iin20220331_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 1-5005

INTRICON CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania		23-1069060
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

1260 Red Fox Road
Arden Hills, Minnesota		55112
(Address of principal executive offices)		(Zip Code)

(651) 636-9770

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $1.00 per share	IIN	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☒
Non-accelerated filer ☐		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of outstanding shares of the registrant’s common stock, $1.00 par value, on April 30, 2022 was 9,302,316.

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INTRICON CORPORATION

I N D E X

		Page Numbers

PART I: FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2022 and 2021	4

	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	6

	Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2022 and 2021	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II: OTHER INFORMATION		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

Signatures		29

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PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements

INTRICON CORPORATION

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

	*Three Months Ended*
(unaudited)	*March 31,*			*March 31,*
	*2022*			*2021*

Revenue, net	$	33,060		$	31,768
Cost of goods sold		24,188			23,558
Gross profit		8,872			8,210

Operating expenses:
Sales and marketing		2,318			1,982
General and administrative		4,310			4,052
Research and development		1,587			1,293
Merger-related costs		1,032			-
Other operating expenses		54			35
Total operating expenses		9,301			7,362
Operating (loss) income		(429	)		848

Interest expense, net		(1	)		(9	)
Other expense, net		(152	)		(77	)
(Loss) income before income taxes		(582	)		762
Income tax expense		15			90
Net (loss) income		(597	)		672
Less: Income (loss) allocated to non-controlling interest		60			(42	)
Net (loss) income attributable to Intricon shareholders	$	(657	)	$	714

(Loss) income per share attributable to Intricon shareholders:
Basic	$	(0.07	)	$	0.08
Diluted	$	(0.07	)	$	0.07

Average shares outstanding:
Basic		9,256			8,994
Diluted		9,256			9,607

(See accompanying notes to the condensed consolidated financial statements)

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INTRICON CORPORATION

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

	*Three Months Ended*
(unaudited)	*March 31,*			*March 31,*
	*2022*			*2021*
Net (loss) income	$	(597	)	$	714
Unrealized foreign currency translation adjustment		(7	)		25
Realized pension and postretirement obligations		11			12
Other		26			115
Comprehensive (loss) income	$	(567	)	$	866

(See accompanying notes to the condensed consolidated financial statements)

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INTRICON CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands, Except Per Share Amounts)

(unaudited)	*March 31,*			*December 31,*
	*2022*			*2021*
Current assets:
Cash and cash equivalents	$	5,311		$	5,584
Restricted cash		638			645
Short-term investment securities		15,457			19,420
Accounts receivable, less provision for doubtful accounts of $65 at March 31, 2022 and $69 at December 31, 2021		11,089			8,257
Inventories		28,438			24,456
Contract assets		12,589			11,455
Other current assets		3,094			4,564
Total current assets		76,616			74,381

Property, plant and equipment		49,779			48,208
Less: Accumulated depreciation		34,940			34,371
Net property, plant and equipment		14,839			13,837

Goodwill		13,873			13,873
Intangible assets, net		8,595			8,999
Operating lease right-of-use assets, net		6,274			5,138
Investment in partnerships		596			473
Long-term investment securities		4,551			4,558
Other assets, net		1,167			1,200
Total assets	$	126,511		$	122,459

Current liabilities:
Current financing leases	$	1		$	4
Current operating leases		1,928			1,807
Accounts payable		13,323			9,398
Accrued salaries, wages and commissions		4,486			5,185
Other accrued liabilities		4,209			3,818
Total current liabilities		23,947			20,212

Noncurrent operating leases		4,426			3,431
Pension and postretirement benefit obligations		1,049			1,093
Deferred tax liabilities, net		873			873
Other long-term liabilities		2,447			3,100
Total liabilities		32,742			28,709

Commitments and contingencies (Note 11)

Shareholders’ equity:
Common stock, $1.00 par value per share; 20,000 shares authorized; 9,295 and 9,179 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		9,295			9,179
Additional paid-in capital		92,255			91,785
Accumulated deficit		(7,573	)		(6,916	)
Accumulated other comprehensive loss		(363	)		(393	)
Total shareholders' equity		93,614			93,655
Non-controlling interest		155			95
Total equity		93,769			93,750
Total liabilities and equity	$	126,511		$	122,459

(See accompanying notes to the condensed consolidated financial statements)

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INTRICON CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

