TABLE OF CONTENTS

TITLE		PAGE
	PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	6
ITEM 1B.	Unresolved Staff Comments	11
ITEM 2.	Properties	11
ITEM 3.	Legal Proceedings	11
ITEM 4.	Mine Safety Disclosures	11
	PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
	Securities	11
ITEM 6.	Selected Financial Data	11
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 7A.	Quantitative and Qualitative Disclosure About Market Risk	16
ITEM 8.	Financial Statements and Supplementary Data	16
ITEM 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	17
ITEM 9A	Controls and Procedures	17
ITEM 9B.	Other Information	17
	PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	17
ITEM 11.	Executive Compensation	19
ITEM 12.	Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters	21
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	22
ITEM 14.	Principal Accountant Fees And Services	22
	PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	23

SIGNATURES

PART I

ITEM 1. BUSINESS

Overview

Andrea Electronics Corporation (“Andrea,” “us,” “we,” “our”) designs, develops and manufactures state-of-the-art digital microphone products and noise reduction software that facilitate natural language processing, human/machine interfaces. Our technologies eliminate unwanted background noise to enable the optimum performance of various speech-based and audio applications. We are incorporated under the laws of the State of New York and have been engaged in the electronic communications industry since 1934.

Andrea’s products and technologies optimize the performance of speech-based applications and audio applications primarily in the following markets:

●	Speech recognition applications;

●	Communications; and

●	Audio and video recording.

Andrea Digital Signal Processing (“DSP”) Microphone and Audio Software Business – Our patented digital noise canceling technologies enable a speaker to be at a distance from the microphone (we refer to this capability as “far-field” microphone use) and free the speaker from having to use a close talking microphone. Our Digital Super Directional Array (“DSDA”) and PureAudio microphone products convert sound received by an array of microphones into digital signals that are then processed to cancel background noise from the signal to be transmitted. These two adaptive technologies represent the core technologies within our portfolio of far-field technologies. In addition to DSDA and PureAudio, Andrea has developed and commercialized several other digital, far-field noise canceling technologies, including, among others, Andrea EchoStop, a high-quality full duplex acoustic echo canceller which enables speakerphone functionality with technology for canceling speaker feedback.

All of our digital, far-field microphone technologies are software-based and operate using either a dedicated DSP or a general purpose processor (for example, the Intel Pentium). The software, which may encompass one or all of our far-field noise canceling technologies, can be applied to improve the performance of a single microphone or multiple microphones. In addition, our digital, far-field, noise canceling technologies can be tailored to be used individually or combined depending on particular customer requirements.

We are currently marketing our far-field technologies at Original Equipment Manufacturers (“OEMs”) that have new sophisticated artificial intelligence (“AI”) voice applications that require new digital microphone performance for enhancing the safe use and efficiency of devices. Our far-field, digital noise canceling technologies and related products comprise our Andrea DSP Microphone and Audio Software line of business. Net revenues from such technologies and products during the years ended December 31, 2020 and 2019 were approximately 100% of our total revenues. We dedicate a significant amount of our marketing and research and development resources to this business segment, as we believe that voice interface products will increasingly require high performance, touchless microphone technology.

Patent Monetization, Intellectual Property and Licensing – Our products and technologies are developed in part using our proprietary intellectual property, and we believe that the strength of our intellectual property rights will be important to the success of our business. We utilize patent and trade secret protection, confidentiality agreements with customers and partners, disclosure and invention assignment agreements with employees and consultants and other contractual provisions to protect our intellectual property and other proprietary information. We plan to license specific, custom designs to our customers, charging royalties at a fixed amount per product or a percentage of sales. More generally, we intend to vigorously defend and monetize our intellectual property through licensing arrangements and, where necessary, enforcement actions against those entities using our patented solutions in their products. Royalties resulting from these patent monetization efforts can be structured in a variety of ways, including but not limited to one-time paid up licenses or on-going royalty arrangements. We expect to generate a portion of our revenues with these types of licensing arrangements. As part of our plan to aggressively pursue patent monetization, we entered into a Revenue Sharing and Note Purchase Agreement (the “Revenue Sharing Agreement”) with AND34 Funding LLC (“AND34”), which was effective as of February 14, 2014. Under the Revenue Sharing Agreement, the Company granted AND34 a perpetual predetermined share in the rights of the Company’s specified future revenues from currently owned patents. Under the terms of the Revenue Sharing Agreement, Andrea issued and sold to AND34 Notes which were repaid as of December 31, 2016. In 2016, 2017 and 2019, the parties executed and subsequently amended a rider to the Revenue Sharing Agreement (the “Rider”) pursuant to which Andrea agreed to issue and sell to AND34 a specified amount of additional Notes (the “Additional Notes”), or such greater amount as AND34 may agree to in its sole discretion. The most recent rider executed in 2019 increased the aggregate principal amount from $7,500,000 to $11,500,000. The Additional Notes have a maturity date of August 31, 2022. The proceeds of the Additional Notes will be used to pay certain expenses related to the Revenue Sharing Agreement and expenses of the Company incurred in pursuing patent monetization. As of December 31, 2020, there was $2,093,967 in Additional Notes and PIK interest outstanding. Total revenues from this segment during the years ended December 31, 2020 and 2019 were minimal, representing less than 1% of our total revenues.

For more financial information regarding our operating segments, see Note 14 of the accompanying consolidated financial statements.

Industry Background

Our primary mission is to provide the emerging “voice interface” markets with state-of-the-art digital microphone solutions. The idea underlying these markets is AI natural language processing of the human voice will become an important means by which to communicate and control many types of computing devices and other appliances and equipment that contain microprocessors and cloud services. We are designing and marketing our products and technologies so they can be used for “natural language, human/machine” interfaces including:

●	Amazon Alexa™

●	Google Now™

●	IBM Watson®

●	Microsoft Cortana™

End users of these applications and interfaces will require high quality microphone and speakerphone products that enhance voice transmission, particularly in noisy outdoor and public environments. We also believe that these applications will increasingly require microphones that are located at a distance from the person speaking, or far-field microphone technology. Due to changing marketing conditions as a result of COVID 19, we believe that there will be significant growth in this touchless technology marketplace during the next several years.

Our Strategy

Our strategy is to:

●	maintain and advance our market position with our Andrea DSP Microphone and Audio Software technologies and products;

●	broaden our Andrea DSP Microphone and Audio Software product lines through a healthy level of internal research and development;

●	design our products to satisfy specific end-user requirements identified by our collaborative partners;

●	develop relationships with companies that have significant distribution capabilities for our Andrea DSP Microphone and Audio Software technologies and products;

●	outsource manufacturing of our products in order to reduce fixed overhead and achieve economies of scale; and

●	vigorously defend and monetize our intellectual property through licensing arrangements and, where necessary, enforcement actions against those entities using our patented solutions in their products.

An important element of our strategy for expanding our industrial and commercial channels broadening the base of users for our products is increasing our own direct business to business marketing efforts to original equipment manufacturers for incorporation into, or for use with, their products.

The success of our strategy will depend on our ability to, among other things:

●	increase total revenues of Andrea DSP Microphone and Audio Software products;

●	continue to contain costs;

●	introduce additional Andrea DSP Microphone and Audio Software products;

●	maintain the competitiveness of our technologies through focused and targeted research and development;

●	achieve widespread adoption of our products and technologies through ongoing marketing efforts; and

●	defend and monetize our intellectual property.

Our Technologies

We design our Andrea DSP Microphone and Audio Software to transmit voice signals with the high level of quality, intelligibility and reliability required by the broad range of voice-based applications in cloud computing. We achieve this through the use of several audio technologies that employ software processes that are proprietary to us. Software processes of this type are commonly referred to as algorithms.

Andrea DSP Microphone and Audio Software Technology

This set of technologies is generally based on the use of an array of microphones from which the analog signals are converted to digital form and then processed using digital electronic circuitry and software to eliminate unwanted noise in the speaker’s environment. Our Andrea DSP Microphone and Audio Software Products provide clear acoustic and audio input performance where the desired audio signal is at a distance from the microphone. Our technology is portable and can be embedded into new platforms such as micro DSP’s, mobile OS and wireless chipsets. We believe that our Andrea DSP Microphone and Audio Software technology achieve far-field microphone performance previously unattainable through microphones based on mechanical acoustic designs and microphones based on analog signal processing.

Our Andrea DSP Microphone and Audio Software Products include the use of the following technologies, among other technologies and techniques:

Digital Super Directional Array (“DSDA”^®). Andrea’s patented DSDA adaptive beam forming system enables more intelligible audio by forming a beam toward the speaker and eliminating background noises that are outside of the beam. DSDA microphone technology enables high quality far-field communications by centering microphone sensitivity on a user’s voice and canceling noise outside of that signal. DSDA continuously samples the ever changing acoustic parameters within an environment and adaptively identifies interfering noises that are extraneous to the voice signal, resulting in increased intelligibility of the array microphone’s output.

PureAudio^®. Andrea’s patented PureAudio and award winning noise reduction speech enhancement algorithm significantly improves intelligibility of voice audio and accuracy in speech driven applications used in noisy environments. PureAudio is a noise canceling algorithm that enhances speech by sampling the ambient noise in an environment and attenuating the noise from sources near or around the desired speech signals, thus delivering a clear audio signal. Designed specifically to improve the signal-to-noise ratio, PureAudio is effective in canceling stationary noises such as computer and ventilation fans, tires and engines.

EchoStop^®. Andrea’s patented full duplex acoustic echo cancellation algorithm enables both loudspeakers to broadcast and microphones to transmit simultaneously providing a high quality speakerphone function. EchoStop is an advanced acoustic echo canceller (stereo version available) developed for use with conferencing systems such as group audio and videoconferencing systems and cellular car phone kits. EchoStop allows true two-way communication (often referred to as full duplex) over a conferencing system, even when the system is used in large spatial environments that may be vulnerable to extensive reverberation. EchoStop incorporates noise reduction to reduce the background noise of both the microphone input and the loudspeaker output, thus preventing the accumulation of interfering noise over conferencing systems that facilitate communication among multiple sites.

Direction Finding and Tracking Array (“DFTA”^®). Andrea’s patented DFTA technology utilizes an array of microphones and a unique algorithm to detect the presence of a user’s voice, determine the direction of the voice and follow and track it when it moves. In a videoconferencing setting, this unique technology can provide direction to a videoconferencing camera and allow the system to steer and concentrate on the speaker, thus providing a “video-follow-audio” capability.

Our Products and their Markets and Applications

Our Andrea DSP Microphone and Audio Software Products have been designed for applications that are controlled by or depend on speech across a broad range of hardware and software platforms. These products incorporate our DSP microphone technologies and are designed to cancel background noise in a range of noisy environments, such as homes, offices, factories and automobiles. We also manufacture a line of accessories for these products. For commercial markets, we have designed our Andrea DSP Microphone and Audio Software Products for the following applications:

●	Mass transit and automotive communication systems;

●	Automated teller machines;

●	Information kiosks;

●	Quick Service Restaurant Automated Ordering;

●	Internet of Things (“IoT”);

●	Smart building entrance intercom systems;

●	Audio and Video recording; and

●	Video surveillance.

Andrea DSP Microphone and Audio Noise Reduction Software Products

We develop our Andrea DSP Microphone and Audio Noise Reduction Software Products primarily through customer-specific integration efforts, and we either license our related algorithms, sell a product incorporating our related algorithms, or both. In addition, we have developed stand-alone products for specific industrial and commercial OEM customers. As a result, such products are not generally sold to consumers. Therefore, as part of our strategy to increase sales to prospective customers desiring high-quality microphone performance for certain customer-specific environments, we have developed the following products:

DA-350 Auto Array Microphone (“DA-350”). The DA-350 is a linear four element array microphone with Digital Signal Processing (“DSP”) circuitry contained within a single microphone housing. The product also has integrated adaptive beam forming and noise reduction digital filtering software. The DA-350 is ideal for achieving superior far-field voice intelligibility and accuracy of Automatic Speech Recognition (“ASR”) in automotive and mass transit environments.

DA-250 OEM Array Microphone (“DA-250”). The DA-250 is a small compact Stereo Array Microphone and DSP circuit board platform that can easily be integrated into many different OEM devices that would greatly benefit from directional noise canceling microphone performance, but in the past has been unattainable with an embedded microphone configuration. Requiring only two tiny holes in the faceplate of a device, the DA-250 Stereo Array Microphone can deliver directional microphone sensitivity without the need for acoustic baffling, as found in shotgun tube type microphones. This product also includes full duplex echo cancellation for speakerphone functionality.

USB-SA Array Microphone. The USB-SA Array Microphone provides a USB digital audio adapter to bypass a computer’s standard integrated sound system, providing a high fidelity/low noise digital audio platform that is isolated from the computer’s motherboard. This external digital audio system utilizes the computer’s central processor to run Andrea’s AudioCommander™ adaptive beam forming directional microphone and noise reduction software.

Andrea AudioCommander™. Andrea’s PC Audio Control Panel, AudioCommander, includes a speaker volume adjustment with received PureAudio noise reduction control and a 10-band graphic equalizer with 18 built-in presets to customize sound for a user’s listening preference. It also includes a microphone volume adjustment with noise reduction, beam forming, and acoustic echo cancellation controls. The software also includes an audio wizard that sets microphone levels to optimize PC audio for speech-enabled applications including speech recognition, internet telephony and command and speech control functions.

Andrea Audio Software for Mac. Andrea Audio Software for Mac provides an intuitive graphic user interface to control stereo array microphone beam forming, noise cancellation on the input and EQ filters for the output of Andrea’s USB-SA audio devices running on the Apple Mac OS.

Andrea PureAudio Live Recorder. PureAudio™ Live Recorder is a full function digital voice and audio recording application for use with Apple™ iOS devices. The PureAudio™ Live Recorder is enhanced with Andrea's patented digital noise reduction microphone technology. PureAudio™ digitally reduces background noise, while enhancing the recorded sound quality and intelligibility when making recordings in real-world noisy mobile environments.

Andrea PureAudio Plus Recorder. In addition to the features offered in PureAudio Live Recorder, PureAudio Plus Recorder offers unlimited bookmarks for easy navigation of large recordings, 10-band graphic equalizer to customize your listening experience, aggressive PureAudio for recording in noisy environments, stereo recording for capturing surround sound recordings and beam forming noise cancellation to reduce sounds coming from the sides. PureAudio Plus Recorder is an easy to use, intuitive stereo recorder for capturing music and offers background noise reduction for crystal clear recordings of voice notes, lectures and interviews with almost unlimited recording time.

Our Collaborative Arrangements

An important element of our strategy is to promote widespread adoption of our products and technologies by collaborating with large enterprises and market and technology leaders in security systems and services, industrial system integrators, voice activated services, communications and computer manufacturing. In addition to the arrangements we are involved in, we are currently discussing additional arrangements with other companies, but we cannot assure you that any of these discussions will result in any definitive agreements.

Patents, Trademarks, and Other Intellectual Property Rights

Our products and technologies are developed in part using our proprietary intellectual property, and we believe that the strength of our intellectual property rights will be important to the success of our business. We utilize patent and trade secret protection, confidentiality agreements with customers and partners, disclosure and invention assignment agreements with employees and consultants and other contractual provisions to protect our intellectual property and other proprietary information. We plan to license specific, custom designs to our customers, charging royalties at a fixed amount per product or a percentage of sales. More generally, we intend to vigorously defend and monetize our intellectual property through licensing arrangements and, where necessary, enforcement actions against those entities using our patented solutions in their products. Royalties resulting from these patent monetization efforts can be structured in a variety of ways, including but not limited to one-time paid up licenses or on-going royalty arrangements. We expect to generate a portion of our revenues with these types of licensing arrangements.

Andrea maintains a number of patents in the United States covering claims to certain of its products and technology, which expire at various dates up to 2029. We cannot assure you that the strength or scope of our patents, or any new patents, will be of sufficient scope or strength or provide meaningful protection or commercial advantage to us.

Research and Development

We consider our technology to be of substantial importance to our competitiveness. To maintain this competitiveness, we have organized our research and development efforts using a “market and applications” approach for meeting the requirements of new and existing customers. Consistent with this approach, our engineering staff interacts closely with our sales and marketing personnel and directly with customers. The engineering staff is responsible for the research and development of new products and the improvement and support of existing products. For the years ended December 31, 2020 and 2019, total research and development expenses were $573,980 and $568,799, respectively. For fiscal 2021, we currently expect research and development expenses to remain at approximately the same level when compared to 2020. However, no assurance can be given that our research and development efforts will succeed. See Part II “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

Sales and Marketing

We employ a sales staff as well as outside sales representatives to market our Andrea DSP Microphone and Audio Software Products. Andrea DSP Microphone and Audio Software Products are marketed to computer and kiosk OEMs and industrial system integrators. Under our existing collaborative agreements, our collaborators have various marketing and sales rights to our Andrea DSP Microphone and Audio Software. We are seeking to enter into additional collaborative arrangements for the marketing and sale of our Andrea DSP Microphone and Audio Software Products, but we cannot assure you that we will be successful in these efforts. Market acceptance of the Andrea DSP Microphone and Audio Software Products and achievement of patent monetization is critical to our success.

Production Operations

In 2020 and 2019, all of our assembly operations were performed with subcontractors in the United States or in Asia. Most of the components for the Andrea DSP Microphone and Audio Software Products are available from several sources and are not characteristically in short supply. However, certain specialized components, such as microphones and DSP boards, are available from a limited number of suppliers and subject to long lead times. To date, we have been able to obtain sufficient supplies of these more specialized components, but we cannot assure you that we will continue to be able to do so. Shortages of, or interruptions in, the supply of these more specialized components could have a material adverse effect on our sales of Andrea DSP Microphone Products.

Competition

The markets for our Andrea DSP Microphone and Audio Software Products are highly competitive. Competition in these markets is based on varying combinations of product features, quality and reliability of performance, price, sales, marketing and technical support, ease of use, compatibility with evolving industry standards and other systems and equipment, name recognition, and development of new products and enhancements. Most of our current and potential competitors in these markets have significantly greater financial, marketing, technical, and other resources than us. Consequently, these competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the development, marketing, and sale of their products than we can.

We believe that our ability to compete successfully will depend upon our ability to develop and maintain advanced technology, develop proprietary products, attract and retain qualified personnel, obtain patent or other proprietary protection for our products and technologies and manufacture, assemble and market products, either alone or through third parties, in a profitable manner.

Employees

At December 31, 2020, we had nine employees, of whom one was engaged in production and related operations, three were engaged in research and development, and five were engaged in management, administration, sales and customer support duties. None of our employees are unionized or covered by a collective bargaining agreement. We believe that we generally enjoy good relations with our employees. In addition to our regular employees, we utilize eight independent consultants (two are sales representatives, two are engaged for administration purposes and four are engaged in research and development activities).

Available Information

We file reports, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on From 8-K and amendments to those reports, with the Securities and Exchange Commission (the “SEC”). The SEC maintains an internet site that contains such reports, proxy, and information statements and other information regarding issuers at http://www.sec.gov. Our website is not part of this annual report on Form 10-K.

ITEM 1A. RISK FACTORS

Andrea is a party to the Revenue Sharing Agreement under which a perpetual predetermined share of its Monetization Revenues will be allocated to AND34 and under which a default could cause a material adverse effect on its financial position.

Under the Revenue Sharing Agreement that we entered into with AND34, Monetization Revenues will first be applied 100% to the payment of accrued and unpaid interest on, and then will be allocated to AND34 and the Company in accordance with certain predetermined percentages. During each of the years ended December 31, 2020 and 2019, $200,000 of notes payable were issued to AND34. At December 31, 2020, there was $2,093,967 of accrued and unpaid interest and related outstanding principal notes issued to AND34. The Revenue Sharing Agreement contains many stipulations between the parties regarding the handling of various matters related to the monetization of our patents. Following an Event of Default, under the Revenue Sharing Agreement and the Rider, AND34 may proceed to protect and enforce its rights by suit or other appropriate proceeding, either for specific performance or in aid of the exercise of any power granted under the Revenue Sharing Agreement, the Rider or ancillary documents including the notes.

Andrea is limited in its ability to get traditional funding.

The terms of the Revenue Sharing Agreement historically expressly prohibited the Company from incurring any other indebtedness in connection with the patents covered by the Revenue Sharing Agreement and collateral outside of the patents covered by the Revenue Sharing Agreement, barring certain exceptions. Such restrictions contained in the Revenue Sharing Agreement terminated on June 30, 2020 and no longer prohibit the Company from incurring additional indebtedness. However, in order to incur third party indebtedness, the Company would need to offer some form of collateral and currently much of the Company’s intellectual property is serving as collateral in connection with the Revenue Sharing Agreement. In addition, the conversion price adjustment provisions of the Company’s Series C and Series D Convertible Preferred Stock, and the current low quotation price of the Company’s common stock on the OTCQB limit our ability to get traditional funding.

Our operating results are subject to significant fluctuation; period-to-period comparisons of our operating results may not necessarily be meaningful and you should not rely on them as indications of our future performance.

Our results of operations have historically been and are subject to continued substantial annual and quarterly fluctuations. The causes of these fluctuations include, among other things:

●	the volume of sales of our products under our collaborative marketing arrangements;

●	the cost of development of our products;

●	the mix of products we sell;

●	the mix of distribution channels we use;

●	the timing of our new product releases and those of our competitors;

●	fluctuations in the computer and communications hardware and software marketplace; and

●	general economic conditions.

We cannot assure you that the level of revenues and gross profit, if any, that we achieve in any particular fiscal period will not be significantly lower than in other fiscal periods. Our total revenues for the years ended December 31, 2020 and 2019 were approximately $1,355,000 and $1,895,000, respectively. Net loss for the year ended December 31, 2020 was approximately $824,000, or $0.01 net loss per share on a basic and diluted basis, versus net loss of approximately $549,000, or $0.01 net loss per share on a basic and diluted basis, for the year ended December 31, 2019. We continue to explore opportunities to grow sales in other business areas and vigorously defend and monetize our intellectual property.

Shares eligible for future sale may have an adverse effect on market price; Andrea shareholders may experience substantial dilution.

Sales of a substantial number of shares of our common stock in the public market could have the effect of depressing the prevailing market price of our common stock. Of the 200,000,000 shares of common stock presently authorized, 68,104,957 were outstanding as of March 23, 2021. The number of shares outstanding does not include an aggregate of 20,454,812 shares of common stock that are issuable. This number of issuable common shares is equal to approximately 30% of the 68,104,957 outstanding shares. These issuable common shares are comprised of: a) 6,301,500 shares of our common stock reserved for issuance upon exercise of outstanding awards granted under our 2006 Stock Plan; b) 10,000,000 shares reserved for future grants under our 2019 Plan; c) 524,736 shares of common stock that are issuable upon conversion of the Series C Preferred Stock and related accrued dividends; and d) 3,628,576 shares of common stock issuable upon conversion of the Series D Preferred Stock.

Conversions of our Series C Preferred Stock and Series D Preferred Stock may result in substantial dilution to other holders of our common stock.

As of March 23, 2021, we had 11.469249 shares of Series C Preferred Stock and 907,144 shares of Series D Preferred Stock outstanding. The issuance of shares of common stock upon conversion of the Series C Preferred Stock is limited to that amount which, after giving effect to the conversion, would cause the holder not to beneficially own in excess of 4.99% or, together with other shares beneficially owned during the 60-day period prior to such conversion, not to beneficially own in excess of 9.99% of the outstanding shares of common stock. The issuance of common stock upon conversion of the Series D Preferred Stock also is limited to that amount which, after giving effect to the conversion, would cause the holder not to beneficially own in excess of 4.99% of the outstanding shares of our common stock, except that each holder has a right to terminate such limitation upon 61 days’ notice to us. Beneficial ownership for purposes of calculation of such percentage limitations does not include shares whose acquisition is subject to similar limitations. If all shares of the Series C and Series D Preferred Stock, which are outstanding to be issued, are assumed to be converted into or exercised for shares of common stock, the number of new shares of common stock required to be issued as a result would aggregate 4,153,312 shares, which is equal to approximately 6% of the 68,104,957 outstanding shares.

If we conduct offerings in the future, the price at which we offer our securities may trigger a price protection provision for our Series C Preferred Stock and Series D Preferred Stock.

The shares of Series C and Series D Preferred Stock are subject to antidilution provisions, which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions. In addition, issuances of common stock at a price below the conversion price then in effect (currently $0.2551 and $0.25 for the Series C and Series D, respectively), or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than that conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment), require the adjustment of the conversion price to that lower price at which shares of common stock have been issued or may be acquired. In the event that Andrea issues securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series C or Series D Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series C or Series D Preferred Stock. This would make it more likely that the Series C and Series D Preferred Stock would be converted into common stock, resulting in dilution to our other holders of common stock as outlined in the risk factor above.

Short sales of our common stock may be attracted by or accompany conversions of Series C Preferred Stock and Series D Preferred Stock, which sales may cause downward pressure upon the price of our common stock.

Short sales of our common stock may be attracted by or accompany the sale of converted common stock, which in the aggregate could cause downward pressure upon the price of the common stock, regardless of our operating results, thereby attracting additional short sales of the common stock.

If we fail to commercialize and fully market our Andrea DSP Microphone and Audio Software products, our total revenues may not increase at a high enough rate to improve our results of operations or may not increase at all.

Our business, results of operations and financial condition depend on the successful commercialization of our Andrea DSP Microphone and Audio Software products and technologies. We introduced our first Andrea DSP Microphone products in 1998 and we continued to introduce complementary products and technologies over the last several years. We primarily target the computer market, the audio and video conferencing markets and the market for in-vehicle computing, among others. The success of these products is subject to the risks frequently encountered by companies in an early stage of product commercialization, particularly companies in the computing and communications industries.

If we are unable to obtain market acceptance of Andrea DSP Microphone and Audio Software products and technologies, or if market acceptance of these products and technologies occurs at a slow rate, then our business, results of operations and financial condition will be materially and adversely affected.

We, and our competitors, are focused on developing and commercializing products and technologies that enhance the use of voice, particularly in noisy environments, for a broad range of computer and communications applications. These products and technologies have been rapidly evolving and the number of our competitors has grown, but the markets for these products and technologies are subject to a high level of uncertainty and have been developing slowly. We, alone or together with our industry, may be unsuccessful in obtaining market acceptance of these products and technologies.

If we fail to develop and successfully introduce new products and technologies in response to competition and evolving technology, we may not be able to attract new customers or retain current customers.

The markets in which we sell our Andrea DSP Microphone and Audio Software products are highly competitive. We may not compete successfully with any of our competitors. Most of our current and potential competitors have significantly greater financial, research and development, marketing, technical support and other resources than we do. Consequently, these competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or devote greater resources to the development, marketing, and sale of their products than we can. The introduction of products incorporating new technologies could render our products obsolete and unmarketable and could exert price pressures on existing products.

We are currently engaged in the development of digital signal processing products and technologies for the voice, speech and natural language interface markets. We may not succeed in developing these new digital signal processing products and technologies, and any of these new digital signal processing products or technologies may not gain market acceptance.

Further, the markets for our products and technologies are characterized by evolving industry and government standards and specifications that may require us to devote substantial time and expense to adapt our products and technologies. For example, certain of our Andrea DSP Microphone and Audio Software products are subject to the Federal Communications Commission requirements. We may not successfully anticipate and adapt our products and technologies in a cost effective and timely manner to changes in technology and industry standards or to introductions of new products and technologies by others that render our then existing products and technologies obsolete.

If our marketing collaborators do not effectively market their products that include or incorporate our products, our sales growth will be adversely affected.

