<SEC-DOCUMENT>0000840715-12-000033.txt : 20120822
<SEC-HEADER>0000840715-12-000033.hdr.sgml : 20120822
<ACCEPTANCE-DATETIME>20120821174159
ACCESSION NUMBER:		0000840715-12-000033
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20120813
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20120822
DATE AS OF CHANGE:		20120821

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CLEARONE COMMUNICATIONS INC
		CENTRAL INDEX KEY:			0000840715
		STANDARD INDUSTRIAL CLASSIFICATION:	RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
		IRS NUMBER:				870398877
		STATE OF INCORPORATION:			UT
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33660
		FILM NUMBER:		121048492

	BUSINESS ADDRESS:	
		STREET 1:		5225 WILEY POST WAY
		STREET 2:		SUITE 500
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84116
		BUSINESS PHONE:		8019757200

	MAIL ADDRESS:	
		STREET 1:		5225 WILEY POST WAY
		STREET 2:		SUITE 500
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84116

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GENTNER COMMUNICATIONS CORP
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GENTNER ELECTRONICS CORP
		DATE OF NAME CHANGE:	19910808
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>clrofinancialsrelease_form8k.htm
<DESCRIPTION>CLEARONE 8-K FINANCIALS RELEASE
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<P style="margin:0px" align=center><B>UNITED STATES</B></P>
<P style="margin:0px" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0px" align=center><B>WASHINGTON, D.C. 20549</B></P>
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<P style="margin:0px; font-size:16pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0px" align=justify>&#160;</P>
<P style="margin:0px" align=center><B>CURRENT REPORT PURSUANT</B></P>
<P style="margin:0px" align=center><B>TO SECTION 13 OR 15(D) OF</B></P>
<P style="margin:0px" align=center><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin:0px" align=justify>&#160;</P>
<P style="margin:0px" align=center>Date of report (Date of earliest event reported): <B><U>August 13, 2012</U></B></P>
<P style="margin:0px" align=justify>&#160;</P>
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<P style="margin:0px; font-size:16pt" align=center><B><U>ClearOne Communications, Inc.</U></B></P>
<P style="margin:0px" align=center>(Exact Name of Registrant as Specified in Its Charter)</P>
<P style="margin:0px" align=justify>&#160;</P>
<P style="margin:0px" align=center><B><U>Utah</U></B></P>
<P style="margin:0px" align=center>(State or Other Jurisdiction of Incorporation)</P>
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</TD><TD style="margin-top:0px; border-bottom:2px solid #000000" valign=top width=345.067><P style="margin:0px; padding-right:1.067px" align=center><B>87-0398877</B></P>
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<TR><TD style="margin-top:0px" valign=top width=383.467><P style="margin:0px; padding-right:1.067px" align=center>(Commission File Number)</P>
</TD><TD style="margin-top:0px" valign=top width=39.467><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=345.067><P style="margin:0px; padding-right:1.067px" align=center>(I.R.S. employer</P>
<P style="margin:0px; padding-right:1.067px" align=center>identification number)</P>
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<TR><TD style="margin-top:0px; border-bottom:2px solid #000000" valign=top width=554.133><P style="margin:0px; padding-right:1.067px" align=center><B>5225 Wiley Post Way, Suite 500</B></P>
<P style="margin:0px; padding-right:1.067px" align=center><B>Salt Lake City, Utah</B></P>
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</TD><TD style="margin-top:0px; border-bottom:2px solid #000000" valign=top width=180.067><P style="margin:0px; padding-right:1.067px" align=center><B>&#160;</B></P>
<P style="margin:0px; padding-right:1.067px" align=center><B>84116</B></P>
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</TD><TD style="margin-top:0px" valign=top width=33.8><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=180.067><P style="margin:0px; padding-right:1.067px" align=center>(Zip Code)</P>
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<P style="margin:0px" align=center><B><U>(801) 975-7200</U></B></P>
<P style="margin:0px" align=center>(Registrant<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s Telephone Number, Including Area Code)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B><U>Not applicable</U></B></P>
<P style="margin:0px" align=center>(Former Name or Former Address, if Changed Since Last Report)</P>
<P style="margin:0px" align=justify>&#160;</P>
<P style="margin:0px">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">[&#160;&#160;&#160;]&#160;&#160;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>
<P style="margin:0px">[&#160;&#160;&#160;]&#160;&#160;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>
<P style="margin:0px">[&#160;&#160;&#160;]&#160;&#160;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>
<P style="margin:0px">[&#160;&#160;&#160;]&#160;&#160;Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </P>
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<P style="margin:0px; page-break-before:always"><B>Item 2.02. &nbsp;Results of Operations and Financial Condition</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px">On August 13, 2012, ClearOne Communications, Inc. issued a press release announcing its financial results for the three and six months ended June 30, 2012. The full text of the press release is attached as Exhibit 99.1</P>
<P style="margin:0px">&#160;</P>
<P style="margin:0px"><B>Item 9.01. Financial Statements and Exhibits</B></P>
<P style="margin-top:0.067px; margin-bottom:0px"><BR></P>
<P style="margin-top:0.067px; margin-bottom:0px">(d) Exhibits.</P>
<P style="margin-top:0.067px; margin-bottom:0px">&nbsp;</P>
<P style="line-height:0.05pt; margin:0px"><BR></P>
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<TR><TD style="margin-top:0px; border-bottom:1.333px solid #000000" valign=bottom width=91.467><P style="margin:0px; padding-right:1.067px; font-size:8pt"><B>Exhibit No.</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=19.467><P style="margin:0px; padding-right:1.067px; font-size:5pt" align=center><B>&nbsp;</B></P>
</TD><TD style="margin-top:0px; border-bottom:1.333px solid #000000" valign=bottom width=657.067><P style="margin:0px; padding-right:1.067px; font-size:8pt" align=center><B>Description</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=91.467><P style="margin:0px; padding-right:1.067px">&nbsp;</P>
</TD><TD style="margin-top:0px" valign=bottom width=19.467><P style="margin:0px; padding-right:1.067px">&nbsp;</P>
</TD><TD style="margin-top:0px" valign=top width=657.067><P style="margin:0px; padding-right:1.067px">&nbsp;</P>
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<TR><TD style="margin-top:0px" valign=top width=91.467><P style="margin:0px; padding-right:1.067px">Exhibit 99.1</P>
</TD><TD style="margin-top:0px" valign=bottom width=19.467><P style="margin:0px; padding-right:1.067px; font-size:5pt">&nbsp;</P>
</TD><TD style="margin-top:0px" valign=top width=657.067><P style="margin:0px; padding-right:1.067px">Press Release dated August 13, 2012 titled <font style='font-family:Arial Unicode MS,Times New Roman'>&#8220;</font>ClearOne Reports 2012 Second Quarter Financial Results<font style='font-family:Arial Unicode MS,Times New Roman'>&#8221;</font>.</P>
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<P style="margin:0px; page-break-before:always" align=center><B>SIGNATURES</B></P>
<P style="margin:0px" align=justify>&#160;</P>
<P style="margin:0px">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
<P style="margin:0px" align=justify>&#160;</P>
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<TR><TD style="margin-top:0px" valign=top width=290.4><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=477.6 colspan=2><P style="margin:0px; padding-right:2.4px" align=justify>CLEARONE COMMUNICATIONS, INC.</P>
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<TR><TD style="margin-top:0px" valign=top width=290.4><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px">&#160;</P>
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</TD><TD style="margin-top:0px" valign=top width=424.667><P style="margin:0px; padding-right:1.067px">&#160;</P>
