
—
|
|
1.
|
Business Description, Basis of Presentation and Significant Accounting Policies
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Balance at the beginning of year
|
$
|
338
|
|
|
$
|
385
|
|
Warranty accruals/additions
|
94
|
|
|
433
|
|
||
Warranty usage
|
(106
|
)
|
|
(480
|
)
|
||
Balance at end of period
|
$
|
326
|
|
|
$
|
338
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
490
|
|
|
$
|
731
|
|
Denominator:
|
|
|
|
||||
Basic weighted average shares outstanding
|
9,082,546
|
|
|
9,152,859
|
|
||
Dilutive common stock equivalents using treasury stock method
|
476,395
|
|
|
241,322
|
|
||
Diluted weighted average shares outstanding
|
9,558,941
|
|
|
9,394,181
|
|
||
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.05
|
|
|
$
|
0.08
|
|
Diluted earnings per common share
|
$
|
0.05
|
|
|
$
|
0.08
|
|
|
|
|
|
||||
Weighted average options outstanding
|
1,044,208
|
|
|
1,128,483
|
|
||
Anti-dilutive options not included in the computations
|
116,000
|
|
|
208,957
|
|
|
Consideration
|
||
Cash
|
$
|
8,129
|
|
Common stock
|
1,679
|
|
|
Contingent consideration
|
573
|
|
|
Total
|
$
|
10,381
|
|
|
Fair value
|
||
Cash
|
$
|
125
|
|
Accounts receivable
|
298
|
|
|
Inventories
|
844
|
|
|
Prepaid and other
|
116
|
|
|
Intangibles
|
3,180
|
|
|
Property, plant and equipment
|
292
|
|
|
Goodwill
|
6,399
|
|
|
Trade accounts payable
|
(416
|
)
|
|
Accrued liabilities
|
(402
|
)
|
|
Stock registration costs
|
(55
|
)
|
|
Total
|
$
|
10,381
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
12,977
|
|
|
$
|
12,163
|
|
Earnings
|
249
|
|
|
750
|
|
||
Basic and diluted earnings per common share
|
$
|
0.03
|
|
|
$
|
0.08
|
|
3.
|
Marketable Securities
|
|
Amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
||||||||||
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|||||||||
|
|
Corporate bonds and notes
|
$
|
19,605
|
|
|
$
|
149
|
|
|
$
|
(17
|
)
|
|
$
|
19,737
|
|
|
|
Municipal bonds
|
6,620
|
|
|
29
|
|
|
(7
|
)
|
|
6,642
|
|
||||
|
Total available-for-sale securities
|
$
|
26,225
|
|
|
$
|
178
|
|
|
$
|
(24
|
)
|
|
$
|
26,379
|
|
|
Amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
||||||||||
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|||||||||
|
|
Corporate bonds and notes
|
$
|
18,832
|
|
|
$
|
68
|
|
|
$
|
(43
|
)
|
|
$
|
18,857
|
|
|
|
Municipal bonds
|
6,658
|
|
|
22
|
|
|
(11
|
)
|
|
6,669
|
|
||||
|
Total available-for-sale securities
|
$
|
25,490
|
|
|
$
|
90
|
|
|
$
|
(54
|
)
|
|
$
|
25,526
|
|
|
Amortized
cost
|
|
Estimated
fair value
|
|||||
March 31, 2014
|
|
|
||||||
|
Due within one year
|
$
|
4,724
|
|
|
$
|
4,734
|
|
|
Due after one year through five years
|
19,927
|
|
|
20,036
|
|
||
|
Due after five years through ten years
|
1,574
|
|
|
1,609
|
|
||
|
Total available-for-sale securities
|
$
|
26,225
|
|
|
$
|
26,379
|
|
4.