We have entered into collaborative and distribution arrangements with software publishers and computer hardware manufacturers relating to the marketing and sale of Andrea DSP Microphone and Audio Software products through inclusion or incorporation with the products of our collaborators. Our success is dependent to a substantial degree on the efforts of these collaborators to market their products that include or incorporate our products. Our collaborators may not successfully market these products. In addition, our collaborators generally are not contractually obligated to any minimum level of sales of our products or technologies, and we have no control over their marketing efforts. Furthermore, our collaborators may develop their own microphone products and technologies that may replace our products or technologies or to which they may give higher priority.

Shortages of, or interruptions in, the supply of more specialized components for our products could have a material adverse effect on our sales of these products.

The majority of our assembly operations are fulfilled by subcontractors (primarily in Asia) using purchased components. Some specialized components for the Andrea DSP Microphone products, such as microphones and digital signal processing boards, are available from a limited number of suppliers (and in some cases foreign) and subject to long lead times. We may not be able to continue to obtain sufficient supplies of these more specialized components, particularly if the sales of our products increase substantially or market demand for these components otherwise increases. If our subcontractors fail to meet our production and shipment schedules, our business, results of operations and financial condition would be materially and adversely affected.

The Company depends on component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the United States.

Substantially all of the Company’s components and products are manufactured in whole or in part by a few third-party manufacturers. Many of these manufacturers are located outside of the United States. The Company has also outsourced much of its transportation and logistics management. While these arrangements may lower operating costs, they also reduce the Company’s direct control over production and distribution. It is uncertain what effect such diminished control will have on the quality or quantity of products or the Company’s flexibility to respond to changing conditions. If manufacturing or logistics in these locations is disrupted for any reason, including but not limited to, natural disasters, information technology system failures, military actions or economic, business, labor, environmental, public health, or political issues, the Company’s consolidated financial condition and operating results could be materially adversely affected.

Our ability to compete may be limited by our failure to adequately protect our intellectual property or by patents granted to third parties.

We rely on a combination of patents, patent applications, trade secrets, copyrights, trademarks, and nondisclosure agreements with our employees, independent contractors, licensees and potential licensees, limited access to and dissemination of our proprietary information, and other measures to protect our intellectual property and proprietary rights. However, the steps that we have taken to protect our intellectual property may not prevent its misappropriation or circumvention. In addition, numerous patents have been granted to other parties in the fields of noise cancellation, noise reduction, computer voice recognition, digital signal processing and related subject matter. We expect that products in these fields will increasingly be subject to claims under these patents as the numbers of products and competitors in these fields grow and the functionality of products overlap. Claims of this type could have an adverse effect on our ability to manufacture and market our products or to develop new products and technologies, because the parties holding these patents may refuse to grant licenses or only grant licenses with onerous royalty requirements. Moreover, the laws of other countries do not protect our proprietary rights to our technologies to the same extent as the laws of the United States.

Our business may be adversely affected by the recent coronavirus outbreak.

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China. In January 2020, COVID-19 spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a national emergency with respect to COVID-19. In response to the COVID-19 outbreak, “shelter in place” orders and other public health measures were implemented across much of the United States, including the Long Island area, which was considered an epicenter of the outbreak and is where the Company is located. Due to “shelter in place” orders and other public health guidance measures, the Company had implemented a work-from-home policy for all staff members. The Company’s increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay or otherwise adversely impact the Company’s business, financial condition and results of operation. Although the Company has not yet had any customers cancel any open orders, some customers have delayed shipments of products into future months, causing our 2020 product revenues through December 31, 2020 to be approximately $400,000 less than the same period in 2019.

The COVID-19 global pandemic continues to rapidly evolve. The extent to which the outbreak may affect the Company’s business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, such as the duration, spread and severity of the outbreak, travel restrictions and actions to contain the outbreak or treat its impact, such as social distancing and quarantines or lock-downs in the United States and elsewhere, business closures or business disruptions and the effectiveness of actions taken in the United States and elsewhere to contain and treat the disease, including the speed of the ongoing vaccine distribution effort. Future developments in these and other areas present material uncertainty and risk with respect to the Company’s business, financial condition and results of operations.

Our business may be adversely affected if there is a default on the Payment Protection Program (“PPP”) Loans and/or the SBA Loan.

The Company entered into two PPP loans with HSBC Bank USA, N.A. in an aggregate principal amount of $285,552, pursuant to a program which was established under the CARES Act, whereby the Company received $142,775 in its first draw in May 2020 (the “PPP Loan First Draw”) and $142,777 in its second draw in February 2021 (the “PPP Loan Second Draw” and together with the PPP Loan First Draw, the “PPP Loans”). Under the terms of the CARES Act, recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels. On January 18, 2021, the PPP Loan First Draw was forgiven, barring an initial $8,000 advance. No assurance is provided that the Company will obtain forgiveness of the remaining amount of the PPP Loan First Draw or any of the PPP Loan Second Draw; therefore, the Company may be liable for paying the outstanding balances of the PPP Loans back.

The PPP Loans contain customary events of default relating to, among other things, payment defaults or breach of representations and warranties. If the PPP Loans are not forgiven, the Company may default on the PPP Loans and trigger the immediate repayment of all amounts outstanding and/or the Lender filing suit and obtaining judgment against the Company.

Additionally, the Company entered into the SBA Loan pursuant to which the Company received loan proceeds of $150,000. The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company intends to use the proceeds of the SBA Loan for such purpose.

While the SBA Loan does not allow for forgiveness like the PPP Loans, there are similar risks of default for the SBA Loan.

An unfavorable ruling in any current litigation proceeding or future proceeding may adversely affect our business, results of operations and financial condition.

From time to time, we are subject to litigation incidental to our business. For example, we are subject to the risk of adverse claims, interference proceedings before the U.S. Patent and Trademark Office, oppositions to patent applications outside the United States, and litigation alleging infringement of the proprietary rights of others. Litigation to establish the validity of patents, to assert infringement claims against others, and to defend against patent infringement claims can be expensive and time-consuming, even if the outcome is in our favor.

For example, as discussed in Part II “Item 3 – Legal Proceedings” of this Form 10-K, we are currently involved in appealing an unfavorable ruling by the ITC in our patent infringement claims against Apple Inc. In line with our business strategy, we have dedicated significant resources to vigorously prosecuting these patent infringement claims, and not succeeding on these claims could be detrimental to our Company.

Changes in economic and political conditions outside the United States could adversely affect our business, results of operations and financial condition.

We generate revenues from regions outside the United States. For the years ended December 31, 2020 and 2019, total revenues from sales to customers outside the United States accounted for approximately 23% and 25%, respectively, of our total revenues. International sales and operations are subject to a number of risks, including:

●	trade restrictions in the form of license requirements;

●	restrictions on exports and imports and other government controls;

●	changes in tariffs and taxes;

●	difficulties in staffing and managing international operations;

●	problems in establishing and managing distributor relationships;

●	general economic conditions; and

●	political and economic instability or conflict.

To date, we have invoiced our international revenues in U.S. dollars and have not engaged in any foreign exchange or hedging transactions. We may not be able to continue to invoice all of our revenues in U.S. dollars in order to avoid engaging in foreign exchange or hedging transactions. If we are required to invoice any material amount of international revenues in non-U.S. currencies, fluctuations in the value of non-U.S. currencies relative to the U.S. dollar may adversely affect our business, results of operations and financial condition or require us to incur hedging costs to counter such fluctuations.

If we are unable to attract and retain the necessary managerial, technical and other personnel necessary for our business, then our business, results of operations and financial condition will be harmed.

Our performance is substantially dependent on the performance of our executive officers and key employees. The loss of the services of any of these executive officers or key employees could have a material adverse effect on our business, results of operations and financial condition. Our future success depends on our continuing ability to attract and retain highly qualified managers and technical personnel. Competition for qualified personnel is intense and we may not be able to attract, motivate or retain qualified personnel in the future.

We have significantly less financial resources than most of our competitors which limits our ability to implement new products or enhancements to our current products and may require us to implement future restructuring plans, which could adversely affect our future sales and financial condition.

Financial resource constraints could limit our ability to execute our product strategy or require us to implement restructuring plans, particularly if we are unable to generate cash from operations or obtain additional sources of financing. Any future restructuring actions may slow our development of new or enhanced products by limiting our research and development and engineering activities. Our cash balances are also lower than those of our competitors, which may limit our ability to develop competitive new products on a timely basis. If we are unable to successfully introduce new or enhanced products, our sales and financial condition will be adversely affected.

A significant amount of our business involves licensing our proprietary software, a strategy that increases business risk and volatility.

We have licensed certain of our proprietary software to third parties and may seek to enter into additional license arrangements in the future. We cannot assure you, however, that others will be interested in licensing our software on commercially favorable terms or at all. We also cannot ensure that licensees will honor agreed-upon market restrictions, not infringe upon or misappropriate our intellectual property or maintain the confidentiality of our proprietary information.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Andrea has a lease for its corporate headquarters, which is located at 620 Johnson Avenue, Suite 1B, Bohemia, New York. The lease, which currently expires in November 2025, is for approximately 3,000 square feet of space used for research and development, sales and executive offices. We believe that we maintain our machinery, equipment and tooling in good operating condition and that these assets are adequate for our current business and are adequately insured. See Notes 5 and 12 of the accompanying Consolidated Financial Statements for further information concerning our property and equipment and leased facilities.

ITEM 3. LEGAL PROCEEDINGS

In September 2016, the Company filed a complaint with the United States District Court for the Eastern District of New York, alleging patent infringement against Apple Inc. (“Apple”) and requesting monetary and injunctive relief (the “New York Litigation”). The New York Litigation was stayed pending final disposition of a parallel case that the Company filed against Apple with the United States International Trade Commission (“ITC”). The ITC’s final decision finding that Apple did not violate the ITC’s statute was issued on March 22, 2018. Apple informed the New York judge of this final decision on May 30, 2018. The ITC’s final decision does not affect Andrea’s right to continue prosecuting the New York litigation.

In January 2017, Apple filed four (4) petitions for inter partes review (“IPR”) of the Company’s patents asserted in the New York Litigation with the United States Patent and Trademark Office (“PTO”). The Company filed its Patent Owner’s Preliminary Response in two of these IPR proceedings on May 1, 2017. The PTO instituted the four IPR proceedings requested by Apple on July 24, 2017. The Company filed its Patent Owner’s Response in two of these IPR proceedings on November 7, 2017. Oral argument in these two IPR proceedings, occurred on April 25, 2018. On July 12, 2018, the PTO issued its final written decisions in those two IPR proceedings, ruling that claims 6-9 of the Company’s U.S. Patent No. 6,363,345 remain valid and enforceable after the PTO’s review. On September 13, 2018, Apple filed its Notice of Appeal of that ruling to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”). Apple filed its Appeal Brief with the Federal Circuit on January 31, 2019. The Company filed its Response to Apple’s Appeal Brief on March 12, 2019. The Federal Circuit held an oral argument on October 1, 2019. On February 7, 2020, the Federal Circuit issued its decisions on Apple’s appeals. The Federal Circuit affirmed the PTO’s findings in one of the ongoing IPRs. In the other ongoing IPR, the Federal Circuit partly affirmed the PTO’s findings, but also partly vacated the PTO’s findings, and remanded the case back to the PTO for further proceedings. On remand of the ongoing IPR, on October 28, 2020, the PTO found that claims 6-9 of the Company’s U.S. Patent No. 6,363,345 are invalid. The Company has appealed this decision to the Federal Circuit.

The New York Litigation is stayed pending the final outcome of Apple’s IPR proceedings against the Company’s U.S. Patent No. 6,363,345.

Andrea intends to vigorously prosecute the New York Litigation and the ongoing IPR proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Andrea’s common stock is currently quoted on the OTCQB tier of the OTC Market Group’s quotation platform. On March 23, 2021, there were approximately 298 holders of record of Andrea’s Common Stock.

No cash dividends were paid on Andrea’s Common Stock in 2020 or 2019.

During the three months ended December 31, 2020, the Company did not repurchase any of its common stock.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Our primary mission is to provide the emerging “voice interface” markets with state-of-the-art digital microphone products and noise reduction software that facilitate AI natural language processing of the human voice/machine interfaces.

Examples of the applications and interfaces for which Andrea DSP Microphone and Audio Software Products provide benefits include: internet and other computer-based speech; telephony communications; multi-point conferencing; speech recognition; and other applications and interfaces that incorporate natural language processing. We believe that end users of these applications and interfaces will require high quality microphone and earphone products that enhance voice transmission, particularly in noisy environments, for use with personal computers, mobile personal computing devices, cellular and other wireless communication devices and automotive communication systems. Our Andrea DSP Microphone and Audio Software Products use “far-field” digital signal processing technology to provide high quality transmission of voice where the user is at a distance from the microphone. High quality audio communication technologies will be required for emerging far-field voice applications, ranging from continuous speech dictation, to internet telephony and multiparty video teleconferencing and collaboration, to natural language-driven interfaces for automobiles, home and office automation and other machines and devices into which voice-controlled microprocessors are expected to be introduced during the next several years.

Our Critical Accounting Policies

Our consolidated financial statements and the notes to our consolidated financial statements contain information that is pertinent to management's discussion and analysis. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and determination of revenues and expenses in the reporting period. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On a continual basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results may vary from these estimates and assumptions under different and/or future circumstances. Management considers an accounting estimate to be critical if: 1) it requires assumptions to be made that were uncertain at the time the estimate was made; and 2) changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on the Company’s consolidated results of operations or financial condition.

The following critical accounting policies that affect the more significant judgments and estimates used in the preparation of the consolidated financial statements have been identified. In addition to the recording and presentation of our convertible preferred stock, we believe that the following are some of the more critical judgment areas in the application of our accounting policies that affect our consolidated financial condition and results of operations. We have discussed the application of these critical accounting policies with our Audit Committee. The following critical accounting policies are not intended to be a comprehensive list of all of the Company’s accounting policies or estimates.

Revenue Recognition – On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASU No. 2014-09”), which is described below in Recent Accounting Pronouncements. In accordance with Topic 606, the Company recognizes revenue using the following five-step approach:

1.	Identify the contract with a customer.

2.	Identify the performance obligations in the contract.

3.	Determine the transaction price of the contract.

4.	Allocate the transaction price to the performance obligations in the contract.

5.	Recognize revenue when the performance obligations are met or delivered.

Andrea utilizes the modified retrospective approach when reviewing its current accounting policies to identify potential differences that would result from applying the new requirements to its customer contracts. This approach includes the evaluation of sales terms, performance obligations, variable consideration, and costs to obtain and fulfill contracts. Based on the Company’s review, management did not need to record a cumulative effect adjustment to retained earnings as of the date of initial application and application of this guidance did not have a material impact on its consolidated financial statements.

The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately one quarter in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed.

Accounts Receivable – We are required to estimate the collectability of our trade receivables. Judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and related aging of the past due balances. We evaluate specific accounts when we become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information is received. Our reserves are also determined by using percentages applied to certain aged receivable categories. At December 31, 2020 and 2019, our allowance for doubtful accounts was $4,789.

Inventories – We are required to state our inventories at net realizable value. In assessing the ultimate realization of inventories, we are required to make considerable judgments as to future demand requirements and compare that with our current inventory levels. Our reserve requirements generally increase as our projected demand requirements decrease due to market conditions, technological and product life cycle changes occur, as well as longer than previously expected usage periods. We have evaluated the current levels of inventories, considering historical total revenues and other factors and, based on this evaluation, recorded adjustments to cost of revenues to adjust inventories to net realizable value. We had inventories of $114,393 and $210,161 at December 31, 2020 and 2019, respectively. It is possible that additional charges to inventory may occur in the future if there are further declines in market conditions, or if additional restructuring actions are taken.

Long Lived Assets – ASC 360 “Property, Plant and Equipment” (“ASC 360”) requires management judgments regarding the future operating and disposition plans for marginally performing assets, and estimates of expected realizable values for assets to be sold. Andrea accounts for its long-lived assets in accordance with ASC 360 for purposes of determining and measuring impairment of its other intangible assets. Andrea’s policy is to periodically review the value assigned to its long lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea. If required, an impairment charge would be recorded based on an estimate of future discounted cash flows. Considerable management judgment is necessary to estimate undiscounted future operating cash flows and fair values and, accordingly, actual results could vary significantly from such estimates. No impairment charges were recognized during the years ended December 31, 2020 and 2019.

Deferred Tax Assets – We currently have significant deferred tax assets. ASC 740, “Income Taxes” (“ASC 740”), requires a valuation allowance be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. Furthermore, ASC 740 provides that it is difficult to conclude that a valuation allowance is not needed when there is negative evidence such as cumulative losses in recent years. Therefore, cumulative losses weigh heavily in the overall assessment. Accordingly, and after considering changes in previously existing positive and negative evidence, the Company determined that a full valuation allowance against the deferred tax assets was required. Andrea will reduce its valuation allowance in future periods to the extent that we can demonstrate our ability to utilize the assets. The future realization of a portion of our reserved deferred tax assets related to tax benefits associated with the exercise of stock options, if and when realized, will not result in a tax benefit in the consolidated statement of operations, but rather will result in an increase in additional paid in capital. We will continue to re-assess our reserves on deferred income tax assets in future periods on a quarterly basis.

Contingencies – We are subject to proceedings, lawsuits and other claims, including proceedings under laws and government regulations related to securities, environmental, labor, product and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is based on an analysis of each individual issue with the assistance of legal counsel. The amount of any reserves may change in the future due to new developments in each matter.

The impact of changes in the estimates and judgments pertaining to revenue recognition, receivables and inventories is directly reflected in our segments’ loss from operations. Although any charges related to our deferred tax provision are not reflected in our segment results, the long-term forecasts supporting the realization of those assets and changes in them are significantly affected by the actual and expected results of each segment.

Cautionary Statement Regarding Forward-Looking Statements

Certain information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2020 and other items set forth in this Annual Report on Form 10-K are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “seeks,” variations of such words, and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations, estimates and projections about our business and industry, our beliefs and certain assumptions made by our management. Investors are cautioned that matters subject to forward-looking statements involve risks and uncertainties including economic, competitive, governmental, technological and other factors that may affect our business and prospects. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. These statements are based on current expectations and speak as of the date of such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. In order to obtain the benefits of these “safe harbor” provisions for any such forward-looking statements, we caution investors and prospective investors about the following significant factors, which, among others, have in some cases affected our actual results and are in the future likely to affect our actual results and could cause them to differ materially from those expressed in any such forward-looking statements. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, our ability to enforce our patents, changes in economic, competitive, governmental, technological and other factors, such as the ongoing impact of COVID-19 and the PPP Loans, that may affect our business and prospects. Additional factors are discussed in Part I, “Item 1A – Risk Factors” of this Form 10-K.

Results Of Operations

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Total Revenues

	For the Year Ended December 31,				% Change
	2020		2019		% Change
Patent Monetization revenues
License revenues	$	554	$	950	(42	)
Total Patent Monetization revenues		554		950

Andrea DSP Microphone and Audio Software Products revenues
Revenue from automotive array microphone products		334,904		670,236	(50	)	(a)
Revenue from OEM array microphone products		777,487		897,718	(13	)	(b)
Revenue from customized digital product		100,670		125,782	(20	)	(c)
All other Andrea DSP Microphone and Audio Software Product revenues		79,572		158,586	(50	)	(d)
License revenues and service related revenues		62,176		41,968	49		(e)
Total Andrea DSP Microphone and Audio Software Products revenues		1,354,809		1,894,290	(29	)

Total revenues	$	1,355,363	$	1,895,240	(29	)

(a)	The decrease of approximately $335,000 for the year ended December 31, 2020, as compared to the same period in 2019, in revenues from automotive array microphone products is primarily the result of timing of sales to integrators of public safety and mass transit vehicle solutions because of COVID-19.

(b)	The decrease of approximately $120,000 for the year ended December 31, 2020, as compared to the same period in 2019, in revenues of OEM array microphone products is primarily the result of decreased product revenues from integrators of commercial product audio solutions because of COVID-19.

(c)	The decrease of approximately $25,000 for the year ended December 31, 2020, as compared to the same period in 2019, from customized digital product revenues is related to the timing of purchases from an OEM customer because of COVID-19.

(d)	The decrease of approximately $79,000 for the year ended December 31, 2020, as compared to the same period in 2019, in all other Andrea DSP Microphone and Audio Software Product revenues is primarily the result of timing in revenues from sales to the China market for audio solutions.

(e)	The increase of approximately $20,000 for the year ended December 31, 2020, as compared to the same period in 2019, is primarily the result of increased service revenue of approximately $31,000 related to engineer services partially offset by decreased royalties reported as a result of a decrease in sales of PC models which feature our technology.

Cost of Revenues

Cost of revenues as a percentage of total revenues for the year ended December 31, 2020 decreased to 23% from 28% for the year ended December 31, 2019. There was no cost of revenues associated with the Patent Monetization revenues of $554 and $950 for the years ended December 31, 2020 and 2019, respectively. The cost of revenues as a percentage of total revenue for the year ended December 31, 2020 for Andrea DSP Microphone and Audio Software Products was 23% compared to 28% for the year ended December 31, 2019. These changes are primarily the result of the changes in the product mix of revenues as described under “Total Revenues” above.

Patent Monetization Expenses

Patent monetization expenses for the year ended December 31, 2020 decreased by 14% to $166,694 from $194,215 for the year ended December 31, 2019, primarily as a result of timing of legal services incurred to pursue patent monetization. These expenses are a result of our continuing efforts to pursue patent monetization, including the filing of the complaints disclosed under Part I, “Item 3 –Legal Proceedings” of this Form 10-K. Such patent monetization is a key component of our business strategy.

Research and Development Expenses

Research and development expenses for the year ended December 31, 2020 increased by 1% to $573,980 from $568,799 for the year ended December 31, 2019. These expenses primarily relate to costs associated with the development of new products. For the year ended December 31, 2020, research and development expenses reflected a 22% decrease in our Patent Monetization efforts to $18,908 or 3% of total research and development expenses, and a 2% increase in our Andrea DSP Microphone and Audio Software Technology efforts to $555,072, or 97% of total research and development expenses. With respect to DSP Microphone and Audio Software technologies, research efforts are primarily focused on the pursuit of commercializing a natural language-driven human/machine interface by developing optimal far-field microphone solutions for various voice-driven interfaces, incorporating Andrea’s digital super directional array microphone technology, and certain other related technologies such as noise suppression and stereo acoustic echo cancellation. We believe that continued research and development spending should benefit Andrea in the future.

General, Administrative and Selling Expenses

General, administrative and selling expenses decreased by approximately 1% to $1,058,980 for the year ended December 31, 2020 from $1,070,654 for the year ended December 31, 2019. For the year ended December 31, 2020, there was a 1% decrease in our Patent Monetization efforts to $177,206, or 17% of total general, administrative and selling expenses and a 1% decrease in general, administrative and selling expenses in our Andrea DSP Microphone and Audio Software Technology efforts to $881,774, or 83% of total general, administrative and selling expenses. The overall 1% decrease of approximately $12,000 is primarily related to decreased stock based compensation expense.

Interest expense, net

Interest expense, net for the year ended December 31, 2020 was $68,020, compared to interest expense, net of $70,133 for the year ended December 31, 2019.

Provision for Income Taxes

The income tax provision for the year ended December 31, 2020 was $619, compared to $1,805 for the year ended December 31, 2019. The provision for income taxes for the years ended December 31, 2020 and 2019 is a result of certain licensing revenues that are subject to withholding of income tax as mandated by the foreign jurisdiction in which the revenues of approximately $3,000 and $9,000 for the years ending December 31, 2020 and 2019, respectively, are earned.

Net loss

Net loss for the year ended December 31, 2020 was $823,835 compared to a net loss of $548,566 for the year ended December 31, 2019. The net loss for the year ended December 31, 2020 principally reflects the factors described above.

Inflation

We do not believe that inflation has had a material impact on our business and operating results during the periods presented, and we do not expect it to have a material impact in the near future, although there can be no assurances that our business will not be affected by inflation in the future.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its consolidated financial condition, changes in consolidated financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Liquidity And Capital Resources

At December 31, 2020, we had cash of $362,730 compared to $335,790 at December 31, 2019. The increase in our cash balance at December 31, 2020 is primarily a result of proceeds of the Additional Notes received in connection with the Revenue Sharing Agreement, the SBA Loan and the PPP Loan partially offset by cash used in operating activities.

Our working capital balance at December 31, 2020 was $321,491 compared to working capital of $556,850 at December 31, 2019. The decrease in working capital reflects a decrease in total current assets of $196,347 and an increase in total current liabilities of $39,012. The decrease in total current assets reflects an increase in cash of $26,940, a decrease in accounts receivable of $195,308, a decrease in inventories of $95,768 and an increase in prepaid expenses and other current assets of $67,789. The increase in total current liabilities reflects an increase in trade accounts payable and other current liabilities of $29,033 and an increase in the current portion of long-term debt of $9,979.

The increase in cash of $26,940 reflects $448,543 of net cash used in operating activities, plus $25,292 of net cash used in investing activities, partially offset by $500,775 of net cash provided by financing activities.

The cash used in operating activities of $448,543, excluding non-cash charges, is primarily attributable to the $823,835 net loss for the year ended December 31, 2020, a $194,689 decrease in accounts receivable, a $104,948 decrease in inventories, a $67,790 increase in prepaid expenses, other current assets and other assets, and a $19,078 decrease in trade accounts payable and other current liabilities and lease liabilities. The changes in receivables, inventories and trade accounts payable primarily reflect differences in the timing related to both the payments for and the acquisition of inventory as well as for other services in connection with ongoing efforts related to Andrea’s operations.

The cash used in investing activities of $25,292 reflects a $19,303 increase in patents and trademarks and purchases of property and equipment of $5,989. The increase in patents and trademarks reflects capital expenditures associated with our intellectual property. The increase in property and equipment is associated with the purchases of computer equipment.

The cash provided by financing activities of $500,775, reflects $200,000 of proceeds from long-term debt, $158,000 from the SBA Loan and $142,775 from the PPP Loan First Draw.

We plan to improve our cash flows in 2021 by aggressively pursuing monetization of our patents related to our Andrea DSP Microphone Audio Software to result in increased licensing arrangements, increasing the sales of our Andrea DSP Microphone Audio Software Products through the introduction of new products, as well as our increased efforts toward our sales and marketing efforts. As of March 23, 2021, Andrea had approximately $340,000 of cash deposits. We cannot assure you that demand will continue for any of our products, including future products related to our Andrea DSP Microphone and Audio Software technologies, or, that if such demand does exist, that we will be able to obtain the necessary working capital to increase production and provide marketing resources to meet such demand on favorable terms, or at all.

Market Risk

Historically, our principal source of financing activities had been the issuance of convertible preferred stock with financial institutions. We are affected by market risk exposure primarily through any amounts payable in stock, or cash by us under convertible securities. We do not utilize derivative financial instruments to hedge against changes in interest rates or for any other purpose. In addition, substantially all transactions entered into by us are denominated in U.S. dollars. As such, we have shifted foreign currency exposure onto our foreign customers. As a result, if exchange rates move against foreign customers, we could experience difficulty collecting unsecured accounts receivable, the cancellation of existing orders or the loss of future orders. For the year ended December 31, 2020, total revenue from sales to customers outside the United States accounted for approximately 23% of our total revenue. The foregoing could materially adversely affect our business, financial condition and results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements are included in this report beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a)	Disclosure Controls and Procedures

	The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)	Internal Controls Over Financial Reporting

	Management’s annual report on internal control over financial reporting is included herein by reference to the section titled “Management’s Report on Internal Control Over Financial Reporting” immediately preceding the Company’s audited Consolidated Financial Statements in this Report.