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<TR><TD style="margin-top:0px" valign=top width=290.4><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=424.667><P style="margin:0px; padding-right:1.067px">&#160;</P>
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<TR><TD style="margin-top:0px" valign=top width=290.4><P style="margin:0px; padding-right:1.067px" align=justify>Date:&#160;August 21, 2012</P>
</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px" align=justify>By:</P>
</TD><TD style="margin-top:0px; border-bottom:2px solid #000000" valign=top width=424.667><P style="margin:0px; padding-right:1.067px" align=justify>/s/ Narsi Narayanan</P>
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</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=424.667><P style="margin:0px; padding-right:1.067px" align=justify>Narsi Narayanan</P>
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</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px">&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=424.667><P style="margin:0px; padding-right:1.067px" align=justify>Vice President of Finance</P>
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</TD><TD style="margin-top:0px" valign=top width=52.933><P style="margin:0px; padding-right:1.067px">&#160;</P>
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<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>exhibit99z1.htm
<DESCRIPTION>EXHIBIT 99.1 PRESS RELEASE
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<P style="margin:0px" align=right><B>Exhibit 99.1</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><img src="exhibit99z1001.jpg" alt="[exhibit99z1001.jpg]" align=middle></P>
<P style="margin:0px"><B><U>Contact: </U></B></P>
<P style="margin:0px">Brent Johnson</P>
<P style="margin:0px">Investor Relations </P>
<P style="margin:0px">801-303-3577</P>
<P style="margin:0px">brent.johnson@clearone.com</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B>CLEARONE REPORTS 2012 SECOND QUARTER FINANCIAL RESULTS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B>SALT LAKE CITY, UTAH </B><font style='font-family:Arial Unicode MS,Times New Roman'>&#8212;</font><B> August 13, 2012 </B><font style='font-family:Arial Unicode MS,Times New Roman'>&#8212;</font> ClearOne (NASDAQ: CLRO) today reported its financial results for the three and six months ended June 30, 2012.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">For the 2012 second quarter, revenue was $11.7 million compared with $11.9 million for the second quarter of 2011. &nbsp;Gross profit was $7.1 million, or 61% of revenue, compared with $7.2 million, or 60% of revenue, for the second quarter of 2011. &nbsp;Operating expenses increased to $6.0 million from $5.3 million in the prior year second quarter. &nbsp;Operating income declined to $1.1 million from $1.9 million for the second quarter of last year. &nbsp;Net income declined to $575,000, or $0.06 per diluted share, from $1.3 million, or $0.14 per diluted share, for the 2011 second quarter. &nbsp;Non-GAAP net income decreased to $905,000, or $0.10 per diluted share, from $1.7 million, or $0.18 per diluted share, for the second quarter of 2011. &nbsp;Non-GAAP Adjusted EBITDA decreased to $1.9 million, or $0.20 per diluted share, from $2.6 million, or $0.27 per diluted share, for the second quarter of 2011. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">For the first half of 2012, revenue was $21.8 million compared with $22.6 million for the same period in 2011. &nbsp;Gross profit was $13.2 million, or 61% of revenue, compared with $13.5 million, or 60% of revenue, for the first half of 2011. &nbsp;Operating expenses, excluding litigation proceeds, increased to $11.6 million from $10.4 million in the first six months of the prior year. &nbsp;Operating income declined to $1.8 million from $3.1 million for the same period in the previous year. &nbsp;Net income declined to $1.0 million, or $0.11 per diluted share, from $2.1 million, or $0.23 per diluted share, for the 2011 first half. &nbsp;Non-GAAP net income decreased to $1.5 million, or $0.17 per diluted share, from $2.8 million, or $0.30 per diluted share, for the first half of 2011. &nbsp;Non-GAAP Adjusted EBITDA decreased to $3.1 million, or $0.33 per diluted share, from $4.5 million, or $0.48 per diluted share, for the first half of 2011. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The reconciliation between GAAP and Non-GAAP measures is available in the tables attached to this release. The results for the first six months of 2012 included the operations of VCON, a video conferencing solutions company acquired in February 2012. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">At June 30, 2012, the Company had cash and cash equivalents of $10.4 million, and no debt after paying for the acquisition of VCON.</P>
<P style="margin:0px"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8220;</font>Our financial performance for the 2012 second quarter met our expectations but did not match last year<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s record-setting results, due to overall softness in all the markets in which we operate,<font style='font-family:Arial Unicode MS,Times New Roman'>&#8221;</font> said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne. <font style='font-family:Arial Unicode MS,Times New Roman'>&#8220;</font>We continue to build and align our sales channel and internal sales organization for the new video solutions we are bringing to the market. The new products from our acquisition of VCON are in production and will be shipping under the ClearOne brand at the end of this month. The introduction of these new software-based video conferencing products complements our industry-leading enterprise audio, expands our total available market and we believe will make immediate contributions to ClearOne<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s top-line.<font style='font-family:Arial Unicode MS,Times New Roman'>&#8221;</font></P>
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<P style="line-height:14.4pt; margin:0px; page-break-before:always"><B>Recent Highlights:</B></P>
<P style="line-height:14.4pt; margin:0px"><BR></P>
<P style="line-height:14.4pt; margin-top:0px; margin-bottom:-2px; text-indent:24px; width:48px; font-family:Symbol; font-size:12pt; float:left">&#183;</P>
<P style="line-height:14.4pt; margin:0px; padding-left:48px; text-indent:-2px">At InfoComm, ClearOne demonstrated COLLABORATE<font style='font-family:Arial Unicode MS,Times New Roman'>&#8482;</font>, software-based video conferencing solutions for desktop, room, infrastructure and management to provide future-proof solutions for video and audio conferencing and collaboration. </P>
<P style="line-height:14.4pt; margin-top:0px; margin-bottom:-2px; text-indent:24px; width:48px; font-family:Symbol; font-size:12pt; clear:left; float:left">&#183;</P>
<P style="line-height:14.4pt; margin:0px; padding-left:48px; text-indent:-2px">ClearOne introduced at InfoComm CONNECT<font style='font-family:Arial Unicode MS,Times New Roman'>&#8482;</font> AVB and CONNECT<font style='font-family:Arial Unicode MS,Times New Roman'>&#8482;</font> CobraNet<font style='font-family:Arial Unicode MS,Times New Roman'>&#8482;</font>, its first network audio bridges to provide a modular approach for networked audio using ClearOne<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s flagship audio products. </P>
<P style="line-height:14.4pt; margin-top:0px; margin-bottom:-2px; text-indent:24px; width:48px; font-family:Symbol; font-size:12pt; clear:left; float:left">&#183;</P>
<P style="line-height:14.4pt; margin:0px; padding-left:48px; text-indent:-2px">The company also unveiled at the tradeshow the Beamforming Microphone Array, the Pro Audio industry's first professional-grade microphone array with patent-pending audio beamforming with adaptive steering and next generation AEC technology. </P>
<P style="line-height:14.4pt; margin-top:0px; margin-bottom:-2px; text-indent:24px; width:48px; font-family:Symbol; font-size:12pt; clear:left; float:left">&#183;</P>
