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| Utah                                                           |   | 87-0398877                              |
|----------------------------------------------------------------|--------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. employer identification number) |

| 5225 Wiley Post Way, Suite 500, Salt Lake City, Utah |   | 84116      |
|------------------------------------------------------|--------|------------|
| (Address of principal executive offices)             |   | (Zip Code) |

| Larger Accelerated Filer [ ]                                                       | Accelerated Filer  [ ]          |
|------------------------------------------------------------------------------------|-------------------------------------------|
| Non-Accelerated Filer  [ ] (Do not check if a smaller reporting company) | Smaller Reporting Company   [x] |

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CLEARONE COMMUNICATIONS, INC.

| Item Number |                                                                                                       | Page No. |
|-------------|------------------------------------------------------------------------------------------------------------|----------|
| PART I      | FINANCIAL INFORMATION                                                                                      |     |
| Item 1      | Condensed Consolidated Financial Statements:                                                               |     |
|        | Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009                                 | 1        |
|        | Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2009 | 2        |
|        | Consolidated Statements of Cash Flows for nine months ended September 30, 2010 and 2009               | 3        |
|        |  Notes to Condensed Consolidated Financial Statements                                                 | 4        |
| Item 2      |  Management’s Discussion and Analysis of Financial Condition and Results of Operations          | 8        |
| Item 3      |  Quantitative and Qualitative Disclosures About Market Risk                                           | 15       |
| Item 4T     |  Controls and Procedures                                                                              | 15       |
| PART II     | OTHER INFORMATION                                                                                          |     |
| Item 1      | Legal Proceedings                                                                                          | 16       |
| Item 1A     | Risk Factors                                                                                               | 16       |
| Item 2      | Unregistered Sales of Equity Securities and Use of Proceeds                                                | 16       |
| Item 3      | Defaults Upon Senior Securities                                                                            | 16       |
| Item 4      | Removed and Reserved                                                                                       | 16       |
| Item 5      | Other Information                                                                                          | 16       |
| Item 6      | Exhibits                                                                                                   | 16       |
| Signatures  |                                                                                                       | 17       |

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Table of Contents

CLEARONE COMMUNICATIONS

|                                                                                                                                         |   | Unaudited                    |    |   | Audited                |    |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|------------------------|---------|
|                                                                                                                                         |   | As ofSeptember 30, 2010 |    |   | As ofDecember 31, 2009 |    |
| ASSETS                                                                                                                                       |   |                         |    |   |                   |    |
| Current assets:                                                                                                                              |   |                         |    |   |                   |    |
| Cash and cash equivalents                                                                                                                    |   | $                            | 11,516  |   |                   | $       | 9,494 |   |
| Receivables, net of allowance for doubtful accounts of $310 and $103, respectively                                                           |   |                         | 8,805   |   |                   |    | 6,571 |   |
| Inventories, net                                                                                                                             |   |                         | 6,024   |   |                   |    | 6,236 |   |
| Deferred income taxes                                                                                                                        |   |                         | 3,340   |   |                   |    | 3,128 |   |
| Prepaid expenses and other assets                                                                                                            |   |                         | 357     |   |                   |    | 1,609 |   |
| Total current assets                                                                                                                         |   |                         | 30,042  |   |                   |    | 27,038 |   |
|                                                                                                                                         |   |                         |    |   |                   |    |   |   |
| Long-term inventory                                                                                                                          |   |                         | 4,135   |   |                   |    | 6,412 |   |
| Property and equipment, net                                                                                                                  |   |                         | 3,151   |   |                   |    | 3,246 |   |
| Intangibles                                                                                                                                  |   |                         | 2,832   |   |                   |    | 3,095 |   |
| Goodwill                                                                                                                                     |   |                         | 726     |   |                   |    | 726 |   |
| Deferred income taxes                                                                                                                        |   |                         | 622     |   |                   |    | 1,037 |   |
| Other assets                                                                                                                                 |   |                         | 18      |   |                   |    | 21 |   |
| Total assets                                                                                                                                 |   | $                            | 41,526  |   |                   | $       | 41,575 |   |
|                                                                                                                                         |   |                         |    |   |                   |    |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                         |   |                         |    |   |                   |    |   |   |
| Current liabilities:                                                                                                                         |   |                         |    |   |                   |    |   |   |
| Accounts payable                                                                                                                             |   |  $                      | 2,188   |   |                   |  $ | 2,304 |   |
| Accrued liabilities                                                                                                                          |   |                         | 2,855   |   |                   |    | 1,768 |   |
| Current maturities of long-term debt                                                                                                         |   |                         | — |   |                   |    | 2,000 |   |
| Deferred product revenue                                                                                                                     |   |                         | 4,699   |   |                   |    | 4,707 |   |
| Total current liabilities                                                                                                                    |   |                         | 9,742   |   |                   |    | 10,779 |   |
|                                                                                                                                         |   |                         |    |   |                   |    |   |   |
| Deferred rent                                                                                                                                |   |                         | 608     |   |                   |    | 466 |   |
| Other long-term liabilities                                                                                                                  |   |                         | 297     |   |                   |    | 1,232 |   |
| Total liabilities                                                                                                                            |   |                         | 10,647  |   |                   |    | 12,477 |   |
|                                                                                                                                         |   |                         |    |   |                   |    |   |   |
| Shareholders' equity:                                                                                                                        |   |                         |    |   |                   |    |   |   |
| Common stock, par value $0.001, 50,000,000 shares authorized, 8,929,350  and 8,929,134 shares issued and outstanding, respectively |   |                         | 9       |   |                   |    | 9 |   |
| Additional paid-in capital                                                                                                                   |   |                         | 39,034  |   |                   |    | 38,810 |   |
| Accumulated deficit                                                                                                                          |   |                         | (8,164  | )      |                   |    | (9,721 | ) |
| Total shareholders' equity                                                                                                                   |   |                         | 30,879  |   |                   |    | 29,098 |   |
| Total liabilities and shareholders' equity                                                                                                   |   | $                            | 41,526  |   |                   | $       | 41,575 |   |

