CLEARONE INC
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
CLRO$5.01+10.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001753926-25-001796
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001753926-26-000897
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 94 current paragraphs.
45 unchanged; 20 reworded; 29 added; 47 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
ClearOne, Inc. (the “Company,” “we,” “us,” or “our”) was historically a global provider of conferencing, collaboration, and AV streaming solutions for voice and visual communications. Following the October 24, 2025 disposition of substantially all operating assets and intellectual property to Biamp Systems, LLC (the “Asset Sale”), the Company no longer manufactures or sells products. Our continuing operations are now limited to (i) fulfilling warranty and technical support obligations for legacy products, (ii) maintaining public-company compliance and governance, (iii) collecting accounts receivable and recovering prepaid assets and (iv) evaluating and pursuing strategic alternatives, including a potential mergers or other transaction intended to maximize stockholder value.
Current report
July 2025 – Issuance of Class A Redeemable Preferred Stock as a special stock dividend and automatic conversion of the $3.0 million convertible note into Class B Convertible Preferred Stock (see Notes 3 and 4).
Current report
September 2025 – Repurchase and cancellation of all then-outstanding warrants (see Note 5).
Current report
October 24, 2025 – Completion of the Asset Sale to Biamp Systems, LLC for $3.0 million in cash. The transaction represented a strategic shift that had a major effect on the Company’s operations and financial results. The results of the disposed component are presented as discontinued operations for all periods presented (see Note 2).
Current report
March 2, 2026 – Private placement with First Finance Ltd. (largest stockholder) for 437,500 shares and a warrant to purchase 437,500 additional shares (see Note 11).
Current report
March 9, 2026 – Repurchase of 24,155 warrants from CVI Investments, Inc. (see Note 5).
Current report
April 1, 2026 – Transition of CEO Derek Graham to a consulting arrangement (see Note 15).
Current report
April 7, 2026 – Termination of the Edgewater Corporate Park lease and receipt of Nasdaq continued listing deficiency notice (see Notes 9 and 15).
Current report
April 10, 2026 – Board approval of Class A Preferred Stock redemption at par (April 21, 2026) (see Notes 3 and 15).
Current report
April 22, 2026 – Completion of reincorporation from Delaware to Nevada (see Note 1).
Current report
Following the Asset Sale, our continuing operations generate minimal revenue and consist primarily of warranty support, collecting accounts receivable and recovering prepaid assets, public-company compliance costs, and restructuring activities. Management’s primary focus is preserving liquidity, and evaluating strategic alternatives (including a potential reverse merger or other transaction) to maximize stockholder value. The Company has incurred net losses and used cash in operations, and substantial doubt exists about its ability to continue as a going concern (see Note 1 – Going Concern).
Current report
Following the Asset Sale on October 24, 2025, our continuing operations are limited to (i) fulfilling warranty and technical support obligations for legacy products, (ii) maintaining public-company compliance and governance, (iii) collecting accounts receivable and recovering prepaid assets and (iv) evaluating and pursuing strategic alternatives. We do not expect to generate material revenue from continuing operations in the foreseeable future.
Current report
Management’s near-term priorities include monetizing any remaining assets, collecting receivables, settling liabilities, and completing the Class A Preferred redemption. All three facility leases were terminated by April 7, 2026 (see Note 9 and Note 15).
Current report
Deferred product revenue decreased to $0 at both March 31, 2026 and December 31, 2025.
Current report
Results of Operations for the three months ended March 31, 2026
Current report
Following the Asset Sale on October 24, 2025, the Company’s continuing operations generate minimal revenue and consist primarily of warranty support, public-company compliance, and restructuring costs. The majority of the Company’s historical operations are now presented as discontinued operations (see Note 2):
Current report
Revenue in discontinued operations declined to $0 in Q1 2026 compared to $2,313 in Q1 2025, reflecting the completion of the Asset Sale in October 2025. See Note 2 — Discontinued Operations and Assets Held for Sale for additional details on the components of discontinued operations.