|
Intangible Assets
|
|
Estimated useful lives
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Tradename
|
7 years
|
|
$
|
435
|
|
|
$
|
435
|
|
Patents and technological know-how
|
10 years
|
|
5,310
|
|
|
2,070
|
|
||
Proprietary software
|
3 to 15 years
|
|
2,961
|
|
|
2,961
|
|
||
Other
|
5 years
|
|
238
|
|
|
208
|
|
||
|
|
|
8,944
|
|
|
5,674
|
|
||
Accumulated amortization
|
|
|
(2,128
|
)
|
|
(1,964
|
)
|
||
|
|
|
$
|
6,816
|
|
|
$
|
3,710
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Amortization of intangible assets
|
$
|
164
|
|
|
$
|
143
|
|
Years ending December 31,
|
|
||
2014 (remainder)
|
$
|
665
|
|
2015
|
847
|
|
|
2016
|
810
|
|
|
2017
|
721
|
|
|
2018
|
700
|
|
|
Thereafter
|
3,073
|
|
|
|
$
|
6,816
|
|
5.
|
Inventories
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Current:
|
|
|
|
||||
Raw materials
|
$
|
1,959
|
|
|
$
|
1,362
|
|
Finished goods
|
10,682
|
|
|
10,916
|
|
||
|
$
|
12,641
|
|
|
$
|
12,278
|
|
Long-term:
|
|
|
|
||||
Raw materials
|
$
|
256
|
|
|
$
|
227
|
|
Finished goods
|
319
|
|
|
324
|
|
||
|
$
|
575
|
|
|
$
|
551
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net loss (gain) on valuation of inventory and write-off of obsolete inventory
|
$
|
416
|
|
|
$
|
(34
|
)
|
6.
|
Share-based Compensation
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Cost of goods sold
|
$
|
2
|
|
|
$
|
2
|
|
Sales and marketing
|
20
|
|
|
15
|
|
||
Research and product development
|
11
|
|
|
11
|
|
||
General and administrative
|
51
|
|
|
31
|
|
||
|
$
|
84
|
|
|
$
|
59
|
|
7.
|
Shareholders’ Equity
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Balance at the beginning of the period
|
$
|
70,335
|
|
|
$
|
66,668
|
|
Net income during the period
|
490
|
|
|
731
|
|
||
Treasury stock purchased
|
—
|
|
|
(574
|
)
|
||
Share-based compensation
|
84
|
|
|
59
|
|
||
Tax benefit - stock option exercise
|
87
|
|
|
—
|
|
||
Exercise of stock options
|
1,021
|
|
|
76
|
|
||
Stock issued for acquisitions
|
1,679
|
|
|
—
|
|
||
Unrealized gain or loss on investments, net of tax
|
73
|
|
|
—
|
|
||
Balance at end of the period
|
$
|
73,769
|
|
|
$
|
66,960
|
|
8.
|
Fair Value Measurements
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|||||||||
Corporate bonds and notes
|
$
|
—
|
|
|
$
|
19,737
|
|
|
$
|
—
|
|
|
$
|
19,737
|
|
|
Municipal bonds
|
—
|
|
|
6,642
|
|
|
—
|
|
|
6,642
|
|
|||||
|
Total
|
$
|
—
|
|
|
$
|
26,379
|
|
|
$
|
—
|
|
|
$
|
26,379
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|||||||||
Corporate bonds and notes
|
$
|
—
|
|
|
$
|
18,857
|
|
|
$
|
—
|
|
|
$
|
18,857
|
|
|
Municipal bonds
|
—
|
|
|
6,669
|
|
|
—
|
|
|
6,669
|
|
|||||
|
Total
|
$
|
—
|
|
|
$
|
25,526
|
|
|
$
|
—
|
|
|
$
|
25,526
|
|
9.
|
Income Taxes
|
10.
|
Subsequent Events
|
•
|
Maintain our leading global market share in professional audio conferencing products for large businesses and organizations;
|
•
|
Leverage the video conferencing, streaming and digital signage technologies we have acquired over the years to enter new growth markets;
|
•
|
Focus on the small and medium business (SMB) market with scaled, lower cost and less complex products and solutions;
|
•
|
Capitalize on the increasing adoption of unified communications and introduce new products through information technology channels;
|
•
|
Capitalize on emerging market opportunities as audio visual, information technology, unified communications and traditional digital signage converge to meet enterprise and commercial multimedia needs; and
|
•
|
Expand and strengthen our sales channels.