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Table of Contents

CONDENSED 

|                                           |   | Three months ended      |      |   | Nine months ended  |   |
|------------------------------------------------|--------|-------------------------|-----------|--------|-------------------------|--------|
|                                           |   | September 30, 2010 |      |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Revenue                                        |   | $                       | 10,359    |   |                    | $      | 7,646 |   |   | $ | 28,652 |   |   | $ | 22,308 |   |
| Cost of goods sold                             |   |                    | 4,105     |   |                    |   | 3,692 |   |   |   | 11,542 |   |   |   | 11,127 |   |
| Gross profit                                   |   |                    | 6,254     |   |                    |   | 3,954 |   |   |   | 17,110 |   |   |   | 11,181 |   |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                            |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                            |   |                    | 2,243     |   |                    |   | 1,603 |   |   |   | 6,328 |   |   |   | 5,222 |   |
| Research and product development               |   |                    | 2,124     |   |                    |   | 1,668 |   |   |   | 5,772 |   |   |   | 5,589 |   |
| General and administrative                     |   |                    | 1,106     |   |                    |   | 1,329 |   |   |   | 3,252 |   |   |   | 2,632 |   |
| Insurance settlement                           |   |                    | —   |   |                    |   | — |   |   |   | — |   |   |   | (1,100 | ) |
| Total operating expenses                       |   |                    | 5,473     |   |                    |   | 4,600 |   |   |   | 15,352 |   |   |   | 12,343 |   |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                        |   |                    | 781       |   |                    |   | (646 | ) |   |   | 1,758 |   |   |   | (1,162 | ) |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense), net                    |   |                    | 12        |   |                    |   | 67 |   |   |   | (120 | ) |   |   | 352 |   |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes              |   |                    | 793       |   |                    |   | (579 | ) |   |   | 1,638 |   |   |   | (810 | ) |
| Benefit from (provision for) income taxes |   |                    | 194       |   |                    |   | 304 |   |   |   | (81 | ) |   |   | 493 |   |
| Net income (loss)                              |   | $                       | 987       |   |                    | $      | (275 | ) |   | $ | 1,557 |   |   | $ | (317 | ) |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share         |   | $                       | 0.11      |   |                    | $      | (0.03 | ) |   | $ | 0.17 |   |   | $ | (0.04 | ) |
| Diluted earnings (loss) per common share       |   | $                       | 0.11      |   |                    | $      | (0.03 | ) |   | $ | 0.17 |   |   | $ | (0.04 | )  |
|                                           |   |                    |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic weighted average shares outstanding      |   |                    | 8,929,342 |   |                    |   | 8,928,897 |   |   |   | 8,929,266 |   |   |   | 8,923,869 |   |
| Diluted weighted average shares outstanding    |   |                    | 9,108,102 |   |                    |   | 9,052,070 |   |   |   | 9,095,879 |   |   |   | 9,043,977 |   |