Current report
The reduction in gross profit reflects the completion of the Asset Sale in October 2025. See Note 2 — Discontinued Operations and Assets Held for Sale for additional details on the components of discontinued operations.
Current report
G&A expenses were $222 in Q1-2026, compared to $361 in Q1-2025. The decreases were due to decreased expenses related to the exploration of strategic alternatives and closing down facilities.
Current report
During the three months ended March 31, 2026, the Company recorded an income tax benefit of $793 (recorded in discontinued operations) resulting from the reversal of unrecognized tax benefits (FIN 48 reserves). This reversal occurred because the statute of limitations expired for certain tax years, and the underlying tax positions were no longer subject to IRS review. For the three months ended March 31, 2025, the Company did not recognize any tax benefit from its losses due to the establishment of a full valuation allowance on its net deferred tax assets.
Current report
Net Loss and Outlook
Current report
Net loss for the first quarter of 2026 was $487, compared to a net loss of $2,834 in the first quarter of 2025. The improvement was primarily driven by a one-time income tax benefit of $793 (recorded in discontinued operations) from the release of uncertain tax positions, partially offset by the absence of revenue-generating operations following the October 2025 Asset Sale to Biamp Systems.
Current report
Looking ahead, the Company’s continuing operations are expected to consist primarily of warranty servicing and technical support for legacy products, along with ongoing public company compliance and governance costs. We will continue to evaluate warranty claims experience and adjust our reserves as appropriate. In parallel, management is actively pursuing strategic alternatives, completed the redemption of the Class A Redeemable Preferred Stock on April 21, 2026, collecting accounts receivable and recovering prepaid assets, and continues to evaluate potential reverse merger or other value-enhancing transactions. We expect these activities to remain the primary focus for the remainder of 2026.
Current report
As of March 31, 2026, cash and cash equivalents were $1,053 compared to $739 as of December 31, 2025. Working capital was minimal at both dates.
Current report
Cash used inopera ting activities was approximately $680 in thethree months ended March 31, 2026, compared to $2,644 in the three months ended March 31, 2025. The decrease in cash used was primarily due to the absence of operating activities following the Asset Sale.
Current report
Cash provided by financing activities in thethree months ended March 31, 2026 was $1,728, compared to $1,000 in the three months ended March 31, 2025. Both provision to cash were the result of common stock sales.
Current report
For a detailed discussion of liquidity and going-concern considerations, including management’s plans and the substantial doubt about the Company’s ability to continue as a going concern, see Note 1 – Going Concern.
Current report
Our critical accounting policies and estimates are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026, other than (i) the presentation of discontinued operations as described in Note 2 and (ii) the reclassification of Class A Redeemable Preferred Stock from temporary equity to a current liability (see Note 3).
Current report
See Note 1 — Significant Accounting Policies and Recent Accounting Pronouncements for a discussion of recently issued accounting standards and their expected impact on our financial statements.
Removed paragraphs (47)
Previous report
ClearOne is a global Company that designs, develops and sells conferencing, collaboration, and AV networking solutions for voice and visual communications. The performance and simplicity of our advanced, comprehensive solutions offer a high level of functionality, reliability and scalability. We derive a major portion of our revenue from audio conferencing products and microphones by promoting our products in the professional audio-visual channel. We have extended our total addressable market from the installed audio conferencing market to adjacent complementary markets – microphones, video collaboration and AV networking. We have achieved this through strategic technological acquisitions as well as by internal product development.
Previous report
Special stock dividend — Class A Redeemable Preferred Stock. In July 2025, we issued Class A Redeemable Preferred Stock via a one-time special stock dividend designed to distribute 100% of the net proceeds from an asset sale to holders upon redemption (see Note 3 — Class A Redeemable Preferred (Temporary Equity)). Class A is presented in temporary equity on the balance sheet.
Previous report
In July 2025, our convertible note automatically converted into shares of Class B Convertible Preferred Stock pursuant to its original terms (see Note 4).