(c)	Changes to Internal Control Over Financial Reporting

	There were no changes in the Company’s internal control over financial reporting during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On January 31, 2021, the Company amended the employment agreement, dated August 1, 2014, with Douglas J. Andrea, Chairman of the Board, President and Chief Executive Officer of the Company (the “Amended Agreement”). The original agreement, as amended, was scheduled to terminate on January 31, 2021. The Amended Agreement extended this date until July 31, 2021. Pursuant to the Amended Agreement, Mr. Andrea will receive an annual base salary of $216,000.

If a change in control occurs during the term of the Amended Agreement and results in the subsequent termination of Mr. Andrea’s employment within twelve months thereafter, Mr. Andrea will be entitled to a severance payment equal to twelve months of Mr. Andrea's most recent Base Salary plus a pro-rated portion of Mr. Andrea’s most recent annual and four quarterly bonuses paid immediately preceding the Change of Control, continuation of health and medical benefits for twelve months and immediate vesting of all stock options.

Under the Amended Agreement, in the event of his termination without cause or resignation with the Company’s consent, Mr. Andrea is entitled to a severance payment equal to two months of his base salary, plus two months pro-rated portion of Mr. Andrea's most recent annual and quarterly bonuses, payment of $12,500, (the un-paid bonus for the quarter ended September 30, 2017), and a continuation of health insurance coverage for Mr. Andrea and his dependents for 6 months.

The foregoing summary of the Amended Agreement is not complete and is qualified in its entirety by reference to the complete text of such amendment, which is filed as Exhibit 10.5 to this Form 10-K and which is incorporated herein by reference in its entirety.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information on the Directors of the Company is provided below. All Directors serve one-year terms and their ages are as of December 31, 2020. Based on their respective experiences, qualifications, attributes and skills set forth below, the Board of Directors determined that each current Director should serve as a Director.

Douglas J. Andrea, age 58, has been Chairman of the Board of Directors since November 2001, a Director of the Company since 1991, Corporate Secretary since 2003 and Chief Executive Officer since January 2005. He was Co-Chairman and Co-Chief Executive Officer of the Company from November 1998 until August 2001. He served as Co-President of the Company from November 1992 to November 1998, as Vice President - Engineering of the Company from December 1991 to November 1992, and as Secretary of the Company from 1989 to January 1993.

Mr. Andrea’s extensive experience in the software and communications industry affords the Board valuable insight regarding the business and operation of the Company. In addition, Mr. Andrea’s extensive background in corporate management provides him with a unique and broad-based decision-making experience. Mr. Andrea has held various positions within the Company, which has given him knowledge of all aspects of the Company’s business and history and positions him well to continue to serve as a member of the Board.

Louis Libin, age 62, has been a Director of the Company since February 2002. Mr. Libin is Vice President of Spectrum Policy and Strategy for One Media and Sinclair Broadcast Group (SBGI). Since 1996, he has been the President of Broad Comm, Inc., a consulting group specializing in advanced television broadcast, interactive TV, Internet Protocol and wireless communications. Mr. Libin has been an executive director of the Advanced Television Broadcasting Alliance (the “ATBA”) since January 2014. The ATBA is an organization comprised of hundreds of low-power television (“LPTV”) broadcasters, owners and operators of translators, and allied industry organizations and companies. Mr. Libin also served as the Senior Director for advanced technology for Sinclair Broadcast Group from 2015 to 2018. Mr. Libin was Chief Technology Officer for NBC, and was responsible for all business and technical matters for satellite, wireless and communication issues for General Electric and NBC. Since 1989, Mr. Libin has represented the United States on satellite and transmission issues at the International Telecommunications Union in Geneva, Switzerland. Mr. Libin is a Senior Member of the Institute of Electrical and Electronic Engineers and is a member of the National Society of Professional Engineers. Mr. Libin also serves on the boards of directors of several private and not-for profit companies.

Mr. Libin’s extensive experience in the communications industry affords the Board valuable insight regarding the business and operation of the Company. Mr. Libin’s technical background, as well as his experiences from his other board memberships, makes him a valuable asset to continue to serve as a member of the Board.

Joseph J. Migliozzi, age 70, has been a Director of the Company since September 2003. Since 2020, Mr. Migliozzi serves as Vice President of Finance and Chief Financial Officer of Eastern Alloys, Inc., a company that formulates metal alloys primarily from zinc and aluminum. From 2008 to 2019, Mr. Migliozzi served as the Executive Vice President of Ionian Management Inc., a petroleum shipping, trading and distribution company. Prior to that he was the Engagement Partner at Tatum LLC, an Interim CFO practice, from 2005 to 2008. He has operated his own management consulting firm since 2001. From 1997 to 2001, Mr. Migliozzi was the Chief Operating and Financial Officer of Turtle Beach Systems. Prior to that, he served in various executive management positions in the electronics manufacturing industries, with both financial and operational responsibilities. Mr. Migliozzi is a Certified Public Accountant.

Mr. Migliozzi’s accounting, finance and corporate management experience affords the Board valuable insight regarding the business, finances and operation of the Company. Mr. Migliozzi’s extensive background provides him the distinctive skill set required to continue to serve as a member of the Board.

Jonathan D. Spaet, age 64, has been a Director of the Company since 2003. He currently is Senior Vice President of Networks Sales for Sinclair Broadcast, one of the largest owners of television stations in the country, and served in such positon since January 2014. Previously, he was the Senior Director of Advanced Advertising from 2010 to 2013, heading the group for Viamedia, a cable television advertising representation company that represents many cable providers including, but not limited to, Verizon FiOS and RCN. Prior to Viamedia, he was Executive Vice President of Vault.com, an internet site in the career and recruitment space. Before Vault, he was Vice-President/General Manager of Advertising Sales for Time Warner Cable in New York City, where he had been since 2008. Prior to that appointment, he was at Time Warner Cable National Advertising Sales since September 2004, overseeing advertising sales for Time Warner Cable markets around the country. Previously, he was Vice-President of Sales for Westwood One Radio Networks, managing ad sales for one of the largest radio groups in the country. From 2002 to 2003, he was the Chief Operating Officer of MEP Media, a company that started a digital cable channel devoted to the music enthusiast. Prior to MEP, he was President of Ad Sales for USA Networks, supervising ad sales, marketing, research and operations for both USA and Sci-fi, two top-tier cable channels. Previously, he was President of Ad Sales for About.com. This followed 15 years at NBC, where Mr. Spaet’s career included a six-year position in NBC Cable and nine years in the NBC Television Stations Group. Mr. Spaet holds a Bachelor and Masters of Business Administration degrees from New York University and is a member of the National Sales Advisory Board of the Cable Advertising Bureau, and is a member of the Internet Advertising Bureau.

Mr. Spaet’s extensive experience in media sales, marketing, promotion and finance brings the Board valuable insight regarding the business and operation of the Company. Mr. Spaet’s background in producing, packaging, positioning and experience in the communication industry make him a valuable asset to continue to serve as a member of the Board.

Information about Executive Officers Who Are Not Directors

The following information is provided for the Company’s executive officer who is not also a director:

Corisa L. Guiffre, age 48, has been the Company's Vice President and Chief Financial Officer since June 2003 and Assistant Corporate Secretary since October 2003. Ms. Guiffre joined the Company in November 1999 and served as Vice President and Controller until June 2003. Prior to joining the Company, she was a member of the Audit, Tax and Business Advisory divisions at Arthur Andersen LLP. She is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants and a member of the New York State Society of Certified Public Accountants.

Ms. Guiffre is elected annually and holds office until her successor has been elected and qualified or until she is removed or replaced.

Code of Business Ethics and Conduct

Andrea has adopted a Code of Business Ethics and Conduct which applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and employees. See Part II, “Item 15 – Exhibits” to this Annual Report on Form 10-K.

Audit Committee and Audit Committee Financial Expert.

The Company has a separately designated standing Audit Committee, which currently consists of Messrs. Jones, Libin, Migliozzi and Spaet, each of whom the Board determined was “independent” and financially literate under the rules and regulations promulgated by the SEC and The Nasdaq Stock Market. Although not required, the Company has elected to continue to assess director "independence" and evaluate the service of its directors serving on its Board committees under the applicable Nasdaq Stock Market rules and regulations. Our Board has determined that Mr. Migliozzi is an audit committee financial expert under the rules of the SEC.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information for the last two fiscal years relating to compensation earned by each person who served as chief executive officer and the other most highly compensated executive officer whose total compensation was over $100,000 during the years ended December 31, 2020 and 2019.

Name and Principal Position	Year	Salary		Bonus		Total
Douglas J. Andrea, Chairman of the Board, Chief Executive Officer, and Corporate Secretary	2020	$	216,000	$	-	$	216,000
	2019		216,000		-		216,000
Corisa L. Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary	2020	$	170,000	$	-	$	170,000
	2019		170,000		-		170,000

Outstanding Equity Awards at December 31, 2020

The following table provides information concerning outstanding unexercised options as of December 31, 2020 for each named executive officer. Neither of the named executive officers had stock awards that have not vested or unearned equity incentive plan awards at December 31, 2020.

	Option Awards
Name	Number of securities underlying unexercised options (#) exercisable	Number of securities underlying unexercised options (#) unexercisable	Option exercise price ($/share)		Option expiration date
Douglas J. Andrea	500,000	-	$	0.10	9-02-2024
	500,000	-	$	0.06	8-07-2025
	1,400,000	-	$	0.05	11-16-2026
Corisa L. Guiffre	350,000	-	$	0.08	10-21-2024
	400,000	-	$	0.05	11-16-2026

Employment Agreements

In August 2014, the Company entered into an employment agreement with Mr. Andrea, which was subsequently amended several times, most recently on January 31, 2021. The effective date of the original employment agreement was August 1, 2014 and it currently expires on July 31, 2021, subject to renewal as approved by the Compensation Committee of the Board of Directors. Pursuant to his amended employment agreement, Mr. Andrea will receive an annual base salary of $216,000. The employment agreement provides for quarterly bonuses equal to 5% of the Company’s pre-bonus net after tax quarterly earnings for a total quarterly bonus amount not to exceed $12,500; and annual bonuses equal to 9% of the Company’s annual pre-bonus net after tax earnings in excess of $300,000 up to $3,000,000, and 3% of the Company’s annual pre-bonus adjusted net after tax earnings in excess of $3,000,000. Adjustments to net after tax earnings shall be made to remove the impact of change in recognition of accumulated deferred tax asset value and any income recognized from forgiveness of debt relating to the CARES Act. All bonuses shall be payable as soon as the Company’s cash flow permits. All bonus determinations or any additional bonus in excess of the above will be made in the sole discretion of the Compensation Committee. Under certain circumstances, Mr. Andrea is entitled to a change in control payment equal to twelve months of Mr. Andrea’s most recent base salary plus a pro-rated portion of Mr. Andrea's most recent annual and four quarterly bonuses paid immediately preceding the change of control, continuation of health and medical benefits for twelve months and immediate vesting of all stock options in the event of a change in control during the term of his agreement and subsequent termination of his employment within twelve months following the change of control. In the event of his termination without cause or resignation with the Company’s consent, Mr. Andrea is entitled to a severance payment equal to two months of his base salary, plus the two months pro-rated portion of his most recent annual and quarterly bonuses, payment of $12,500 (the un-paid bonus for the quarter ended September 30, 2017) and a continuation of health insurance coverage for Mr. Andrea and his dependents for 6 months. At December 31, 2020, the future minimum cash commitments under this agreement aggregate $126,000.

On November 11, 2008, the Company entered into an amended and restated change in control agreement with Corisa Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary of the Company. The change in control agreement provides Ms. Guiffre with a severance benefit upon termination in connection with a change in control (as defined in the agreement). If Ms. Guiffre is terminated following a change in control, the Company will pay Ms. Guiffre a sum equal to three times Ms. Guiffre’s average annual compensation for the five preceding taxable years. All restrictions on any restricted stock will lapse immediately and incentive stock options and stock appreciation rights, if any, will become immediately exercisable in the event of a change in control. Upon the occurrence of a change in control followed by Ms. Guiffre’s termination of employment, the Company will continue life, medical, dental and disability coverage for 36 full calendar months following the date of termination.

Director Compensation

The following table provides the compensation received by individuals who served as non-employee directors of the Company during the 2020 fiscal year.

Director	Fees Earned or Paid in Cash		Stock Option Awards		Total
Gary A. Jones⁽¹⁾	$	1,500	$	-	$	1,500
Louis Libin		6,500		-		6,500
Joseph J. Migliozzi		7,000		-		7,000
Jonathan D. Spaet		5,500		-		5,500

(1)	Mr. Jones passed away on October 12, 2020; therefore, the above fees earned by Mr. Jones only represent the fees earned from January 1, 2020 through October 12, 2020.

Annual Retainer and Meeting Fees for Non-Employee Directors

The following sets forth the applicable retainers and fees that were paid to non-employee directors for their service on the Board of Directors of the Company during 2020. Mr. Andrea, as an employee director does not receive any retainers or fees for his service on the Board of Directors.

Annual Retainer	$	3,500
Fee per Board Meeting (Regular or Special)	$	250
Fee per Committee Meeting	$	250
Additional Annual Retainer for the Chairperson of the Audit Committee	$	1,500

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Stock Ownership

The following table sets forth certain information as of March 23, 2021, with respect to the common stock ownership of (i) each director of the Company, (ii) each executive officer named in the Summary Compensation Table and (iii) all directors and executive officers of the Company as a group.

Name of Beneficial Owner	Number of Shares Owned (excluding options)	Number of Shares That May be Acquired Within 60 days by Exercising Options	Percent of Common Stock Outstanding⁽¹⁾
Executive Officer
Douglas J. Andrea	2,923,576	2,400,000	7.6	%
Corisa L. Guiffre	102,750	750,000	1.6	%
Non-Employee Directors
Louis Libin	352,149	475,000	1.2	%
Joseph J. Migliozzi	1,529,354	475,000	2.9	%
Jonathan D. Spaet	29,261	375,000	*
Current directors and executive officers as a group (5 persons)	4,933,214	4,475,000	13.0	%

____________________

*	Less than 1%

(1)	Percentages with respect to each person or group of persons have been calculated on the basis of 68,104,957 shares of Company common stock outstanding, plus the number of shares of Company common stock which such person or group of persons has the right to acquire within 60 days from March 23, 2021, by the exercise of options. The information concerning the shareholders is based upon information furnished to the Company by such shareholders. Except as otherwise indicated, none of the shares listed are pledged as security and all of the shares next to each identified person or group are owned of record and beneficially by such person or each person within such group and such persons have sole voting and investment power with respect thereto.

The following table sets forth certain information as of March 23, 2021 with respect to the stock ownership of beneficial owners of more than 5% of the Company’s outstanding common stock other than Mr. Andrea whose stock ownership is set forth above:

Name and Address	Shares of Common Stock Owned		Common Stock Equivalents ⁽¹⁾		Percent of Common Stock and Common Stock Equivalents Outstanding ⁽²⁾
Alpha Capital Anstalt	-		5,722,159	⁽³⁾	7.8	%
Pradafant 7,
Furstentums 9490
Vaduz, Liechtenstein
Nickolas W. Edwards	5,390,000	⁽⁴⁾	-		7.9	%
937 Pine Ave, Long Beach, CA 90813

____________________

(1)

Alpha Capital Anstalt (“Alpha Capital”) holds the Company’s Series C and Series D Preferred Stock that is convertible in the Company’s common stock. The issuance of shares of common stock upon conversion of the Series C Preferred Stock is limited to that amount which, after given effect to the conversion, would cause the holder not to beneficially own in excess of 4.99% or, together with other shares beneficially owned during the 60 day period prior to such conversion, not to beneficially own in excess of 9.99% of the outstanding shares of common stock. The issuance of common stock upon conversion of the Series D Preferred Stock also are limited to that amount which, after given effect to the conversion, would cause the holder not to beneficially own an excess of 4.99% of the outstanding shares of our common stock, except that each holder has a right to terminate such limitation upon 61 days notice to us.

(2)	Percentages with respect to each person or group of persons have been calculated on the basis of 68,104,957 shares of Company common stock outstanding, plus in the case of Alpha Capital the number of shares of Company common stock which such person or groups of persons has the right to acquire within 60 days of the conversion of Series C Preferred Stock and Series D Preferred Stock.

(3)	Based on information filed with the Securities and Exchange Commission in a Schedule 13G (Amendment No. 1) on February 15, 2007. Common stock ownership of Alpha Capital is not known as of March 23, 2021. As of March 23, 2021, Alpha Capital has 2,086,809 of common stock equivalents from Series C Preferred Stock and Series D Preferred Stock. See footnote (1) above for limitations on the conversion of such common stock equivalents.

(4)	Based on information filed with the Securities and Exchange Commission in a Schedule 13G (Amendment No. 1) on October 20, 2006 by Nickolas W. Edwards.

The following table sets forth certain information as of December 31, 2020 for all compensation plans, including individual compensation arrangements under which equity securities of the Company are authorized for issuance.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	6,301,500	$	0.06	10,000,000
Equity compensation plans not approved by security holders	-		-	-
Total	6,301,500	$	0.06	10,000,000

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Each member of the Company’s Board of Directors is independent under the listing standards of the Nasdaq Stock Market, except for Mr. Andrea, Chairman of the Board, President and Chief Executive Officer of the Company. Although not required, the Company has elected to continue to assess director “independence” and evaluate the service of its directors serving on its Board committees under the applicable Nasdaq Stock Market rules and regulations.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The following table sets forth the fees billed or expected to be billed to the Company for the fiscal years ended December 31, 2020 and 2019 by Marcum LLP:

	2020		2019
Audit Fees	$	109,500	$	109,500
Audit-related fees		-		-
Tax fees		-		-
All other fees		-		-

Pre-Approval of Services by the Independent Auditor

The Audit Committee has adopted a policy for pre-approval of audit and permitted non-audit services by the Company’s independent auditor. The Audit Committee will consider annually and, if appropriate, approve the provision of audit services by its external auditor and consider and, if appropriate, pre-approve the provision of certain defined audit and non-audit services. The Audit Committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved.

Any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the Audit Committee for consideration at its next regular meeting or, if earlier consideration is required, to the Audit Committee or one or more of its members. The member or members to whom such authority is delegated shall report any specific approval of services at its next regular meeting. The Audit Committee will regularly review summary reports detailing all services being provided to the Company by its external auditor.

During the year ended December 31, 2020, all services were approved, in advance, by the Audit Committee in compliance with these procedures.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The following documents are included in this Annual Report on Form 10-K beginning on page F-1.

●	Report of Independent Registered Public Accounting Firm

●	Consolidated Balance Sheets—at December 31, 2020 and 2019

●	Consolidated Statements of Operations—Years Ended December 31, 2020 and 2019

●	Consolidated Statements of Shareholders’ Deficit—Years Ended December 31, 2020 and 2019

●	Consolidated Statements of Cash Flows—Years ended December 31, 2020 and 2019

●	Notes to Consolidated Financial Statements.

(a)(2) Financial Statement Schedules

All schedules are omitted as required information is either not applicable, or is presented in the consolidated financial statements.

(a)(3) Exhibits

Exhibit Number		Description
3.1		Restated Certificate of Incorporation of Registrant, dated May 14, 1992 (incorporated by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K filed for the year ended December 31, 2017)
3.2		Certificate of Amendment of the Restated Certificate of Incorporation of Registrant, dated August 19, 1997 (incorporated by reference to Exhibit 3.2 of the Registrant’s Form 10-K for the year ended December 31, 1997)
3.3		Certificate of Amendment to the Restated Certificate of Incorporation of Registrant, dated November 24, 1998 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed November 30, 1998)
3.4		Certificate of Amendment to the Restated Certificate of Incorporation of Registrant, dated May 7, 1999 (incorporated by reference to Exhibit 3.4 of the Registrant’s Annual Report on Form 10-K filed for the year ended December 31, 2017)
3.5		Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant, dated June 10, 1999 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed June 22, 1999)
3.6		Certificate of Amendment to the Restated Certificate of Incorporation of Registrant, dated September 28, 2000 (incorporated by reference to Exhibit 3.6 of the Registrant’s Annual Report on Form 10-K filed for the year ended December 31, 2017)
3.7		Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant, dated October 3, 2000 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed October 12, 2000)
3.8		Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant dated August 22, 2001 (incorporated by reference to Exhibit 3.6 of the Registrant’s Annual Report on Form 10-K filed April 1, 2002)
3.9		Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant dated February 5, 2003 (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form 8-A/A filed February 6, 2003)
3.10		Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant dated February 23, 2004 (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form 8-K filed February 26, 2004)
3.11		Amended By-Laws of Registrant (incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed November 30, 1998)

Exhibit Number		Description
4.1		Description of Securities+
4.2		Rights Agreement dated as of April 23, 1999 between Andrea and Continental Stock Transfer and Trust Company, as Rights Agent, including the form of Certificate of Amendment to Certificate of Incorporation as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Shares of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed May 7, 1999)
10.1		*2006 Equity Compensation Plan of the Registrant (incorporated by reference to Appendix A of the Registrant’s Schedule 14A filed on October 17, 2006)
10.2		* Amendment to the 2006 Equity Compensation Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 10-K filed on March 16, 2010)
10.3		* 2019 Equity Compensation Plan of the Registrant (incorporated by reference to Appendix A of the Registrant’s Schedule 14A filed on September 18, 2019)
10.4		*Employment Agreement, dated as of August 1, 2014 by and between Andrea Electronics Corporation and Douglas J. Andrea (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on September 8, 2014)
10.5		+ * Tenth Amendment to Executive Employment Agreement, dated as of January 31, 2021, by and between Andrea Electronics Corporation and Douglas J. Andrea
10.6		*Amended and Restated Change in Control Agreement, dated as of November 11, 2008, by and between Andrea Electronics Corporation and Corisa L. Guiffre (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 10-Q filed on November 14, 2008)
10.7		**Revenue Sharing and Note Purchase Agreement by and among Andrea Electronics Corporation and AND34 Funding LLC dated as of February 14, 2014 (incorporated by reference to Exhibit 1.1 of the Registrant’s Form 10-Q/A filed on December 31, 2014)
10.8		**Amended and Restated Revenue Sharing and Note Purchase Agreement by and among Andrea Electronics Corporation and AND34 Funding LLC dated as of December 24, 2014, retroactively effective as of February 14, 2014 (incorporated by reference to Exhibit 1.1 of the Registrant’s Form 8-K/A filed on January 22, 2015)
10.9		Rider to Amended and Restated Revenue Sharing and Note Purchase Agreement by and among Andrea Electronics Corporation and AND34 Funding LLC dated as of December 24, 2014, retroactively effective as of February 14, 2014 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q filed on November 14, 2016)
10.10		First Amendment to the Rider to Amended and Restated Revenue Sharing and Note Purchase Agreement by and among Andrea Electronics Corporation and AND34 Funding LLC dated as of October 24, 2017 (incorporated by reference to Exhibit 10.1 of the Registrant's Form 10-Q filed on May 15, 2019)
10.11		Second Amendment to the Rider to Amended and Restated Revenue Sharing and Note Purchase Agreement by and among Andrea Electronics Corporation and AND34 Funding LLC dated as of May 10, 2019 (incorporated by reference to Exhibit 10.1 of the Registrant's Form 10-Q filed on May 15, 2019)
14.0		Code of Business Ethics and Conduct (incorporated by reference to Exhibit 14.0 of the Registrant’s Form 10-KSB filed April 15, 2005)
21.0		+Subsidiaries of Registrant
23.1		+Consent of Independent Registered Public Accounting Firm
31.0		+Rule 13a-14(a)/15d – 14(a) Certifications
32.0		+Section 1350 Certifications
101.0		The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in XBRL:

	(i)		the Consolidated Balance Sheets;
	(ii)		the Consolidated Statements of Operations;
	(iii)		the Consolidated Statements of Shareholders’ Equity;
	(iv)		the Consolidated Statements of Cash Flows; and
	(v)		the Notes to the Consolidated Financial Statements.

+ Filed herewith

* Management contract or compensatory plan or arrangement

** Confidential treatment has been requested with respect to portions of this exhibit pursuant to Rule 24b-2 of the Exchange Act and these confidential portions have been redacted from the document filed as an exhibit to this report. A complete copy of this agreement, including the redacted terms, has been separately filed with the SEC.

Management’s Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, utilizing the 2013 framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2020 is effective.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements are prevented or timely detected.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to consolidated financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Andrea Electronics Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Andrea Electronics Corporation and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Critical Audit Matter

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going Concern Assessment

Description of the Matter

As described in Note 2 to the consolidated financial statements, the Company is required to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern and meet its obligations as they become due within one year after the date that the consolidated financial statements have been issued. The Company has current year and historical losses, cash flows used in operations and adverse change in the business climate based on the impacts of COVID-19. Management believes, based on the Company’s cash balances, current working capital, loan proceeds from a Paycheck Protection Program loan and projected future revenues, the Company will be able to satisfy their obligations as they come due for at least one year from the financial statement issuance date. The ability to continue as a going concern is dependent upon the Company’s ability to successfully execute its business plan and generate profitable operations in the future.

The principal considerations for our determination that performing procedures relating to the Company’s assessment of its ability to continue as a going concern is a critical audit matter are the significant judgement by management in the estimation of the Company’s future cash flows and the risk of bias in managements judgments and assumptions in estimating these cash flows.

How We Addressed the Matter in Our Audit

Our audit procedures related to the Company’s assessment of its ability to continue as a going concern included the following, among others:

We tested the reasonableness of the forecasted revenue, operating expenses and uses and sources of cash in management’s assessment of liquidity to fund operations for at least one year from the financial statement issuance date. This testing included inquiries with management, comparison of prior period forecasts to actual results, consideration of positive and negative evidence impacting managements forecasts and reviewing customer purchase orders and/or forecasts used in the projections.

/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2002.
Melville, NY
March 31, 2021

F-3

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2020			2019
ASSETS

Current assets:
Cash	$	362,730		$	335,790
Accounts receivable, net of allowance for doubtful accounts of $4,789		182,871			378,179
Inventories		114,393			210,161
Prepaid expenses and other current assets		110,235			42,446
Total current assets		770,229			966,576

Property and equipment, net		17,725			26,160
Intangible assets, net		212,619			231,123
Other assets, net		209,331			65,612
Total assets	$	1,209,904		$	1,289,471

LIABILITIES AND SHAREHOLDERS’ (DEFICIT)

Current liabilities:
Trade accounts payable and other current liabilities	$	419,591		$	390,558
Current portion of long-term debt		9,979			-
Accrued Series C Preferred Stock Dividends		19,168			19,168
Total current liabilities		448,738			409,726

Lease liabilities payable		159,794			15,221
Long-term debt		2,388,192			1,827,509
Total liabilities		2,996,724			2,252,456

Series B Redeemable Convertible Preferred Stock, $.01 par value; authorized: 1,000 shares; issued and outstanding: 0 shares		-			-

Commitments and contingencies:

Shareholders’ (deficit):
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding		-			-
Series C Convertible Preferred Stock, net, $.01 par value; authorized: 1,500 shares; issued and outstanding: 11.47; liquidation value: $114,692		-			-
Series D Convertible Preferred Stock, net, $.01 par value; authorized: 2,500,000 shares; issued and outstanding: 907,144 shares; liquidation value: $907,144		9,072			9,072
Common stock, $.01 par value; authorized: 200,000,000 shares; 68,104,957 issued and outstanding		681,050			681,050
Additional paid-in capital		78,086,910			78,086,910
Accumulated deficit		(80,563,852	)		(79,740,017	)

Total shareholders’ (deficit)		(1,786,820	)		(962,985	)

Total liabilities and shareholders’ (deficit)	$	1,209,904		$	1,289,471

The accompanying notes are an integral part of these consolidated financial statements.