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Table of Contents

CONDENSED CONSOLIDATED 

|                                                                                          |   | Nine months ended       |    |
|-----------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                          |   | September 30, 2010 |    |   | September 30, 2009 |   |
| Cash flows from operating activities:                                                         |   |                    |    |   |   |   |
| Net income (loss)                                                                             |   | $                       | 1,557   |   |   | $ | (317 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: |   |                    |    |   |   |   |   |   |
| Depreciation and amortization expense                                                         |   |                    | 900     |   |   |   | 556 |   |
| Stock-based compensation                                                                      |   |                    | 224     |   |   |   | 427 |   |
| Write-off of inventory                                                                        |   |                    | 145     |   |   |   | 1,931 |   |
| Loss on disposal of assets                                                                    |   |                    | 111     |   |   |   | — |   |
| Provision for doubtful accounts                                                               |   |                    | 207     |   |   |   | 38 |   |
| Changes in operating assets and liabilities:                                                  |   |                    |    |   |   |   |   |   |
| Receivables                                                                                   |   |                    | (2,441  | ) |   |   | 308 |   |
| Deferred income taxes                                                                         |   |                    | 203     |   |   |   | (200 | )  |
| Note receivable                                                                               |   |                    | — |   |   |   | (29 | ) |
| Inventories                                                                                   |   |                    | 2,344   |   |   |   | (3,302 | ) |
| Prepaid expenses and other assets                                                             |   |                    | 609     |   |   |   | (704 | ) |
| Accounts payable                                                                              |   |                    | 177     |   |   |   | 1,415 |   |
| Accrued liabilities                                                                           |   |                    | 1,324   |   |   |   | (1,374 | ) |
| Deferred product revenue                                                                      |   |                    | (8      | ) |   |   | (16 | ) |
| Other assets/liabilities, net                                                                 |   |                    | (932    | ) |   |   | 310 |   |
| Net cash provided by (used in) operating activities                                      |   |                    | 4,420   |   |   |   | (957 | ) |
|                                                                                          |   |                    |    |   |   |   |   |   |
| Cash flows from investing activities:                                                         |   |                    |    |   |   |   |   |   |
| Escrow proceeds received pursuant to NetStreams acquisition                                   |   |                    | 350     |   |   |   | — |   |
| Purchase of property and equipment                                                            |   |                    | (748    | ) |   |   | (915 | ) |
| Purchase of marketable securities                                                             |   |                    | — |   |   |   | (1,253 | ) |
| Sale of marketable securities                                                                 |   |                    | — |   |   |   | 8,742 |   |
| Net cash (used in) provided by investing activities                                           |   |                    | (398    | ) |   |   | 6,574 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |
| Cash flows from financing activities:                                                         |   |                    |    |   |   |   |   |   |
| Proceeds from the issuance of common stock - options                                          |   |                    | — |   |   |   | 118 |   |
| Principal payments on long-term debt                                                          |   |                    | (2,000  | ) |   |   | — |   |
| Tax benefit from stock options                                                                |   |                    | — |   |   |   | 2 |   |
| Net cash (used in) provided by financing activities                                           |   |                    | (2,000  | ) |   |   | 120 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                     |   |                    | 2,022   |   |   |   | 5,737 |   |
| Cash and cash equivalents at the beginning of the period                                      |   |                    | 9,494   |   |   |   | 2,323 |   |
| Cash and cash equivalents at the end of the period                                            |   | $                       | 11,516  |   |   | $ | 8,060 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                             |   |                    |    |   |   |   |   |   |
| Cash paid for interest                                                                        |   | $                       | 61      |   |   | $ | — |   |
| Cash paid for income taxes                                                                    |   |                    | 3       |   |   |   | 675 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |
| Supplemental disclosure of non-cash activities:                                               |   |                    |    |   |   |   |   |   |
| Exchanged deposits from a vendor with accounts payable to the same vendor                     |   | $                       | 293     |   |   | $ | 672 |   |
| Unrealized loss on marketable securities, net of tax of $0 and $19                            |   |                    | — |   |   |   | (15 | ) |
| Current liabilities reclassed to deferred rent                                                |   |                    | 176     |   |   |   | — |   |