Previous report
In September 2025, we repurchased and cancelled certain outstanding warrants, including one related-party transaction approved by our Board (see Note 5).
Previous report
Disposition status (subsequent event). On October 24, 2025, after quarter-end, we closed the sale of intellectual property and certain inventories to an industry buyer for cash consideration (see Subsequent Events). Any differences between the carrying amounts at September 30, 2025 and final closing amounts will be recognized in the subsequent period.
Previous report
Beginning in the third quarter of 2025:
Previous report
The disposal group of assets is presented as assets held for sale (and liabilities held for sale, if any) on the balance sheet.
Previous report
The statement of cash flows remains consolidated, with supplemental cash-flow information for the discontinued operations disclosed in Note 2.
Previous report
**During 2025, our operating results were impacted by constrained liquidity, intermittent supply chain availability, and reduced channel demand relative to the prior year. Management’s primary focus through and after quarter-end has been executing the asset sale, aligning our cost structure with the go-forward profile of the business, and preserving liquidity while we evaluate additional strategic alternatives.
Previous report
**Following the classification of our product business as held for sale at September 30, 2025, and the subsequent closing of the asset sale after quarter-end (see Note 2 — Discontinued Operations and Assets Held for Sale and Subsequent Events), our continuing operations consist of: (i) executing a restructuring in furtherance of the Asset Disposition to Biamp and a possible Strategic Transaction, including monetization of residual assets not included in the sale (e.g., fixed assets, leaseholds) and collection of accounts receivable and prepaids; (b) maintaining a lean corporate infrastructure to satisfy reporting and governance requirements; (c) providing product support and warranty services with a small service inventory and technical support team; (d) managing and, where feasible, terminating or assigning facility leases to reduce ongoing cash burn; (e) completing the redemption of our Class A Redeemable Preferred Stock in accordance with its terms; and (f) evaluating additional financing or strategic alternatives as necessary to satisfy obligations as they come due.
Previous report
Management’s near-term priorities include:
Previous report
Monetizing remaining assets not included in the sale, including fixed assets, and leaseholds/fixtures (through sale or lease termination/assignment);
Previous report
Collecting outstanding accounts receivable and realizing prepaid balances and deposits where recoverable;
Previous report
Settling outstanding trade payables, accrued expenses, warranty obligations, and other liabilities retained at closing;
Previous report
Managing leases, including negotiated terminations or assignments to reduce ongoing occupancy costs;
Previous report
Completing a restructuring and identifying a Strategic Transaction partner in the fourth quarter of 2025;
Previous report
Overseeing redemption mechanics for the Class A Redeemable Preferred Stock, which is designed to receive 100% of the net proceeds from the asset sale upon redemption (see Note 3 — Class A Redeemable Preferred (Temporary Equity))
Previous report
Deferred product revenue decreased to $12 on September 30, 2025 compared to $17 on December 31, 2024.
Previous report
Results of Operations for the three and nine months ended September 30, 2025
Previous report
We discuss Continuing Operations and Discontinued Operations separately. The following tables set forth certain items from our unaudited condensed consolidated statements of operations for thethree and nine months ended September 30, 2025 (“2025-Q3”)and 2024 ("2024-Q3"), respectively, together with the percentage of total revenue which each such item represents:
Previous report
Outlook
Previous report
We expect continuing operations to consist mainly of warranty servicing and public-company costs while we monetize remaining assets, manage lease exits, and complete the Class A redemption mechanics. We will continue to evaluate warranty claims experience and service inventory levels and adjust estimates as appropriate.
Previous report
As of September 30, 2025, our cash and cash equivalents were approximately $0.8 million compared to $1.4 million as of December 31, 2024. Our working capital was $4.8 million and $15.2 million as of September 30, 2025 and December 31, 2024, respectively.
Previous report
Cash used inopera ting activities was approximately ($3.3) million in thenine months ended September 30, 2025, an increaseof approximately $1.2 million from ($2.1) million of cash used in operating activities in thenine months ended September 30, 2024. The increase in cash used was primarily due to increased legal and transaction fees to complete a strategic transaction.
