CLEARONE INC

Item 1. LEGAL PROCEEDINGS

The Company is a party to certain legal proceedings arising in the ordinary course of business.

On June 26, 2025, ClearOne Spain, SL (“ClearOne Spain”), the Company’s wholly-owned subsidiary in Spain, delivered notices to its employees of the ClearOne Spain’s intention to terminate certain employees in connection with the Company’s reduction in force that it initiated on June 20, 2025. On August 2, 2025, eight former employees of ClearOne Spain filed a claim with the High Court of Justice of Aragon Spain against the Company and ClearOne Spain claiming wrongful termination and seeking unspecified statutory compensation as damages (the “Spanish Proceeding”).

The Company intends to defend the claims against the Company and ClearOne Spain in the Spanish Proceeding and may appeal any adverse judgements and awards of damages. It is not possible at this time to predict any outcome with respect to the Spanish Proceeding or to estimate the potential financial impact on the Company in the event of any adverse judgment against the Company and ClearOne Spain in the Spanish Proceeding. Any adverse judgment could have a material adverse effect on the Company and its financial condition and results of operations.