Item 1.01 Entry into a Material Definitive Agreement.

(a)

ClearOne, Inc. (the "Company") previously reported in its periodic filings (by Form 8-K, dated November 19, 2012) that it expected resolution by the end of 2012 of two pending arbitration matters concerning auction rate securities sold to the Company by Morgan Stanley & Co., Inc. ("Morgan Stanley") and UBS Financial Services, Inc. ("UBS"). The Company has determined the outcome of both matters, involving substantially identical claims against two different parties, effective January 14, 2013.

(b)

With respect to the Morgan Stanley arbitration, the arbitration panel denied the Company's claims in their entirety;

(c)

With respect to the UBS arbitration, the company has settled its dispute for a total amount of Forty-Five Million Dollars ($45,000,000), effective December 10, 2012. The settlement agreement was subject to a confidentiality provision pending resolution of the Morgan Stanley arbitration matter described immediately above. The settlement award is subject to a 15% contingency legal fee payable to the

Company's litigation counsel. The UBS settlement proceeds have been held in trust pending resolution of the Morgan Stanley matter and will be disbursed to the company shortly, with interest, less the contingency fee paid to the Company's legal counsel.

Item 8.01 Other Events.

The information contained in Item 1.01 relating to arbitration matters concerning auction rate securities ("ARS") is incorporated by reference herein.