Previous report
Cash provided by financing activities in thenine months ended September 30, 2025 was $4.0 million compared to ($14.5) million of cash used by financing activities in the nine months ended September 30, 2024. The 2025 amount was comprised primarily of a stock sale and the sale of a convertible note, as discussed in Note(s)1,3,4,11 and 12 above, and our discussion in the following paragraphs.
Previous report
In September 2025, the Company’s Board of Directors approved a plan (the “Strategic Plan”) to seek the sale of a significant portion of the Company’s operating assets related to its product business, reduce the Company’s continuing operations to warranty and product support, and position the Company as a reverse merger vehicle for a possible strategic transaction (a “Strategic Transaction”). Accordingly, as of September 30, 2025, the Company classified the related disposal group of assets as held for sale, measured at the lower of carrying amount or fair value less costs to sell. After quarter-end, on October 24, 2025, the Company closed the sale of certain inventory and intellectual property for cash consideration (see Subsequent Events). Pursuant to the terms of the Class A Redeemable Preferred Stock issued in July 2025, net proceeds from a qualifying asset sale are payable to Class A holders upon redemption (see Note 3 — Class A Redeemable Preferred (Temporary Equity)). As a result, the asset-sale proceeds will not be available to fund ongoing operations other than for permitted transaction costs and restructuring activities.
Previous report
These conditions, including (i) historical operating losses and negative operating cash flows, (ii) limited liquidity at September 30, 2025, (iii) the requirement to redeem Class A from asset-sale net proceeds, and (iv) the Company’s go-forward profile consisting primarily of warranty support, public-company compliance, and restructuring activities, raise substantial doubt about the Company’s ability to continue as a going concern withinone year after the issuance of these financial statements.
Previous report
Management is (a) executing a structured restructuring, including monetization of residual assets not included in the sale (e.g., fixed assets, leaseholds) and collection of accounts receivable and prepaids; (b) maintaining a lean corporate infrastructure to satisfy reporting and governance requirements; (c) administering warranty obligations with a small service inventory and technical support team; (d) managing and, where feasible, terminating or assigning facility leases to reduce ongoing cash burn; (e) completing the Class A redemption in accordance with its terms; and (f) evaluating additional financing or strategic alternatives as necessary to satisfy obligations as they come due. There can be no assurance these plans will be successful, timely, or sufficient to alleviate the conditions raising substantial doubt.
Previous report
Accordingly, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for thetwelve-month period following the issuance of these unaudited condensed consolidated financial statements. The financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that might result if the Company were unable to continue as a going concern.
Previous report
Our discussion and analysis are based on unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Actual results could differ materially from those estimates. The estimates that we believe involve the most judgment and have the most significant potential to materially affect our results are summarized below; see the referenced notes for additional information.
Previous report
Held for sale measurement and impairment (ASC 360)
Previous report
As of September 30, 2025, we classified a disposal group of assets (intellectual property and certain inventories) as held for sale and measured it at the lower of carrying amount or fair value less costs to sell (FVLCTS). The determination of FVLCTS involves significant judgment, including consideration of an executed asset purchase agreement, market-participant assumptions, condition and salability of inventory, and estimated transaction costs. Changes in these inputs, including final closing adjustments, could result in additional impairment or reversal within discontinued operations. See Note 2 — Discontinued Operations and Assets Held for Sale.
Previous report
Discontinued operations presentation (ASC 205-20)
Previous report
We determined that disposal of the product business represents a strategic shift with a major effect on operations and financial results. Accordingly, we present the disposed component as discontinued operations for all periods shown. This requires management judgment in identifying direct vs. indirect costs, ceasing depreciation/amortization within the disposal group of assets, and recasting prior periods. See Note 2.