<P style="line-height:14.4pt; margin:0px; padding-left:48px; text-indent:-2px">Also, Frost &amp; Sullivan, recognized ClearOne with the 2012 Global Tabletop Audio Conferencing Endpoints Product Line Strategy Award. The award recognizes ClearOne<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s breadth of product line for emerging UC and VoIP trends for enterprise and SMBs. The Product Line Strategy Award criteria measured ClearOne's tabletop solutions against the competition in several categories, including breadth of product line, size of addressable customer base, impact on market share and breadth of applications and markets served. When compared to competitive solutions, the Frost &amp; Sullivan analysis gave top ratings to ClearOne in every category, including a perfect score for breadth of applications and markets served.</P>
<P style="line-height:14.4pt; margin:0px; clear:left"><BR></P>
<P style="line-height:14.4pt; margin:0px"><B>Non-GAAP Financial Measures</B> </P>
<P style="line-height:14.4pt; margin:0px">ClearOne provides non-GAAP financial information in the form of Non-GAAP net income, EBITDA, Adjusted EBITDA and corresponding earnings per share to investors to supplement GAAP financial information. &nbsp;ClearOne believes that excluding certain items from GAAP results allows ClearOne's management to better understand ClearOne's consolidated financial performance from period to period as management does not believe that the excluded items are reflective of underlying operating performance. &nbsp;Non-GAAP net income, EBITDA, Adjusted EBITDA and corresponding earnings per share excludes certain costs and expenses, the details of which are provided in the tables below containing the reconciliation between GAAP and Non-GAAP financial measures. &nbsp;The exclusion of these items in the non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. &nbsp;ClearOne believes non-GAAP financial measures will provide investors with useful information to help them evaluate ClearOne's operating results and projections. &nbsp;This non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating income, net income or other financial measures prepared in accordance with GAAP. &nbsp;There are limitations to the use of non-GAAP financial measures. &nbsp;Other companies, including companies in ClearOne's industry, may calculate non-GAAP financial measures differently than ClearOne does, limiting the usefulness of those measures for comparative purposes. &nbsp;A detailed reconciliation of Non-GAAP net income to GAAP net income is included with this news release. </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B>About ClearOne</B></P>
<P style="margin:0px">ClearOne is a global company that designs, develops and sells conferencing, collaboration, streaming and digital signage solutions for audio, video and data multimedia communication. &nbsp;The performance and simplicity of its advanced comprehensive solutions enhance the quality of life. &nbsp;ClearOne products are designed for business and residential use, offering unprecedented levels of functionality, reliability and scalability. &nbsp;More information about the Company can be found at www.clearone.com.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">This release contains <font style='font-family:Arial Unicode MS,Times New Roman'>&#8220;</font>forward-looking<font style='font-family:Arial Unicode MS,Times New Roman'>&#8221;</font> statements that are based on present circumstances and on ClearOne<font style='font-family:Arial Unicode MS,Times New Roman'>&#8217;</font>s predictions with respect to events that have not occurred, that may not occur, or that may occur with different consequences and timing than those now assumed or anticipated. &nbsp;Such forward-looking statements, including any statements of the plans and objectives of management for future operations, are not guarantees of future performance or results and involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements. &nbsp;Such forward-looking statements are made only as of the date of this release and ClearOne assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances. &nbsp;Readers should not place undue reliance on these forward-looking statements.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center># # #</P>
<P style="margin-top:5.533px; margin-bottom:5.533px; color:#0000FF"><U>http://www.b2i.us/irpass.asp?BzID=509&amp;to=ea&amp;s=0</U></P>
<P style="margin-top:0px; margin-bottom:11.133px"><BR></P>
<TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=430.667 /><TD width=109.333 /><TD width=140 /></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680 height=9.6 colspan=3><P style="margin:0px; font-size:9pt" align=center><B>CLEARONE COMMUNICATIONS, INC. </B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680 height=9.6 colspan=3><P style="margin:0px; font-size:9pt" align=center><B>CONDENSED CONSOLIDATED BALANCE SHEETS</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680 height=9.6 colspan=3><P style="margin:0px; font-size:9pt" align=center><B>(Dollars in thousands, except par value)</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>As of June 30, 2012</B></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>As of December 31, 2011</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Unaudited</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Audited</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt" align=center><B>ASSETS</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Current assets:</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Cash and cash equivalents</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-right:-88px; margin-bottom:-2px; text-indent:9.333px; width:97.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:88px; font-size:9pt; float:left" align=right>10,418&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-right:-120px; margin-bottom:-2px; text-indent:9.333px; width:129.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:120px; font-size:9pt; float:left" align=right>16,683&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Receivables, net of allowance for doubtful accounts of $61 and $149, respectively</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>7,409&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>8,457&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Inventories</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>15,064&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>12,565&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Deferred income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>3,025&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>2,987&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Prepaid expenses and other assets</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>1,501&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>740&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total current assets</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>37,417&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:121.333px; font-size:9pt; float:left" align=right>41,432&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Long-term inventories, net</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>2,064&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>1,905&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Property and equipment, net</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>2,135&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>2,338&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Intangibles, net</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>5,858&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>2,690&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Goodwill</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>1,939&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>1,153&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Other assets</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>64&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>41&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total assets</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-right:-88px; margin-bottom:-2px; text-indent:9.333px; width:97.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:88px; font-size:9pt; float:left" align=right>49,477&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-right:-112px; margin-bottom:-2px; text-indent:9.333px; width:121.