|
|
Three months ended March 31,
|
||||||||||||
|
2014
|
|
% of Revenue
|
|
2013
|
|
% of Revenue
|
||||||
Revenue
|
$
|
12,708
|
|
|
100
|
%
|
|
$
|
11,293
|
|
|
100
|
%
|
Cost of goods sold
|
5,006
|
|
|
39
|
%
|
|
4,294
|
|
|
38
|
%
|
||
Gross profit
|
7,702
|
|
|
61
|
%
|
|
6,999
|
|
|
62
|
%
|
||
Sales and marketing
|
2,736
|
|
|
22
|
%
|
|
2,267
|
|
|
20
|
%
|
||
Research and product development
|
2,241
|
|
|
18
|
%
|
|
1,866
|
|
|
17
|
%
|
||
General and administrative
|
1,964
|
|
|
15
|
%
|
|
1,797
|
|
|
16
|
%
|
||
Operating income
|
761
|
|
|
6
|
%
|
|
1,069
|
|
|
9
|
%
|
||
Other income (expense), net
|
81
|
|
|
1
|
%
|
|
(14
|
)
|
|
0
|
%
|
||
Income before income taxes
|
842
|
|
|
7
|
%
|
|
1,055
|
|
|
9
|
%
|
||
Provision for income taxes
|
352
|
|
|
3
|
%
|
|
324
|
|
|
3
|
%
|
||
Net income
|
$
|
490
|
|
|
4
|
%
|
|
$
|
731
|
|
|
6
|
%
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Deferred revenue
|
$
|
4,107
|
|
|
$
|
4,158
|
|
Deferred cost of goods sold
|
1,578
|
|
|
1,520
|
|
||
Deferred gross profit
|
$
|
2,529
|
|
|
$
|
2,638
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
Exhibit No.
|
|
Title of Document
|
10.1
|
|
Framework Agreement between ClearOne, Inc. and Dialcom Networks S.L., dated December 20, 2013 (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on April 7, 2014)
|
10.2
|
|
Amendment to Framework Agreement between ClearOne, Inc. and Dialcom Networks S.L., dated March 31, 2014 (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on April 7, 2014)
|
10.3
|
|
Purchase Agreement between ClearOne, Inc. and Dialcom Networks S.L., dated March 31, 2014 (filed herewith)
|
31.1
|
|
Section 302 Certification of Chief Executive Officer (filed herewith)
|
31.2
|
|
Section 302 Certification of Principal Financial Officer (filed herewith)
|
32.1
|
|
Section 906 Certification of Chief Executive Officer (filed herewith)
|
32.2
|
|
Section 906 Certification of Principal Financial Officer (filed herewith)
|
101.INS
|
|
XBRL Instance Document (filed herewith)
|
101.SCH
|
|
XBRL Taxonomy Extension Schema (filed herewith)
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
|
101.DEF
|
|
XBRL Taxonomy Extension Definitions Linkbase (filed herewith)
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase (filed herewith)
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
|
|
|
ClearOne, Inc.,
(Registrant)
|
|
|
|
May 14, 2014
|
By:
|
/s/ Zeynep Hakimoglu
|
|
|
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
May 14, 2014
|
By:
|
/s/ Narsi Narayanan
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|
I.-
|
On December 20
th
, 2013, the parties signed a Framework Agreement regulating the purchase of the so-called
“Spontania Business”
, by means of which they agreed to a procedure that was to be concluded with the spin-off and sale of the newly incorporated company “CLEARONE SPAIN,S.L.”.
|
II.-
|
Furthermore, on January 16
th
, 2014 Dialcom Networks and ClearOne Inc. signed a loan agreement for an amount of 365,000€ plus a 0.46% monthly interest rate, hereinafter “
the Owed Loan Amount
”, in order to cover the operating costs of the Spontania Business.