F-4

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2020			2019
Revenues
Net product revenues	$	1,295,833		$	1,852,322
License revenues and service related revenues		59,530			42,918
Total revenues		1,355,363			1,895,240
Cost of revenues		310,905			538,200
Gross margin		1,044,458			1,357,040
Patent Monetization Expenses		166,694			194,215
Research and development expenses		573,980			568,799
General, administrative and selling expenses		1,058,980			1,070,654
Operating loss		(755,196	)		(476,628	)
Interest expense, net		(68,020	)		(70,133	)
Loss from operations before provision for income taxes		(823,216	)		(546,761	)
Provision for income taxes		619			1,805
Net loss	$	(823,835	)	$	(548,566	)
Basic and diluted weighted average shares		68,104,957			68,104,957
Basic and diluted net loss per share	$	(0.01	)	$	(0.01	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

	Series C Convertible Preferred Stock Outstanding	Series C Convertible Preferred Stock		Series D Convertible Preferred Stock Outstanding	Series D Convertible Preferred Stock		Common Stock Shares Outstanding	Common Stock		Additional Paid-In Capital		Accumulated Deficit			Total Shareholders’ Deficit
Balance, January 1, 2019	11.469249	$	-	907,144	$	9,072	68,104,957	$	681,050	$	78,069,200	$	(79,191,451	)	$	(432,129	)
Stock-based Compensation Expense related to Stock Option Grants	-		-	-		-	-		-		17,710		-			17,710
Net loss	-		-	-		-	-		-		-		(548,566	)		(548,566	)
Balance, December 31, 2019	11.469249	$	-	907,144	$	9,072	68,104,957		681,050		78,086,910		(79,740,017	)		(962,985	)
Net loss	-		-	-		-	-		-		-		(823,835	)		(823,835	)
Balance, December 31, 2020	11.469249	$	-	907,144	$	9,072	68,104,957	$	681,050	$	78,086,910	$	(80,563,852	)	$	(1,786,820	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
Cash flows from operating activities:	2020			2019
Net loss	$	(823,835	)	$	(548,566	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		52,231			77,361
Stock based compensation		-			17,710
Inventory net realizable adjustment		(9,180	)		16,978
Provision for income tax withholding		619			1,805
Amortization of right-of-use assets		48,965			47,974
Deferred interest on PPP and SBA loans		3,429			-
PIK interest, net		66,458			76,226
Change in:
Accounts receivable		194,689			38,697
Inventories		104,948			(14,083	)
Prepaid expenses, other current assets and other assets		(67,789	)		35,147
Trade accounts payable and other current liabilities and lease liability payable		(19,078	)		(83,243	)
Net cash used in operating activities		(448,543	)		(333,994	)

Cash flows from investing activities:
Purchases of property and equipment		(5,989	)		-
Purchases of patents and trademarks		(19,303	)		(16,737	)
Net cash used in investing activities		(25,292	)		(16,737	)

Cash flows from financing activities:
Proceeds from PPP loan		142,775			-
Proceeds from SBA loan		158,000			-
Proceeds from long-term debt		200,000			200,000
Net cash provided by financing activities		500,775			200,000

Net increase (decrease) in cash		26,940			(150,731	)

Cash, beginning of year		335,790			486,521
Cash, end of year	$	362,730		$	335,790

Supplemental disclosures of cash flow information:
Cash paid for:
Income Taxes	$	947		$	2,473

The accompanying notes are an integral part of these consolidated financial statements.

F-7

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

1. ORGANIZATION AND BUSINESS

Andrea Electronics Corporation, incorporated in the State of New York in 1934, (together with its subsidiaries, “Andrea” or the “Company”) has been engaged in the electronic communications industry since its inception. Since the early 1990s, Andrea has been primarily focused on developing and manufacturing state-of-the-art microphone technologies and products for enhancing speech-based applications software and communications, primarily in the computer and business enterprise markets that require high quality, clear voice signals. Andrea’s technologies eliminate unwanted background noise to enable the optimum performance of various speech-based and audio applications. Andrea DSP Microphone and Audio Software Products have been designed for applications that are controlled by or depend on speech across a broad range of hardware and software platforms. These products incorporate Digital Signal Processing, Noise Cancellation, Active Noise Cancellation and Active Noise Reduction microphone technologies, and are designed to cancel background noise in a wide range of noisy environments, such as homes, offices, factories and automobiles. Andrea also manufactures a line of accessories for these products for the consumer and commercial markets in the United States as well as in Europe and Asia. Andrea’s products and technologies are developed in part using its proprietary intellectual property. Andrea intends to vigorously defend and monetize its intellectual property through licensing arrangements and, where necessary, enforcement actions against those entities using our patented solutions in their products. Royalties resulting from these patent monetization efforts can be structured in a variety of ways, including but not limited to one-time paid up licenses or on-going royalty arrangements. Andrea records these activities as part of Andrea’s Patent Monetization segment.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Liquidity

ASC 205-40, “Presentation of Financial statements-Going Concern,” requires management to evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued. Based upon the evaluation, management believes the Company has the ability to meet its obligations as they become due within the next twelve months from the date of the financial statement issuance.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. In response to the COVID-19 outbreak, “shelter in place” orders and other public health measures were implemented across much of the United States, including the Long Island area, where the Company is located.

The COVID-19 global pandemic continues to rapidly evolve. The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread including the speed of the ongoing vaccine distribution effort, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company's operations and liquidity is uncertain as of the date of this report. Although the Company has not yet had customers cancel any open orders, some customers have delayed shipments of products into future months, causing the Company’s 2020 product revenues to be approximately $400,000 less than the same period in 2019. While there could ultimately be a material impact on future operations and liquidity of the Company, the full impact of COVID-19 cannot be determined.

On May 8, 2020, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,775 (the “PPP Loan First Draw”). The PPP Loan First Draw was made under, and is subject to the terms and conditions of, the Payment Protection Program (“PPP”) which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans. On January 18, 2021, the PPP Loan First Draw was forgiven by the SBA, barring an initial $8,000 advance. The Company expects the initial advance to also be forgiven.

On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company used the proceeds of the SBA Loan for such purpose. See Note 7 for additional information on the SBA Loan.

F-8

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

On February 5, 2021, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,777 (the “PPP Loan Second Draw” and together with the PPP Loan First Draw, the “PPP Loans”). The PPP Loan Second Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans.

The Company’s loss before income taxes was approximately $823,000 for the year ended December 31, 2020, of which $52,000 represents non-cash depreciation and amortization expenses. As part of its evaluation, management considered the Company’s cash balance of $362,730 and working capital of $321,491 as of December 31, 2020 as well as the Company’s projected revenues and expenses for the next twelve months. If the Company is not successful in achieving its projected revenues and expenses, it may need to seek other sources of revenue, areas of further expense reduction or additional funding from other sources such as debt or equity raising; however, there is no assurance that the Company would be successful in a debt or equity raise or that such funding would be on terms that it would find acceptable.

Principles of Consolidation

The consolidated financial statements include the accounts of Andrea and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain prior period balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operation or loss per share.

Loss Per Share

Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss adjusts basic loss earnings per share for the effects of convertible securities, stock options and other potentially dilutive financial instruments, only in the periods in which such effect is dilutive. Diluted loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).

Securities that could potentially dilute basic earnings per share (“EPS”) in the future that were not included in the computation of the diluted EPS because to do so would have been anti-dilutive for the periods presented, consist of the following:

	December 31,
	2020	2019
Total potentially dilutive common shares as of:
Stock options to purchase common stock (Note 13)	6,301,500	8,100,500
Series C Convertible Preferred Stock and related accrued dividends (Note 9)	524,736	524,736
Series D Convertible Preferred Stock (Note 10)	3,628,576	3,628,576

Total potentially dilutive common shares	10,454,812	12,253,812

Cash

Cash includes cash and highly liquid investments with original maturities of three months or less. At various times during the years ended December 31, 2020 and 2019, the Company had cash deposits in excess of the maximum amounts insured by the Federal Deposit Insurance Corporation insurance limits. The Company does not believe it is exposed to significant credit risk due to the financial position of the financial institutions in which its deposits are held. At December 31, 2020, the Company’s cash was held at four financial institutions.

F-9

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Concentration of Risk

The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below:

	December 31,
	2020	2019
Customer A	31%	40%
Customer B	23%	18%
Customer C	15%	18%

________________________

*	Amounts are less than 10%

As of December 31, 2020, Customers A, B and C accounted for approximately 32%, 14% and 17%, respectively, of accounts receivable. As of December 31, 2019, Customers A, B and C accounted for approximately 39%, 17% and 31%, respectively, of accounts receivable.

Allowance for Doubtful Accounts

The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. Collections and payments from customers are continuously monitored. The Company maintains an allowance for doubtful accounts, which is based upon historical experience, as well as specific customer collection issues that have been identified. While such bad debt expenses have historically been within expectations and allowances established, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories

Inventories are stated at the lower of cost (on a first-in, first-out) or net realizable value. The cost of inventory is based on the respective cost of materials. Andrea reviews its inventory reserve for obsolescence on a quarterly basis and establishes reserves on inventories based on the specific identification method as well as a general reserve. Andrea records charges in inventory reserves as part of cost of revenues.

Property and Equipment, net

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets ranging from 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lives of the respective leases or the expected useful lives of those improvements.

Expenditures for maintenance and repairs that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Improvements that substantially extend the useful lives of the assets are capitalized. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in the statement of operations.

Other Intangible Assets

Andrea amortizes its core technology and patents and trademarks on a straight-line basis over their estimated useful lives that range from 10 to 20 years.

Long-Lived Assets

Andrea accounts for its long-lived assets in accordance with ASC 360 “Plant, Property and Equipment, ” for purposes of determining and measuring impairment of its long-lived assets (primarily intangible assets) other than goodwill. Andrea’s policy is to review the value assigned to its long-lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s long-lived assets is not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product sales), the impaired asset is adjusted to its estimated fair value, based on an estimate of future discounted cash flows which becomes the new cost basis for the impaired asset. Considerable management judgment is necessary to estimate undiscounted future operating cash flows and fair values and, accordingly, actual results could vary significantly from such estimates. No impairment charges were recognized during the years ended December 31, 2020 and 2019.

F-10

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Revenue Recognition

On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606) (“ASU No. 2014-09”), which is described below in Recent Accounting Pronouncements. In accordance with Topic 606, the Company recognizes revenue using the following five-step approach:

1.	Identify the contract with a customer.

2.	Identify the performance obligations in the contract.

3.	Determine the transaction price of the contract.

4.	Allocate the transaction price to the performance obligations in the contract.

5.	Recognize revenue when the performance obligations are met or delivered.

Andrea utilized the modified retrospective approach when reviewing its current accounting policies to identify potential differences that would result from applying the new requirements to its customer contracts. This approach includes the evaluation of sales terms, performance obligations, variable consideration, and costs to obtain and fulfill contracts. Based on the Company’s review, management did not need to record a cumulative effect adjustment to retained earnings as of the date of initial application and application of this guidance did not have a material impact on its consolidated financial statements.

The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed. At December 31, 2020, the Company did not have any deferred revenue. See Note 14 for additional description of the Company’s reportable business segments and the revenue reported in each segment.

Income Taxes

Andrea accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax bases of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2020, the Company has recorded a full valuation allowance. Andrea expects it will reduce its valuation allowance in future periods to the extent that it can demonstrate its ability to utilize the assets. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Income tax expense consists of taxes payable for the period, withholding of income tax as mandated by the foreign jurisdiction in which the revenues are earned and the change during the period in deferred tax assets and liabilities. The Company has identified its federal tax return and its state tax return in New York as "major" tax jurisdictions. Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for tax years ended 2016 through 2020. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.

F-11

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Stock-Based Compensation

At December 31, 2020, Andrea had one stock-based employee compensation plan, which is described more fully in Note 13. Andrea accounts for stock based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified in cash flows from financing activities. The future realization of the reserved deferred tax assets related to these tax benefits associated with the exercise of stock options will result in a credit to additional paid in capital if the related tax deduction reduces taxes payable. The Company has elected the “with and without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit did reduce taxes payable in the current year. Under this approach, the windfall tax benefit would be recognized in additional paid-in-capital only if an incremental tax benefit is realized after considering all other benefits presently available.

Research and Development

Andrea expenses all research and development costs as incurred.

Advertising Expenses

All media costs of newspaper and magazine advertisements as well as trade show costs are expensed as incurred. Total advertising and marketing expenses for the years ended December 31, 2020 and 2019 were approximately $6,000 and $12,000, respectively and are included in general, administrative and selling expenses.

Fair Value of Financial Instruments

ASC 820 “Fair Value Measurement and Disclosures: (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and expands disclosures about payments to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 applies to all assets and liabilities that are measured and reported on a fair value basis.

The Company will apply the provisions of ASC 820 to nonfinancial assets and liabilities. Andrea calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the book value of those financial instruments. When the book value approximates fair value, no additional disclosure is made. Andrea uses quoted market prices whenever available to calculate these fair values. When quoted market prices are not available, Andrea uses standard pricing models for various types of financial instruments which take into account the present value of estimated future cash flows. As of December 31, 2020 and 2019, the carrying value of all financial instruments approximated fair value.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most significant estimates, among other things, are used in accounting for allowances for bad debts, inventory valuation and obsolescence, product warranty, depreciation, deferred income taxes, expected realizable values for assets (primarily intangible assets), contingencies, revenue recognition as well as the recording and presentation of the Company’s convertible preferred stock. Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the consolidated financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

F-12

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Subsequent Events

The Company evaluates events that occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, other than what is disclosed, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

3. INTANGIBLE ASSETS

Intangible assets, net, consisted of the following:

	December 31,
	2020			2019
Core Technology	$	8,567,448		$	8,567,448
Patents and trademarks		983,010			963,707
		9,550,458			9,531,155
Less: accumulated amortization		(9,337,839	)		(9,300,032	)
	$	212,619		$	231,123

The changes in the carrying amount of intangible assets during the years ended December 31, 2020 and 2019 were as follows:

Balance as of January 1, 2019	$	262,819
Additions during the period		16,737
Amortization		(48,433	)
Balance as of December 31, 2019		231,123
Additions during the period		19,303
Amortization		(37,807	)
Balance as of December 31, 2020	$	212,619

Andrea accounts for its long-lived assets in accordance with ASC 360 “Property, Plant and Equipment” for purposes of determining and measuring impairment of its long-lived assets (primarily intangible assets) other than goodwill. Andrea’s policy is to periodically review the value assigned to its long-lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s long-lived assets are not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product revenues), a new cost basis for the impaired asset will be established. If required, an impairment charge is recorded based on an estimate of future discounted cash flows. This new cost basis will be net of any recorded impairment. At December 31, 2020 and 2019, Andrea concluded that there were no long-lived assets that were required to be tested for recoverability.

Amortization expense was $37,807 and $48,433 for the years ended December 31, 2020 and 2019, respectively. Patents and trademarks, once issued are amortized on a straight-line basis over periods ranging from 10 to 20 years. Assuming no changes in the Company's intangible assets, estimated amortization expense for each of the five succeeding fiscal years ending December 31 is expected to be approximately $30,000, $28,000, $26,000, $26,000 and $26,000, respectively.

4. INVENTORIES

Inventories consisted of the following:

	December 31,
	2020		2019
Raw materials	$	18,996	$	22,254
Finished goods		95,397		187,907
	$	114,393	$	210,161

F-13

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following:

	December 31,
	2020			2019
Information Technology Equipment	$	280,724		$	274,735
Furniture and fixtures		87,958			87,958
Tools, molds and testing equipment		212,366			212,366
		581,048			575,059
Less: accumulated depreciation and amortization		(563,323	)		(548,899	)
	$	17,725		$	26,160

Depreciation and amortization of property and equipment was $14,424 and $28,928 for the years ended December 31, 2020 and 2019, respectively.

6. REVENUE SHARING, NOTE PURCHASE AGREEMENT

Revenue Sharing and Note Purchase Agreement

On December 24, 2014, the Company entered into an Amended and Restated Revenue Sharing and Note Purchase Agreement (the “Revenue Sharing Agreement”) with AND34 Funding LLC (“AND34”) (acting as the “Revenue Participants,” the “Note Purchasers,” and the “Collateral Agent”), which was retroactively effective as of February 14, 2014. Under the Revenue Sharing Agreement, the Company granted AND34 a perpetual predetermined share in the rights of the Company’s specified future revenues from patents (“Monetization Revenues”) owned by the Company (the “Patents”) in exchange for $3,500,000, which was fully repaid as of September 30, 2016 and issued certain notes containing the features described in the Revenue Sharing Agreement (the “Notes”), which were also repaid in 2016. In 2016, 2017 and 2019, the parties executed and amended a rider to the Revenue Sharing Agreement (the “Rider”) pursuant to which Andrea agreed to issue and sell to AND34 additional Notes up to an aggregate amount of $11,500,000 (the “Additional Notes”), or such greater amount as AND34 may agree to in its sole discretion. The most recent rider executed in 2019 increased the aggregate principal amount from $7,500,000 to $11,500,000. The Additional Notes and related PIK interest have a maturity date of August 31, 2022. The proceeds of the Additional Notes will be used to pay certain expenses related to the Revenue Sharing Agreement and expenses of the Company incurred in pursuing patent monetization. As of December 31, 2019, there was $1,684,422 of Additional Notes principal and $143,087 PIK interest outstanding. As of December 31, 2020, there was $1,884,422 of Additional Notes principal and $209,545 PIK interest outstanding.

Any Monetization Revenues will first be applied 100% to the payment of accrued and unpaid interest on, and then to repay outstanding principal of, the Additional Notes. After the Additional Notes are paid in full, the Monetization Revenues will be allocated amongst the Revenue Participants and the Company in accordance with certain predetermined percentages (based on aggregate amounts received by the Revenue Participants) ranging from 50% to the Revenue Participants to ultimately 20%. Monetization Revenues is defined in the Revenue Sharing Agreement to include, but is not limited to, amounts that the Company receives from third parties with respect to the Patents, which may include new license revenues, certain product revenue, payments and judgments. Monetization Revenues and associated expenses are included in the Company’s Patent Monetization Segment (See Note 14).

The Revenue Sharing Agreement contains many stipulations between the parties regarding the handling of various matters related to the monetization of the Patents including tax treatment. Following an Event of Default under the Revenue Sharing Agreement, the Note Purchasers and Revenue Participants may proceed to protect and enforce their rights by suit or other appropriate proceeding, either for specific performance or the exercise of any power granted under the Revenue Sharing Agreement or ancillary documents including the Additional Notes.

7. LONG TERM DEBT

On May 8, 2020, the Company entered into the PPP Loan First Draw, a U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,775. While applying for the PPP Loan First Draw, the U.S. Small Business Administration advanced $8,000 of loan proceeds to the Company on April 30, 2020. The PPP Loan First Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. The term of the PPP Loan First Draw is two years with a maturity date of May 8, 2022 and contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan First Draw will be deferred until the SBA has reached a decision on the Company’s loan forgiveness application. Principal and interest are payable monthly and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during the eight-week period following the funding of the PPP Loan First Draw. The Company used the proceeds of the PPP Loan First Draw for Qualifying Expenses. The Company was granted loan forgiveness of the PPP Loan First Draw in January 2021, for all but the $8,000 that was initially advanced.

F-14

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company intends to use the proceeds of the SBA Loan for such purpose.

	December 31,
	2020			2019
Additional Notes	$	1,884,422		$	1,684,422
PIK interest		209,545			143,087
PPP Loan with accrued interest		143,703			-
SBA Loan with accrued interest		160,501			-
Total long-term debt		2,398,171			1,827,509
Less: current maturities of long-term debt		(9,979	)		-
Long-term debt, net of current maturities	$	2,388,192		$	1,827,509

The unpaid principal amount of the Additional Notes (including any PIK interest) has an interest rate equal to LIBOR (as defined in the Revenue Sharing Agreement) plus 2% per annum, (totaling 3.00% and 4.10% at December 31, 2020 and 2019, respectively); provided that upon and during the continuance of an Event of Default (as set forth in the Revenue Sharing Agreement), the interest rate will increase an additional 2% per annum. Interest may be paid in cash at the option of the Company or otherwise shall be paid by increasing the principal amount of the Additional Notes by the amount of such PIK interest. The Company may prepay the Additional Notes from time to time in whole or in part, without penalty or premium. During the years ended December 31, 2020 and 2019 $200,000 of Additional Notes were issued to AND34. As of December 31, 2020, the remaining amount of Additional Notes that can be issued is $3,700,000. Amounts reported as current maturities of long-term debt reflect amounts expected to be paid in the next twelve months.

On March 12, 2021 $100,000 of Additional Notes were issued to AND34.

On February 5, 2021, the Company entered into the PPP Loan Second Draw, a U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,777. The PPP Loan Second Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during the eight-week period following the funding of the PPP Loan Second Draw. The Company intends to use the proceeds of the PPP Loan Second Draw, for Qualifying Expenses. The Company intends to apply for loan forgiveness of the PPP Loan Second Draw, there is no assurance that the Company will be granted forgiveness of the PPP Loan Second Draw in whole or in part.

F-15

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

8. TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Trade accounts payable and other current liabilities consisted of the following:

	December 31,
	2020		2019
Trade accounts payable	$	49,182	$	87,524
Payroll and related expenses		39,290		7,788
Patent monetization expenses		120,105		107,605
Current lease liabilities		44,630		47,364
Deferred revenue		34,178		-
Professional and other service fees		132,206		140,277
Total trade accounts payable and other current liabilities	$	419,591	$	390,558

9. SERIES C CONVERTIBLE PREFERRED STOCK

On October 10, 2000, Andrea issued and sold in a private placement $7,500,000 of Series C Redeemable Convertible Preferred Stock (the “Series C Preferred Stock”). Each of these shares of Series C Preferred Stock had a stated value of $10,000 plus a $1,671 increase in the stated value, which sum is convertible into Common Stock at a conversion price of $0.2551. On February 17, 2004, Andrea announced that it had entered into an Exchange and Termination Agreement and an Acknowledgment and Waiver Agreement, which eliminated the dividend of 5% per annum on the stated value. The additional amount of $1,671 represents the 5% per annum from October 10, 2000 through February 17, 2004. The shares of Series C Preferred Stock are subject to antidilution provisions, which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions. In addition, issuances of common stock at a price below the conversion price then in effect (currently $0.2551), or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than that conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment), require the adjustment of the conversion price to that lower price at which shares of common stock have been issued or may be acquired. In the event that Andrea issues securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series C Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series C Preferred Stock.

In accordance with Sub Topic 815-40, Andrea evaluated the Series C Preferred Stock and concluded that it is not indexed to the Company’s stock because of the conversion price adjustment feature described above. Accordingly, under the provisions of ASC 815, “Derivatives and Hedging” (“ASC 815”), Andrea evaluated the Series C Preferred Stock embedded conversion feature. The Company has concluded that the embedded conversion feature would be classified in shareholders’ equity if it were a freestanding instrument, but as the Series C Preferred Stock is more akin to equity and as such it should not be bifurcated from the Series C instrument and accounted for separately.

As of December 31, 2020, there were 11.469249 shares of Series C Preferred Stock outstanding, which were convertible into 524,736 shares of Common Stock and had remaining accrued dividends of $19,168.

10. SERIES D CONVERTIBLE PREFERRED STOCK

On February 17, 2004, Andrea entered into a Securities Purchase Agreement (including a Registration Rights Agreement) with certain holders of the Series C Preferred Stock and other investors (collectively, the “Buyers”) pursuant to which the Buyers agreed to invest a total of $2,500,000. In connection with this agreement, on February 23, 2004, the Buyers purchased, for a purchase price of $1,250,000, an aggregate of 1,250,000 shares of a new class of preferred stock, the Series D Preferred Stock, convertible into 5,000,000 shares of Common Stock (an effective conversion price of $0.25 per share) and Common Stock warrants exercisable for an aggregate of 2,500,000 shares of Common Stock. These warrants were exercisable at any time after August 17, 2004, at an exercise price of $0.38 per share. On February 23, 2009, these warrants expired without being exercised.

In addition, on June 4, 2004, the Buyers purchased for an additional $1,250,000, an additional 1,250,000 shares of Series D Preferred Stock convertible into 5,000,000 shares of Common Stock (an effective conversion price of $0.25 per share) and Common Stock warrants exercisable for an aggregate of 2,500,000 shares of Common Stock. The warrants were exercisable at any time after December 4, 2004 and before June 4, 2009 at an exercise price of $0.17 per share. On June 4, 2009, these warrants expired without being exercised.

F-16

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

The shares of Series D Preferred Stock are also subject to antidilution provisions, which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions. In addition, issuances of common stock at a price below the conversion price then in effect (an effective conversion price of $0.25 per share), or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than that conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment), require the adjustment of the conversion price to that lower price at which shares of common stock have been issued or may be acquired. In the event that Andrea issues securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series D Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series D Preferred Stock. In addition, the Company is required to use its best efforts to secure the inclusion for quotation on the Over-the-Counter Bulletin Board for the common stock issuable under the Series D Preferred Stock and to arrange for at least two market makers to register with the Financial Industry Regulatory Authority. In the event that the holder of the Series D Preferred Stock is unable to convert these securities into Andrea Common Stock, the Company shall pay to each such holder a Registration Delay Payment. This payment is to be paid in cash and is equal to the product of (i) the stated value of such Preferred Shares multiplied by (ii) the product of (1) .0005 multiplied by (2) the number of days that sales cannot be made pursuant to the Registration Statement (excluding any days during that period that may be considered grace periods as defined by the Registration Rights Agreement).

In accordance with Sub Topic 815-40, Andrea evaluated the Series D Preferred Stock and concluded that it is not considered to be indexed to the Company’s stock because of the conversion price adjustment feature described above. Accordingly, under the provisions of ASC 815, Andrea evaluated the Series D Preferred Stock embedded conversion feature. The Company has concluded that the embedded conversion feature would be classified in shareholders’ equity if it were a freestanding instrument, but as the Series D Preferred Stock is more akin to equity and as such it should not be bifurcated from the Series D instrument and accounted for separately.

As of December 31, 2020, there were 907,144 shares of Series D Preferred Stock outstanding which were convertible into 3,628,576 shares of Common Stock.

11. INCOME TAXES

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, net operating loss carryback periods, alternative minimum tax refunds, modifications to the net interest deduction limitations and technical corrections to the tax depreciation methods for qualified improvement property. The CARES Act has an immaterial impact on the Company’s income taxes.

The Company accounts for income taxes in accordance with ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. There were no unrecognized tax benefits as of January 1, 2019 and during the years ended December 31, 2020 and 2019.

The Company has identified its federal tax return and its state tax return in New York as “major” tax jurisdictions, as defined in ASC 740. Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for tax years ended 2017 through 2020. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its consolidated financial position.