Previous report
Warranty obligations (ASC 460)
Previous report
We retained responsibility for legacy product warranties. The warranty liability reflects estimates of expected claim rates, parts and labor costs, and logistics, informed by historical experience and current product information. Actual experience could differ, requiring increases or decreases to the liability and impacting continuing operations. See Note 1 and MD&A — Continuing Operations.
Previous report
Going concern (ASC 205-40)
Previous report
We evaluate conditions and events that raise substantial doubt about our ability to continue as a going concern withinone year after financial statement issuance, including historical losses, liquidity levels, the requirement to redeem Class A from net asset-sale proceeds, and the profile of continuing operations (warranty, public-company costs, restructuring). Our conclusions require judgment about the timing and success of plans (asset monetization, lease exits, financing). See Note 1 — Going Concern and Liquidity.
Previous report
Temporary equity — Class A Redeemable Preferred (ASC 480-10-S 99)
Previous report
Class A is mandatorily redeemable upon a qualifying asset sale for 100% of net proceeds and is presented in temporary equity. Judgment is required to assess accretion to redemption value (e.g., when redemption becomes probable and reasonably estimable) and to evaluate EPS participation. See Note 3 — Class A Redeemable Preferred.
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Reworded paragraphs (20)
Previous wording
This report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27 A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this report, other than statements of historical fact, are forward-looking statements for purposes of these provisions, including any projections of earnings, revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statement. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are based upon reasonable assumptions at the time made, there can be no assurance that any such expectations or any forward-looking statement will prove to be correct. Our actual results will vary, and may vary materially, from those projected or assumed in the forward-looking statements. Future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not anticipate, including, without limitation, descriptions of our review of strategic alternatives and the timing and impact of any potential strategic transactions, the proposed development, manufacturing, and sale of our products; statements that describe expectations regarding pricing trends, the markets for our products, our anticipated capital expenditures, our cost reduction and operational restructuring initiatives, and future impact of regulatory developments; statements with regard to the nature and extent of competition we may face in the future; statements with respect to the anticipated sources of and need for future financing; and statements with respect to future strategic plans, goals, and objectives and forecasts of future growth and value; and other factors referred to in our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024. All subsequent forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are discussed in Part I, Item 1 A “Ri…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27 A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this report, other than statements of historical fact, are forward-looking statements for purposes of these provisions, including any projections of earnings, revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statement. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are based upon reasonable assumptions at the time made, there can be no assurance that any such expectations or any forward-looking statement will prove to be correct. Our actual results will vary, and may vary materially, from those projected or assumed in the forward-looking statements. Future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not anticipate, including, without limitation, descriptions of our review of strategic alternatives and the timing and impact of any potential strategic transactions, the proposed development, manufacturing, and sale of our products; statements that describe expectations regarding pricing trends, our ability to collect accounts receivable and recover prepaid assets, our ability to regain compliance with the continued listing standards of the Nasdaq Capital Market; statements with respect to the anticipated sources of and need for future financing; and statements with respect to future strategic plans, goals, and objectives and forecasts of future growth and value; and other factors referred to in our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025. All subsequent forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are discussed in Part I, Item 1 A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Beginning S…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
In September 2025, the Company’s Board of Directors approved a plan (the “Strategic Plan”) to seek the sale of a significant portion of the Company’s operating assets related to its product business, reduce the Company’s continuing operations to warranty and product support, and position the Company as a reverse merger vehicle for a possible strategic transaction (a “Strategic Transaction”). Accordingly, as of September 30, 2025, and we classified the related disposal group of assets as held for sale and measured it at the lower of carrying amount or fair value less costs to sell (see Note 2 — Discontinued Operations and Assets Held for Sale). Because the planned disposal represents a strategic shift that will have a significant effect on our operations and financial results, we present the results of that component as discontinued operations for all periods shown. Accordingly, this MD&A discusses continuing operations separately from discontinued operations where relevant.
