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 [x]
|
Non-Accelerated Filer [ ] (Do not check if a smaller reporting company)
|
Smaller Reporting Company [ ]
|
|
PART I – FINANCIAL INFORMATION
|
|
|
||
|
||
|
||
|
||
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PART II – OTHER INFORMATION
|
|
Item 1.
|
FINANCIAL STATEMENTS
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
Unaudited
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,913
|
|
|
$
|
13,412
|
|
Marketable securities
|
5,890
|
|
|
7,161
|
|
||
Receivables, net of allowance for doubtful accounts of $77 and $54, respectively
|
8,133
|
|
|
8,692
|
|
||
Inventories
|
14,470
|
|
|
13,447
|
|
||
Distributor channel inventories
|
1,445
|
|
|
1,628
|
|
||
Prepaid expenses and other assets
|
2,427
|
|
|
1,806
|
|
||
Total current assets
|
46,278
|
|
|
46,146
|
|
||
Long-term marketable securities
|
20,347
|
|
|
19,204
|
|
||
Long-term inventories, net
|
2,021
|
|
|
2,018
|
|
||
Property and equipment, net
|
1,468
|
|
|
1,589
|
|
||
Intangibles, net
|
6,368
|
|
|
6,638
|
|
||
Goodwill
|
12,724
|
|
|
12,724
|
|
||
Deferred income taxes
|
5,020
|
|
|
5,093
|
|
||
Other assets
|
127
|
|
|
117
|
|
||
Total assets
|
$
|
94,353
|
|
|
$
|
93,529
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,195
|
|
|
$
|
2,815
|
|
Accrued liabilities
|
2,144
|
|
|
2,243
|
|
||
Deferred product revenue
|
4,203
|
|
|
4,549
|
|
||
Total current liabilities
|
10,542
|
|
|
9,607
|
|
||
Deferred rent
|
154
|
|
|
150
|
|
||
Other long-term liabilities
|
1,152
|
|
|
1,203
|
|
||
Total liabilities
|
11,848
|
|
|
10,960
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common stock, par value $0.001, 50,000,000 shares authorized, 9,219,978 and 9,183,957 shares issued and outstanding
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
45,568
|
|
|
46,291
|
|
||
Accumulated other comprehensive (loss)
|
(12
|
)
|
|
(166
|
)
|
||
Retained earnings
|
36,940
|
|
|
36,435
|
|
||
Total shareholders' equity
|
82,505
|
|
|
82,569
|
|
||
Total liabilities and shareholders' equity
|
$
|
94,353
|
|
|
$
|
93,529
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue
|
$
|
13,033
|
|
|
$
|
13,586
|
|
Cost of goods sold
|
4,568
|
|
|
5,124
|
|
||
Gross profit
|
8,465
|
|
|
8,462
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
2,625
|
|
|
2,622
|
|
||
Research and product development
|
2,270
|
|
|
1,941
|
|
||
General and administrative
|
1,598
|
|
|
2,000
|
|
||
Total operating expenses
|
6,493
|
|
|
6,563
|
|
||
|
|
|
|
||||
Operating income
|
1,972
|
|
|
1,899
|
|
||
Other income, net
|
11
|
|
|
104
|
|
||
Income before income taxes
|
1,983
|
|
|
2,003
|
|
||
Provision for income taxes
|
615
|
|
|
731
|
|
||
Net income
|
$
|
1,368
|
|
|
$
|
1,272
|
|
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.15
|
|
|
$
|
0.14
|
|
Diluted earnings per common share
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
|
|
|
||||
Basic weighted average shares outstanding
|
9,196,522
|
|
|
9,100,107
|
|
||
Diluted weighted average shares outstanding
|
9,513,440
|
|
|
9,508,479
|
|
||
|
|
|
|
||||
Comprehensive income:
|
|
|
|
||||
Net income
|
$
|
1,368
|
|
|
$
|
1,272
|
|