The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the year ended December 31, 2020. For the year ended December 31, 2020, the Company determined that, more likely than not, its deferred tax assets would not be realized and, accordingly, decreased the valuation allowance. The increase in the valuation allowance is included in the income tax provision in the accompanying consolidated statement of operations for the year ended December 31, 2020. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

F-17

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

The provision for income tax consisted of the following:

	For the Years Ended December 31,
	2020			2019
Current:
Federal	$	-		$	-
Foreign		619			1,805
State and Local		-			-
Total Current		619			1,805
Deferred
Federal		1,731,000			1,337,000
Foreign		-			-
State and Local		(9,000	)		25,000
Adjustment to valuation allowance related to net deferred tax assets		(1,722,000	)		(1,362,000	)
Total Deferred		-			-
Provision for income taxes	$	619		$	1,805

The provision for income taxes for the years ended December 31, 2020 and 2019 of approximately $600 and $1,800, respectively, is the result of certain licensing revenues that are subject to withholding of income tax as mandated by the foreign jurisdiction in which the revenues are earned partially offset by a Federal income tax refund relating to alternative minimum tax credits.

Loss before income taxes is comprised of the following:

	For the Years Ended December 31,
	2020			2019
Domestic	$	(826,359	)	$	(555,843	)
Foreign		3,143			9,082
Net loss before income taxes	$	(823,216	)	$	(546,761	)

A reconciliation between the effective rate for income taxes and the amount computed by applying the statutory Federal income tax rate to loss before provision for income taxes is as follows:

	For the Years Ended December 31,
	2020		2019
Tax provision at statutory rate	(21	)%	(21	)%
State and local taxes	(3	)%	(3	)%
Incentive Stock Option Expense	-		1	%
Change in valuation allowance for net deferred tax assets	24	%	23	%
	-	%	-	%

The components of temporary differences that give rise to significant portions of the deferred tax asset, net, are as follows:

	For the Years Ended December 31,
	2020			2019
Deferred tax assets:
Accrued expenses	$	16,000		$	17,000
Allowance for doubtful accounts		1,000			1,000
Deferred revenue		8,000			-
Reserve for obsolescence		23,000			25,000
Expense associated with non-qualified stock options		37,000			37,000
Revenue Sharing Agreement		210,000			234,000
General business credit		1,004,000			1,198,000
NOL carryforward		5,732,000			7,241,000
		7,031,000			8,753,000
Less: valuation allowance		(7,031,000	)		(8,753,000	)
Deferred tax asset, net	$	-		$	-

F-18

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

The change in the valuation allowance for deferred tax assets are summarized as follows:

	For the Years Ended December 31,
	2020			2019
Beginning Balance	$	8,753,000		$	10,115,000
Change in Allowance		(1,722,000	)		(1,362,000	)
Ending Balance	$	7,031,000		$	8,753,000

As of December 31, 2020, Andrea federal had net operating loss carryforwards of approximately $27,000,000. $2,400,000 of these federal net operating loss carryforwards are carried forward indefinitely, the remaining $24,600,000 expire in varying amounts beginning in 2021 through 2036. Andrea has state net operating loss carryforwards of approximately $3,700,000 expiring in varying amounts beginning in 2035. Andrea has general business credits of approximately $1,000,000 expiring in varying amounts beginning in 2021 through 2039. The Company records tax benefits and expense in the statements of earnings.

12. COMMITMENTS AND CONTINGENCIES

Leases

Effective January 1, 2019, the Company adopted a new lease accounting standard using the modified retrospective method of applying the new standard at the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard. This allowed us to carry forward the historical lease classification. Adoption of this standard resulted in the recording of net operating lease right-of-use (“ROU”) assets and corresponding operating lease liabilities of $77,547, with no material cumulative effect adjustment to equity as of the date of adoption. The financial position for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance.

Our operating lease portfolio includes corporate offices, information technology (IT) equipment, and automobiles with remaining lease terms of 1 year to 2 years. Operating lease ROU assets are presented within other assets. The current portion of operating lease liabilities are presented within trade accounts payable and other current liabilities, and the non-current portion of operating lease liabilities are presented separately on the accompanying consolidated balance sheet.

Supplemental balance sheet information related to leases was as follows:

Operating Leases

	December 31, 2020		December 31, 2019
Other Assets	$	204,081	$	60,362

Trade accounts payable and other current liabilities	$	44,630	$	47,364
Lease liabilities payable non-current		159,794		15,221
Total operating lease liabilities	$	204,424	$	62,585

Weighted-average remaining lease term		56 months		17 months
Weighted-average discount rate		4.00%		7.34%

As of December 31, 2020, maturities of operating lease liabilities were as follows:

2021	$	51,787
2022		45,071
2023		42,389
2024		43,743
2025		40,344
Total		223,334
Less: interest		(18,910	)
Total Lease Payments	$	204,424

F-19

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Employment Agreements

On November 11, 2008, the Company entered into an amended and restated change in control agreement with Corisa L. Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary of the Company. The change in control agreement provides Ms. Guiffre with a severance benefit upon termination in connection with a change in control (as defined in the agreement). If Ms. Guiffre is terminated following a change in control, the Company will pay Ms. Guiffre a sum equal to three times Ms. Guiffre’s average annual compensation for the five preceding taxable years. All restrictions on any restricted stock will lapse immediately and incentive stock options and stock appreciation rights, if any, will become immediately exercisable in the event of a change in control of the Company. Upon the occurrence of a change in control followed by Ms. Guiffre’s termination of employment, the Company will continue life, medical, dental and disability coverage for 36 full calendar months following the date of termination.

Legal Proceedings

The New York Litigation is stayed pending the final outcome of Apple’s IPR proceedings against the Company’s U.S. Patent No. 6,363,345.

F-20

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

Andrea intends to vigorously prosecute the New York Litigation and the ongoing IPR proceedings.

13. STOCK PLANS AND STOCK-BASED COMPENSATION

In August 2019, the Board adopted the Andrea Electronics Corporation 2019 Equity Compensation Plan (“2019 Plan”), which was subsequently approved by the shareholders on October 24, 2019. The 2019 Plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 10,000,000 shares of Andrea’s common stock to be acquired by the holders of those awards. Awards can be granted to key employees, officers, directors and consultants. No awards have been granted under the 2019 Plan.

In October 2006, the Board adopted the Andrea Electronics Corporation 2006 Equity Compensation Plan (“2006 Plan”), which was subsequently approved by the shareholders. The 2006 Plan, as amended, authorized the granting of awards, the exercise of which would allow up to an aggregate of 18,000,000 shares of Andrea’s Common Stock to be acquired by the holders of those awards. Awards could be granted to key employees, officers, directors and consultants. As the 2006 Plan has expired, no further awards will be granted under the 2006 Plan.

The stock option awards granted under the 2006 Plan have been granted with an exercise price equal to the market price of the Company’s stock at the date of grant with vesting periods of up to four years and 10-year contractual terms. The fair values of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model that uses the weighted-average assumptions noted in the following table. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

No options were granted during the year ended December 31, 2020 or 2019.

Option activity during 2020 is summarized as follows:

	Options Outstanding							Options Exercisable
	Options Outstanding		Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life	Options Exercisable	Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life
At January 1, 2020	8,100,500		$	0.07	$	0.07	4.80 years	8,100,500	$	0.07	$	0.07	4.80 years
Canceled	(1,799,000	)	$	0.11	$	0.11
At December 31, 2020	6,301,500		$	0.06	$	0.06	4.98 years	6,301,500	$	0.06	$	0.06	4.98 years

During the year ended December 31, 2020, no options vested, nor were any options exercised or forfeited. Based on the December 31, 2020 fair market value of the Company’s common stock of $0.04 per share, there is no aggregate intrinsic value for the 6,301,500 options outstanding and exercisable.

There was no compensation expense recognized related to stock option awards for the year ended December 31, 2020. Total compensation expense recognized related to stock option awards was $17,710 for the year ended December 31, 2019. In the accompanying consolidated statement of operations for the year ended December 31, 2019, $15,659 of expense is included in general, administrative and selling expenses and $2,051 is included in research and development expenses. As of December 31, 2020, there is no unrecognized compensation cost related to nonvested share-based compensation arrangements.

14. SEGMENT INFORMATION

Andrea follows the provisions of ASC 280 “Segment Reporting” (“ASC 280”). Reportable operating segments are determined based on Andrea’s management approach. The management approach, as defined by ASC 280, is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making operating decisions and assessing performance. While Andrea’s results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker manages the enterprise in two segments: (i) Patent Monetization; and (ii) Andrea DSP Microphone and Audio Software Products. Patent Monetization includes Monetization Revenues (as defined in our Revenue Sharing Agreement). Andrea DSP Microphone and Audio Software Products primarily include products based on the use of some, or all, of the following technologies: Andrea Digital Super Directional Array microphone technology (“DSDA”), Andrea Direction Finding and Tracking Array microphone technology (“DFTA”), Andrea PureAudio noise filtering technology, and Andrea EchoStop, an advanced acoustic echo cancellation technology.

F-21

ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

The following represents selected consolidated financial information for Andrea’s segments for the years ended December 31, 2020 and 2019:

2020 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2020
Net product revenues	$	-		$	1,295,833		$	1,295,833
Service related revenues		-			45,200			45,200
License revenues		554			13,776			14,330
Loss from operations		(362,254	)		(392,942	)		(755,196	)
Depreciation and amortization		18,908			33,323			52,231
Purchases of property and equipment		-			5,989			5,989
Purchases of patents and trademarks		9,651			9,652			19,303
Assets		279,437			930,467			1,209,904
Total long lived assets		106,296			333,379			439,675

2019 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2019
Net product revenues	$	-		$	1,852,322		$	1,852,322
Service related revenues		-			17,271			17,271
License revenues		950			24,697			25,647
Loss from operations		(397,200	)		(79,428	)		(476,628	)
Depreciation and amortization		24,220			53,141			77,361
Purchases of patents and trademarks		8,369			8,368			16,737
Assets		257,685			1,031,786			1,289,471
Total long lived assets		115,562			207,333			322,895

Management of Andrea assesses assets and non-operating income statement data on a consolidated basis only. International revenues are based on the country in which the end-user is located. For the years ended December 31, 2020 and 2019, and as of each respective year-end, total revenues and accounts receivable by geographic area were as follows:

Geographic Data	2020		2019
Total Revenues:
United States	$	1,043,384	$	1,420,447
Foreign⁽¹⁾		311,979		474,793
	$	1,355,363	$	1,895,240
Accounts receivable:
United States	$	157,725	$	218,935
Foreign		25,146		159,244
	$	182,871	$	378,179

____________________

(1)	Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.

F-22

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ANDREA ELECTRONICS CORPORATION

By:	/s/ DOUGLAS J. ANDREA
	Name: Douglas J. Andrea
	Title: Chairman of the Board, President,
	Chief Executive Officer and Corporate
	Secretary

Date: March 31, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities and on the dates indicated.

/s/ DOUGLAS J. ANDREA	Chairman of the Board, President, Chief Executive	March 31, 2021
Douglas J. Andrea	Officer and Corporate Secretary

/s/ CORISA L. GUIFFRE	Vice President, Chief Financial Officer and	March 31, 2021
Corisa L. Guiffre	Assistant Corporate Secretary

/s/ LOUIS LIBIN	Director	March 31, 2021
Louis Libin

/s/ JOSEPH J. MIGLIOZZI	Director	March 31, 2021
Joseph J. Migliozzi

/s/ JONATHAN D. SPAET	Director	March 31, 2021
Jonathan D. Spaet

EX-4.1 2 andrea3890141-ex41.htm DESCRIPTION OF SECURITIES

Exhibit 4.1

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 200,000,000 shares of common stock, $0.01 par value per share, and 5,000,000 shares of preferred stock, $0.01 par value per share. A description of material terms and provisions of our Restated Certificate of Incorporation, as amended, and Amended By-Laws affecting the rights of holders of our capital stock is set forth below. The description is intended as a summary, and is qualified in its entirety by reference to our Restated Certificate of Incorporation, as amended, and Amended By-Laws.

Common Stock

The holders of our common stock are entitled to one vote per share on all matters to be voted on by shareholders and are entitled to receive dividends when declared by our board of directors, at their discretion, from legally available funds. The holders of our common stock are not entitled to preemptive, subscription or conversion rights, and there are no redemption or sinking fund provisions applicable to our common stock.

Upon liquidation or dissolution, the holders of our common stock are entitled to receive all assets available for distribution to shareholders, subject to the preferential rights of the holders of the Series C and Series D Convertible Preferred Stock and any other series of preferred stock that may be then outstanding.

Preferred Stock

Shares of preferred stock are issuable in one or more series at the time or times and for the consideration as our board of directors may determine. All shares of each series of preferred stock shall be equal in rank and identical in all respects. Authority is expressly granted to our board of directors to fix from time to time, by resolution or resolutions providing for:

●	the establishment and/or issuance of any series of preferred stock;

●	the designation of any series of preferred stock;

●	the powers, preferences and rights of the shares of that series; and

●	the qualifications, limitations or restrictions of the preferred stock.

We currently have designated four series of preferred stock. Each series of preferred stock is summarized below. While we have no present intention to issue shares of any additional series of preferred stock, any such issuance could dilute the equity of the outstanding shares of common stock and could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. In addition, any newly issued preferred stock may have other rights, including economic rights senior to the common stock and, as a result, the issuance thereof could have a material adverse effect on the market value of the common stock.

Series B Convertible Preferred Stock. 1,000 shares of Series B Convertible Preferred Stock are authorized and were issued however, all of such shares have been converted into shares of our common stock as of May 20, 2004 and none of such shares remain issued and outstanding.

Series C Convertible Preferred Stock. The following is a summary of the material terms of the Series C Convertible Preferred Stock, as those terms have been revised pursuant to an Acknowledgement and Waiver Agreement dated as of February 17, 2004. The underlying documents for the Series C Convertible Preferred Stock are a securities purchase agreement, a registrations rights agreement, a certificate of amendment, all of which have been filed as exhibits to our Form 8-K filed with the Commission on October 12, 2000, a letter of understanding and term sheet filed as exhibits to our report on Form 8-K filed with the Commission on March 22, 2002, an agreement filed as an exhibit to our report on Form 8-K filed with the Commission on January 6, 2003 and an acknowledgement and waiver agreement filed as an exhibit to our Form 8-K filed with the Commission on February 17, 2004.

Exhibit 4.1

General Terms of the Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock has no voting rights other than as required by law, and is not entitled to receive dividends. However, the holders of Series C Convertible Preferred Common Stock prior to February 17, 2004 were entitled to receive an additional amount in cash or shares of common stock, at our option, upon conversion of the Series C Convertible Preferred Stock. Subsequent to February 17, 2004, holders of Series C Convertible Preferred Stock are no longer entitled to any further additional amounts.

In the event of our liquidation or dissolution, the holders of the Series C Convertible Preferred Stock are entitled to receive in cash out of our assets an amount per share equal to $10,000 plus $1,671, the additional amount described above. The holders of Series C Convertible Preferred Stock are entitled to receive these amounts in preference to the holders of our common stock and any other junior class of our capital stock.

Conversion. Each share of Series C Convertible Preferred Stock is convertible into shares of the common stock at the option of the holder. The number of shares of common stock into which a share of Series C Convertible Preferred Stock may be converted (the “conversion rate”) is equal to $10,000 plus the additional amount divided by the conversion price of $0.2551 of the Series C Convertible Preferred Stock.

Limitations on Conversion. The issuance of shares of common stock upon conversion of the Series C Convertible Preferred Stock is limited to that amount which, after giving effect to the conversion, would cause the holder not to beneficially own in excess of 4.99% or, together with other shares beneficially owned during the 60-day period prior to such conversion, not to beneficially own in excess of 9.99% of the outstanding shares of common stock. These calculations exclude the number of shares of common stock which would be issuable upon:

●	conversion of the remaining, nonconverted shares of Series C Convertible Preferred Stock beneficially owned by the holder and its affiliates; or

●	exercise or conversion of any of the unexercised or unconverted portion of any other of our securities (including, without limitation, any warrants or convertible preferred stock) subject to a limitation on conversion or exercise analogous to this limitation beneficially owned by the holder and its affiliates.

These limitations do not prevent the holder from reducing its beneficial ownership by sale or other transfer of common stock, and then acquiring additional shares of common stock, up to the beneficial ownership limits, by conversion of shares of Series C Convertible Preferred Stock.

Other Terms. The transaction documents relating to the Series C Convertible Preferred Stock contain other representations, warranties, agreements and indemnification obligations of Andrea. The operative agreements

●	contain a right of first refusal in favor of the investors which applies to certain of our private equity financings for one year after the initial closing,

Exhibit 4.1

●	restrict our ability to redeem, pay any cash dividends and make certain distributions on our common stock,

●	limit our ability to issue senior preferred stock, and

●	prohibit us from entering into certain related party transactions except as set forth in the securities purchase agreement.

The shares of Series C Convertible Preferred Stock are also subject to antidilution provisions which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions, as well as issuances of common stock at a price below the conversion price in effect, or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than the conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment). In the event that we issue securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series C Convertible Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series C Convertible Preferred Stock.

Series D Convertible Preferred Stock. The following is a summary of the material terms of the Series D Convertible Preferred Stock. The underlying documents for the Series D Convertible Preferred Stock are a securities purchase agreement, registration rights agreement and a certificate of amendment, all filed as exhibits to our Form 8-K filed with the Commission on February 26, 2004.

General Terms of the Series D Convertible Preferred Stock. The Series D Convertible Preferred Stock has no voting rights other than as required by law, and is not entitled to receive dividends. In the event of our liquidation or dissolution, the holders of the Series D Convertible Preferred Stock are entitled to receive in cash out of our assets an amount per share equal to $1.00. The holders of Series D Convertible Preferred Stock are entitled to receive these amounts in preference to the holders of our common stock and any other junior class of our capital stock.

Conversion. Each share of Series D Convertible Preferred Stock is convertible into four shares of common stock at the option of the holder (a conversion price of $0.25 per share, subject to adjustment for certain stock splits, recapitalizations, or other dilutive transactions).

Limitations on Conversion. The issuance of shares of common stock upon conversion of the Series D Convertible Preferred Stock is limited to that amount which, after giving effect to the conversion, would cause the holder not to beneficially own in excess of 4.99% of then outstanding shares of our common stock, and except that each holder has a right to terminate such limitation upon 61-days notice to us. These calculations exclude the number of shares of common stock which would be issuable upon:

●	conversion of the remaining, nonconverted shares of Series D Convertible Preferred Stock beneficially owned by the holder and its affiliates;

●	exercise of the warrants issued in connection with the Series D Convertible Preferred Stock beneficially owned by the holder and its affiliates; and

●	exercise or conversion of any of the unexercised or unconverted portion of any other of our securities (including, without limitation, any warrants or convertible preferred stock) subject to a limitation on conversion or exercise analogous to this limitation beneficially owned by the holder and its affiliates.

Exhibit 4.1

Other Terms. The transaction documents relating to the Series D Convertible Preferred Stock and warrants contain other representations, warranties, agreements and indemnification obligations of Andrea. The operative agreements

●	restrict our ability to redeem, pay any cash dividends and make certain distributions on our common stock, and

●	limit our ability to issue senior preferred stock.

The shares of Series D Convertible Preferred Stock are also subject to antidilution provisions which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions, as well as issuances of common stock at a price below the conversion price in effect, or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than the conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment). In the event that we issue securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series D Convertible Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series D Convertible Preferred Stock.

EX-10.5 3 andrea3890141-ex105.htm TENTH AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.5

TENTH AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

THIS TENTH AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Tenth Amendment”) is made and entered into this 31^stday of January, 2021 by and between ANDREA ELECTRONICS CORPORATION (the “Company”), a New York corporation, and DOUGLAS J. ANDREA (the “Executive”).

WHEREAS, the Company and the Executive are parties to an Executive Employment Agreement dated as of August 1, 2014, as amended (collectively with all amendments, the “Agreement”), which provides that the Agreement would terminate on July 31, 2021, unless extended under its terms;

WHEREAS, the Company desires to continue to employ the Executive as the Chief Executive Officer of the Company and the Executive wishes to accept such continued employment under the terms and conditions set forth in the Agreement, as further modified by this Tenth Amendment; and

WHEREAS, the parties desire to retroactively extend the term of the Agreement until July 31, 2021, subject to the terms of this Tenth Amendment.

WHEREAS, the parties agree to modify the Agreement paragraph 4.(b) (1) Quarterly Bonus and (2) Annual Bonus to reflect an adjustment to remove the gain from the funds received from the U.S. Federal ‘Paycheck Protection Program’, including round one and round two, if and when it is forgiven and recognized as income in the financial statements.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the “Parties”) agree as follows:

1. Amendment.

The term of the Agreement is hereby extended for the period beginning on February 1, 2021 and ending on July 31, 2021.

2. Ratification.

Except as modified and amended by this Tenth Amendment, the Parties hereto hereby agree and confirm that the Agreement remains in full force and effect.

3. Counterparts.

This Tenth Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this Tenth Amendment as of January 31, 2021

ANDREA ELECTRONICS CORPORATION

By:	/s/ Louis Libin
	Louis Libin
	Director

By:	/s/ Joseph J. Migliozzi
	Joseph J. Migliozzi
	Director

By:	/s/ Jonathan D. Spaet
	Jonathan D. Spaet
	Director

	EXECUTIVE

	/s/ Douglas J. Andrea
	Douglas J. Andrea

EX-21 4 andrea3890141-ex21.htm SUBSIDIARIES OF REGISTRANT

Exhibit 21

Subsidiaries of the Registrant

Name of Subsidiary		Jurisdiction of Incorporation
Andrea ANC Manufacturing Inc.		Delaware
Andrea Digital Technologies, Inc.		Delaware
Andrea Direct Marketing Inc.		Delaware
Andrea Electronics Europe Inc.		Delaware
Andrea Marketing Inc.		Delaware
Lamar Signal Processing, Ltd.		Israel

EX-23.1 5 andrea3890141-ex231.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Exhibit 23.1

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

We consent to the incorporation by reference in the Registration Statement of Andrea Electronics Corporation on Form S-8 (File Nos. 333-142548 and 333-173131) of our report dated March 31, 2021, with respect to our audits of the consolidated financial statements of Andrea Electronics Corporation and Subsidiaries as of December 31, 2020 and 2019 and for the years then ended December 31, 2020 and 2019, which report is included in this Annual Report on Form 10-K of Andrea Electronics Corporation for the year ended December 31, 2020.

/s/ Marcum LLP

Marcum LLP
Melville, New York
March 31, 2021

EX-31 6 andrea3890141-ex31.htm RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

EXHIBIT 31.0

RULE 13a-14(a)/15d-14(a)
CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Douglas J. Andrea, certify that:

1.	I have reviewed this annual report on Form 10-K of Andrea Electronics Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:


	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2021	/s/ DOUGLAS J. ANDREA
	Douglas J. Andrea
	Chairman of the Board, President, Chief
	Executive Officer and Corporate Secretary

RULE 13a-14(a)/15d-14(a)
CHIEF FINANCIAL OFFICER CERTIFICATION

I, Corisa L. Guiffre, certify that:

1.	I have reviewed this annual report on Form 10-K of Andrea Electronics Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:


	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2021	/s/ CORISA L. GUIFFRE
	Corisa L. Guiffre
	Vice President, Chief Financial Officer and
	Assistant Corporate Secretary

EX-32 7 andrea3890141-ex32.htm SECTION 1350 CERTIFICATIONS

EXHIBIT 32.0

SECTION 1350 CERTIFICATIONS

In connection with the Annual Report of Andrea Electronics Corporation (the “Company”) on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date:	March 31, 2021	/s/ DOUGLAS J. ANDREA
		Douglas J. Andrea
		Chairman of the Board, President, Chief
		Executive Officer and Corporate Secretary

		/s/ CORISA L. GUIFFRE
		Corisa L. Guiffre
		Vice President, Chief Financial Officer and
		Assistant Corporate Secretary