	*Three Months Ended*
(unaudited)	*March 31,*			*March 31,*
	*2022*			*2021*
Cash flows from operating activities:
Net (loss) income	$	(597	)	$	672
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		1,460			1,440
Equity in loss of partnerships		53			60
Stock-based compensation		481			453
Change in fair value of contingent consideration		38			35
Change in allowance for doubtful accounts		(4	)		(58	)
Loss on disposal of assets		10			-
Changes in operating assets and liabilities:
Accounts receivable		(2,816	)		726
Inventories		(3,976	)		(821	)
Contract assets		(1,134	)		320
Other assets		1,489			(410	)
Accounts payable		4,041			3,491
Accrued expenses		(631	)		206
Other liabilities		(72	)		(249	)
Net cash (used in) provided by operating activities		(1,658	)		5,865

Cash flows from investing activities:
Purchases of property, plant and equipment		(2,001	)		(851	)
Purchase of investment securities		-			(5,412	)
Purchases of intangible assets		(124	)		-
Proceeds from maturities of investment securities		3,940			3,752
Investment in partnerships		(188	)		-
Net cash provided by (used in) investing activities		1,627			(2,511	)

Cash flows from financing activities:
Payment of financing leases		-			(11	)
Payments on liabilities for acquisition of intangible assets		(416	)		(53	)
Exercise of stock options and employee stock purchase plan shares		331			60
Withholding of common stock upon vesting of restricted stock units		(226	)		(241	)
Net cash used in financing activities		(311	)		(245	)

Effect of exchange rate changes on cash		62			22

Net (decrease) increase in cash		(280	)		3,131
Cash, cash equivalents and restricted cash, beginning of period		6,229			9,280

Cash, cash equivalents and restricted cash, end of period	$	5,949		$	12,411


Non-cash investing and financing:
Acquisition of property, plant and equipment in accounts payable	$	130		$	122

(See accompanying notes to the condensed consolidated financial statements)

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INTRICON CORPORATION

Condensed Consolidated Statements of Equity

(In Thousands)

	*Shareholders' Equity, Three Months Ended March 31, 2022 (unaudited)*
	*Common Stock Number of Shares*		*Common Stock Amount*		*Additional Paid-in Capital*			*Accumulated Deficit*			*Accumulated Other Comprehensive Loss*			*Non-Controlling Interest*		*Total Equity*
Balances December 31, 2021		9,179	$	9,179	$	91,785		$	(6,916	)	$	(393	)	$	95	$	93,750
Exercise of stock options, net		74		74		201			-			-			-		275
Withholding of common stock upon vesting of restricted stock units		40		40		(266	)		-			-			-		(226	)
Shares issued under the employee stock purchase plan		2		2		54			-			-			-		56
Stock-based compensation		-		-		481			-			-			-		481
Net (loss) income		-		-		-			(657	)		-			60		(597	)
Comprehensive Income		-		-		-			-			30			-		30
Balances March 31, 2022		9,295	$	9,295	$	92,255		$	(7,573	)	$	(363	)	$	155	$	93,769

	*Shareholders' Equity, Three Months Ended March 31, 2021 (unaudited)*
	*Common Stock Number of Shares*		*Common Stock Amount*		*Additional Paid-in Capital*			*Accumulated Deficit*			*Accumulated Other Comprehensive Loss*			*Non-Controlling Interest*			*Total Equity*
Balances December 31, 2020		8,951	$	8,951	$	89,702		$	(6,810	)	$	(679	)	$	35		$	91,199
Exercise of stock options, net		22		22		(15	)		-			-			-			7
Withholding of common stock upon vesting of restricted stock units		24		24		(265	)		-			-			-			(241	)
Shares issued under the employee stock purchase plan		2		2		51			-			-			-			53
Stock-based compensation		-		-		453			-			-			-			453
Net income (loss)		-		-		-			714			-			(42	)		672
Other		-		-		-			-			152			(50	)		102
Balances March 31, 2021		8,999	$	8,999	$	89,926		$	(6,096	)	$	(527	)	$	(57	)	$	92,245

(See accompanying notes to the condensed consolidated financial statements)

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INTRI

CON CORPORATION

Notes to Condensed Consolidated Financial Statements (Unaudited) (In Thousands, Except Per Share Da

ta)

1.	Management’s Statement

Intricon Corporation (together with its subsidiaries referred herein as the “Company”, or “Intricon”, “we”, “us” or “our”) is an international company and joint development manufacturer (“JDM”) of micromedical components, sub-assemblies and final devices. The Company serves as a JDM partner to leading medical device original equipment manufacturers (“OEMs”) by designing, developing, engineering, manufacturing, packaging and distributing micromedical products for high growth medical markets, such as diabetes, peripheral vascular, interventional pulmonology, electrophysiology and hearing healthcare. Our mission is to improve, extend and save lives by advancing innovative micromedical technologies through joint development and manufacturing partnerships with industry leading medical device companies.

