CLEARONE INC
For the period ended Jun 30, 2026. Filed Aug 14, 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.
Jun 30, 2026 · Filed Aug 14, 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 2026-03-31; filed 2026-05-15.
0001753926-26-000897
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001753926-26-001521
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 94 previous paragraphs and 103 current paragraphs.
52 unchanged; 31 reworded; 20 added; 11 removed; 0 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 (20)
Current report
On July 1, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, CLRO Merger Sub, Inc., a wholly owned subsidiary of the Company ("Merger Sub"), Cortigent, Inc. ("Cortigent"), and Vivani Medical, Inc. ("Vivani"), pursuant to which, subject to satisfaction or waiver of certain conditions, Merger Sub will merge with and into Cortigent, with Cortigent surviving as a wholly owned subsidiary of the Company (the "Merger"). The transaction is expected to be accounted for as a reverse recapitalization, with Cortigent treated as the accounting acquirer. Consummation is subject to the Financing as described, effectiveness of a registration statement on Form S-1, Nasdaq approval of an initial listing application resulting from the change-of-control determination described below, stockholder approvals, and other customary conditions. See Note 14 — Subsequent Events. The following discussion of the Company's historical results of operations should be read in that context, as the Company's continuing operations are expected to change substantially upon completion of the Merger.
Current report
June 30, 2026 – Entry into a $1.0 million related party loan facility with First Finance (see Note 4).
Current report
July 1, 2026 – Entry into Merger Agreement (see Note 14).
Current report
July 8, 2026 – Receipt of Nasdaq determination that the Merger constitutes a change of control under Listing Rule 5110(a) (see Note 14).
Current report
July 17, 2026 – Adoption of the 2026 Omnibus Incentive Plan and filing of a preliminary information statement on Schedule 14C (see Note 14).
Current report
July 31, 2026 – Entry into an employment agreement with the Company's Chief Financial Officer, effective upon completion of the Merger (see Note 14).
Current report
August 3, 2026 – Approval by written consent of holders of approximately 61.3% of the voting power of the issuance of the Consideration Shares and the adoption of the 2026 Omnibus Incentive Plan (see Note 14).
Current report
August 4, 2026 – Cancellation of the March 2, 2026 warrant to purchase 437,500 shares in connection with the Merger (see Notes 5 and 14).
Current report
August 10, 2026 – Filing of a registration statement on Form S-1 for the concurrent Merger financing of between $10.0 million and $15.0 million (see Note 14).
Current report
General & administrative (G&A) - General and administrative (G&A) expenses were $849 and $1,629 for the three andsix months ended June 30, 2026, compared to $1,092 and $1,891 for the comparable 2025 periods, decreases of 22% and 14%, respectively. The decreases reflect the substantial reduction in corporate infrastructure and headcount following the Asset Sale, partially offset by legal, advisory, and other professional fees associated with the Merger and related transactions. G&A expenses consist primarily of audit and tax fees, legal and advisory fees, SEC reporting costs, D&O insurance, and other public-company compliance costs.
Current report
Sales & marketing (S&M) and research & development (R&D) - No sales and marketing or research and development expense was recognized in continuing operations during the periods presented; all such costs relate to the disposed product business and are reported within discontinued operations.
Current report
Restructuring/exit costs - No material restructuring or exit costs were recognized in continuing operations during the periods presented. Any such costs meeting the recognition criteria of ASC 420 are recorded in the period incurred.
Current report
R&D expenses were $(26) in Q2-2026, compared to $1,359 in Q2-2025, while the year-to-date results for the six months ended June 30, showed $(17) in 2026 compared to $2,050 in 2025. The change in the quarterly results reflect the reversal of previously accrued amounts following the wind-down of product development activities.
Current report
Other income (expense), net within discontinued operations was $50 for the three months ended June 30, 2026 and $(28) for the six months ended June 30, 2026. The six-month amount reflects a $78 charge for costs associated with the closure of the Company's former foreign subsidiaries, partially offset by a $50 credit from the reversal of a liability accrued in a prior period in connection with the anticipated redemption of the Class A Redeemable Preferred Stock. That accrual was separate from the redemption obligation described in Note 3, which was settled in cash in April 2026, and was reversed at June 30, 2026 upon confirmation that no further amounts were payable.