Other comprehensive income:
|
|
|
|
||||
Unrealized gain on available-for-sale securities, net of tax
|
121
|
|
|
55
|
|
||
Change in foreign currency translation adjustment
|
33
|
|
|
(180
|
)
|
||
Comprehensive income
|
$
|
1,522
|
|
|
$
|
1,147
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
1,368
|
|
|
$
|
1,272
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
||||
Depreciation and amortization expense
|
483
|
|
|
521
|
|
||
Amortization of deferred rent
|
(20
|
)
|
|
(23
|
)
|
||
Stock-based compensation expense
|
148
|
|
|
238
|
|
||
Provision for doubtful accounts, net
|
25
|
|
|
21
|
|
||
Write-down of inventory to net realizable value
|
119
|
|
|
47
|
|
||
Loss on disposal of assets
|
49
|
|
|
—
|
|
||
Tax benefit from exercise of stock options
|
(583
|
)
|
|
(7
|
)
|
||
Deferred income taxes
|
47
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
562
|
|
|
1,205
|
|
||
Inventories
|
(964
|
)
|
|
(806
|
)
|
||
Prepaid expenses and other assets
|
(144
|
)
|
|
877
|
|
||
Accounts payable
|
1,378
|
|
|
820
|
|
||
Accrued liabilities
|
(82
|
)
|
|
(832
|
)
|
||
Income taxes payable
|
106
|
|
|
338
|
|
||
Deferred product revenue
|
(354
|
)
|
|
(291
|
)
|
||
Other long-term liabilities
|
(52
|
)
|
|
(537
|
)
|
||
Net cash provided by operating activities
|
2,086
|
|
|
2,843
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(139
|
)
|
|
(76
|
)
|
||
Proceeds from maturities and sales of marketable securities
|
2,787
|
|
|
2,376
|
|
||
Purchases of marketable securities
|
(2,538
|
)
|
|
(1,612
|
)
|
||
Net cash provided by investing activities
|
110
|
|
|
688
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the exercise of stock options
|
318
|
|
|
20
|
|
||
Repurchase and cancellation of stock options
|
(1,752
|
)
|
|
—
|
|
||
Tax benefit from exercise of stock options
|
583
|
|
|
7
|
|
||
Dividends paid
|
(459
|
)
|
|
—
|
|
||
Repurchase and cancellation of stock
|
(404
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(1,714
|
)
|
|
27
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
19
|
|
|
(133
|
)
|
||
Net increase in cash and cash equivalents
|
501
|
|
|
3,425
|
|
||
Cash and cash equivalents at the beginning of the period
|
13,412
|
|
|
7,440
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
13,913
|
|
|
$
|
10,865
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
537
|
|
|
$
|
881
|
|
1.
|
Business Description, Basis of Presentation and Significant Accounting Policies
|
2.
|
Earnings Per Share
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
1,368
|
|
|
$
|
1,272
|
|
Denominator:
|
|
|
|
||||
Basic weighted average shares outstanding
|
9,196,522
|
|
|
9,100,107
|
|
||
Dilutive common stock equivalents using treasury stock method
|
316,918
|
|
|
408,372
|
|
||
Diluted weighted average shares outstanding
|
9,513,440
|
|
|
9,508,479
|
|
||
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.15
|
|
|
$
|
0.14
|
|
Diluted earnings per common share
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
|
|
|
||||
Weighted average options outstanding
|
1,000,571
|
|
|
1,037,137
|
|
||
Anti-dilutive options not included in the computations
|
289,623
|
|
|
268,709
|
|
3.