Basis of Presentation

The interim condensed consolidated financial statements of the Company presented herein have been prepared by the Company and are unaudited. They have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with instructions to Form 10-Q and Article 10 of Regulation S-X. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods presented.

The interim condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The Company evaluates its voting and variable interests in entities on a qualitative and quantitative basis. The Company consolidates entities in which it concludes it has the power to direct the activities that most significantly impact an entity’s economic success and has the obligation to absorb losses or the right to receive benefits that could be significant to the entity.

During the three months ended March 31, 2022, the Company operated and managed our business under one segment. This is consistent with disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto for the fiscal year ended December 31, 2021, included in the Company's Annual Report on Form 10-K.

Use of Estimates

The Company makes estimates and assumptions relating to the reporting of assets and liabilities, the recording of reported amounts of revenues and expenses and the disclosure of contingent assets and liabilities to prepare these condensed consolidated financial statements. Actual results could differ from those estimates. Considerable management judgment is necessary in estimating future cash flows and other factors affecting the valuation of goodwill and intangible assets, including the operating and macroeconomic factors that may affect them. The Company uses historical financial information, internal plans and projections and industry information in making such estimates.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are detailed in “Note 1: Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The Company follows these policies in preparation of the condensed consolidated financial statements.

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2.	Pending Merger with Altaris Capital Partners LLC

On February 27, 2022, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, IIN Holding Company LLC, a Delaware limited liability company ("Parent"), and IC Merger Sub Inc., a Pennsylvania corporation and wholly owned subsidiary of Parent ("Merger Sub"). Parent and Merger Sub are owned by funds affiliated with Altaris Capital Partners, LLC. The Merger Agreement provides, subject to its terms and conditions, for the acquisition of the Company by Parent through the merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent (the "Merger").

As a result of the Merger, each share of common stock of the Company ("Common Stock") issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than Rollover Shares (as defined below) or shares of Common Stock (a) held in treasury of the Company, (b) owned by any subsidiary of the Company, or owned by Parent, Merger Sub or any other subsidiary of Parent or (c) held by a holder who is entitled to, and who has perfected, appraisal rights for such shares under Pennsylvania law) automatically will be converted into the right to receive cash in an amount of $24.25 per share, without interest, subject to any required withholding of taxes.

As permitted by the Merger Agreement, Intricon and certain members of Intricon’s management, or “Rollover Shareholders”, entered into a rollover agreement with IIN Holdings LLC, an affiliate of Parent (“IIN Holdings”), providing for the contribution, immediately prior to the effective time of the Merger, of an aggregate of 127,836 shares of Intricon common stock held by the Rollover Shareholders to IIN Holdings, in exchange for equity interests of IIN Holdings.

The completion of the Merger is subject to customary closing conditions, including: (i) the approval of the Merger Agreement by the Company’s shareholders; (ii) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the approval of the Merger under the antitrust laws of other jurisdictions, as applicable; (iii) the absence of any laws or court orders making the Merger illegal or otherwise prohibiting the Merger; and (iv) other customary closing conditions, including the accuracy of the representations and warranties of each party (subject to certain materiality exceptions) and material compliance by each party with its covenants under the Merger Agreement. The parties expect the transaction to close in the second quarter of 2022, subject to the satisfaction or waiver of the closing conditions.

In connection with the negotiation and execution of the Merger Agreement, the Company has incurred legal, consulting and accounting fees of $1,032 through the quarter ended March 31, 2022.

A special meeting of shareholders of the Company will be held at 8:00 a.m. Central Daylight Time on May 24, 2022, to approve and adopt the Merger Agreement and approve the Merger, among other matters.

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3.	New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses Topic 326, which requires certain financial assets to be measured at amortized cost net of an allowance for estimated credit losses, such that the net receivable represents the present value of expected cash collection. In addition, this standard update requires that certain financial assets be measured at amortized cost reflecting an allowance for estimated credit losses expected to occur over the life of the assets. The estimate of credit losses must be based on all relevant information including historical information, current conditions, and reasonable and supportable forecasts that affect the collectability of the amounts. Topic 326 is effective for interim and annual periods beginning January 1, 2022 for smaller reporting companies. This standard update did not have a material impact on our financial position, results of operations and cash flows.

