UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported): January
22, 2007
ClearOne
Communications, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Utah
(State
or
Other Jurisdiction of Incorporation)
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000-17219
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87-0398877
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(Commission
File Number)
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(I.R.S.
employer
identification
number)
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5225
Wiley Post Way, Suite 500,
Salt
Lake City, Utah
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84116
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(Address
of principal executive offices)
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(Zip
Code)
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(801)
975-7200
(Registrant’s
Telephone Number, Including Area Code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
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:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR
30.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
40.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
8.01 Other Events.
On
March
4, 2005, ClearOne Communications, Inc. (“CLRO”) sold all of the issued and
outstanding stock of its Canadian subsidiary, ClearOne Communications of
Canada,
Inc. (“ClearOne Canada”) to 6351352 Canada Inc., a Canada corporation
(“Purchaser”). ClearOne Canada owned all the issued and outstanding stock of
Stechyson Electronics, Ltd., which conducts business under the name OM Video
(“OMV”). CLRO agreed to sell the stock of ClearOne Canada for $200,000 in cash;
a $1,256,000 secured promissory note; and contingent consideration ranging
from
3.0 percent to 4.0 percent of related gross revenues over a five-year period
(“Earn-out Payment”). In June 2005, CLRO was advised that the OMV Purchaser had
settled an action brought by the former employer of certain of OMV Purchaser’s
owners and employees alleging violation of non-competition agreements. The
settlement reportedly involved a cash payment and an agreement not to sell
certain products for a period of one year. Based on an analysis of the facts
and
circumstances that existed, and considering the guidance from the SEC Rules
and
Regulations, “Gain Recognition on the Sale of a Business or Operating Assets to
a Highly Leveraged Entity,” the gain was being recognized as cash was collected
(as collection was not reasonably assured). Through December 31, 2005, all
payments required through such date had been received and $854,000 of the
promissory note remained outstanding; however, 6351352 Canada Inc. failed
to
make any subsequent, required payments under the note receivable until June
30,
2006, when CLRO received a payment of $50,000.
On
January 22, 2007, the receivable, which remained in default, totaled
approximately $1.2 million and consisted of (1) the promissory note balance
of
approximately $970,000, inclusive of interest and late fees and (2) the Earn-out
Payment balance of about $250,000. After exploring several collection options
CLRO, as the primary secured creditor, elected to appoint a receiver over
the
assets of OMV. Through receivership CLRO expects to collect a net total of
approximately $400,000 to $600,000 of the receivable.
SIGNATURES
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.
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CLEARONE
COMMUNICATIONS, INC.
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Date:
January 22, 2007
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By:
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/s/
Zeynep Hakimoglu
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Zeynep
Hakimoglu
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President
and Chief Executive Officer
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