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:112px; font-size:9pt; float:left" align=right>49,559&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt" align=center><B>LIABILITIES AND SHAREHOLDERS' EQUITY</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Current liabilities:</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Accounts payable</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-right:-88px; margin-bottom:-2px; text-indent:9.333px; width:97.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:88px; font-size:9pt; float:left" align=right>1,285&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-right:-120px; margin-bottom:-2px; text-indent:9.333px; width:129.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:120px; font-size:9pt; float:left" align=right>2,814&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Accrued liabilities</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>2,648&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>2,534&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Deferred product revenue</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>3,451&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>3,404&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total current liabilities</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>7,384&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:121.333px; font-size:9pt; float:left" align=right>8,752&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Deferred income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>128&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>101&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Deferred rent</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>487&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>494&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Other long-term liabilities</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>686&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>548&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total liabilities</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>8,685&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:121.333px; font-size:9pt; float:left" align=right>9,895&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Shareholders' equity:</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Common stock, par value $0.001, 50,000,000 shares authorized, &nbsp;&nbsp;&nbsp;9,125,774 and 9,098,152 shares issued and outstanding, &nbsp;respectively</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>9&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>9&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Additional paid-in capital</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>40,265&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>40,073&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Treasury stock at cost - 22,814 shares as of June 30, 2012</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>(92)</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; font-size:9pt">Retained earnings (accumulated deficit)</P>
</TD><TD style="margin-top:0px" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>610&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:129.333px; font-size:9pt; float:left" align=right>(418)</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total shareholders' equity</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:97.333px; font-size:9pt; float:left" align=right>40,792&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:121.333px; font-size:9pt; float:left" align=right>39,664&#160;</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=430.667 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total liabilities and shareholders' equity</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=109.333 height=9.6><P style="margin-top:0px; margin-right:-88px; margin-bottom:-2px; text-indent:9.333px; width:97.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:88px; font-size:9pt; float:left" align=right>49,477&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=140 height=9.6><P style="margin-top:0px; margin-right:-112px; margin-bottom:-2px; text-indent:9.333px; width:121.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:112px; font-size:9pt; float:left" align=right>49,559&#160;</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:11.133px">&nbsp;</P>
<P style="margin:6.667px"><BR></P>
<TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=293.667 /><TD width=105.333 /><TD width=100.933 /><TD width=14.8 /><TD width=103.467 /><TD width=100.933 /></TR>
<TR><TD style="margin-top:0px" valign=bottom width=719.133 height=9.6 colspan=6><P style="margin:0px; font-size:9pt" align=center><B>CLEARONE COMMUNICATIONS, INC.</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=719.133 height=9.6 colspan=6><P style="margin:0px; font-size:9pt" align=center><B>UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=719.133 height=9.6 colspan=6><P style="margin:0px; font-size:9pt" align=center><B>(Dollars in thousands, except per share value)</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=206.267 height=9.6 colspan=2><P style="margin:0px; font-size:8pt" align=center><B>Three months ended June 30,</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=204.4 height=9.6 colspan=2><P style="margin:0px; font-size:8pt" align=center><B>Six Months ended June 30,</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:8pt; float:left" align=right><B>2012&#160;</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:8pt; float:left" align=right><B>2011</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:8pt; float:left" align=right><B>2012&#160;</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:8pt; float:left" align=right><B>2011</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Revenue</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-right:-74.667px; margin-bottom:-2px; text-indent:8px; width:82.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:74.667px; font-size:9pt; float:left" align=right>11,655&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>11,890</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-right:-73.333px; margin-bottom:-2px; text-indent:8px; width:81.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:73.333px; font-size:9pt; float:left" align=right>21,809&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>22,591</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Cost of goods sold</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>4,562&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>4,734</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>8,608&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>9,133</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Gross profit</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>7,093&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>7,156</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>13,201&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>13,458</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Operating expenses:</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Sales and marketing</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>2,254&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>2,106</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>4,388&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>4,089</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Research and product development</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>2,029&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>1,816</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>4,037&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>3,453</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">General and administrative</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>1,686&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>1,361</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>3,191&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>2,833</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Proceeds from litigation</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>(250)</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>-</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Total