4.	Revenue Recognition

Revenue is measured based on consideration specified in the contract with a customer. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer. For contractual arrangements in which an enforceable right to payment exists, control of these units is deemed to transfer to the customer over time during the manufacturing process. Consequently, the transaction price is recognized as revenue over time. The transaction price for contractual arrangements without an enforceable right to payment including a reasonable margin is recognized as revenue at a point in time.

The Company’s revenue recognition policy is further detailed in “Note 1: Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

During the 2021 second quarter, the Company reclassified first quarter revenue of $682 from certain customers in Legacy OEM to Value Based ITEC for the three months ended March 31, 2021. The following tables set forth, for the periods indicated, timing of revenue recognition by market:

Timing of revenue recognition for the three months ended March 31, 2022:

	*Products and services transferred at point in time*		*Products and services transferred over time*		*Total*
Diabetes	$	-	$	20,323	$	20,323
Interventional Catheters		3,271		-		3,271
Other Medical		2,363		1,336		3,699
Value Based DTEC		685		-		685
Value Based ITEC		1,144		-		1,144
Legacy OEM		2,726		-		2,726
Professional Audio Communications		1,212		-		1,212
Total Revenue, net	$	11,401	$	21,659	$	33,060

Timing of revenue recognition for the three months ended March 31, 2021:

	*Products and services transferred at point in time*		*Products and services transferred over time*		*Total*
Diabetes	$	-	$	18,364	$	18,364
Interventional Catheters		3,802		-		3,802
Other Medical		1,590		1,368		2,958
Value Based DTEC		937		-		937
Value Based ITEC		1,985		-		1,985
Legacy OEM		2,737		-		2,737
Professional Audio Communications		985		-		985
Total Revenue, net	$	12,036	$	19,732	$	31,768

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Net revenue by geography is allocated based on shipment and set forth below:

	*Three Months Ended*
Net Revenue by Geography	*March 31, 2022*		*March 31, 2021*
United States	$	24,021	$	23,701
Europe		1,963		1,264
Asia		2,042		3,468
All other countries		5,034		3,335
Consolidated	$	33,060	$	31,768

Geographic net revenue is allocated based on the shipment location of the Company’s direct OEM customer. These customers then distribute products globally.

For the three months ended March 31, 2022, and 2021, one customer accounted for 68% of the Company’s consolidated net revenue.

Two customers combined accounted for 56% and 44% of the Company’s consolidated accounts receivable at March 31, 2022 and December 31, 2021, respectively.

Two customers accounted for 100% of the Company’s consolidated contract assets at March 31, 2022 and December 31, 2021.

5.	(Loss) Income Per Share

The following table presents a reconciliation between basic and diluted net (loss) income per share:

	*Three Months Ended*
	*March 31, 2022*			*March 31, 2021*

Net (loss) income	$	(597	)	$	672
Less: Income (loss) allocated to non-controlling interest		60			(42	)
Net (loss) income attributable to Intricon shareholders	$	(657	)	$	714


Basic – weighted shares outstanding		9,256			8,994
Weighted shares assumed upon exercise of stock awards		-			613
Diluted – weighted shares outstanding		9,256			9,607

Basic (loss) income per share attributable to Intricon shareholders:	$	(0.07	)	$	0.08
Diluted (loss) income per share attributable to Intricon shareholders:	$	(0.07	)	$	0.07

Net (loss) income per common share was based on the weighted average number of common shares outstanding during the periods when computing basic net income per share. Stock options are dilutive when the average market price of Company stock exceeds the exercise price of the potentially dilutive options. When dilutive, stock options are included as equivalents using the treasury stock method when computing diluted net income per share. Unvested shares represented by RSUs are also included in the dilution calculation, net of assumed proceeds and equivalent share repurchases. The Company excluded all stock awards outstanding in 2022 from the computation of the diluted loss per share because their effect would be anti-dilutive.

6.	Income Taxes

Income tax expense for the three months ended March 31, 2022 was $15 compared to $90 for the same period in 2021. The Company has net operating loss carryforwards for U.S. federal income tax purposes. The Company has recorded a full valuation allowance against US deferred tax assets as of March 31, 2022.