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Table of Contents

NOTES TO 

| Decrease in receivables                         |   | $      | 91  |   |
|-------------------------------------------------|--------|--------|-----|--------|
| Decrease in deferred income taxes - current     |   |   | 1   |   |
| Increase in deferred income taxes - non current |   |   | (35 | )      |
| Increase in goodwill                            |   | $      | 57  |   |

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Table of Contents

|                                |   | Estimateduseful lives (Years) |   |   | Amount |   |   | AccumulatedAmortization |   |    | Net    |   |
|-------------------------------------|--------|-------------------------------|--------|--------|--------|--------|--------|-------------------------|--------|---------|--------|--------|
| Trade name                          |   |                          | 7      |   |   | $      | 435    |                    |   | $       | 56     |   |   | $ | 379 |   |
| Patents and technological know-how  |   |                          | 10     |   |   |   | 2,070  |                    |   |    | 190    |   |   |   | 1,880 |   |
| Proprietary software                |   |                          | 3      |   |   |   | 215    |                    |   |    | 66     |   |   |   | 149 |   |
| Other                               |   |                          | 5      |   |   |   | 49     |                    |   |    | 25     |   |   |   | 24 |   |
|                                |   |                          |   |   |   |   | 2,769  |                    |   |    | 337    |   |   |   | 2,432 |   |
| In-process research and development |   | Indefinite                    |   |   |   | 400    |   |                    |   | — |   |   |   | 400 |   |
| Total                               |   |                          |   |   |   | $      | 3,169  |                    |   | $       | 337    |   |   | $ | 2,832 |   |

|                                          |   | Three months ended |   |   | Nine months ended  |   |
|-----------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                          |   | September 30, 2010 |   |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Amortization of intangibles with finite lives |   | $                  | 88     |   |               | $      | 2 |   |   | $ | 263 |   |   | $ | 7 |   |

|           |   | As ofSeptember 30, 2010 |   |   | As ofDecember 31, 2009 |   |
|----------------|--------|-------------------------|--------|--------|------------------------|--------|
| Current:       |   |                    |   |   |                   |   |
| Raw materials  |   | $                       | 278    |   |                   | $      | 453 |   |
| Finished goods |   |                    | 5,746  |   |                   |   | 5,783 |   |
|           |   | $                       | 6,024  |   |                   | $      | 6,236 |   |
|           |   |                    |   |   |                   |   |   |   |
| Long-term:     |   |                    |   |   |                   |   |   |   |
| Raw materials  |   | $                       | 826    |   |                   | $      | 1,056 |   |
| Finished goods |   |                    | 3,309  |   |                   |   | 5,356 |   |
|           |   | $                       | 4,135  |   |                   | $      | 6,412 |   |

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Table of Contents

|                                                                          |   | Three months ended      |   |   | Nine months ended  |   |
|-------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-------------------------|--------|
|                                                                          |   | September 30, 2010 |   |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Losses incurred on valuation of inventory and write-off of obsolete inventory |   | $                       | 4      |   |                    | $      | 7 |   |   | $ | 149 |   |   | $ | 1,927 |   |

|                       |   | Three months ended      |    |   | Nine months ended       |   |
|----------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                       |   | September 30, 2010 |    |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Cost of goods sold         |   | $                       | — |   |                    | $      | — |   |   | $ | — |   |   | $ | — |   |
| Sales and marketing        |   |                    | 7       |   |                    |   | 22 |   |   |   | 31 |   |   |   | 68 |   |
| Research and development   |   |                    | 8       |   |                    |   | 2 |   |   |   | 22 |   |   |   | 15 |   |
| General and administrative |   |                    | 47      |   |                    |   | 94 |   |   |   | 169 |   |   |   | 344 |   |
|                       |   | $                       | 62      |   |                    | $      | 118 |   |   | $ | 222 |   |   | $ | 427 |   |