|
Marketable Securities
|
|
Amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
||||||||||
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|||||||||
|
|
Corporate bonds and notes
|
$
|
19,422
|
|
|
$
|
136
|
|
|
$
|
(52
|
)
|
|
$
|
19,506
|
|
|
|
Municipal bonds
|
6,691
|
|
|
41
|
|
|
(1
|
)
|
|
6,731
|
|
||||
|
Total available-for-sale securities
|
$
|
26,113
|
|
|
$
|
177
|
|
|
$
|
(53
|
)
|
|
$
|
26,237
|
|
|
Amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||||
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|||||||||
|
|
Corporate bonds and notes
|
$
|
20,827
|
|
|
$
|
50
|
|
|
$
|
(133
|
)
|
|
$
|
20,744
|
|
|
|
Municipal bonds
|
5,608
|
|
|
18
|
|
|
(5
|
)
|
|
5,621
|
|
||||
|
Total available-for-sale securities
|
$
|
26,435
|
|
|
$
|
68
|
|
|
$
|
(138
|
)
|
|
$
|
26,365
|
|
|
Amortized
cost
|
|
Estimated
fair value
|
|||||
March 31, 2016
|
|
|
||||||
|
Due within one year
|
$
|
5,881
|
|
|
$
|
5,890
|
|
|
Due after one year through five years
|
19,247
|
|
|
19,365
|
|
||
|
Due after five years through ten years
|
985
|
|
|
982
|
|
||
|
Total available-for-sale securities
|
$
|
26,113
|
|
|
$
|
26,237
|
|
|
Less than 12 months
|
|
More than 12 months
|
|
Total
|
||||||||||||||||||
(In thousands)
|
Estimated
fair value
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
|
Gross
unrealized
holding
losses
|
|
Estimated
fair value
|
|
Gross
unrealized
holding
losses
|
||||||||||||
As of March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate bonds and notes
|
$
|
3,416
|
|
|
$
|
(38
|
)
|
|
$
|
1,644
|
|
|
$
|
(14
|
)
|
|
$
|
5,060
|
|
|
$
|
(52
|
)
|
Municipal bonds
|
—
|
|
|
—
|
|
|
200
|
|
|
(1
|
)
|
|
200
|
|
|
(1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
$
|
3,416
|
|
|
$
|
(38
|
)
|
|
$
|
1,844
|
|
|
$
|
(15
|
)
|
|
$
|
5,260
|
|
|
$
|
(53
|
)
|
4.
|
Intangible Assets
|
|
Estimated useful lives
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Tradename
|
7 years
|
|
$
|
555
|
|
|
$
|
555
|
|
Patents and technological know-how
|
10 years
|
|
5,869
|
|
|
5,850
|
|
||
Proprietary software
|
3 to 15 years
|
|
4,341
|
|
|
4,341
|
|
||
Other
|
5 years
|
|
324
|
|
|
324
|
|
||
|
|
|
11,089
|
|
|
11,070
|
|
||
Accumulated amortization
|
|
|
(4,721
|
)
|
|
(4,432
|
)
|
||
|
|
|
$
|
6,368
|
|
|
$
|
6,638
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Amortization of intangible assets
|
$
|
289
|
|
|
$
|
315
|
|
5.
|
Inventories
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Current:
|
|
|
|
||||
Raw materials
|
$
|
3,404
|
|
|
$
|
2,735
|
|
Finished goods
|
11,066
|
|
|
10,712
|
|
||
|
$
|
14,470
|
|
|
$
|
13,447
|
|
Long-term:
|
|
|
|
||||
Raw materials
|
$
|
438
|
|
|
$
|
375
|
|
Finished goods
|
1,583
|
|
|
1,643
|
|
||
|
$
|
2,021
|
|
|
$
|
2,018
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net loss (gain) on valuation of inventory and write-off of obsolete inventory
|
$
|
119
|
|
|
$
|
47
|
|
6.
|
Share-based Compensation
|
|
Number of shares
|
|
Weighted average exercise price
|
Options outstanding at beginning of quarter
|
1,028,935
|
|
$6.03
|
Granted
|
157,200
|
|
11.97
|
Less:
|
|
|
|
Exercised
|
(69,621)
|
|
4.21
|
Repurchased
|
(225,542)
|
|
4.37
|
Canceled or Expired
|
(980)
|
|
8.51
|
Options outstanding at end of quarter
|
889,992
|
|
7.64
|
Options exercisable at end of quarter
|
550,097
|
|
$5.64
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Cost of goods sold
|
$
|
4
|
|
|
$
|
5
|
|
Sales and marketing
|
14
|
|
|
40
|
|
||
Research and product development
|
27
|
|
|
33
|
|
||
General and administrative
|
103
|
|
|
160
|
|
||
|
$
|
148
|
|
|
$
|
238
|
|
7.