Current wording
In September 2025, the Company’s Board of Directors approved a plan (the “Strategic Plan”) to seek the sale of a significant portion of the Company’s operating assets related to its product business, reduce the Company’s continuing operations to warranty and product support, and position the Company as a reverse merger vehicle for a possible strategic transaction (a “Strategic Transaction”). Accordingly, as of September 30, 2025, we classified the related disposal group of assets as held for sale and measured it at the lower of carrying amount or fair value less costs to sell; the assets held for sale were sold in October 2025 and certain assets and liabilities related to discontinued operations remained after the October 2025 sale (see Note 2 — Discontinued Operations and Assets Held for Sale). Because the planned disposal represents a strategic shift that will have a significant effect on our operations and financial results, we present the results of that component as discontinued operations for all periods shown. Accordingly, this MD&A discusses continuing operations separately from discontinued operations where relevant.
Previous wording
Strategic actions during 2025
Current wording
Strategic actions during 2025 and 2026
Previous wording
We retained responsibility for legacy product support and warranty obligations; the buyer did not assume these liabilities. As a result, continuing operations will maintain a small technical support function and service inventory (e.g., spare parts and repair units) to honor product support and warranty terms. We do not expect to manufacture new product or pursue new product sales, but we will pursue sale of remaining inventories and any other assets as part of eliminating all assets for cash. Any immaterial service or parts revenue, if recognized, will be reported within continuing operations. We will evaluate our service inventory and warranty accruals each period and adjust estimates based on observed claim rates and resolution costs.
Current wording
We retained responsibility for legacy product support and warranty obligations. The Company maintains a small technical support function and limited service inventory to honor these obligations. Any immaterial service or parts revenue, if recognized, is reported within continuing operations. We evaluate warranty accruals each period and adjust estimates based on observed claim rates and resolution costs.
Previous wording
To support reporting, governance, and restructuring activities, we expect to maintain a lean corporate staff, including accounting/finance, IT, and senior management (CEO/CFO). Ongoing costs will include audit and tax services, legal and advisory fees, SEC reporting, D&O insurance, IT/licensing, and Board and compliance expenses.
Current wording
We maintain a lean corporate staff, including accounting/finance, IT, and senior management (CEO/CFO). Ongoing costs include audit and tax services, legal and advisory fees, SEC reporting, D&O insurance, IT/licensing, and Board and compliance expenses.
Previous wording
Beginning in the third quarter of 2025, results of the disposed product business are presented as discontinued operations for all periods shown. Continuing operations primarily comprise warranty support, corporate and restructuring costs. The balance sheet reflects assets held for sale (and liabilities held for sale, if any) as of September 30, 2025. The statement of operations presents (loss) from continuing operations separately from (loss) from discontinued operations, net of tax, and basic/diluted loss per share is shown for continuing operations, discontinued operations, and total (see Note 7 — Loss Per Share).
Current wording
Results of the disposed product business are presented as discontinued operations for all periods shown. Continuing operations primarily comprise warranty support, corporate and restructuring costs. The balance sheet reflects assets and liabilities related to discontinued operations. The statement of operations presents (loss) from continuing operations separately from gain (loss) from discontinued operations, net of tax, and basic/diluted income (loss) per share is shown for continuing operations, discontinued operations, and total (see Note 7 — Income (Loss) Per Share).
Previous wording
We have incurred net losses and used cash in operations for the periods presented. Our ability to meet obligations as they come due depends on the timing and magnitude of cash available after the asset sale (net of costs), collections of receivables and other assets, management of restructuring costs, and access to additional financing or further strategic transactions, if required. These conditions raise substantial doubt about our ability to continue as a going concern withinone year after the issuance of these financial statements. Management’s plans include executing its restructuring and a Strategic Transaction efficiently, managing warranty exposure, monetizing residual assets, and prioritizing liquidity while completing the Class A redemption process. See Note 1 — Basis of Presentation, Note 2, Note 3, and Subsequent Events.