|                                                                     |   | Three months ended      |    |   | Nine months ended       |   |
|--------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                                                     |   | September 30, 2010 |    |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Balance at the beginning of the period                                   |   | $                       | 29,828  |   |                    | $      | 28,486 |   |   | $ | 29,098 |   |   | $ | 28,131 |   |
| Net income during the period                                             |   |                    | 987     |   |                    |   | (275 | ) |   |   | 1,557 |   |   |   | (317 | ) |
| Stock based compensation                                                 |   |                    | 64      |   |                    |   | 118 |   |   |   | 224 |   |   |   | 427 |   |
| Exercise of stock options                                                |   |                    | — |   |                    |   | — |   |   |   | — |   |   |   | 118 |   |
| Unrealized gain (loss) on marketable securities net of tax, $(11) and $8 |   |                    | — |   |                    |   | 15 |   |   |   | — |   |   |   | (15 | ) |
| Balance at end of the period                                             |   | $                       | 30,879  |   |                    | $      | 28,344 |   |   | $ | 30,879 |   |   | $ | 28,344 |   |

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Table of Contents

|                                              |   | Three months ended |    |   | Nine months ended  |   |
|---------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|
|                                              |   | September 30, 2010 |    |   | September 30, 2009 |   |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Interest income                                   |   | $                  | 12      |   |               | $      | 59 |   |   | $ | 39 |   |   | $ | 326 |   |
| Interest expense                                  |   |               | — |   |               |   | — |   |   |   | (51 | ) |   |   | — |   |
| Gain (loss) on disposal of property and equipment |   |               | — |   |               |   | — |   |   |   | (111 | ) |   |   | — |   |
| Other                                             |   |               | — |   |               |   | 8 |   |   |   | 3 |   |   |   | 26 |   |
|                                              |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | $                  | 12      |   |               | $      | 67 |   |   | $ | (120 | )  |   | $ | 352 |   |

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Table of Contents

MANAGE

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Table of Contents

| ·   | Focus on Unified Communications (UC) by forging strategic product and channel relationships with major UC systems providers. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Extend our reach into the enterprise by offering enterprise-wide HD audio, video and data distribution solutions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Develop and deepen direct relationships with key partner resellers. |
|--------------------|---------------------------------------------------------------------|

| ·   | Following the successful operational integration of NetStreams into ClearOne, accelerate development of next generation products by tightly integrating ClearOne and NetStreams technologies. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Target bigger vertical markets including digital signage and audio distribution. |
|--------------------|----------------------------------------------------------------------------------|