Current report
The Company's total net loss was $(914) for the second quarter of 2026, compared to $(4,572) for the second quarter of 2025, and $(1,401) for the 2026 year-to-date period, compared to $(7,406) for the comparable 2025 period. The reduction in net loss primarily reflects the absence of the operating losses of the disposed product business, now presented within discontinued operations, together with a $763 income tax benefit recorded in discontinued operations from the release of uncertain tax positions.
Current report
As of June 30, 2026, cash, cash equivalents and restricted cash were $522, compared to $739 as of December 31, 2025. Of the $522, $75 was unrestricted cash and cash equivalents and $447 was restricted cash representing undisbursed proceeds of the First Finance loan, the disbursement of which requires lender approval (see Note 1). Working capital was $47 as of June 30, 2026 compared to $209 as of December 31, 2025.
Current report
Cash used in operating activities was $2,445 for the six months ended June 30, 2026 ($1,585 used in continuing operations and $860 used in discontinued operations), compared to $2,568 for the comparable 2025 period.
Current report
Cash provided by financing activities was $2,228 for the six months ended June 30, 2026, consisting of $1,750 of proceeds from the March 2026 private placement and $500 from the First Finance loan, partially offset by $22 to repurchase warrants, compared to $4,000 in the prior-year period ($1,000 from common stock sales and $3,000 from the convertible note).
Current report
On June 30, 2026, the Company entered into a Loan Agreement with First Finance providing for advances of up to $1,000, of which $500 was received on June 30, 2026 and $500 was received on July 16, 2026. All amounts bear interest at 11% per annum and mature on December 30, 2026, or such other date as the parties may mutually agree in writing. The Company's near-term liquidity depends on the proceeds of this facility and on completion of the Merger and the concurrent registered financing of between $10,000 and $15,000 described in Note 14. Completion of the Financing is a condition to the Merger and is subject to effectiveness of a registration statement on Form S-1 and market conditions. There can be no assurance the Financing or the Merger will be completed. These conditions raise substantial doubt about the Company's ability to continue as a going concern. See Note 1 — Going Concern.
Current report
The Company had previously issued a one-time special stock dividend of Class A Redeemable Preferred Stock, which was mandatorily redeemable upon an Asset Sale. The redemption was completed on April 21, 2026 at par value for aggregate consideration of $2, and holders received no distribution of Asset Sale proceeds (see Note 3).
Removed paragraphs (11)
Previous report
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 report
Sales & marketing (S&M) and research & development (R&D) - Following classification of the product business as held for sale, S&M and R&D expenses in continuing operations were immaterial for the periods presented. To the extent severance or other exit costs were recognized in the quarter, such costs are reflected in the relevant operating expense caption in the period incurred.
Previous report
Restructuring/exit costs - To the extent actions met ASC 420 recognition criteria, we recorded employee termination or contract termination costs; otherwise, such costs will be recognized when probable and reasonably estimable.
Previous report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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.
Reworded paragraphs (31)
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, 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.
Current wording
This report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E 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, statements regarding the Merger and the Financing described below, including the timing and likelihood of their completion; the effectiveness of a registration statement on Form S-1; the Company's ability to satisfy Nasdaq's initial listing requirements in connection with the change of control resulting from the Merger and to maintain compliance with Nasdaq's continued listing standards; the receipt of required stockholder approvals; the possibility that the Merger Agreement may be terminated; substantial doubt about the Company's ability to continue as a going concern; the Company's liquidity and its sources of and need for future financing; the fulfillment of legacy product warranty obligations and collection of remaining receivables; 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…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
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 wording
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 to maximize stockholder value, which resulted in the Agreement and Plan of Merger Agreement described below.
Previous wording
September 2025 – Repurchase and cancellation of all then-outstanding warrants (see Note 5).
Current wording
September 2025 – Repurchase and cancellation of certain then-outstanding warrants (see Note 5).