|
III.-
|
On March 3
rd
, 2014 the company Dialcom Networks, S.L. granted the spin-off deed before the Madrid Notary Mr. Angel Almoguera Gómez, with number 1090 of his records. As a result of the same, DIALCOM NETWORKS, S.L. is the owner of 3,650,000 shares, numbered from 1 to 3,650,000 both inclusive, 100% of the shares, hereinafter “
the Shares
”, of CLEARONE SPAIN, S.L., a Spanish private limited company, registered with the Zaragoza Trade registry under page Z-56348, hereinafter
“the Company”.
|
IV.-
|
The spin off was registered with the Zaragoza trade registry on March 4 2014 causing the first inscription of the Company’s page
.
|
4.1.-
|
As established in 2.6 (a) of the Framework Agreement, all Seller Closing Deliveries are included herewith as
Annex 2
.
|
4.2.-
|
In turn, as established in 2.6 (b) of the Framework Agreement, all Purchaser Closing Deliveries are included herewith as
Annex 3
.
|
(i)
|
Identified Creditor Payments.
The Seller hereby declares that the creditors listed in
Annex 4,
are all the Company´s and/or the Seller´s currently existing creditors, including the Tax Authorities, Social Security, public administrations, financial institutions and, in general, any third party (excluding accrued and unpaid payrolls of the Company´s Employees). To that respect, the Seller provides duly signed releases, included hereto as
Annex 5,
by means of which said creditors declare that all existing debts with the Seller and/or the Company will be settled once they receive the amounts established in the same.
|
(ii)
|
Owed Loan Amount.
In accordance with the conditions established in the Loan Agreement, the Owed Loan Amount is
€
368,358
as described in
Annex 7.
Said amount is further deducted from the Purchase Price.
|
(iii)
|
Escrow.
As established in Clause 2.4, an escrow agreement is signed by the Parties and the Spanish bank BBVA, S.A., included herewith as
Annex 8
, by means of which the Purchaser deducts from the Purchase Price and deposits via a wire transfer to the Escrow Account an amount of
547,500€.
|
(iv)
|
Opposed Creditors.
The Seller declares and warrants that the only creditors initially opposing to the spin-off of DIALCOM NETWORKS, S.L. were BANKINTER S.A. and Elena Álvarez Martín-Ballestero who duly waived their opposition to the same.
|
(v)
|
Remaining amount.
Taking into consideration the deductions from the Purchase Price established in points (i) to (iv) of the present clause, the Purchaser shall pay the remaining amount, that is to say
€ 1,508,379.54
, via a wire transfer, to the Seller’s bank account. The Seller acknowledges receipt for the above-mentioned amount. A copy of said wire transfer order is attached hereto as
Annex 9
.
|
|
ClearOne, Inc.
|
|
By
Name: Zeynep Hakimoglu
Title: President & CEO
|
|
Dialcom Networks S.L.
|
|
By
Name:Enrique Domínguez García
Title: President & CEO
|
Initial purchase figure
|
€ 3,650,000
|
Interim Operating Expense Amount
|
€ 240,000
|
Unpaid Payrolls
|
€ 26,886.06
|
Revenue invoiced
|
€ 201,572.36
|
Purchase price
|
€3,661,541.58
|
Dialcom Networks S.L.
|
By
Name:Enrique Domínguez García
Title: President & CEO
|
1.
|
Spanish Tax Agency / AEAT
186.044,7 €
|
2.
|
Spanish Social Security / Seguridad Social
96.781,42 €
|
3.
|
Banks / Bancos:
|
a.
|
BBVA
241.000
€
|
b.
|
Banco Santander
161,694.16 €
|
c.
|
Banco Popular
248,390.06 €
|
1.
|
I have reviewed this quarterly report of ClearOne, Inc. on Form 10-Q;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
May 14, 2014
|
By:
|
/s/ Zeynep Hakimoglu
|
|
|
|
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report of ClearOne, Inc. on Form 10-Q;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
May 14, 2014
|
By:
|
/s/ Narsi Narayanan
|
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|
|
|
|
|
May 14, 2014
|
By:
|
/s/ Zeynep Hakimoglu
|
|
|
|
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
May 14, 2014
|
By:
|
/s/ Narsi Narayanan
|
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|