operating expenses</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>5,969&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>5,283</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>11,366&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>10,375</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Operating income</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>1,124&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>1,873</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>1,835&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>3,083</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Other income (expense), net</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>(5)</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>7</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>11&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>18</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Income before income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>1,119&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>1,880</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>1,846&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>3,101</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Provision for income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>544&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>559</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>818&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>968</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Net income</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-right:-74.667px; margin-bottom:-2px; text-indent:8px; width:82.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:74.667px; font-size:9pt; float:left" align=right>575&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>1,321</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-right:-73.333px; margin-bottom:-2px; text-indent:8px; width:81.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:73.333px; font-size:9pt; float:left" align=right>1,028&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>2,133</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Basic earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-right:-74.667px; margin-bottom:-2px; text-indent:8px; width:82.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:74.667px; font-size:9pt; float:left" align=right>0.06&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>0.15</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-right:-73.333px; margin-bottom:-2px; text-indent:8px; width:81.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:73.333px; font-size:9pt; float:left" align=right>0.11&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>0.24</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Diluted earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-right:-74.667px; margin-bottom:-2px; text-indent:8px; width:82.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:74.667px; font-size:9pt; float:left" align=right>0.06&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>0.14</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-right:-73.333px; margin-bottom:-2px; text-indent:8px; width:81.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:73.333px; font-size:9pt; float:left" align=right>0.11&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-right:-68px; margin-bottom:-2px; text-indent:9.333px; width:77.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:68px; font-size:9pt; float:left" align=right>0.23</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Basic weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>9,107,420&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>8,992,500</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>9,102,786&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>8,962,171</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=293.667 height=9.6><P style="margin:0px; font-size:9pt">Diluted weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=105.333 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:82.667px; font-size:9pt; float:left" align=right>9,226,426&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>9,433,650</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=103.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:81.333px; font-size:9pt; float:left" align=right>9,224,727&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=100.933 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:77.333px; font-size:9pt; float:left" align=right>9,279,800</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:11.133px"><BR></P>
<P style="margin:6.667px"><BR></P>
<TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=284.133 /><TD width=69.067 /><TD width=72.533 /><TD width=69.467 /><TD width=14.8 /><TD width=74.4 /><TD width=72.533 /><TD width=70.4 /></TR>
<TR><TD style="margin-top:0px" valign=bottom width=727.333 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>CLEARONE COMMUNICATIONS, INC.</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=727.333 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>RECONCILIATION OF GAAP TO NON-GAAP NET INCOME</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=727.333 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>(Dollars in thousands, except per share value)</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=211.067 height=9.6 colspan=3><P style="margin:0px; font-size:8pt" align=center><B>Three months ended June 30, 2012</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=217.333 height=9.6 colspan=3><P style="margin:0px; font-size:8pt" align=center><B>Three months ended June 30, 2011</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.067 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>GAAP</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Adjustments</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.467 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Non-GAAP</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=74.4 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>GAAP</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Adjustments</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.4 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Non-GAAP</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Revenue</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>11,655&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>11,655&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>11,890</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>11,890</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Cost of goods sold</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>4,562&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>4,562&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>4,734</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>4,734</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Gross profit</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>7,093&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>7,093&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>7,156</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>7,156</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Operating expenses:</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Sales and marketing</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>2,254&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(17)</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>2,237&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>2,106</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(6)</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>2,100</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Research and product development</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>2,029&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(10)</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>2,019&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,816</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(4)</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>1,812</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">General