Previous wording
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 wording
March 2, 2026 – Private placement with First Finance Ltd. (“First Finance”), the Company's largest stockholder, for 437,500 shares and a warrant to purchase 437,500 additional shares (see Note 10).
Previous wording
April 1, 2026 – Transition of CEO Derek Graham to a consulting arrangement (see Note 15).
Current wording
April 1, 2026 – Transition of CEO Derek Graham to a consulting arrangement (as reported on our Current Report on Form 8-K filed April 3, 2026).
Previous wording
April 7, 2026 – Termination of the Edgewater Corporate Park lease and receipt of Nasdaq continued listing deficiency notice (see Notes 9 and 15).
Current wording
April 7, 2026 – Termination of the Edgewater Corporate Park lease and receipt of Nasdaq continued listing deficiency notice (see Note 9 and Part II, Item 1A).
Previous wording
April 10, 2026 – Board approval of Class A Preferred Stock redemption at par (April 21, 2026) (see Notes 3 and 15).
Current wording
April 10, 2026 – Board of Directors' approval of Class A Preferred Stock redemption at par (April 21, 2026) (see Note 3).
Previous wording
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 wording
Following the Asset Sale, our continuing operations generate no 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 completing the Merger described above and in Note 14 — Subsequent Events. 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).
Previous wording
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 wording
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) and pursuing strategic alternatives to maximize stockholder value, which resulted in the Merger Agreement described above and in Note 14 — Subsequent Events. We do not expect to generate revenue from continuing operations in the foreseeable future.
Previous 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.
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. No service or parts revenue was recognized, in continuing operations during the periods presented. We evaluate warranty accruals each period and adjust estimates based on observed claim rates and resolution costs.
Previous 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.
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 of Directors' and compliance expenses.
Previous wording
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 wording
Management's near-term priorities include completing the Merger and the Financing described in Note 14, monetizing any remaining assets, collecting receivables, and settling liabilities. The Class A Redeemable Preferred Stock was redeemed at par on April 21, 2026 (see Note 3), and all three facility leases had been terminated by April 7, 2026 (see Note 9).
Previous wording
The classification of the disposal group of assets as held for sale and presentation as discontinued operations required management to make significant estimates, including the measurement of fair value less costs to selloff the disposal group of assets (ASC 360) and the warranty obligation retained by the Company (ASC 460). These estimates use assumptions regarding market participant pricing, transaction costs, expected claim rates and unit repair costs. Actual results could differ materially from these estimates.
Current wording
The classification of the disposal group of assets as held for sale and presentation as discontinued operations required management to make significant estimates, including the measurement of fair value less the costs to sell, of the disposal group (ASC 360) and the warranty obligation retained by the Company (ASC 460). These estimates use assumptions regarding market participant pricing, transaction costs, expected claim rates and unit repair costs. Actual results could differ materially from these estimates.
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 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.
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 $1.0 million related party loan facility with First Finance (see Note 4) and on completion of the Merger and the concurrent registered financing of between $10.0 million and $15.0 million pursuant to the Company’s registration statement on Form S-1 filed on August 10, 2026 for a best-efforts offering of a minimum of 2,857,142 units and a maximum of 4,285,714 units (the “Units) at $3.50 per Unit, to raise minimum aggregate gross proceeds of $10.0 million and maximum aggregate gross proceeds of $15.0 million (the "Financing"). Each Unit is comprised of one share of common stock and one warrant. The Warrants will initially have an exercise price of $10.00 per share of common stock, will be exercisable immediately, and will expire six months from the date of issuance. Completion of the Merger and the Financing is subject to conditions outside our control, including effectiveness of a registration statement on Form S-1, Nasdaq approval of an initial listing application, and stockholder approvals. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date these financial statements are issued, and management has concluded that its plans do not alleviate that doubt. See Note 1 — Going Concern for additional information.
Previous 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.
Current wording
Execution of the Merger involves risks, including the possibility that the Merger or the Financing is not completed, that the post-transaction entity does not satisfy Nasdaq's initial listing requirements, warranty claim variability, and the cost and availability of essential public-company services. Actual outcomes may differ materially from current expectations.