|
Shareholders’ Equity
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Balance at the beginning of the period
|
$
|
82,569
|
|
|
$
|
76,016
|
|
Exercise of stock options
|
293
|
|
|
20
|
|
||
Stock repurchased
|
(404
|
)
|
|
—
|
|
||
Options repurchased
|
(1,752
|
)
|
|
—
|
|
||
Proceeds from stock purchase plan
|
25
|
|
|
—
|
|
||
Dividends
|
(459
|
)
|
|
(319
|
)
|
||
Share-based compensation - options
|
143
|
|
|
238
|
|
||
Share-based compensation - ESPP
|
5
|
|
|
—
|
|
||
Tax benefit - stock option exercises
|
563
|
|
|
7
|
|
||
Unrealized gain or loss on investments, net of tax
|
121
|
|
|
55
|
|
||
Foreign currency translation adjustment
|
33
|
|
|
(180
|
)
|
||
Net Income during the period
|
1,368
|
|
|
1,272
|
|
||
Balance at end of the period
|
$
|
82,505
|
|
|
$
|
77,109
|
|
8.
|
Fair Value Measurements
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|||||||||
Corporate bonds and notes
|
$
|
—
|
|
|
$
|
19,506
|
|
|
$
|
—
|
|
|
$
|
19,506
|
|
|
Municipal bonds
|
—
|
|
|
6,731
|
|
|
—
|
|
|
6,731
|
|
|||||
|
Total
|
$
|
—
|
|
|
$
|
26,237
|
|
|
$
|
—
|
|
|
$
|
26,237
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|||||||||
Corporate bonds and notes
|
$
|
—
|
|
|
$
|
20,744
|
|
|
$
|
—
|
|
|
$
|
20,744
|
|
|
Municipal bonds
|
—
|
|
|
5,621
|
|
|
—
|
|
|
5,621
|
|
|||||
|
Total
|
$
|
—
|
|
|
$
|
26,365
|
|
|
$
|
—
|
|
|
$
|
26,365
|
|
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 & collaboration, streaming and digital signage technologies 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 growing adoption of unified communications and introduce new products through emerging 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.
|
•
|
Providing a superior conferencing and collaboration experience;
|
•
|
Significantly impacting multimedia distribution and control;
|
•
|
Offering greater value to our customers and partners;
|
•
|
Leveraging and extending ClearOne technology, leadership and innovation;
|
•
|
Leveraging our strong domestic and international channels to distribute new products; and
|
•
|
Strengthening existing customer and partner relationships through dedicated support.
|
|
Three months ended March 31,
|
||||||||||
|
2016
|
|
% of Revenue
|
|
2015
|
|
% of Revenue
|
||||
Revenue
|
$
|
13,033
|
|
|
100%
|
|
$
|
13,586
|
|
|
100%
|
Cost of goods sold
|
4,568
|
|
|
35%
|
|
5,124
|
|
|
38%
|
||
Gross profit
|
8,465
|
|
|
65%
|
|
8,462
|
|
|
62%
|
||
Sales and marketing
|
2,625
|
|
|
20%
|
|
2,622
|
|
|
19%
|
||
Research and product development
|
2,270
|
|
|
17%
|
|
1,941
|
|
|
14%
|
||
General and administrative
|
1,598
|
|
|
12%
|
|
2,000
|
|
|
15%
|
||
Operating income
|
1,972
|
|
|
15%
|
|
1,899
|
|
|
14%
|
||
Other income (expense), net
|
11
|
|
|
0%
|
|
104
|
|
|
1%
|
||
Income before income taxes
|
1,983
|
|
|
15%
|
|
2,003
|
|
|
15%
|
||
Provision for income taxes
|
615
|
|
|
5%
|
|
731
|
|
|
5%
|
||
Net income
|
$
|
1,368
|
|
|
10%
|
|
$
|
1,272
|
|
|
9%
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Deferred revenue
|
$
|
4,203
|
|
|
$
|
4,549
|
|
Deferred cost of goods sold
|
1,445
|
|
|
1,628
|
|
||
Deferred gross profit
|
$
|
2,758
|
|
|
$
|
2,921
|
|
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
|
Period
|
|
(a)
Total Number of Shares Purchased
|
|
(b)
Average Price
Paid per Share |
|
|
|
(d)
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
|
|||||
January 1 to January 31
|
|
—
|
|
|
|
|
—
|
|
|
10,000,000
|
|
||
February 1 to February 29
|
|
—
|
|
|
|
|
—
|
|
|
10,000,000
|
|
||
March 1 to March 31
|
|
33,600
|
|
|
$
|
12.02
|
|
|
33,600
|
|
|
9,596,063
|
|
Total
|
|
33,600
|
|
|
12.02
|
|
|
33,600
|
|
|
9,596,063
|
|
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
|
|
Form of Offer to Repurchase Eligible Options for Cash
|
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 10, 2016
|
By:
|
/s/ Zeynep Hakimoglu
|
|
|
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
May 10, 2016
|
By:
|
/s/ Narsi Narayanan
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|
EXAMPLE FOR CALCULATING REPURCHASE VALUE
|
||
No. of eligible options (Refer to Optionee Statement)
|
|
800
|
No. of options that you have chosen to deliver for repurchase (delivered options)
|
(A)
|
500
|
Exercise price for each delivered option
|
(B)
|
$3.65
|
Date when you sent the acceptance of this offer to ClearOne
|
|
03/11/2015
|
Closing Market price on 03/11/2015
|
(C)
|
$12.00
|
Repurchase value per option (C) - (B)
|
(D)
|
$8.35
|
Repurchase value of delivered options(D) x (A)
|
|
$4,175
|
1.