EX-101.INS 8 andr-20201231.xml XBRL INSTANCE DOCUMENT 0000006494 2018-12-31 0000006494 andr:AndreaDspMicrophoneAndAudioSoftwareProductsMember 2020-12-31 0000006494 andr:PatentMonetizationMember 2020-12-31 0000006494 andr:SeriesCConvertiblePreferredStockMember 2018-12-31 0000006494 andr:SeriesDConvertiblePreferredStockMember 2018-12-31 0000006494 us-gaap:SeriesCPreferredStockMember 2000-10-10 0000006494 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000006494 us-gaap:RetainedEarningsMember 2018-12-31 0000006494 us-gaap:CommonStockMember 2018-12-31 0000006494 andr:AndreaDspMicrophoneAndAudioSoftwareProductsMember 2020-01-01 2020-12-31 0000006494 andr:PatentMonetizationMember 2020-01-01 2020-12-31 0000006494 country:US 2020-01-01 2020-12-31 0000006494 andr:ForeignCountrySegmentMember 2020-01-01 2020-12-31 0000006494 us-gaap:SeriesCPreferredStockMember 2020-01-01 2020-12-31 0000006494 us-gaap:SeriesDPreferredStockMember 2020-01-01 2020-12-31 0000006494 us-gaap:StockCompensationPlanMember 2020-01-01 2020-12-31 0000006494 2016-09-30 0000006494 srt:ChiefExecutiveOfficerMember 2014-08-01 2014-08-31 0000006494 country:US 2020-12-31 0000006494 andr:ForeignCountrySegmentMember 2020-12-31 0000006494 andr:CustomerMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-12-31 0000006494 andr:CustomerBMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-12-31 0000006494 andr:CustomerCMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-12-31 0000006494 andr:CustomerMember us-gaap:AccountsReceivableMember 2020-01-01 2020-12-31 0000006494 andr:CustomerBMember us-gaap:AccountsReceivableMember 2020-01-01 2020-12-31 0000006494 andr:CustomerCMember us-gaap:AccountsReceivableMember 2020-01-01 2020-12-31 0000006494 andr:TrademarksAndPatentsMember 2020-12-31 0000006494 andr:CoreTechnologyMember 2020-12-31 0000006494 us-gaap:ToolsDiesAndMoldsMember 2020-12-31 0000006494 us-gaap:FurnitureAndFixturesMember 2020-12-31 0000006494 us-gaap:TechnologyEquipmentMember 2020-12-31 0000006494 us-gaap:SeriesCPreferredStockMember 2000-09-11 2000-10-10 0000006494 us-gaap:SeriesDPreferredStockMember 2004-06-04 0000006494 us-gaap:SeriesDPreferredStockMember 2004-02-23 0000006494 us-gaap:SeriesDPreferredStockMember 2004-05-05 2004-06-04 0000006494 us-gaap:SeriesDPreferredStockMember 2004-01-23 2004-02-23 0000006494 2004-02-17 0000006494 2008-10-20 2008-11-11 0000006494 andr:StockCompensationPlanOneMember 2006-10-31 0000006494 2019-01-01 2019-12-31 0000006494 2019-12-31 0000006494 andr:SeriesCConvertiblePreferredStockMember 2019-12-31 0000006494 andr:SeriesDConvertiblePreferredStockMember 2019-12-31 0000006494 andr:SeriesCConvertiblePreferredStockMember 2019-01-01 2019-12-31 0000006494 andr:SeriesDConvertiblePreferredStockMember 2019-01-01 2019-12-31 0000006494 us-gaap:CommonStockMember 2019-01-01 2019-12-31 0000006494 us-gaap:CommonStockMember 2019-12-31 0000006494 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-12-31 0000006494 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000006494 us-gaap:RetainedEarningsMember 2019-01-01 2019-12-31 0000006494 us-gaap:RetainedEarningsMember 2019-12-31 0000006494 us-gaap:StockCompensationPlanMember 2019-01-01 2019-12-31 0000006494 us-gaap:SeriesCPreferredStockMember 2019-01-01 2019-12-31 0000006494 us-gaap:SeriesDPreferredStockMember 2019-01-01 2019-12-31 0000006494 andr:CustomerMember us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0000006494 andr:CustomerBMember us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0000006494 andr:CustomerCMember us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0000006494 andr:NetRevenueMember 2020-01-01 2020-12-31 0000006494 srt:MinimumMember andr:PatentsAndTrademarksMember 2020-01-01 2020-12-31 0000006494 srt:MaximumMember andr:PatentsAndTrademarksMember 2020-01-01 2020-12-31 0000006494 srt:MinimumMember andr:CoreTechnologyMember 2020-01-01 2020-12-31 0000006494 srt:MaximumMember andr:CoreTechnologyMember 2020-01-01 2020-12-31 0000006494 andr:CustomerMember us-gaap:AccountsReceivableMember 2019-01-01 2019-12-31 0000006494 us-gaap:AccountsReceivableMember andr:CustomerBMember 2019-01-01 2019-12-31 0000006494 us-gaap:AccountsReceivableMember andr:CustomerCMember 2019-01-01 2019-12-31 0000006494 andr:TrademarksAndPatentsMember 2019-12-31 0000006494 andr:CoreTechnologyMember 2019-12-31 0000006494 andr:TrademarksAndPatentsMember srt:MinimumMember 2020-01-01 2020-12-31 0000006494 andr:TrademarksAndPatentsMember srt:MaximumMember 2020-01-01 2020-12-31 0000006494 us-gaap:TechnologyEquipmentMember 2019-12-31 0000006494 us-gaap:FurnitureAndFixturesMember 2019-12-31 0000006494 us-gaap:ToolsDiesAndMoldsMember 2019-12-31 0000006494 us-gaap:PropertyPlantAndEquipmentMember 2019-12-31 0000006494 us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-12-31 0000006494 us-gaap:LondonInterbankOfferedRateLIBORMember 2020-12-31 0000006494 us-gaap:SeriesCPreferredStockMember 2020-12-31 0000006494 us-gaap:SeriesDPreferredStockMember 2020-12-31 0000006494 srt:ChiefExecutiveOfficerMember 2020-12-31 0000006494 andr:StockCompensationPlanOneMember 2020-01-01 2020-12-31 0000006494 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-12-31 0000006494 us-gaap:EmployeeStockOptionMember 2020-12-31 0000006494 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-12-31 0000006494 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-12-31 0000006494 andr:PatentMonetizationMember 2019-01-01 2019-12-31 0000006494 andr:AndreaDspMicrophoneAndAudioSoftwareProductsMember 2019-01-01 2019-12-31 0000006494 andr:PatentMonetizationMember 2019-12-31 0000006494 andr:AndreaDspMicrophoneAndAudioSoftwareProductsMember 2019-12-31 0000006494 country:US 2019-12-31 0000006494 andr:ForeignCountrySegmentMember 2019-12-31 0000006494 country:US 2019-01-01 2019-12-31 0000006494 andr:ForeignCountrySegmentMember 2019-01-01 2019-12-31 0000006494 us-gaap:PropertyPlantAndEquipmentMember srt:MinimumMember 2020-12-31 0000006494 us-gaap:PropertyPlantAndEquipmentMember srt:MaximumMember 2020-12-31 0000006494 andr:StockCompensationPlanOneMember 2019-08-31 0000006494 andr:StockCompensationPlanTwoMember 2019-12-31 0000006494 2020-01-01 2020-12-31 0000006494 2021-03-23 0000006494 2020-06-29 0000006494 andr:SeriesCConvertiblePreferredStockMember 2020-12-31 0000006494 andr:SeriesDConvertiblePreferredStockMember 2020-12-31 0000006494 2020-12-31 0000006494 andr:SeriesCConvertiblePreferredStockMember 2020-01-01 2020-12-31 0000006494 andr:SeriesDConvertiblePreferredStockMember 2020-01-01 2020-12-31 0000006494 us-gaap:CommonStockMember 2020-01-01 2020-12-31 0000006494 us-gaap:CommonStockMember 2020-12-31 0000006494 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-12-31 0000006494 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000006494 us-gaap:RetainedEarningsMember 2020-01-01 2020-12-31 0000006494 us-gaap:RetainedEarningsMember 2020-12-31 0000006494 srt:MinimumMember 2020-01-01 2020-12-31 0000006494 srt:MaximumMember 2020-01-01 2020-12-31 0000006494 us-gaap:PropertyPlantAndEquipmentMember 2020-12-31 0000006494 andr:StockCompensationPlanTwoMember 2020-01-01 2020-12-31 0000006494 andr:StockCompensationPlanTwoMember 2020-12-31 0000006494 andr:PPPLoanMember 2020-05-01 2020-05-08 0000006494 andr:PPPLoanMember us-gaap:SubsequentEventMember 2021-01-01 2021-01-18 0000006494 andr:USSmallBusinessAdministrationLoanMember 2020-07-01 2020-07-13 0000006494 andr:PPPLoanSecondMember us-gaap:SubsequentEventMember 2021-02-01 2021-02-05 0000006494 andr:USSmallBusinessAdministrationLoanMember 2020-04-01 2020-04-30 0000006494 andr:PPPLoanMember 2020-05-08 0000006494 andr:PPPLoanMember us-gaap:SubsequentEventMember 2021-01-01 2021-01-31 0000006494 us-gaap:SubsequentEventMember 2021-03-01 2021-03-12 0000006494 andr:PPPLoanMember 2020-12-31 0000006494 andr:PPPLoanMember 2019-12-31 0000006494 andr:SBALoanAdvanceMember 2020-12-31 0000006494 andr:SBALoanAdvanceMember 2019-12-31 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure andr:Institutions andr:Segments ANDREA ELECTRONICS CORP 0000006494 false --12-31 10-K 2020-12-31 Non-accelerated Filer false

262819

231123

212619

930467

279437

1289471

257685

1031786

1209904

10000

9072

-432129

9072

78069200

-79191451

681050

-962985

9072

681050

78086910

-79740017

9072

-1786820

681050

78086910

-80563852

4789

0.01

2497500

1500

2500000

1500

2500000

2497500

11.47

907144

11.47

907144

114692

907144

114692

907144

0.01

200000000

68104957

1295833

1852322

1295833

13776 554 42918 950 24697 59530

1043384

311979

1895240

1420447

474793

1355363

-392942

-362254

-476628

-397200

-79428

-755196

-548566

-823835

11.469249

907144

68104957

11.469249

907144

68104957

11.469249

907144

68104957

17710

33323

18908

77361

24220

53141

52231

5989

9652

9651

16737

8369

8368

19303

524736

3628576

6301500

12253812

8100500

524736

3628576

10454812

9979

2022-08-31

2022-05-08

2050-07-13

216000

0.05 0.09 300000 3000000 0.03 3000000

126000

45200 17271 17271 45200

157725

25146

378179

218935

159244

182871

0.10

0.31

0.23

0.15

0.32

0.14

0.17

0.40

0.18

0.39

0.17

0.31

34178

P10Y

P20Y

P10Y

P20Y

P10Y

P20Y

983010

8567448

9531155

963707

8567448

9550458

9300032

9337839

16737

19303

48433

37807

30000

28000

26000

22254

18996

187907

95397

212366

87958

280724

575059

274735

87958

212366

581048

548899

28928

563323

14424

87524

49182

7788

39290

107605

120105

140277

132206

390558

419591

7500000

1671 0.05

0.2551

0.25

The additional amount of $1,671 represents the 5% per annum from October 10, 2000 through February 17, 2004.

524736

3628576

5000000

2500000

1250000 1250000 1250000 1250000 2500000 2500000 This payment is to be paid in cash and is equal to the product of (i) the stated value of such Preferred Shares multiplied by (ii) the product of (1) .0005 multiplied by (2) the number of days that sales cannot be made pursuant to the Registration Statement.

11.47

907144

11.47

907144

Warrants were exercisable at any time after December 4, 2004 and before June 4, 2009. Warrants were exercisable at any time after August 17, 2004.

1805

619

1805

619

1337000

1731000

25000

-9000

1362000

1722000

0.21

-0.03

0.01

0.23

0.24

10115000

18753000

7031000

18753000

7031000

7241000

5732000

1198000

1004000

234000 210000

37000

25000 23000

1000

17000

16000

12500

333379

106296

322895

115562

207333

439675

-0.01

68104957

1805

619

-546761

-823216

-70133

-68020

1070654

1058980

568799

573980

194215 166694

1357040

1044458

538200

310905

378179

182871

42446

110235

966576

770229

26160

17725

65612

209331

390558

419591

19168 19168

409726

448738

1827509

2398171

143703

160501

2252456

2996724

681050

78086910

-79740017

-80563852

1289471

1209904

76226

66458

1805

619

16978

-9180

17710

-333994

-448543

-83243

-19078

-35147

67789

14083

-104948

-38697

-194689

-16737

-25292

486521

335790

362730

200000

500775

200000

2473

947

Yes false 1743180 FY No true No 2020

-555843

-826359

9082

3143

-546761

-823216

210161

114393

210161

114393

68104957 Yes NY 001-04324 15221 159794

47364

44630

77547

P17M

P1Y

P2Y

P56M

60362

204081

47364

44630

15221

159794

62585

204424

0.0734

0.0400

45071

42389

43743

223334

18910

204424

0.17 0.38 2009-06-04 2009-02-23

-150731

26940

47974

48965

158000

142775

3429 Andrea has general business credits of approximately $1,000,000 expiring in varying amounts beginning in 2021 through 2039. The effective date of the original employment agreement was August 1, 2014 and it currently expires on July 31, 2021, subject to renewal as approved by the Compensation Committee of the Board of Directors.

Mr. Andrea is entitled to a change in control payment equal to twelve months of Mr. Andrea’s most recent base salary plus a pro-rated portion of Mr. Andrea's most recent annual and four quarterly bonuses paid immediately preceding the change of control, continuation of health and medical benefits for twelve months and immediate vesting of all stock options in the event of a change in control during the term of his agreement and subsequent termination of his employment within twelve months following the change of control. In the event of his termination without cause or resignation with the Company’s consent, Mr. Andrea is entitled to a severance payment equal to two months of his base salary, plus the two months pro-rated portion of his most recent annual and quarterly bonuses, payment of $12,500 (the un-paid bonus for the quarter ended September 30, 2017) and a continuation of health insurance coverage for Mr. Andrea and his dependents for 6 months.

The Company entered into an amended and restated change in control agreement with Corisa L. Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary of the Company. The change in control agreement provides Ms. Guiffre with a severance benefit upon termination in connection with a change in control (as defined in the agreement). If Ms. Guiffre is terminated following a change in control, the Company will pay Ms. Guiffre a sum equal to three times Ms. Guiffre’s average annual compensation for the five preceding taxable years. All restrictions on any restricted stock will lapse immediately and incentive stock options and stock appreciation rights, if any, will become immediately exercisable in the event of a change in control of the Company. Upon the occurrence of a change in control followed by Ms. Guiffre’s termination of employment, the Company will continue life, medical, dental and disability coverage for 36 full calendar months following the date of termination.

51787

40344

142775 150000 142777 8000

8000

P2Y

P30Y

0.0375

10% or more

Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter.

52000

321491

P3Y

P10Y

12000

6000

3500000 1684422 1884422 1.00 0.20 0.50 7500000 11500000

143087

209545

0.02

0.01

200000

100000

3700000

1827509

2388192

P4Y

P10Y

P4Y9M18D

18000000

10000000

8100500

6301500

0.04

6301500

17710

15659

2051

8100500

6301500

1799000

0.07

0.06

0.11

0.07 0.06 0.11 P4Y11M23D

0.07

0.06

0.07 0.06

P4Y9M18D

P4Y11M23D

0.01

1000

1. ORGANIZATION AND BUSINESS Andrea Electronics Corporation, incorporated in the State of New York in 1934, (together with its subsidiaries, “Andrea” or the “Company”) has been engaged in the electronic communications industry since its inception. Since the early 1990s, Andrea has been primarily focused on developing and manufacturing state-of-the-art microphone technologies and products for enhancing speech-based applications software and communications, primarily in the computer and business enterprise markets that require high quality, clear voice signals. Andrea’s technologies eliminate unwanted background noise to enable the optimum performance of various speech-based and audio applications. Andrea DSP Microphone and Audio Software Products have been designed for applications that are controlled by or depend on speech across a broad range of hardware and software platforms. These products incorporate Digital Signal Processing, Noise Cancellation, Active Noise Cancellation and Active Noise Reduction microphone technologies, and are designed to cancel background noise in a wide range of noisy environments, such as homes, offices, factories and automobiles. Andrea also manufactures a line of accessories for these products for the consumer and commercial markets in the United States as well as in Europe and Asia. Andrea’s products and technologies are developed in part using its proprietary intellectual property. Andrea intends to vigorously defend and monetize its intellectual property through licensing arrangements and, where necessary, enforcement actions against those entities using our patented solutions in their products. Royalties resulting from these patent monetization efforts can be structured in a variety of ways, including but not limited to one-time paid up licenses or on-going royalty arrangements. Andrea records these activities as part of Andrea’s Patent Monetization segment.

3. INTANGIBLE ASSETS Intangible assets, net, consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="7" style="border-bottom: Black 1pt solid; width: 7%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Core Technology</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">8,567,448</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">8,567,448</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">983,010</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">963,707</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">9,550,458</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">9,531,155</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Less: accumulated amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,337,839</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,300,032</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">212,619</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">231,123</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> The changes in the carrying amount of intangible assets during the years ended December 31, 2020 and 2019 were as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of January 1, 2019</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">262,819</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Additions during the period</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">16,737</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(48,433</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of December 31, 2019</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">231,123</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Additions during the period</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">19,303</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(37,807</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of December 31, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">212,619</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> Andrea accounts for its long-lived assets in accordance with ASC 360 “Property, Plant and Equipment” for purposes of determining and measuring impairment of its long-lived assets (primarily intangible assets) other than goodwill. Andrea’s policy is to periodically review the value assigned to its long-lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s long-lived assets are not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product revenues), a new cost basis for the impaired asset will be established. If required, an impairment charge is recorded based on an estimate of future discounted cash flows. This new cost basis will be net of any recorded impairment. At December 31, 2020 and 2019, Andrea concluded that there were no long-lived assets that were required to be tested for recoverability. Amortization expense was $37,807 and $48,433 for the years ended December 31, 2020 and 2019, respectively. Patents and trademarks, once issued are amortized on a straight-line basis over periods ranging from 10 to 20 years. Assuming no changes in the Company's intangible assets, estimated amortization expense for each of the five succeeding fiscal years ending December 31 is expected to be approximately $30,000, $28,000, $26,000, $26,000 and $26,000, respectively.

4. INVENTORIES Inventories consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="5" style="border-bottom: Black 1pt solid; width: 5%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Raw materials</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">18,996</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">22,254</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Finished goods</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">95,397</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">187,907</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">114,393</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">210,161</td></tr></table>

5. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="7" style="border-bottom: Black 1pt solid; width: 7%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Information Technology Equipment</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">280,724</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">274,735</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Furniture and fixtures</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">87,958</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">87,958</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Tools, molds and testing equipment</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">212,366</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">212,366</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">581,048</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">575,059</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Less: accumulated depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(563,323</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(548,899</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">17,725</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">26,160</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> Depreciation and amortization of property and equipment was $14,424 and $28,928 for the years ended December 31, 2020 and 2019, respectively.

6. REVENUE SHARING, NOTE PURCHASE AGREEMENT Revenue Sharing and Note Purchase Agreement On December 24, 2014, the Company entered into an Amended and Restated Revenue Sharing and Note Purchase Agreement (the “Revenue Sharing Agreement”) with AND34 Funding LLC (“AND34”) (acting as the “Revenue Participants,” the “Note Purchasers,” and the “Collateral Agent”), which was retroactively effective as of February 14, 2014. Under the Revenue Sharing Agreement, the Company granted AND34 a perpetual predetermined share in the rights of the Company’s specified future revenues from patents (“Monetization Revenues”) owned by the Company (the “Patents”) in exchange for $3,500,000, which was fully repaid as of September 30, 2016 and issued certain notes containing the features described in the Revenue Sharing Agreement (the “Notes”), which were also repaid in 2016. In 2016, 2017 and 2019, the parties executed and amended a rider to the Revenue Sharing Agreement (the “Rider”) pursuant to which Andrea agreed to issue and sell to AND34 additional Notes up to an aggregate amount of $11,500,000 (the “Additional Notes”), or such greater amount as AND34 may agree to in its sole discretion. The most recent rider executed in 2019 increased the aggregate principal amount from $7,500,000 to $11,500,000. The Additional Notes and related PIK interest have a maturity date of August 31, 2022. The proceeds of the Additional Notes will be used to pay certain expenses related to the Revenue Sharing Agreement and expenses of the Company incurred in pursuing patent monetization. As of December 31, 2019, there was $1,684,422 of Additional Notes principal and $143,087 PIK interest outstanding. As of December 31, 2020, there was $1,884,422 of Additional Notes principal and $209,545 PIK interest outstanding. Any Monetization Revenues will first be applied 100% to the payment of accrued and unpaid interest on, and then to repay outstanding principal of, the Additional Notes. After the Additional Notes are paid in full, the Monetization Revenues will be allocated amongst the Revenue Participants and the Company in accordance with certain predetermined percentages (based on aggregate amounts received by the Revenue Participants) ranging from 50% to the Revenue Participants to ultimately 20%. Monetization Revenues is defined in the Revenue Sharing Agreement to include, but is not limited to, amounts that the Company receives from third parties with respect to the Patents, which may include new license revenues, certain product revenue, payments and judgments. Monetization Revenues and associated expenses are included in the Company’s Patent Monetization Segment (See Note 14). The Revenue Sharing Agreement contains many stipulations between the parties regarding the handling of various matters related to the monetization of the Patents including tax treatment. Following an Event of Default under the Revenue Sharing Agreement, the Note Purchasers and Revenue Participants may proceed to protect and enforce their rights by suit or other appropriate proceeding, either for specific performance or the exercise of any power granted under the Revenue Sharing Agreement or ancillary documents including the Additional Notes.

7. LONG TERM DEBT On May 8, 2020, the Company entered into the PPP Loan First Draw, a U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,775. While applying for the PPP Loan First Draw, the U.S. Small Business Administration advanced $8,000 of loan proceeds to the Company on April 30, 2020. The PPP Loan First Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. The term of the PPP Loan First Draw is two years with a maturity date of May 8, 2022 and contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan First Draw will be deferred until the SBA has reached a decision on the Company’s loan forgiveness application. Principal and interest are payable monthly and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during the eight-week period following the funding of the PPP Loan First Draw. The Company used the proceeds of the PPP Loan First Draw for Qualifying Expenses. The Company was granted loan forgiveness of the PPP Loan First Draw in January 2021, for all but the $8,000 that was initially advanced. On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company intends to use the proceeds of the SBA Loan for such purpose. <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="6" style="border-bottom: Black 1pt solid; width: 6%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Additional Notes</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">1,884,422</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">1,684,422</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">PIK interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">209,545</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">143,087</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">PPP Loan with accrued interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">143,703</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: center; text-align: right">-</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">SBA Loan with accrued interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">160,501</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">-</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Total long-term debt</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">2,398,171</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">1,827,509</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">Less: current maturities of long-term debt</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,979</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">-</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Long-term debt, net of current maturities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">2,388,192</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">1,827,509</td></tr></table> The unpaid principal amount of the Additional Notes (including any PIK interest) has an interest rate equal to LIBOR (as defined in the Revenue Sharing Agreement) plus 2% per annum, (totaling 3.00% and 4.10% at December 31, 2020 and 2019, respectively); provided that upon and during the continuance of an Event of Default (as set forth in the Revenue Sharing Agreement), the interest rate will increase an additional 2% per annum. Interest may be paid in cash at the option of the Company or otherwise shall be paid by increasing the principal amount of the Additional Notes by the amount of such PIK interest. The Company may prepay the Additional Notes from time to time in whole or in part, without penalty or premium. During the years ended December 31, 2020 and 2019 $200,000 of Additional Notes were issued to AND34. As of December 31, 2020, the remaining amount of Additional Notes that can be issued is $3,700,000. Amounts reported as current maturities of long-term debt reflect amounts expected to be paid in the next twelve months. On March 12, 2021 $100,000 of Additional Notes were issued to AND34. On February 5, 2021, the Company entered into the PPP Loan Second Draw, a U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,777. The PPP Loan Second Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during the eight-week period following the funding of the PPP Loan Second Draw. The Company intends to use the proceeds of the PPP Loan Second Draw, for Qualifying Expenses. The Company intends to apply for loan forgiveness of the PPP Loan Second Draw, there is no assurance that the Company will be granted forgiveness of the PPP Loan Second Draw in whole or in part.

8. TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES Trade accounts payable and other current liabilities consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="5" style="border-bottom: Black 1pt solid; width: 5%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Trade accounts payable</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">49,182</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">87,524</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Payroll and related expenses</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">39,290</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">7,788</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Patent monetization expenses</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">120,105</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">107,605</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Current lease liabilities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">44,630</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">47,364</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Deferred revenue</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">34,178</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: center; text-align: right">-</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Professional and other service fees</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">132,206</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">140,277</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left; padding-left: 15pt">Total trade accounts payable and other current liabilities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">419,591</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">390,558</td></tr></table>

9. SERIES C CONVERTIBLE PREFERRED STOCK On October 10, 2000, Andrea issued and sold in a private placement $7,500,000 of Series C Redeemable Convertible Preferred Stock (the “Series C Preferred Stock”). Each of these shares of Series C Preferred Stock had a stated value of $10,000 plus a $1,671 increase in the stated value, which sum is convertible into Common Stock at a conversion price of $0.2551. On February 17, 2004, Andrea announced that it had entered into an Exchange and Termination Agreement and an Acknowledgment and Waiver Agreement, which eliminated the dividend of 5% per annum on the stated value. The additional amount of $1,671 represents the 5% per annum from October 10, 2000 through February 17, 2004. The shares of Series C Preferred Stock are subject to antidilution provisions, which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions. In addition, issuances of common stock at a price below the conversion price then in effect (currently $0.2551), or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than that conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment), require the adjustment of the conversion price to that lower price at which shares of common stock have been issued or may be acquired. In the event that Andrea issues securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series C Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series C Preferred Stock. In accordance with Sub Topic 815-40, Andrea evaluated the Series C Preferred Stock and concluded that it is not indexed to the Company’s stock because of the conversion price adjustment feature described above. Accordingly, under the provisions of ASC 815, “Derivatives and Hedging” (“ASC 815”), Andrea evaluated the Series C Preferred Stock embedded conversion feature. The Company has concluded that the embedded conversion feature would be classified in shareholders’ equity if it were a freestanding instrument, but as the Series C Preferred Stock is more akin to equity and as such it should not be bifurcated from the Series C instrument and accounted for separately. As of December 31, 2020, there were 11.469249 shares of Series C Preferred Stock outstanding, which were convertible into 524,736 shares of Common Stock and had remaining accrued dividends of $19,168. 10. SERIES D CONVERTIBLE PREFERRED STOCK On February 17, 2004, Andrea entered into a Securities Purchase Agreement (including a Registration Rights Agreement) with certain holders of the Series C Preferred Stock and other investors (collectively, the “Buyers”) pursuant to which the Buyers agreed to invest a total of $2,500,000. In connection with this agreement, on February 23, 2004, the Buyers purchased, for a purchase price of $1,250,000, an aggregate of 1,250,000 shares of a new class of preferred stock, the Series D Preferred Stock, convertible into 5,000,000 shares of Common Stock (an effective conversion price of $0.25 per share) and Common Stock warrants exercisable for an aggregate of 2,500,000 shares of Common Stock. These warrants were exercisable at any time after August 17, 2004, at an exercise price of $0.38 per share. On February 23, 2009, these warrants expired without being exercised. In addition, on June 4, 2004, the Buyers purchased for an additional $1,250,000, an additional 1,250,000 shares of Series D Preferred Stock convertible into 5,000,000 shares of Common Stock (an effective conversion price of $0.25 per share) and Common Stock warrants exercisable for an aggregate of 2,500,000 shares of Common Stock. The warrants were exercisable at any time after December 4, 2004 and before June 4, 2009 at an exercise price of $0.17 per share. On June 4, 2009, these warrants expired without being exercised. The shares of Series D Preferred Stock are also subject to antidilution provisions, which are triggered in the event of certain stock splits, recapitalizations, or other dilutive transactions. In addition, issuances of common stock at a price below the conversion price then in effect (an effective conversion price of $0.25 per share), or the issuance of warrants, options, rights, or convertible securities which have an exercise price or conversion price less than that conversion price, other than for certain previously outstanding securities and certain “excluded securities” (as defined in the certificate of amendment), require the adjustment of the conversion price to that lower price at which shares of common stock have been issued or may be acquired. In the event that Andrea issues securities in the future which have a conversion price or exercise price which varies with the market price and the terms of such variable price are more favorable than the conversion price in the Series D Preferred Stock, the purchasers may elect to substitute the more favorable variable price when making conversions of the Series D Preferred Stock. In addition, the Company is required to use its best efforts to secure the inclusion for quotation on the Over-the-Counter Bulletin Board for the common stock issuable under the Series D Preferred Stock and to arrange for at least two market makers to register with the Financial Industry Regulatory Authority. In the event that the holder of the Series D Preferred Stock is unable to convert these securities into Andrea Common Stock, the Company shall pay to each such holder a Registration Delay Payment. This payment is to be paid in cash and is equal to the product of (i) the stated value of such Preferred Shares multiplied by (ii) the product of (1) .0005 multiplied by (2) the number of days that sales cannot be made pursuant to the Registration Statement (excluding any days during that period that may be considered grace periods as defined by the Registration Rights Agreement). In accordance with Sub Topic 815-40, Andrea evaluated the Series D Preferred Stock and concluded that it is not considered to be indexed to the Company’s stock because of the conversion price adjustment feature described above. Accordingly, under the provisions of ASC 815, Andrea evaluated the Series D Preferred Stock embedded conversion feature. The Company has concluded that the embedded conversion feature would be classified in shareholders’ equity if it were a freestanding instrument, but as the Series D Preferred Stock is more akin to equity and as such it should not be bifurcated from the Series D instrument and accounted for separately. As of December 31, 2020, there were 907,144 shares of Series D Preferred Stock outstanding which were convertible into 3,628,576 shares of Common Stock.