Previous wording
Results of Operations for the three months ended March 31, 2026
Current wording
Results of Operations for the three and six months ended June 30, 2026
Previous wording
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 wording
Following the Asset Sale on October 24, 2025, the Company’s continuing operations generate no 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):
Previous 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.
Current wording
Continuing operations primarily comprise corporate activities (public-company reporting, governance, and compliance) and warranty support for legacy products. We recorded no revenue in continuing operations during the three orsix months ended June 30, 2026 or the comparable 2025 periods.
Previous wording
Cost of goods sold in continuing operations reflects warranty-related parts and labor and immaterial service inventory usage. With no revenue in continuing operations for the periods presented, gross margin percentages are not meaningful; the period-over-period dollar changes reflect timing and volume of warranty claims and repairs.
Current wording
Cost of goods sold in continuing operations reflects warranty-related parts and labor. Cost of goods sold was $70 and $140 for the three andsix months ended June 30, 2026, compared to $100 and $127 for the comparable 2025 periods. Because continuing operations generated no revenue, gross margin percentages are not meaningful, and the period-over-period changes reflect the timing and volume of warranty claims and repairs.
Previous wording
Other income (expense), net reflects interest income on cash equivalents, interest expense on the convertible note through its conversion on July 21, 2025, and immaterial gains/losses on asset disposals related to restructuring activities.
Current wording
Other income (expense), net in continuing operations was $0 for thethree and six months ended June 30, 2026, compared to $(5) and $7 for the comparable 2025 periods. The 2025 amounts reflect interest expense on the convertible note through its conversion on July 21, 2025 and interest income on cash equivalents.
Previous wording
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 wording
Discontinued operations generated no revenue in the three or six months ended June 30, 2026, compared to $1,916 in the second quarter of 2025 and $4,229 in the 2025 year-to-date period, 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.
Previous wording
Our gross profit decreased from $148 during 2025-Q1 to a loss of $88 during 2026-Q1.
Current wording
Our gross loss decreased from $131 during 2025-Q2 to a loss of $107 during 2026-Q2.
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 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.
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-Q2 were $(92) compared to $3,236 in 2025-Q2. Total operating expenses thru 2026-YTD were $172 compared to $5,404 observing the same 6-month period in 2025.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 $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.
Current wording
S&M expenses were $40 in Q2-2026, compared to $1,383 in Q2-2025 while the year-to-date results for the six months ended June 30, showed $73 in 2026 compared to $2,499 in 2025. Both comparisons are the result of no sales commissions during 2026 due to no sales as well as lowered marketing spend inclusive of the reduction in force completed in Q3 of 2025.
Previous wording
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 wording
G&A expenses were $(106) in Q2-2026, compared to $494 in Q2-2025, while the year-to-date results for the six months ended June 30, showed $116 in 2026 compared to $855 in 2025 The credit in Q2 2026 is due to decreased allowance for doubtful accounts causing a credit to bad debt expense. The overall changes from 2025 were due to decreased expenses related to the exploration of strategic alternatives and closing down facilities.
Previous wording
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 wording
During thesix months ended June 30, 2026 the Company recorded an income tax benefit of $(763) (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 six months ended June 30, 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.
Previous wording
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 wording
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 focused on completing the Merger with Cortigent and the Financing described in Note 14. The Company completed the redemption of the Class A Redeemable Preferred Stock on April 21, 2026 and continues to collect remaining receivables and settle obligations. We expect completion of the Merger to be the primary focus for the remainder of 2026.
Previous 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.
Current wording
Investing activities used $0 in the 2026 period, compared to $21 used in the prior-year period (in discontinued operations).
Previous 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.
Current wording
As of June 30, 2026, First Finance 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 Merger and related transactions described in Note 14, and could affect our ability to attract alternative financing or partners.
Previous wording
As of March 31, 2026, we had inventory totaling $333. This compares to total inventories of $353 as of December 31, 2025.
Current wording
As of June 30, 2026, we had inventory totaling $304. This compares to total inventories of $353 as of December 31, 2025.
Previous wording
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 wording
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 during thesix months ended June 30, 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).