Current wording
We have incurred net losses and used cash in operations for the periods presented. Our ability to meet obligations as they come due depends on the timing and magnitude of cash from residual asset monetization, collections, and access to additional financing or a Strategic Transaction. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the issuance of these financial statements. Management’s plans include managing warranty exposure, collecting accounts receivable and recovering prepaid assets, and pursuing strategic alternatives. See Note 1 — Going Concern for additional information.
Previous wording
Execution of therestructuring and a Strategic Transaction involves risks, including warranty claim variability, timing of asset monetization, vendor and customer responses to our transition, and the cost and availability of essential public company services. Actual outcomes may differ materially from our current expectations. We are evaluating lease terminations or assignments associated with facilities formerly used by the disposed business. We will recognize lease exit costs or ROU asset impairments in periods when such actions are probable and amounts are reasonably estimable.
Current wording
Execution of the restructuring and any Strategic Transaction involves risks, including warranty claim variability, timing of asset monetization, and the cost and availability of essential public-company services. Actual outcomes may differ materially from current expectations.
Previous wording
Continuing operations in the periods presented primarily comprise corporate activities (public-company reporting, governance and compliance), warranty support for legacy products, and restructuring actions associated with the post-disposition profile. As expected, we recorded no product revenue in continuing operations for thethree andnine months ended September 30, 2025 and 2024.
Current wording
Continuing operations in Q1 2026 primarily comprise corporate activities (public-company reporting, governance, and compliance), warranty support for legacy products, and restructuring actions. We recorded no product revenue in continuing operations for thethree months ended March 31, 2026.
Previous wording
General & administrative (G&A) - G&A increased modestly in Q3-2025 versus Q3-2024 and increased year-to-date, driven primarily by legal, advisory and regulatory fees associated with the strategic review and disposition process, audit and tax fees, D&O insurance, and incremental US accounting headcount to meet compliance needs.
Current wording
General & administrative (G&A) - General & administrative (G&A) expenses in Q1 2026 were driven primarily by legal, advisory, and regulatory fees associated with the strategic review, disposition process, audit and tax fees, D&O insurance, and incremental accounting and compliance costs. S&M and R&D expenses in continuing operations were immaterial following the classification of the product business as held for sale.
Previous wording
Ourgross profit decreased from $639 during 2024-Q3 to a loss of $(886) during 2025-Q3.
Current wording
Our gross profit decreased from $148 during 2025-Q1 to a loss of $88 during 2026-Q1.
Previous wording
Operating expenses include sales and marketing (“S&M”) expenses, research and product development (“R&D”) expenses and general and administrative (“G&A”) expenses. Total operating expenses in 2025-Q3 were $1.2 million compared to $2.0 million in 2024-Q3. Total operating expenses thru 2025-YTD were $6.2 million compared to $6.5 million observing the same 9-month period in 2024. The following contains a more detailed discussion of expenses related to sales and marketing, research and product development, general and administrative, and other items.
Current wording
Operating expenses include sales and marketing (“S&M”) expenses, research and product development (“R&D”) expenses and general and administrative (“G&A”) expenses. Total operating expenses in 2026-Q1 were $264 compared to $2,168 in 2025-Q1. The following contains a more detailed discussion of expenses related to sales and marketing, research and product development, general and administrative, and other items.
Previous wording
S&M expenses were $0.4 million in Q3-2025, compared to $1.1 million in Q3-2024, while the year-to-date results for thenine months ended September 30, showed $2.9 million in 2025 compared to $3.6 million in 2024. Both comparisons are the result of decreased sales commissions on fewer sales as well as lowered marketing spend that was offset by severance expense from 2025 Q3 reduction in force being recognized.
Current wording
S&M expenses were $33 in Q1-2026, compared to $1,116 in Q1-2025. Both comparisons are the result of decreased sales commissions on fewer sales as well as lowered marketing spend inclusive of the reduction in force completed in Q3 of 2025.