and administrative</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,686&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(534)</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,152&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,361</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(479)</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>882</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Proceeds from litigation</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>-</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Total operating expenses</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>5,969&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(561)</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>5,408&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>5,283</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(489)</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>4,794</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Operating income</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,124&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>561&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,685&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,873</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>489&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>2,362</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Other income, net</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>(5)</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>(5)</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>7</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>7</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Income before income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,119&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>561&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>1,680&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,880</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>489&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>2,369</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Provision for income taxes</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>544&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>231&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>775&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>559</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>142&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>701</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Net income</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>575&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>330&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>905&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,321</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>347&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>1,668</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Basic earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>0.06&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>0.10&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>0.15</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.19</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Diluted earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>0.06&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-right:-54.667px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>0.10&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>0.14</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.18</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Basic weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>9,107,420&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>9,107,420&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>8,992,500</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>8,992,500</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Diluted weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>9,226,426&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:54.667px; font-size:9pt; float:left" align=right>9,226,426&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>9,433,650</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>9,433,650</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt"><B><U>The adjustments consist of the following:</U></B></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Share-based compensation</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>60&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>44&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Amortization of purchased intangibles</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>224&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>87&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=353.2 height=9.6 colspan=2><P style="margin:0px; font-size:9pt">Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>237&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>358&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=284.133 height=9.6><P style="margin:0px; font-size:9pt">Acquisition related expenses</P>
</TD><TD style="margin-top:0px" valign=top width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>40&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>561&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>489&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=353.2 height=9.6 colspan=2><P style="margin:0px; font-size:9pt">Provision for income taxes affected by the above adjustments</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>231&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>142&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=284.133 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total adjustments</P>
</TD><TD style="margin-top:0px" valign=bottom width=69.067 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>330&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=69.467 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=74.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>347&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
</TABLE>
<P style="margin:6.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:11.133px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=277 /><TD width=70.667 /><TD width=72.533 /><TD width=81.6 /><TD width=14.8 /><TD width=70.667 /><TD width=72.533 /><TD width=79.2 /></TR>
<TR><TD style="margin-top:0px" valign=bottom width=739 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>CLEARONE COMMUNICATIONS, INC.</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=739 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>RECONCILIATION OF GAAP TO NON-GAAP NET INCOME</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=739 height=9.6 colspan=8><P style="margin:0px; font-size:9pt" align=center><B>(Dollars in thousands, except per share value)</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=224.8 height=9.6 colspan=3><P style="margin:0px; font-size:8pt" align=center><B>Six Months ended June 30, 2012</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=222.4 height=9.6 colspan=3><P style="margin:0px; font-size:8pt" align=center><B>Six Months ended June 30, 2011</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>GAAP</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Adjustments</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=81.6 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Non-GAAP</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>GAAP</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Adjustments</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=79.2 height=9.6><P style="margin:0px; font-size:8pt" align=center><B>Non-GAAP</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Revenue</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>21,809&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-45.333px; margin-bottom:-2px; text-indent:5.333px; width:50.