12. COMMITMENTS AND CONTINGENCIES Leases Effective January 1, 2019, the Company adopted a new lease accounting standard using the modified retrospective method of applying the new standard at the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard. This allowed us to carry forward the historical lease classification. Adoption of this standard resulted in the recording of net operating lease right-of-use (“ROU”) assets and corresponding operating lease liabilities of $77,547, with no material cumulative effect adjustment to equity as of the date of adoption. The financial position for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance. Our operating lease portfolio includes corporate offices, information technology (IT) equipment, and automobiles with remaining lease terms of 1 year to 2 years. Operating lease ROU assets are presented within other assets. The current portion of operating lease liabilities are presented within trade accounts payable and other current liabilities, and the non-current portion of operating lease liabilities are presented separately on the accompanying consolidated balance sheet. Supplemental balance sheet information related to leases was as follows: Operating Leases <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; line-height: normal"> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: left"></td> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; white-space: nowrap; text-align: center">December 31, 2020</td> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; white-space: nowrap; text-align: center">December 31, 2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Other Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">204,081</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">60,362</td></tr> <tr style="background-color: Silver"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Trade accounts payable and other current liabilities</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left">$</td> <td style="white-space: nowrap; text-align: right">44,630</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left">$</td> <td style="white-space: nowrap; text-align: right">47,364</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="white-space: nowrap; text-align: left">Lease liabilities payable non-current</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: right">159,794</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: right">15,221</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Total operating lease liabilities</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: right">204,424</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: right">62,585</td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="white-space: nowrap; text-align: left">Weighted-average remaining lease term</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">56 months</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">17 months</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Weighted-average discount rate</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">4.00%</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">7.34%</td></tr></table> As of December 31, 2020, maturities of operating lease liabilities were as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 60%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2021</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">51,787</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">2022</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,071</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2023</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">42,389</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">2024</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">43,743</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2025</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">40,344</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Total</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">223,334</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left; padding-left: 15pt">Less: interest</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(18,910</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Total Lease Payments</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">204,424</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table>   Employment Agreements In August 2014, the Company entered into an employment agreement with Mr. Andrea, which was subsequently amended several times, most recently on January 31, 2021. The effective date of the original employment agreement was August 1, 2014 and it currently expires on July 31, 2021, subject to renewal as approved by the Compensation Committee of the Board of Directors. Pursuant to his amended employment agreement, Mr. Andrea will receive an annual base salary of $216,000. The employment agreement provides for quarterly bonuses equal to 5% of the Company’s pre-bonus net after tax quarterly earnings for a total quarterly bonus amount not to exceed $12,500; and annual bonuses equal to 9% of the Company’s annual pre-bonus net after tax earnings in excess of $300,000 up to $3,000,000, and 3% of the Company’s annual pre-bonus adjusted net after tax earnings in excess of $3,000,000. Adjustments to net after tax earnings shall be made to remove the impact of change in recognition of accumulated deferred tax asset value and any income recognized from forgiveness of debt relating to the CARES Act. All bonuses shall be payable as soon as the Company’s cash flow permits. All bonus determinations or any additional bonus in excess of the above will be made in the sole discretion of the Compensation Committee. Under certain circumstances, Mr. Andrea is entitled to a change in control payment equal to twelve months of Mr. Andrea’s most recent base salary plus a pro-rated portion of Mr. Andrea's most recent annual and four quarterly bonuses paid immediately preceding the change of control, continuation of health and medical benefits for twelve months and immediate vesting of all stock options in the event of a change in control during the term of his agreement and subsequent termination of his employment within twelve months following the change of control. In the event of his termination without cause or resignation with the Company’s consent, Mr. Andrea is entitled to a severance payment equal to two months of his base salary, plus the two months pro-rated portion of his most recent annual and quarterly bonuses, payment of $12,500 (the un-paid bonus for the quarter ended September 30, 2017) and a continuation of health insurance coverage for Mr. Andrea and his dependents for 6 months. At December 31, 2020, the future minimum cash commitments under this agreement aggregate $126,000. On November 11, 2008, the Company entered into an amended and restated change in control agreement with Corisa L. Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary of the Company. The change in control agreement provides Ms. Guiffre with a severance benefit upon termination in connection with a change in control (as defined in the agreement). If Ms. Guiffre is terminated following a change in control, the Company will pay Ms. Guiffre a sum equal to three times Ms. Guiffre’s average annual compensation for the five preceding taxable years. All restrictions on any restricted stock will lapse immediately and incentive stock options and stock appreciation rights, if any, will become immediately exercisable in the event of a change in control of the Company. Upon the occurrence of a change in control followed by Ms. Guiffre’s termination of employment, the Company will continue life, medical, dental and disability coverage for 36 full calendar months following the date of termination. Legal Proceedings In September 2016, the Company filed a complaint with the United States District Court for the Eastern District of New York, alleging patent infringement against Apple Inc. (“Apple”) and requesting monetary and injunctive relief (the “New York Litigation”). The New York Litigation was stayed pending final disposition of a parallel case that the Company filed against Apple with the United States International Trade Commission (“ITC”). The ITC’s final decision finding that Apple did not violate the ITC’s statute was issued on March 22, 2018. Apple informed the New York judge of this final decision on May 30, 2018. The ITC’s final decision does not affect Andrea’s right to continue prosecuting the New York litigation. In January 2017, Apple filed four (4) petitions for inter partes review (“IPR”) of the Company’s patents asserted in the New York Litigation with the United States Patent and Trademark Office (“PTO”). The Company filed its Patent Owner’s Preliminary Response in two of these IPR proceedings on May 1, 2017. The PTO instituted the four IPR proceedings requested by Apple on July 24, 2017. The Company filed its Patent Owner’s Response in two of these IPR proceedings on November 7, 2017. Oral argument in these two IPR proceedings, occurred on April 25, 2018. On July 12, 2018, the PTO issued its final written decisions in those two IPR proceedings, ruling that claims 6-9 of the Company’s U.S. Patent No. 6,363,345 remain valid and enforceable after the PTO’s review. On September 13, 2018, Apple filed its Notice of Appeal of that ruling to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”). Apple filed its Appeal Brief with the Federal Circuit on January 31, 2019. The Company filed its Response to Apple’s Appeal Brief on March 12, 2019. The Federal Circuit held an oral argument on October 1, 2019. On February 7, 2020, the Federal Circuit issued its decisions on Apple’s appeals. The Federal Circuit affirmed the PTO’s findings in one of the ongoing IPRs. In the other ongoing IPR, the Federal Circuit partly affirmed the PTO’s findings, but also partly vacated the PTO’s findings, and remanded the case back to the PTO for further proceedings. On remand of the ongoing IPR, on October 28, 2020, the PTO found that claims 6-9 of the Company’s U.S. Patent No. 6,363,345 are invalid. The Company has appealed this decision to the Federal Circuit. The New York Litigation is stayed pending the final outcome of Apple’s IPR proceedings against the Company’s U.S. Patent No. 6,363,345. Andrea intends to vigorously prosecute the New York Litigation and the ongoing IPR proceedings.

13. STOCK PLANS AND STOCK-BASED COMPENSATION In August 2019, the Board adopted the Andrea Electronics Corporation 2019 Equity Compensation Plan (“2019 Plan”), which was subsequently approved by the shareholders on October 24, 2019. The 2019 Plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 10,000,000 shares of Andrea’s common stock to be acquired by the holders of those awards. Awards can be granted to key employees, officers, directors and consultants. No awards have been granted under the 2019 Plan. In October 2006, the Board adopted the Andrea Electronics Corporation 2006 Equity Compensation Plan (“2006 Plan”), which was subsequently approved by the shareholders. The 2006 Plan, as amended, authorized the granting of awards, the exercise of which would allow up to an aggregate of 18,000,000 shares of Andrea’s Common Stock to be acquired by the holders of those awards. Awards could be granted to key employees, officers, directors and consultants. As the 2006 Plan has expired, no further awards will be granted under the 2006 Plan. The stock option awards granted under the 2006 Plan have been granted with an exercise price equal to the market price of the Company’s stock at the date of grant with vesting periods of up to four years and 10-year contractual terms. The fair values of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model that uses the weighted-average assumptions noted in the following table. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. No options were granted during the year ended December 31, 2020 or 2019. Option activity during 2020 is summarized as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 63%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="10" style="border-bottom: #000000 1pt solid; width: 18%; white-space: nowrap; text-align: center">Options Outstanding</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="9" style="border-bottom: #000000 1pt solid; width: 17%; white-space: nowrap; text-align: center">Options Exercisable</td></tr> <tr style="vertical-align: bottom; line-height: normal"> <td style="width: 63%; white-space: nowrap; text-align: left; padding-top: 2pt; padding-bottom: 2pt"></td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-top: 2pt; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Options Outstanding</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Exercise Price</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Fair Value</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Remaining Contractual Life</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Options Exercisable</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Exercise Price</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Fair Value</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Remaining Contractual Life</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 63%; white-space: nowrap; text-align: left">At January 1, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,100,500</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.80 years</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,100,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.80 years</td></tr> <tr style="vertical-align: bottom"> <td style="width: 63%; white-space: nowrap; text-align: left; padding-left: 15pt">Canceled</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">     (1,799,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.11</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.11</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 63%; white-space: nowrap; text-align: left">At December 31, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">6,301,500</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.98 years</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">6,301,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.98 years</td></tr></table> During the year ended December 31, 2020, no options vested, nor were any options exercised or forfeited. Based on the December 31, 2020 fair market value of the Company’s common stock of $0.04 per share, there is no aggregate intrinsic value for the 6,301,500 options outstanding and exercisable. There was no compensation expense recognized related to stock option awards for the year ended December 31, 2020. Total compensation expense recognized related to stock option awards was $17,710 for the year ended December 31, 2019. In the accompanying consolidated statement of operations for the year ended December 31, 2019, $15,659 of expense is included in general, administrative and selling expenses and $2,051 is included in research and development expenses. As of December 31, 2020, there is no unrecognized compensation cost related to nonvested share-based compensation arrangements.

14. SEGMENT INFORMATION Andrea follows the provisions of ASC 280 “Segment Reporting” (“ASC 280”). Reportable operating segments are determined based on Andrea’s management approach. The management approach, as defined by ASC 280, is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making operating decisions and assessing performance. While Andrea’s results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker manages the enterprise in two segments: (i) Patent Monetization; and (ii) Andrea DSP Microphone and Audio Software Products. Patent Monetization includes Monetization Revenues (as defined in our Revenue Sharing Agreement). Andrea DSP Microphone and Audio Software Products primarily include products based on the use of some, or all, of the following technologies: Andrea Digital Super Directional Array microphone technology (“DSDA”), Andrea Direction Finding and Tracking Array microphone technology (“DFTA”), Andrea PureAudio noise filtering technology, and Andrea EchoStop, an advanced acoustic echo cancellation technology. The following represents selected consolidated financial information for Andrea’s segments for the years ended December 31, 2020 and 2019: <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; line-height: normal"> <td style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 82%; white-space: nowrap; text-align: center">2020 Twelve Month Segment Data</td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-bottom: 2pt">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Patent Monetization</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Andrea DSP Microphone and Audio Software Products</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Total 2020</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Net product revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">-</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$</td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,295,833</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$</td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,295,833</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Service related revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,200</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,200</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">License revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">554</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">13,776</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">14,330</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Loss from operations</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(362,254</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(392,942</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(755,196</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">18,908</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">33,323</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">52,231</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Purchases of property and equipment</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: center; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">5,989</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">5,989</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Purchases of patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">9,651</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">9,652</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">19,303</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">279,437</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">930,467</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,209,904</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Total long lived assets</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">106,296</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">333,379</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">439,675</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left"> </td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td></tr> <tr style="vertical-align: bottom; line-height: normal"> <td style="border-bottom: Black 1pt solid; padding-bottom: 2pt; width: 82%; white-space: nowrap; text-align: center">2019 Twelve Month Segment Data</td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-bottom: 2pt"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Patent Monetization</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Andrea DSP Microphone and Audio Software Products</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Total 2019</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Net product revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$      </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">-</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$          </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,852,322</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,852,322</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Service related revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">17,271</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">17,271</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">License revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">950</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">24,697</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">25,647</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Loss from operations</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(397,200</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(79,428</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(476,628</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">24,220</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">53,141</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">77,361</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Purchases of patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,369</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,368</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">16,737</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">257,685</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,031,786</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,289,471</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Total long lived assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">115,562</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">207,333</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">322,895</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr></table> Management of Andrea assesses assets and non-operating income statement data on a consolidated basis only. International revenues are based on the country in which the end-user is located. For the years ended December 31, 2020 and 2019, and as of each respective year-end, total revenues and accounts receivable by geographic area were as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 60%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: #000000 1pt solid; width: 90%; white-space: nowrap; text-align: center">Geographic Data</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Total Revenues:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">United States</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">1,043,384</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">1,420,447</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign(1)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">311,979</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">474,793</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,355,363</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,895,240</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Accounts receivable:</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">United States</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">157,725</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">218,935</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">25,146</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">159,244</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">182,871</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">378,179</td></tr></table> <table cellspacing="0" cellpadding="0" border="0" style="line-height: normal; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="2" style="width: 100%; white-space: nowrap; text-align: left">____________________</td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; white-space: nowrap; text-align: left"> </td> <td style="width: 99%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">(1)</td> <td style="width: 99%; white-space: nowrap; text-align: left">Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.</td></tr></table>

Liquidity ASC 205-40, “Presentation of Financial statements-Going Concern,” requires management to evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued. Based upon the evaluation, management believes the Company has the ability to meet its obligations as they become due within the next twelve months from the date of the financial statement issuance. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. In response to the COVID-19 outbreak, “shelter in place” orders and other public health measures were implemented across much of the United States, including the Long Island area, where the Company is located. The COVID-19 global pandemic continues to rapidly evolve. The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread including the speed of the ongoing vaccine distribution effort, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company's operations and liquidity is uncertain as of the date of this report. Although the Company has not yet had customers cancel any open orders, some customers have delayed shipments of products into future months, causing the Company’s 2020 product revenues to be approximately $400,000 less than the same period in 2019. While there could ultimately be a material impact on future operations and liquidity of the Company, the full impact of COVID-19 cannot be determined. On May 8, 2020, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,775 (the “PPP Loan First Draw”). The PPP Loan First Draw was made under, and is subject to the terms and conditions of, the Payment Protection Program (“PPP”) which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans. On January 18, 2021, the PPP Loan First Draw was forgiven by the SBA, barring an initial $8,000 advance. The Company expects the initial advance to also be forgiven. On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company used the proceeds of the SBA Loan for such purpose. See Note 7 for additional information on the SBA Loan. On February 5, 2021, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,777 (the “PPP Loan Second Draw” and together with the PPP Loan First Draw, the “PPP Loans”). The PPP Loan Second Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans. The Company’s loss before income taxes was approximately $823,000 for the year ended December 31, 2020, of which $52,000 represents non-cash depreciation and amortization expenses. As part of its evaluation, management considered the Company’s cash balance of $362,730 and working capital of $321,491 as of December 31, 2020 as well as the Company’s projected revenues and expenses for the next twelve months. If the Company is not successful in achieving its projected revenues and expenses, it may need to seek other sources of revenue, areas of further expense reduction or additional funding from other sources such as debt or equity raising; however, there is no assurance that the Company would be successful in a debt or equity raise or that such funding would be on terms that it would find acceptable.

Principles of Consolidation The consolidated financial statements include the accounts of Andrea and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Loss Per Share Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss adjusts basic loss earnings per share for the effects of convertible securities, stock options and other potentially dilutive financial instruments, only in the periods in which such effect is dilutive. Diluted loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Securities that could potentially dilute basic earnings per share (“EPS”) in the future that were not included in the computation of the diluted EPS because to do so would have been anti-dilutive for the periods presented, consist of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Total potentially dilutive common shares as of:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Stock options to purchase common stock (Note 13)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">6,301,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">8,100,500</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series C Convertible Preferred Stock and related accrued dividends (Note 9)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series D Convertible Preferred Stock (Note 10)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"> </td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 30pt">Total potentially dilutive common shares</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">10,454,812</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">12,253,812</td></tr></table>

Cash Cash includes cash and highly liquid investments with original maturities of three months or less. At various times during the years ended December 31, 2020 and 2019, the Company had cash deposits in excess of the maximum amounts insured by the Federal Deposit Insurance Corporation insurance limits. The Company does not believe it is exposed to significant credit risk due to the financial position of the financial institutions in which its deposits are held. At December 31, 2020, the Company’s cash was held at four financial institutions.

Concentration of Risk The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: right">December 31,</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; background-color: White"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: White"></td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: White">     </td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer A</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">31%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">40%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer B</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">23%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer C</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">15%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr></table> <div>________________________</div> <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">*</td> <td style="width: 99%; text-align: left">Amounts are less than 10%</td></tr></table> As of December 31, 2020, Customers A, B and C accounted for approximately 32%, 14% and 17%, respectively, of accounts receivable. As of December 31, 2019, Customers A, B and C accounted for approximately 39%, 17% and 31%, respectively, of accounts receivable.

Allowance for Doubtful Accounts The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. Collections and payments from customers are continuously monitored. The Company maintains an allowance for doubtful accounts, which is based upon historical experience, as well as specific customer collection issues that have been identified. While such bad debt expenses have historically been within expectations and allowances established, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories Inventories are stated at the lower of cost (on a first-in, first-out) or net realizable value. The cost of inventory is based on the respective cost of materials. Andrea reviews its inventory reserve for obsolescence on a quarterly basis and establishes reserves on inventories based on the specific identification method as well as a general reserve. Andrea records charges in inventory reserves as part of cost of revenues.

Property and Equipment, net Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets ranging from 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lives of the respective leases or the expected useful lives of those improvements. Expenditures for maintenance and repairs that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Improvements that substantially extend the useful lives of the assets are capitalized. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in the statement of operations.

Other Intangible Assets Andrea amortizes its core technology and patents and trademarks on a straight-line basis over their estimated useful lives that range from 10 to 20 years.

Long-Lived Assets Andrea accounts for its long-lived assets in accordance with ASC 360 “Plant, Property and Equipment, ” for purposes of determining and measuring impairment of its long-lived assets (primarily intangible assets) other than goodwill. Andrea’s policy is to review the value assigned to its long-lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s long-lived assets is not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product sales), the impaired asset is adjusted to its estimated fair value, based on an estimate of future discounted cash flows which becomes the new cost basis for the impaired asset. Considerable management judgment is necessary to estimate undiscounted future operating cash flows and fair values and, accordingly, actual results could vary significantly from such estimates. No impairment charges were recognized during the years ended December 31, 2020 and 2019.

Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606) (“ASU No. 2014-09”), which is described below in Recent Accounting Pronouncements. In accordance with Topic 606, the Company recognizes revenue using the following five-step approach: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">1.</td> <td style="width: 99%; text-align: left">Identify the contract with a customer.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">2.</td> <td style="width: 99%; text-align: left">Identify the performance obligations in the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">3.</td> <td style="width: 99%; text-align: left">Determine the transaction price of the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">4.</td> <td style="width: 99%; text-align: left">Allocate the transaction price to the performance obligations in the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">5.</td> <td style="width: 99%; text-align: left">Recognize revenue when the performance obligations are met or delivered.</td></tr></table> Andrea utilized the modified retrospective approach when reviewing its current accounting policies to identify potential differences that would result from applying the new requirements to its customer contracts. This approach includes the evaluation of sales terms, performance obligations, variable consideration, and costs to obtain and fulfill contracts. Based on the Company’s review, management did not need to record a cumulative effect adjustment to retained earnings as of the date of initial application and application of this guidance did not have a material impact on its consolidated financial statements. The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed. At December 31, 2020, the Company did not have any deferred revenue. See Note 14 for additional description of the Company’s reportable business segments and the revenue reported in each segment.

Income Taxes Andrea accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax bases of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2020, the Company has recorded a full valuation allowance. Andrea expects it will reduce its valuation allowance in future periods to the extent that it can demonstrate its ability to utilize the assets. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Income tax expense consists of taxes payable for the period, withholding of income tax as mandated by the foreign jurisdiction in which the revenues are earned and the change during the period in deferred tax assets and liabilities. The Company has identified its federal tax return and its state tax return in New York as "major" tax jurisdictions. Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for tax years ended 2016 through 2020. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.

Stock-Based Compensation At December 31, 2020, Andrea had one stock-based employee compensation plan, which is described more fully in Note 13. Andrea accounts for stock based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified in cash flows from financing activities. The future realization of the reserved deferred tax assets related to these tax benefits associated with the exercise of stock options will result in a credit to additional paid in capital if the related tax deduction reduces taxes payable. The Company has elected the “with and without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit did reduce taxes payable in the current year. Under this approach, the windfall tax benefit would be recognized in additional paid-in-capital only if an incremental tax benefit is realized after considering all other benefits presently available.

Research and Development Andrea expenses all research and development costs as incurred.

Advertising Expenses All media costs of newspaper and magazine advertisements as well as trade show costs are expensed as incurred. Total advertising and marketing expenses for the years ended December 31, 2020 and 2019 were approximately $6,000 and $12,000, respectively and are included in general, administrative and selling expenses.

Fair Value of Financial Instruments ASC 820 “Fair Value Measurement and Disclosures: (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and expands disclosures about payments to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 applies to all assets and liabilities that are measured and reported on a fair value basis. The Company will apply the provisions of ASC 820 to nonfinancial assets and liabilities. Andrea calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the book value of those financial instruments. When the book value approximates fair value, no additional disclosure is made. Andrea uses quoted market prices whenever available to calculate these fair values. When quoted market prices are not available, Andrea uses standard pricing models for various types of financial instruments which take into account the present value of estimated future cash flows. As of December 31, 2020 and 2019, the carrying value of all financial instruments approximated fair value.

Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most significant estimates, among other things, are used in accounting for allowances for bad debts, inventory valuation and obsolescence, product warranty, depreciation, deferred income taxes, expected realizable values for assets (primarily intangible assets), contingencies, revenue recognition as well as the recording and presentation of the Company’s convertible preferred stock. Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the consolidated financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

Subsequent Events The Company evaluates events that occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, other than what is disclosed, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Securities that could potentially dilute basic earnings per share (“EPS”) in the future that were not included in the computation of the diluted EPS because to do so would have been anti-dilutive for the periods presented, consist of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Total potentially dilutive common shares as of:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Stock options to purchase common stock (Note 13)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">6,301,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">8,100,500</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series C Convertible Preferred Stock and related accrued dividends (Note 9)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series D Convertible Preferred Stock (Note 10)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"> </td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 30pt">Total potentially dilutive common shares</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">10,454,812</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">12,253,812</td></tr></table>

The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: right">December 31,</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; background-color: White"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: White"></td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: White">     </td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer A</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">31%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">40%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer B</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">23%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer C</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">15%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr></table> <div>________________________</div> <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">*</td> <td style="width: 99%; text-align: left">Amounts are less than 10%</td></tr></table>

Intangible assets, net, consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="7" style="border-bottom: Black 1pt solid; width: 7%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Core Technology</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">8,567,448</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">8,567,448</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">983,010</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">963,707</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">9,550,458</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">9,531,155</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Less: accumulated amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,337,839</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,300,032</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">212,619</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">231,123</td></tr></table>

The changes in the carrying amount of intangible assets during the years ended December 31, 2020 and 2019 were as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of January 1, 2019</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">262,819</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Additions during the period</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">16,737</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(48,433</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of December 31, 2019</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">231,123</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Additions during the period</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">19,303</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(37,807</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Balance as of December 31, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">212,619</td></tr></table>

Inventories consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="5" style="border-bottom: Black 1pt solid; width: 5%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Raw materials</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">18,996</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">22,254</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Finished goods</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">95,397</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">187,907</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">114,393</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">210,161</td></tr></table>

Property and equipment, net, consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="7" style="border-bottom: Black 1pt solid; width: 7%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Information Technology Equipment</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">280,724</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">274,735</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left">Furniture and fixtures</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">87,958</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">87,958</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Tools, molds and testing equipment</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">212,366</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">212,366</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">581,048</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">575,059</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 92%; white-space: nowrap; text-align: left">Less: accumulated depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(563,323</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(548,899</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 92%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">17,725</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">26,160</td></tr></table>

<table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"><tr style="vertical-align: bottom"><td style="width: 93%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="6" style="border-bottom: Black 1pt solid; width: 6%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Additional Notes</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">1,884,422</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">1,684,422</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">PIK interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">209,545</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">143,087</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">PPP Loan with accrued interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">143,703</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: center; text-align: right">-</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">SBA Loan with accrued interest</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">160,501</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">-</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Total long-term debt</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">2,398,171</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">1,827,509</td></tr> <tr style="vertical-align: bottom"> <td style="width: 93%; white-space: nowrap; text-align: left">Less: current maturities of long-term debt</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">(9,979</td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">-</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 93%; white-space: nowrap; text-align: left">Long-term debt, net of current maturities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">2,388,192</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">1,827,509</td></tr></table>

Trade accounts payable and other current liabilities consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td colspan="5" style="border-bottom: Black 1pt solid; width: 5%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="2" style="border-bottom: Black 1pt solid; width: 2%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Trade accounts payable</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">49,182</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom">$     </td> <td style="width: 1%; white-space: nowrap; text-align: right">87,524</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Payroll and related expenses</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">39,290</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">7,788</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Patent monetization expenses</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">120,105</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">107,605</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Current lease liabilities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">44,630</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">47,364</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">Deferred revenue</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: right">34,178</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left; vertical-align: bottom"></td> <td style="width: 1%; white-space: nowrap; text-align: center; text-align: right">-</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Professional and other service fees</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">132,206</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">140,277</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left; padding-left: 15pt">Total trade accounts payable and other current liabilities</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">419,591</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; vertical-align: bottom; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">390,558</td></tr></table>

Supplemental balance sheet information related to leases was as follows: Operating Leases <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; line-height: normal"> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: left"></td> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; white-space: nowrap; text-align: center">December 31, 2020</td> <td style="padding-bottom: 2pt; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; white-space: nowrap; text-align: center">December 31, 2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Other Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">204,081</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">60,362</td></tr> <tr style="background-color: Silver"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Trade accounts payable and other current liabilities</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left">$</td> <td style="white-space: nowrap; text-align: right">44,630</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left">$</td> <td style="white-space: nowrap; text-align: right">47,364</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="white-space: nowrap; text-align: left">Lease liabilities payable non-current</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: right">159,794</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; white-space: nowrap; text-align: right">15,221</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Total operating lease liabilities</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: right">204,424</td> <td style="white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; white-space: nowrap; text-align: right">62,585</td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="white-space: nowrap; text-align: left">Weighted-average remaining lease term</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">56 months</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">17 months</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Weighted-average discount rate</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">4.00%</td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: left"></td> <td style="white-space: nowrap; text-align: right">7.34%</td></tr></table>

As of December 31, 2020, maturities of operating lease liabilities were as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 60%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2021</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">51,787</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">2022</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,071</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2023</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">42,389</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">2024</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">43,743</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left">2025</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">40,344</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Total</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">223,334</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 94%; white-space: nowrap; text-align: left; padding-left: 15pt">Less: interest</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(18,910</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 94%; white-space: nowrap; text-align: left">Total Lease Payments</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">204,424</td></tr></table>

Option activity during 2020 is summarized as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 63%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="10" style="border-bottom: #000000 1pt solid; width: 18%; white-space: nowrap; text-align: center">Options Outstanding</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="9" style="border-bottom: #000000 1pt solid; width: 17%; white-space: nowrap; text-align: center">Options Exercisable</td></tr> <tr style="vertical-align: bottom; line-height: normal"> <td style="width: 63%; white-space: nowrap; text-align: left; padding-top: 2pt; padding-bottom: 2pt"></td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-top: 2pt; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Options Outstanding</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Exercise Price</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Fair Value</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Remaining Contractual Life</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Options Exercisable</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Exercise Price</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td colspan="2" style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 4%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Fair Value</td> <td style="padding-top: 2pt; width: 1%; white-space: nowrap; text-align: center; padding-bottom: 2pt">   </td> <td style="border-bottom: #000000 1pt solid; padding-top: 2pt; width: 3%; white-space: nowrap; text-align: center; padding-bottom: 2pt">Weighted Average Remaining Contractual Life</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 63%; white-space: nowrap; text-align: left">At January 1, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,100,500</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.80 years</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,100,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.07</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.80 years</td></tr> <tr style="vertical-align: bottom"> <td style="width: 63%; white-space: nowrap; text-align: left; padding-left: 15pt">Canceled</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">     (1,799,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.11</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.11</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 63%; white-space: nowrap; text-align: left">At December 31, 2020</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">6,301,500</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.98 years</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">6,301,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">0.06</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">4.98 years</td></tr></table>