Previous wording
R&D expenses were, $0.7 million in Q3-2025, compared to $0.8 million in Q3-2024, while the year-to-date results for thenine months ended September 30, showed $2.7 million in 2025 compared to $2.5 million in 2024. The decrease in comparing the quarterly results was due to a decrease in headcount. The increase in comparing the year-to-date results was primarily due to severance payments made in the Indian subsidiary and severance expense accrued in the US in 2025-Q 2 partially offset by reduction in personnel in the US.
Current wording
R&D expenses were $9 in Q1-2026, compared to $691 in Q1-2025. The decrease in comparing the quarterly results was due to a decrease in headcount.
Previous wording
Other income (expense), net includes gain or loss on disposal of assets and impairment charges related to assets being held for sale. Other income for thethree and nine months ended September 30, 2025 included a $10.7 million charge to impairment related to marking inventory and IP held for sale for fair market value, compared to $0.0 million for thethree and nine months ended September 2024.
Current wording
Other income (expense), net includes gain or loss on disposal of assets and impairment charges related to assets being held for sale. Other income for the three months ended March 31, 2026 included a $78 charge for expenses related to closure of foreign subsidiaries, compared to $0 for thethree months ended March 2025.
Previous wording
Cash provided by (used in) investing activities was ($0.0) million for thenine months ended September 30, 2025, compared to $2.9 million for thenine months ended September 30, 2024. The decrease in cash provided by investing activities for the comparative period primarily reflects the liquidation of the Company’s investment portfolio during 2024, which generated $3.2 million of proceeds in the prior year, less amounts paid for property, plant, equipment and software.
Current wording
Cash provided by (used in) investing activities was $0 for thethree months ended March 31, 2026, compared to $0 used in the prior-year period.
Previous wording
In furtherance of the Asset Sale pursuit, the Company completed aone-time special stock dividend of Class A Redeemable Preferred Stock, payable July 18, 2025 to holders of record of our common stock on July 11, 2025, which entitles holders of the Class A Redeemable Preferred Stock to 100% of net proceeds from any Asset Sale upon redemption. This structure aligns stockholder interests with the strategic process but depends on the successful completion of the Asset Sale for value realization.
Current wording
In furtherance of the Asset Sale pursuit, the Company completed a one-time special stock dividend of Class A Redeemable Preferred Stock, payable July 18, 2025 to holders of record of our common stock on July 11, 2025, which entitles holders of the Class A Redeemable Preferred Stock to 100% of net proceeds from any Asset Sale upon redemption (see Notes 3 and 15 – the redemption occurred on April 21, 2026 at par value of $2). This structure aligns stockholder interests with the strategic process but depends on the successful completion of the Asset Sale for value realization. See Note 3 – Class A Redeemable Preferred Stock.
Previous wording
As of September 30, 2025, First Finance Ltd. beneficially owned approximately 32.4% of our common stock on an as-converted basis and has the right to nominatetwo directors to our Board. This concentration may influence strategic decisions, including the ongoing restructuring and possible Strategic Transactions, and could affect our ability to attract alternative financing or partners.
Current wording
As of March 31, 2026, First Finance Ltd. beneficially owned approximately 61.34% of our common stock on an as-converted basis and has the right to nominate two directors to our Board. This concentration may influence strategic decisions, including the ongoing restructuring and possible Strategic Transactions, and could affect our ability to attract alternative financing or partners.
Previous wording
As of September 30, 2025, we had inventory totaling $0.4 million, of which non-current inventory accounted for $0.0 million. This compares to total inventories of $0.4 million, which includes non-current inventory of $0.0 million as of December 31, 2024.
Current wording
As of March 31, 2026, we had inventory totaling $333. This compares to total inventories of $353 as of December 31, 2025.
Previous wording
The following table summarizes our contractual obligations as of September 30, 2025 (in millions):
Current wording
The following table summarizes our contractual obligations as of March 31, 2026 (in thousands):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The statement of operations includes (loss) income from discontinued operations, net of tax below (loss) from continuing operations; basic and diluted loss per share are presented for continuing operations, discontinued operations, and total (see Note 7 — Loss Per Share).