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:45.333px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-right:-48px; margin-bottom:-2px; width:48px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>21,809</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>22,591</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-right:-49.333px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>22,591</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Cost of goods sold</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>8,608&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(1)</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>8,607</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>9,133</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>9,133</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Gross profit</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>13,201&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>1&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>13,202</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>13,458</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>13,458</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Operating expenses:</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Sales and marketing</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>4,388&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(30)</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>4,358</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>4,089</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(10)</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>4,079</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Research and product development</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>4,037&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(17)</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>4,020</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>3,453</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(8)</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>3,445</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">General and administrative</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>3,191&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(1,005)</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>2,186</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>2,833</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(942)</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>1,891</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Proceeds from litigation</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>(250)</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>250&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>-</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Total operating expenses</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>11,366&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(802)</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>10,564</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>10,375</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>(960)</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>9,415</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Operating income</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>1,835&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>803&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>2,638</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>3,083</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>960&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>4,043</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Other income, net</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>11&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>11</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>18</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>18</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Income before income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>1,846&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>803&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>2,649</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>3,101</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>960&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>4,061</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Provision for (benefit from) income taxes</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>818&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>300&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>1,118</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>968</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>294&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>1,262</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Net income</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>1,028&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-45.333px; margin-bottom:-2px; text-indent:5.333px; width:50.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:45.333px; font-size:9pt; float:left" align=right>503&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-right:-48px; margin-bottom:-2px; width:48px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>1,531</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>2,133</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>666&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:3px double #000000" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-right:-49.333px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>2,799</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Basic earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.11&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-right:-48px; margin-bottom:-2px; width:48px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>0.17</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.24</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-right:-49.333px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>0.31</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Diluted earnings per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.11&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-right:-48px; margin-bottom:-2px; width:48px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>0.17</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-right:-56px; margin-bottom:-2px; width:56px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>0.23</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-right:-49.333px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>0.30</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Basic weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>9,102,786&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>9,102,786</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>8,962,171</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>8,962,171</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Diluted weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>9,224,727&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-size:9pt; float:left" align=right>9,224,727</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:56px; font-size:9pt; float:left" align=right>9,279,800</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:49.333px; font-size:9pt; float:left" align=right>9,279,800</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt"><B><U>The adjustments consist of the following:</U></B></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Share-based compensation</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-45.333px; margin-bottom:-2px; text-indent:5.333px; width:50.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:45.333px; font-size:9pt; float:left" align=right>111&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>83&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Amortization of purchased intangibles</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>351&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>175&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=347.667 height=9.6 colspan=2><P style="margin:0px; font-size:9pt">Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages</P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>364&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>702&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=277 height=9.6><P style="margin:0px; font-size:9pt">Acquisition related expenses</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>227&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Proceeds from litigation</P>