| ·   | Leverage NetStreams’ broad-ranging intellectual property by engaging in a variety of partnership activities ranging from licensing to developing a StreamNet eco-system to expand the application of StreamNet technology. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                      |   | Three months ended September 30, |    |   | Nine months ended September 30, |   |
|-------------------------------------------|--------|---------------------------------------|---------|--------|--------------------------------------|--------|
|                                      |   | 2010                                  |    |   | % ofRevenue                          |   |   | 2009 |   |   | % ofRevenue |   |   | Change |   |   | 2010 |   |   | % ofRevenue |   |   | 2009 |   |   | % ofRevenue |   |   | Change |   |
|                                      |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                   |   | $                                     | 10,360  |   |                                 |   | 100.0 | % |   | $ | 7,646 |   |   |   | 100.0 | % |   |   | 35.5 | % |   | $ | 28,652 |   |   |   | 100.0 | % |   | $ | 22,308 |   |   |   | 100.0 | % |   |   | 28.4 | % |
| Cost of goods sold                        |   |                                  | 4,105   |   |                                 |   | 39.6 | % |   |   | 3,692 |   |   |   | 48.3 | % |   |   | 11.2 | % |   |   | 11,542 |   |   |   | 40.3 | % |   |   | 11,127 |   |   |   | 49.9 | % |   |   | 3.7 | % |
| Gross profit                              |   |                                  | 6,255   |   |                                 |   | 60.4 | % |   |   | 3,954 |   |   |   | 51.7 | % |   |   | 58.2 | % |   |   | 17,110 |   |   |   | 59.7 | % |   |   | 11,181 |   |   |   | 50.1 | % |   |   | 53.0 | % |
| Sales and marketing                       |   |                                  | 2,243   |   |                                 |   | 21.7 | % |   |   | 1,603 |   |   |   | 21.0 | % |   |   | 39.9 | % |   |   | 6,328 |   |   |   | 22.1 | % |   |   | 5,222 |   |   |   | 23.4 | % |   |   | 21.2 | % |
| Research and product development          |   |                                  | 2,124   |   |                                 |   | 20.5 | % |   |   | 1,668 |   |   |   | 21.8 | % |   |   | 27.3 | % |   |   | 5,772 |   |   |   | 20.1 | % |   |   | 5,589 |   |   |   | 25.1 | % |   |   | 3.3 | % |
| General and administrative                |   |                                  | 1,107   |   |                                 |   | 10.7 | % |   |   | 1,329 |   |   |   | 17.4 | % |   |   | -16.7 | % |   |   | 3,252 |   |   |   | 11.3 | % |   |   | 2,632 |   |   |   | 11.8 | % |   |   | 23.6 | % |
| Insurance Settlement                      |   |                                  | — |   |                                 |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1,100 | ) |   |   | -4.9 | % |   |   | * |   |
| Operating income                          |   |                                  | 781     |   |                                 |   | 7.5 | % |   |   | (646 | ) |   |   | -8.4 | % |   |   | * |   |   |   | 1,758 |   |   |   | 6.1 | % |   |   | (1,162 | ) |   |   | -5.2 | % |   |   | * |   |
| Other (expense) income, net               |   |                                  | 12      |   |                                 |   | 0.1 | % |   |   | 67 |   |   |   | 0.9 | % |   |   | -82.1 | %  |   |   | (120 | ) |   |   | -0.4 | % |   |   | 352 |   |   |   | 1.6 | % |   |   | * |   |
| Income before income taxes                |   |                                  | 793     |   |                                 |   | 7.7 | % |   |   | (579 | ) |   |   | -7.6 | % |   |   | * |   |   |   | 1,638 |   |   |   | 5.7 | % |   |   | (810 | ) |   |   | -3.6 | % |   |   | * |   |
| (Provision for) benefit from income taxes |   |                                  | 194     |   |                                 |   | 1.9 | % |   |   | 304 |   |   |   | 4.0 | % |   |   | -36.2 | %  |   |   | (81 | ) |   |   | -0.3 | % |   |   | 493 |   |   |   | 2.2 | % |   |   | * |   |
| Net income                                |   | $                                     | 987     |   |                                 |   | 9.5 | % |   | $ | (275 | ) |   |   | -3.6 | % |   |   | * |   |   | $ | 1,557 |   |   |   | 5.4 | % |   | $ | (317 | ) |   |   | -1.4 | % |   |   | * |   |
|                                      |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| * Not meaningful                          |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                        |   | As ofSeptember 30, 2010 |   |    | As ofDecember 31, 2009 |   |
|-----------------------------|--------|------------------------------|--------|---------|------------------------|--------|
| Deferred revenue            |   | $                            | 4,699  |    |                   | $      | 4,707 |   |
| Deferred cost of goods sold |   |                         | (1,784 | )  |                   |   | (1,846 | )  |
| Deferred gross profit       |   | $                            | 2,915  |    |                   | $      | 2,861 |   |

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Item 3.   QUANTITATIVE 

Item 4T.   CONTROLS 

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PART

| Exhibit No. |   |  Title of Document                                  |
|-------------|--------|----------------------------------------------------------|
| 31.1        |   | Section 302 Certification of Chief Executive Officer     |
| 31.2        |   | Section 302 Certification of Principal Financial Officer |
| 32.1        |   | Section 906 Certification of Chief Executive Officer     |
| 32.2        |   | Section 906 Certification of Principal Financial Officer |

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SIGN

| ClearOne Communications, Inc., a Utah corporation |
|---------------------------------------------------|
|                                              |   |   |
|                                              |   |   |
|                                              |   |   |
| November 15, 2010                                 | By: | /s/ Zeynep Hakimoglu |
|                                              |   | Zeynep Hakimoglu |
|                                              |   | Chief Executive Officer |
|                                              |   | (Principal Executive Officer) |
|                                              |   |   |
|                                              |   |   |
|                                              |   |   |
| November 15, 2010                                 | By: | /s/ Narsi Narayanan |
|                                              |   | Narsi Narayanan |
|                                              |   | Vice President of Finance |
|                                              |   | (Principal Financial and Accounting Officer) |

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