|
What is the Offer?
|
2.
|
Do I have a choice to participate in this Offer?
|
3.
|
How do I benefit by delivering the Options for repurchase pursuant to this Offer?
|
4.
|
How many options am I eligible to deliver pursuant to this Offer?
|
5.
|
How much will I receive for my delivered options?
|
EXAMPLE FOR CALCULATING REPURCHASE VALUE
|
||
No. of eligible options (Refer to Optionee Statement)
|
|
800
|
No. of options that you have chosen to deliver for repurchase (delivered options)
|
(A)
|
500
|
Exercise price for each delivered option
|
(B)
|
$3.65
|
Date when you sent the acceptance of this offer to ClearOne
|
|
03/11/2015
|
Closing Market price on 03/11/2015
|
(C)
|
$12.00
|
Repurchase value per option (C) - (B)
|
(D)
|
$8.35
|
Repurchase value of delivered options(D) x (A)
|
|
$4,175
|
6.
|
When will I receive my cash payment for delivered options?
|
7.
|
Can I forfeit any portion of my cash payment for delivered options after receiving it?
|
8.
|
Why is the Company conducting the Offer?
|
9.
|
Will my decision to participate in the Offer have an impact on my ability to receive options or other equity grants in the future?
|
10.
|
How should I decide whether or not to participate in the Offer?
|
11.
|
If I choose to participate, what will happen to my options that will be delivered for repurchase?
|
12.
|
What do I need to do to participate in the Offer?
|
13.
|
What will happen if I do not turn in an executed Letter of Transmittal by the deadline?
|
14.
|
What if I don’t want to accept the Offer?
|
15.
|
What are the U.S. federal income and withholding tax consequences of accepting the Offer for payment of the cash payment?
|
16.
|
Are there any other tax consequences to which I may be subject?
|
17.
|
What should I do if I have additional questions about this Offer to Repurchase?
|
Choice A
|
I have accepted to deliver all my eligible options totaling_______options for repurchase by the Company.
|
|
Initial
|
||
Choice B
|
I have accepted to deliver only _______ options for repurchase by the Company. I authorize ClearOne to choose from eligible options, those options that will maximize the cash payment to me. I understand that ClearOne will choose those options that have the least exercise price.
|
|
Initial
|
||
Choice C
|
I have accepted to deliver only _______ options for repurchase by the Company. I have selected the options to be delivered by marking the options in the attached Optionee Statement. I have also initialed the Optionee Statement.
|
|
Initial
|
Name
|
|
|
|
|
|
|
Address
|
|
|
|
|
|
|
City, State, Zip
|
|
|
|
|
||
|
|
|
|
|
|
|
Date of grant
|
Expiry Date
|
Grant ID
|
Plan
|
Eligible Options
|
Exercise Price for Eligible Options
|
Repurchase Value of Eligible Options if Stock Price is $12.00 (before taxes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 10, 2016
|
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 10, 2016
|
By:
|
/s/ Narsi Narayanan
|
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|
|
|
|
|
May 10, 2016
|
By:
|
/s/ Zeynep Hakimoglu
|
|
|
|
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
May 10, 2016
|
By:
|
/s/ Narsi Narayanan
|
|
|
|
Narsi Narayanan
Senior Vice President of Finance
(Principal Financial and Accounting Officer)
|