</TD><TD style="margin-top:0px" valign=top width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>(250)</P>
</TD><TD style="margin-top:0px" valign=top width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>-&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; font-size:9pt">Total of adjustments before taxes</P>
</TD><TD style="margin-top:0px" valign=top width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>803&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>960&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Income taxes affected by the above adjustments</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:50.667px; font-size:9pt; float:left" align=right>300&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:46.667px; font-size:9pt; float:left" align=right>294&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=277 height=9.6><P style="margin:0px; text-indent:12px; font-size:9pt">Total adjustments</P>
</TD><TD style="margin-top:0px" valign=bottom width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-45.333px; margin-bottom:-2px; text-indent:5.333px; width:50.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:45.333px; font-size:9pt; float:left" align=right>503&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=81.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=70.667 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:3px double #000000" valign=bottom width=72.533 height=9.6><P style="margin-top:0px; margin-right:-37.333px; margin-bottom:-2px; text-indent:9.333px; width:46.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:37.333px; font-size:9pt; float:left" align=right>666&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=79.2 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:11.133px"><BR></P>
<TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=350.6 /><TD width=14.8 /><TD width=76.6 /><TD width=76.6 /><TD width=14.8 /><TD width=73.4 /><TD width=73.4 /></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680.2 height=9.6 colspan=7><P style="margin:0px; font-size:9pt" align=center><B>CLEARONE COMMUNICATIONS, INC.</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680.2 height=9.6 colspan=7><P style="margin:0px; font-size:9pt" align=center><B>RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=680.2 height=9.6 colspan=7><P style="margin:0px; font-size:9pt" align=center><B>(Dollars in thousands, except per share value)</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=153.2 height=9.6 colspan=2><P style="margin:0px; font-size:8pt" align=center><B>Three months ended June 30,</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=146.8 height=9.6 colspan=2><P style="margin:0px; font-size:8pt" align=center><B>Six months ended June 30,</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:8pt; float:left" align=right><B>2012</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:8pt; float:left" align=right><B>2011</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:8pt; float:left" align=right><B>2012&#160;</B></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:8pt; float:left" align=right><B>2011</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">GAAP Net Income</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>575</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>1,321</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>1,028&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>2,133</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt"><B><U>Adjustments:</U></B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Provision for (benefit from) for income taxes</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>544</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>559</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>818&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>968</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Depreciation and Amortization</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>417</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>292</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>754&#160;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>587</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt"><B>Non-GAAP EBITDA</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>1,536</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>2,172</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>2,600&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>3,688</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Share-based compensation</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>60</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>44</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>111&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>83</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>237</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>358</P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>364&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>702</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Acquisition related expenses</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>40</P>
</TD><TD style="margin-top:0px" valign=top width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>227&#160;</P>
</TD><TD style="margin-top:0px" valign=top width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>-</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Proceeds from litigation</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=top width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>-</P>
</TD><TD style="margin-top:0px" valign=top width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=top width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>(250)</P>
</TD><TD style="margin-top:0px" valign=top width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>-</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt"><B>Non-GAAP Adjusted EBITDA</B></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>1,873</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>2,574</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>3,075&#160;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>4,473</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Basic weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>9,107,420</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>8,992,500</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>9,102,786&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>8,962,171</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Diluted weighted average shares outstanding</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>9,226,426</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:60px; font-size:9pt; float:left" align=right>9,433,650</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>9,224,727&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>9,279,800</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Basic Adjusted EBITDA per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>0.21</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>0.29</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>0.34&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>0.50</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=bottom width=350.6 height=9.6><P style="margin:0px; font-size:9pt">Diluted Adjusted EBITDA per common share</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>0.20</P>
</TD><TD style="margin-top:0px" valign=bottom width=76.6 height=9.6><P style="margin-top:0px; margin-right:-57.333px; margin-bottom:-2px; text-indent:2.667px; width:60px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:57.333px; font-size:9pt; float:left" align=right>0.27</P>
</TD><TD style="margin-top:0px" valign=bottom width=14.8 height=9.6><P style="margin:0px"><BR></P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>0.33&#160;</P>
</TD><TD style="margin-top:0px" valign=bottom width=73.4 height=9.6><P style="margin-top:0px; margin-right:-58.667px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:58.667px; font-size:9pt; float:left" align=right>0.48</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
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