The following was the (loss) income before income taxes for each jurisdiction in which the Company has operations for the period:

	*Three Months Ended*
	*March 31, 2022*			*March 31, 2021*
United States	$	(726	)	$	585
Singapore		89			138
Indonesia		28			21
Germany		27			18
(Loss) income before income taxes	$	(582	)	$	762

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7.	Selected Balance Sheet Data

Inventories:

Inventories consisted of the following at:

	*Raw materials*		*Work-in process*		*Finished products and components*		*Total*
March 31, 2022
Domestic	$	15,940	$	1,478	$	2,646	$	20,064
Foreign		6,985		1,176		213		8,374
Total	$	22,925	$	2,654	$	2,859	$	28,438

*December 31, 2021*
Domestic	$	15,201	$	760	$	1,892	$	17,853
Foreign		5,579		747		277		6,603
Total	$	20,780	$	1,507	$	2,169	$	24,456

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Property, Plant and Equipment Geographic Information:

The geographical distribution of long-lived assets net of accumulated depreciation, consisting of machinery and equipment is set forth below:

	*March 31,*		*December 31,*
	*2022*		*2021*
United States	$	12,603	$	12,337
Singapore		1,273		1,346
Other		963		154
Consolidated	$	14,839	$	13,837

Long-lived assets consist of machinery and equipment with useful lives from three to twelve years. Excluded from long-lived assets are investments in partnerships, patents, goodwill, intangible assets, operating lease right-of-use (ROU) assets and certain other assets. The Company capitalizes long-lived assets pertaining to the production of specialized parts. These assets are periodically reviewed to ensure the net realizable value from the estimated future production based on forecasted cash flows exceeds the carrying value of the assets.

Intangible Assets:

Definite-lived intangible assets consisted of the following at:

	*March 31, 2022*
	*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*
Customer list	$	6,400	$	(1,467	)	$	4,933
Technology intangibles		7,070		(3,408	)		3,662
Total	$	13,470	$	(4,875	)	$	8,595

	*December 31, 2021*
	*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*
Customer list	$	6,400	$	(1,267	)	$	5,133
Technology intangibles		6,946		(3,080	)		3,866
Total	$	13,346	$	(4,347	)	$	8,999

The customer list was established as a part of purchase accounting related to our EMS acquisition in 2020. The estimated useful life is eight years.

The technology intangibles provide the Company with wireless and self-fitting hearing aid technology and are being amortized based on estimated useful lives between five and seven years.

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Investment in Partnerships:

Investment in partnerships consisted of the following:

	*March 31,*		*December 31,*
	*2022*		*2021*
Investment in Signison	$	361	$	226
Other		235		247
Total	$	596	$	473

The Company has a 50% ownership interest in Signison, a German based Company specializing in hearing health services. This is accounted for in the Company’s condensed consolidated financial statements using the equity method for all periods presented.

Contingent Consideration Liabilities:

Contingent consideration for the Emerald Medical Services earnout liability consisted of the following:

Carrying amount at December 31, 2020	$	3,574
Change in fair value		(739	)
Less payments		(1,052	)
Carrying amount at December 31, 2021	$	1,783
Change in fair value		38
Carrying amount at March 31, 2022	$	1,821

The total earnout liability is included in other accrued liabilities and other long-term liabilities proportionately to when the liability is due.

Other Accrued Liabilities:

Other accrued liabilities consisted of the following at:

	*March 31, 2022*		*December 31, 2021*
Pension and postretirement benefit obligations	$	177	$	177
Deferred revenue		251		141
Current technology intangible liability		623		493
Current earn-out contingent consideration liability		161		148
Customer funded projects		728		340
TCPA litigation accrual (Note 11)		-		1,300
Accrued corporate expenses		991		237
Other		1,278		982
Total	$	4,209	$	3,818

The technology intangible liability, reflected above, relates to amounts owed in relation to the Company’s wireless and self-fitting hearing aid technologies.

The earn-out liability is contingent on certain future events and is measured at fair value based on various level 3 inputs and assumptions including forecasts, probabilities of payment and discount rates. Amounts are classified as current if expected to be paid within the next twelve months. The liability for contingent consideration is subject to fair value adjustments each reporting period that will be recognized through the condensed consolidated statement of operations.

Other Long-Term Liabilities:

Other long-term liabilities consisted of the following at:

	*March 31,*		*December 31,*
	*2022*		*2021*
Noncurrent technology intangible liability	$	-	$	541
Noncurrent earn-out contingent consideration liability		1,660		1,635
Litigation liability		540		709
Other		247		215
Total	$	2,447	$	3,100

As of March 31, 2022, the Company had no debt under its existing credit facilities and was in compliance with all applicable covenants.

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8.	Investment Securities

The Company invests in commercial paper, corporate notes and bonds with original maturities of less than two years. The Company classifies these investments as held to maturity based on our intent and ability to hold these investments until maturity. As a result, these investments are recorded at amortized cost, which approximates fair value, using level 2 inputs.

The maturity dates of our investments as of March 31, 2022 are as follows:

Less than one year

SEC Form 10-Q filed by Intricon Corporation