The following represents selected consolidated financial information for Andrea’s segments for the years ended December 31, 2020 and 2019: <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom; line-height: normal"> <td style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 82%; white-space: nowrap; text-align: center">2020 Twelve Month Segment Data</td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-bottom: 2pt">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Patent Monetization</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Andrea DSP Microphone and Audio Software Products</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Total 2020</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Net product revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">-</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$</td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,295,833</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$</td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,295,833</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Service related revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,200</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">45,200</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">License revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">554</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">13,776</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">14,330</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Loss from operations</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(362,254</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(392,942</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(755,196</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">18,908</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">33,323</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">52,231</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Purchases of property and equipment</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: center; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">5,989</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">5,989</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Purchases of patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">9,651</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">9,652</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">19,303</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">279,437</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">930,467</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,209,904</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Total long lived assets</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">106,296</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">333,379</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">439,675</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left"> </td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 3%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td></tr> <tr style="vertical-align: bottom; line-height: normal"> <td style="border-bottom: Black 1pt solid; padding-bottom: 2pt; width: 82%; white-space: nowrap; text-align: center">2019 Twelve Month Segment Data</td> <td style="width: 1%; white-space: nowrap; text-align: left; padding-bottom: 2pt"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Patent Monetization</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Andrea DSP Microphone and Audio Software Products</td> <td style="padding-bottom: 2pt; width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: #000000 1pt solid; padding-bottom: 2pt; width: 5%; white-space: nowrap; text-align: center">Total 2019</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Net product revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$      </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">-</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$          </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,852,322</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,852,322</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Service related revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">17,271</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">17,271</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">License revenues</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">950</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">24,697</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">25,647</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Loss from operations</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(397,200</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(79,428</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(476,628</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Depreciation and amortization</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">24,220</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">53,141</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">77,361</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Purchases of patents and trademarks</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,369</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,368</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">16,737</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left; background-color: Silver">Assets</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">257,685</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,031,786</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="background-color: Silver; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td> <td style="width: 3%; white-space: nowrap; text-align: right; background-color: Silver">1,289,471</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: Silver"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 82%; white-space: nowrap; text-align: left">Total long lived assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">115,562</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 3%; white-space: nowrap; text-align: right">207,333</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">322,895</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr></table>

Management of Andrea assesses assets and non-operating income statement data on a consolidated basis only. International revenues are based on the country in which the end-user is located. For the years ended December 31, 2020 and 2019, and as of each respective year-end, total revenues and accounts receivable by geographic area were as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 60%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: #000000 1pt solid; width: 90%; white-space: nowrap; text-align: center">Geographic Data</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Total Revenues:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">United States</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">1,043,384</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">1,420,447</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign(1)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">311,979</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">474,793</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,355,363</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,895,240</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Accounts receivable:</td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">United States</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">157,725</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: right">218,935</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">25,146</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">159,244</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">182,871</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">378,179</td></tr></table> <table cellspacing="0" cellpadding="0" border="0" style="line-height: normal; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="2" style="width: 100%; white-space: nowrap; text-align: left">____________________</td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; white-space: nowrap; text-align: left"> </td> <td style="width: 99%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">(1)</td> <td style="width: 99%; white-space: nowrap; text-align: left">Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.</td></tr></table>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liquidity ASC 205-40, “Presentation of Financial statements-Going Concern,” requires management to evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued. Based upon the evaluation, management believes the Company has the ability to meet its obligations as they become due within the next twelve months from the date of the financial statement issuance. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. In response to the COVID-19 outbreak, “shelter in place” orders and other public health measures were implemented across much of the United States, including the Long Island area, where the Company is located. The COVID-19 global pandemic continues to rapidly evolve. The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread including the speed of the ongoing vaccine distribution effort, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company's operations and liquidity is uncertain as of the date of this report. Although the Company has not yet had customers cancel any open orders, some customers have delayed shipments of products into future months, causing the Company’s 2020 product revenues to be approximately $400,000 less than the same period in 2019. While there could ultimately be a material impact on future operations and liquidity of the Company, the full impact of COVID-19 cannot be determined. On May 8, 2020, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,775 (the “PPP Loan First Draw”). The PPP Loan First Draw was made under, and is subject to the terms and conditions of, the Payment Protection Program (“PPP”) which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans. On January 18, 2021, the PPP Loan First Draw was forgiven by the SBA, barring an initial $8,000 advance. The Company expects the initial advance to also be forgiven. On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company used the proceeds of the SBA Loan for such purpose. See Note 7 for additional information on the SBA Loan. On February 5, 2021, the Company entered into a certain U.S. Small Business Administration Note and Loan Agreement with HSBC Bank USA, N.A. pursuant to which the Company received loan proceeds of $142,777 (the “PPP Loan Second Draw” and together with the PPP Loan First Draw, the “PPP Loans”). The PPP Loan Second Draw was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. See Note 7 for additional information on the PPP Loans. The Company’s loss before income taxes was approximately $823,000 for the year ended December 31, 2020, of which $52,000 represents non-cash depreciation and amortization expenses. As part of its evaluation, management considered the Company’s cash balance of $362,730 and working capital of $321,491 as of December 31, 2020 as well as the Company’s projected revenues and expenses for the next twelve months. If the Company is not successful in achieving its projected revenues and expenses, it may need to seek other sources of revenue, areas of further expense reduction or additional funding from other sources such as debt or equity raising; however, there is no assurance that the Company would be successful in a debt or equity raise or that such funding would be on terms that it would find acceptable. Principles of Consolidation The consolidated financial statements include the accounts of Andrea and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain prior period balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operation or loss per share. Loss Per Share Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss adjusts basic loss earnings per share for the effects of convertible securities, stock options and other potentially dilutive financial instruments, only in the periods in which such effect is dilutive. Diluted loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Securities that could potentially dilute basic earnings per share (“EPS”) in the future that were not included in the computation of the diluted EPS because to do so would have been anti-dilutive for the periods presented, consist of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center"></td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Total potentially dilutive common shares as of:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Stock options to purchase common stock (Note 13)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">6,301,500</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">8,100,500</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series C Convertible Preferred Stock and related accrued dividends (Note 9)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">524,736</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 15pt">Series D Convertible Preferred Stock (Note 10)</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 1pt solid; width: 1%; white-space: nowrap; text-align: right">3,628,576</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"> </td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; padding-left: 30pt">Total potentially dilutive common shares</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">10,454,812</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="border-bottom: Black 2pt double; width: 1%; white-space: nowrap; text-align: right">12,253,812</td></tr></table> Cash Cash includes cash and highly liquid investments with original maturities of three months or less. At various times during the years ended December 31, 2020 and 2019, the Company had cash deposits in excess of the maximum amounts insured by the Federal Deposit Insurance Corporation insurance limits. The Company does not believe it is exposed to significant credit risk due to the financial position of the financial institutions in which its deposits are held. At December 31, 2020, the Company’s cash was held at four financial institutions. Concentration of Risk The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">     </td> <td colspan="3" style="border-bottom: Black 1pt solid; width: 3%; white-space: nowrap; text-align: right">December 31,</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left; background-color: White"></td> <td style="width: 1%; white-space: nowrap; text-align: right; background-color: White"></td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left; background-color: White">     </td> <td style="border-bottom: Black 1pt solid; background-color: White; width: 1%; white-space: nowrap; text-align: right">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer A</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">31%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">40%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer B</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">23%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 96%; white-space: nowrap; text-align: left">Customer C</td> <td style="width: 1%; white-space: nowrap; text-align: right"></td> <td style="width: 1%; white-space: nowrap; text-align: right">15%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: right">18%</td></tr></table> <div>________________________</div> <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">*</td> <td style="width: 99%; text-align: left">Amounts are less than 10%</td></tr></table> As of December 31, 2020, Customers A, B and C accounted for approximately 32%, 14% and 17%, respectively, of accounts receivable. As of December 31, 2019, Customers A, B and C accounted for approximately 39%, 17% and 31%, respectively, of accounts receivable. Allowance for Doubtful Accounts The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. Collections and payments from customers are continuously monitored. The Company maintains an allowance for doubtful accounts, which is based upon historical experience, as well as specific customer collection issues that have been identified. While such bad debt expenses have historically been within expectations and allowances established, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Inventories Inventories are stated at the lower of cost (on a first-in, first-out) or net realizable value. The cost of inventory is based on the respective cost of materials. Andrea reviews its inventory reserve for obsolescence on a quarterly basis and establishes reserves on inventories based on the specific identification method as well as a general reserve. Andrea records charges in inventory reserves as part of cost of revenues. Property and Equipment, net Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets ranging from 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lives of the respective leases or the expected useful lives of those improvements. Expenditures for maintenance and repairs that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Improvements that substantially extend the useful lives of the assets are capitalized. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in the statement of operations. Other Intangible Assets Andrea amortizes its core technology and patents and trademarks on a straight-line basis over their estimated useful lives that range from 10 to 20 years. Long-Lived Assets Andrea accounts for its long-lived assets in accordance with ASC 360 “Plant, Property and Equipment, ” for purposes of determining and measuring impairment of its long-lived assets (primarily intangible assets) other than goodwill. Andrea’s policy is to review the value assigned to its long-lived assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s long-lived assets is not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product sales), the impaired asset is adjusted to its estimated fair value, based on an estimate of future discounted cash flows which becomes the new cost basis for the impaired asset. Considerable management judgment is necessary to estimate undiscounted future operating cash flows and fair values and, accordingly, actual results could vary significantly from such estimates. No impairment charges were recognized during the years ended December 31, 2020 and 2019. Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606) (“ASU No. 2014-09”), which is described below in Recent Accounting Pronouncements. In accordance with Topic 606, the Company recognizes revenue using the following five-step approach: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">1.</td> <td style="width: 99%; text-align: left">Identify the contract with a customer.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">2.</td> <td style="width: 99%; text-align: left">Identify the performance obligations in the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">3.</td> <td style="width: 99%; text-align: left">Determine the transaction price of the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">4.</td> <td style="width: 99%; text-align: left">Allocate the transaction price to the performance obligations in the contract.</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; white-space: nowrap; text-align: left; padding-right: 8pt"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 15pt; width: 1%; white-space: nowrap; text-align: left; padding-right: 8pt">5.</td> <td style="width: 99%; text-align: left">Recognize revenue when the performance obligations are met or delivered.</td></tr></table> Andrea utilized the modified retrospective approach when reviewing its current accounting policies to identify potential differences that would result from applying the new requirements to its customer contracts. This approach includes the evaluation of sales terms, performance obligations, variable consideration, and costs to obtain and fulfill contracts. Based on the Company’s review, management did not need to record a cumulative effect adjustment to retained earnings as of the date of initial application and application of this guidance did not have a material impact on its consolidated financial statements. The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed. At December 31, 2020, the Company did not have any deferred revenue. See Note 14 for additional description of the Company’s reportable business segments and the revenue reported in each segment. Income Taxes Andrea accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax bases of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2020, the Company has recorded a full valuation allowance. Andrea expects it will reduce its valuation allowance in future periods to the extent that it can demonstrate its ability to utilize the assets. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Income tax expense consists of taxes payable for the period, withholding of income tax as mandated by the foreign jurisdiction in which the revenues are earned and the change during the period in deferred tax assets and liabilities. The Company has identified its federal tax return and its state tax return in New York as "major" tax jurisdictions. Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for tax years ended 2016 through 2020. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Stock-Based Compensation At December 31, 2020, Andrea had one stock-based employee compensation plan, which is described more fully in Note 13. Andrea accounts for stock based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified in cash flows from financing activities. The future realization of the reserved deferred tax assets related to these tax benefits associated with the exercise of stock options will result in a credit to additional paid in capital if the related tax deduction reduces taxes payable. The Company has elected the “with and without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit did reduce taxes payable in the current year. Under this approach, the windfall tax benefit would be recognized in additional paid-in-capital only if an incremental tax benefit is realized after considering all other benefits presently available. Research and Development Andrea expenses all research and development costs as incurred. Advertising Expenses All media costs of newspaper and magazine advertisements as well as trade show costs are expensed as incurred. Total advertising and marketing expenses for the years ended December 31, 2020 and 2019 were approximately $6,000 and $12,000, respectively and are included in general, administrative and selling expenses. Fair Value of Financial Instruments ASC 820 “Fair Value Measurement and Disclosures: (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and expands disclosures about payments to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 applies to all assets and liabilities that are measured and reported on a fair value basis. The Company will apply the provisions of ASC 820 to nonfinancial assets and liabilities. Andrea calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the book value of those financial instruments. When the book value approximates fair value, no additional disclosure is made. Andrea uses quoted market prices whenever available to calculate these fair values. When quoted market prices are not available, Andrea uses standard pricing models for various types of financial instruments which take into account the present value of estimated future cash flows. As of December 31, 2020 and 2019, the carrying value of all financial instruments approximated fair value. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most significant estimates, among other things, are used in accounting for allowances for bad debts, inventory valuation and obsolescence, product warranty, depreciation, deferred income taxes, expected realizable values for assets (primarily intangible assets), contingencies, revenue recognition as well as the recording and presentation of the Company’s convertible preferred stock. Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the consolidated financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions. Subsequent Events The Company evaluates events that occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, other than what is disclosed, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Reclassifications Certain prior period balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operation or loss per share.

8000

11. INCOME TAXES On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, net operating loss carryback periods, alternative minimum tax refunds, modifications to the net interest deduction limitations and technical corrections to the tax depreciation methods for qualified improvement property. The CARES Act has an immaterial impact on the Company’s income taxes. The Company accounts for income taxes in accordance with ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. There were no unrecognized tax benefits as of January 1, 2019 and during the years ended December 31, 2020 and 2019. The Company has identified its federal tax return and its state tax return in New York as “major” tax jurisdictions, as defined in ASC 740. Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for tax years ended 2017 through 2020. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its consolidated financial position. The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the year ended December 31, 2020. For the year ended December 31, 2020, the Company determined that, more likely than not, its deferred tax assets would not be realized and, accordingly, decreased the valuation allowance. The increase in the valuation allowance is included in the income tax provision in the accompanying consolidated statement of operations for the year ended December 31, 2020. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. The provision for income tax consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Current:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Federal</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">619</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">State and Local</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Total Current</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">619</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Deferred</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Federal</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,731,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,337,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">State and Local</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(9,000</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">25,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Adjustment to valuation allowance related to net deferred tax assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,722,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,362,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Total Deferred</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Provision for income taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">619</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> The provision for income taxes for the years ended December 31, 2020 and 2019 of approximately $600 and $1,800, respectively, is the result of certain licensing revenues that are subject to withholding of income tax as mandated by the foreign jurisdiction in which the revenues are earned partially offset by a Federal income tax refund relating to alternative minimum tax credits. Loss before income taxes is comprised of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Domestic</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$       </td> <td style="width: 3%; white-space: nowrap; text-align: right">(826,359</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$       </td> <td style="width: 3%; white-space: nowrap; text-align: right">(555,843</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">3,143</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">9,082</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Net loss before income taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">(823,216</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">(546,761</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">)</td></tr></table> A reconciliation between the effective rate for income taxes and the amount computed by applying the statutory Federal income tax rate to loss before provision for income taxes is as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 13pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="5" style="border-bottom: #000000 1pt solid; width: 9%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Tax provision at statutory rate</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">                 (21</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">                  (21</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left">State and local taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(3</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(3</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Incentive Stock Option Expense</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1</td> <td style="width: 1%; white-space: nowrap; text-align: left">%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left">Change in valuation allowance for net deferred tax assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">24</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">23</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">- </td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">- </td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">%</td></tr></table> The components of temporary differences that give rise to significant portions of the deferred tax asset, net, are as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 13pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Deferred tax assets:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Accrued expenses</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">16,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">17,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Allowance for doubtful accounts</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Deferred revenue</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Reserve for obsolescence</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">23,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">25,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Expense associated with non-qualified stock options</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">37,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">37,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Revenue Sharing Agreement</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">210,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">234,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">General business credit</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,004,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,198,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">NOL carryforward</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">5,732,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">7,241,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">7,031,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Less: valuation allowance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(7,031,00</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(8,753,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Deferred tax asset, net</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: center; text-align: right">-</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: center; text-align: right">-</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> The change in the valuation allowance for deferred tax assets are summarized as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Beginning Balance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">10,115,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Change in Allowance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,722,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,362,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Ending Balance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">7,031,000</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table> As of December 31, 2020, Andrea federal had net operating loss carryforwards of approximately $27,000,000. $2,400,000 of these federal net operating loss carryforwards are carried forward indefinitely, the remaining $24,600,000 expire in varying amounts beginning in 2021 through 2036. Andrea has state net operating loss carryforwards of approximately $3,700,000 expiring in varying amounts beginning in 2035. Andrea has general business credits of approximately $1,000,000 expiring in varying amounts beginning in 2021 through 2039. The Company records tax benefits and expense in the statements of earnings.

The provision for income tax consisted of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Current:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Federal</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">619</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">State and Local</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Total Current</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">619</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Deferred</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Federal</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,731,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,337,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">State and Local</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(9,000</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">25,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Adjustment to valuation allowance related to net deferred tax assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,722,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,362,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Total Deferred</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">-</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Provision for income taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">619</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">1,805</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table>

Loss before income taxes is comprised of the following: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Domestic</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$       </td> <td style="width: 3%; white-space: nowrap; text-align: right">(826,359</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$       </td> <td style="width: 3%; white-space: nowrap; text-align: right">(555,843</td> <td style="width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Foreign</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">3,143</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">9,082</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Net loss before income taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">(823,216</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">(546,761</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">)</td></tr></table>

A reconciliation between the effective rate for income taxes and the amount computed by applying the statutory Federal income tax rate to loss before provision for income taxes is as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 13pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="5" style="border-bottom: #000000 1pt solid; width: 9%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="2" style="border-bottom: #000000 1pt solid; width: 4%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Tax provision at statutory rate</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">                 (21</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">                  (21</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left">State and local taxes</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(3</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">(3</td> <td style="width: 1%; white-space: nowrap; text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left">Incentive Stock Option Expense</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1</td> <td style="width: 1%; white-space: nowrap; text-align: left">%</td></tr> <tr style="vertical-align: bottom"> <td style="width: 90%; white-space: nowrap; text-align: left">Change in valuation allowance for net deferred tax assets</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">24</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">23</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 90%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">- </td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">%</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">- </td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">%</td></tr></table>

<table cellspacing="0" cellpadding="0" border="0" style="line-height: 13pt; border-collapse: collapse; width: 100%"><tr style="vertical-align: bottom; background-color: Silver"><td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">%</td></tr></table> The components of temporary differences that give rise to significant portions of the deferred tax asset, net, are as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 13pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Deferred tax assets:</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Accrued expenses</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">16,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">17,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Allowance for doubtful accounts</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Deferred revenue</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">-</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Reserve for obsolescence</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">23,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">25,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Expense associated with non-qualified stock options</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">37,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">37,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Revenue Sharing Agreement</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">210,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">234,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">General business credit</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,004,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">1,198,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">NOL carryforward</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">5,732,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">7,241,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">7,031,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="background-color: Silver; vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Less: valuation allowance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(7,031,00</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(8,753,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left; padding-left: 15pt">Deferred tax asset, net</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: center; border-bottom: #000000 2pt double; text-align: right">-</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="width: 3%; white-space: nowrap; text-align: center; border-bottom: #000000 2pt double; text-align: right">-</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table>

The change in the valuation allowance for deferred tax assets are summarized as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td colspan="7" style="border-bottom: #000000 1pt solid; width: 11%; white-space: nowrap; text-align: center">For the Years Ended December 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2020</td> <td style="width: 1%; white-space: nowrap; text-align: center">     </td> <td colspan="3" style="border-bottom: #000000 1pt solid; width: 5%; white-space: nowrap; text-align: center">2019</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Beginning Balance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left">$     </td> <td style="width: 3%; white-space: nowrap; text-align: right">10,115,000</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; white-space: nowrap; text-align: left">Change in Allowance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,722,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 1pt solid; width: 3%; white-space: nowrap; text-align: right">(1,362,000</td> <td style="border-bottom: #000000 1pt solid; width: 1%; white-space: nowrap; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 88%; white-space: nowrap; text-align: left">Ending Balance</td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">7,031,000</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td> <td style="width: 1%; white-space: nowrap; text-align: left"></td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left">$</td> <td style="border-bottom: #000000 2pt double; width: 3%; white-space: nowrap; text-align: right">8,753,000</td> <td style="border-bottom: #000000 2pt double; width: 1%; white-space: nowrap; text-align: left"></td></tr></table>

Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.

EX-101.SCH 9 andr-20201231.xsd XBRL TAXONOMY EXTENSION SCHEMA 00000001 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 00000002 - Statement - CONSOLIDATED BALANCE SHEETS link:presentationLink link:calculationLink link:definitionLink 00000003 - Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00000004 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:calculationLink link:definitionLink 00000005 - Statement - CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT EQUITY link:presentationLink link:calculationLink link:definitionLink 00000006 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS link:presentationLink link:calculationLink link:definitionLink 00000007 - Disclosure - ORGANIZATION AND BUSINESS link:presentationLink link:calculationLink link:definitionLink 00000008 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES link:presentationLink link:calculationLink link:definitionLink 00000009 - Disclosure - INTANGIBLE ASSETS link:presentationLink link:calculationLink link:definitionLink 00000010 - Disclosure - INVENTORIES link:presentationLink link:calculationLink link:definitionLink 00000011 - Disclosure - PROPERTY AND EQUIPMENT, NET link:presentationLink link:calculationLink link:definitionLink 00000012 - Disclosure - REVENUE SHARING, NOTE PURCHASE AGREEMENT link:presentationLink link:calculationLink link:definitionLink 00000013 - Disclosure - LONG TERM DEBT link:presentationLink link:calculationLink link:definitionLink 00000014 - Disclosure - TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES link:presentationLink link:calculationLink link:definitionLink 00000015 - Disclosure - SERIES C CONVERTIBLE PREFERRED STOCK link:presentationLink link:calculationLink link:definitionLink 00000016 - Disclosure - SERIES D CONVERTIBLE PREFERRED STOCK link:presentationLink link:calculationLink link:definitionLink 00000017 - Disclosure - INCOME TAXES link:presentationLink link:calculationLink link:definitionLink 00000018 - Disclosure - COMMITMENTS AND CONTINGENCIES link:presentationLink link:calculationLink link:definitionLink 00000019 - Disclosure - STOCK PLANS AND STOCK-BASED COMPENSATION link:presentationLink link:calculationLink link:definitionLink 00000020 - Disclosure - SEGMENT INFORMATION link:presentationLink link:calculationLink link:definitionLink 00000021 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) link:presentationLink link:calculationLink link:definitionLink 00000022 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000023 - Disclosure - INTANGIBLE ASSETS (Tables) link:presentationLink link:calculationLink link:definitionLink 00000024 - Disclosure - INVENTORIES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000025 - Disclosure - PROPERTY AND EQUIPMENT, NET (Tables) link:presentationLink link:calculationLink link:definitionLink 00000026 - Disclosure - LONG TERM DEBT (Tables) link:presentationLink link:calculationLink link:definitionLink 00000027 - Disclosure - TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000028 - Disclosure - INCOME TAXES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000029 - Disclosure - COMMITMENTS AND CONTINGENCIES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000030 - Disclosure - STOCK PLANS AND STOCK-BASED COMPENSATION (Tables) link:presentationLink link:calculationLink link:definitionLink 00000031 - Disclosure - SEGMENT INFORMATION (Tables) link:presentationLink link:calculationLink link:definitionLink 00000032 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000033 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of antidilutive securities) (Details) link:presentationLink link:calculationLink link:definitionLink 00000034 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of concentration of credit risk, percentage of total revenues) (Details) link:presentationLink link:calculationLink link:definitionLink 00000035 - Disclosure - INTANGIBLE ASSETS (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000036 - Disclosure - INTANGIBLE ASSETS (Schedule of intangible assets) (Details) link:presentationLink link:calculationLink link:definitionLink 00000037 - Disclosure - INTANGIBLE ASSETS (Schedule of changes in the carrying amount of intangible assets) (Details) link:presentationLink link:calculationLink link:definitionLink 00000038 - Disclosure - INVENTORIES (Schedule of inventories) (Details) link:presentationLink link:calculationLink link:definitionLink 00000039 - Disclosure - PROPERTY AND EQUIPMENT, NET (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000040 - Disclosure - PROPERTY AND EQUIPMENT, NET (Schedule of property and equipment, net) (Details) link:presentationLink link:calculationLink link:definitionLink 00000041 - Disclosure - REVENUE SHARING, NOTE PURCHASE AGREEMENT (Details) link:presentationLink link:calculationLink link:definitionLink 00000042 - Disclosure - LONG TERM DEBT (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000043 - Disclosure - LONG TERM DEBT (Schedule of Long Term Debt) (Details) link:presentationLink link:calculationLink link:definitionLink 00000044 - Disclosure - TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Schedule of trade payable and other current liabilities) (Details) link:presentationLink link:calculationLink link:definitionLink 00000045 - Disclosure - SERIES C CONVERTIBLE PREFERRED STOCK (Details) link:presentationLink link:calculationLink link:definitionLink 00000046 - Disclosure - SERIES D CONVERTIBLE PREFERRED STOCK (Details) link:presentationLink link:calculationLink link:definitionLink 00000047 - Disclosure - INCOME TAXES (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000048 - Disclosure - INCOME TAXES (Schedule of provision for income tax) (Details) link:presentationLink link:calculationLink link:definitionLink 00000049 - Disclosure - INCOME TAXES (Schedule of loss before income taxes) (Details) link:presentationLink link:calculationLink link:definitionLink 00000050 - Disclosure - INCOME TAXES (Schedule of effective rate for income taxes) (Details) link:presentationLink link:calculationLink link:definitionLink 00000051 - Disclosure - INCOME TAXES (Schedule of components of temporary differences of deferred tax asset, net) (Details) link:presentationLink link:calculationLink link:definitionLink 00000052 - Disclosure - INCOME TAXES (Schedule of change in valuation allowance for deferred tax assets) (Details) link:presentationLink link:calculationLink link:definitionLink 00000053 - Disclosure - COMMITMENTS AND CONTINGENCIES (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000054 - Disclosure - COMMITMENTS AND CONTINGENCIES (Schedule of Operating Leases) (Details) link:presentationLink link:calculationLink link:definitionLink 00000055 - Disclosure - COMMITMENTS AND CONTINGENCIES (Schedule of Maturities of Operating Lease Liabilities) (Details) link:presentationLink link:calculationLink link:definitionLink 00000056 - Disclosure - STOCK PLANS AND STOCK-BASED COMPENSATION (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000057 - Disclosure - STOCK PLANS AND STOCK-BASED COMPENSATION (Schedule of Stock Option Activity) (Details) link:presentationLink link:calculationLink link:definitionLink 00000058 - Disclosure - SEGMENT INFORMATION (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 00000059 - Disclosure - SEGMENT INFORMATION (Schedule of selected consolidated financial information for Andrea's segments) (Details) link:presentationLink link:calculationLink link:definitionLink 00000060 - Disclosure - SEGMENT INFORMATION (Schedule of total revenues and accounts receivable by geographic area) (Details) link:presentationLink link:calculationLink link:definitionLink EX-101.PRE 10 andr-20201231_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE EX-101.LAB 11 andr-20201231_lab.xml XBRL TAXONOMY EXTENSION LABEL LINKBASE Business Segments [Axis] Andrea Dsp Microphone and Audio Software Products [Member] Patent Monetization [Member] Class of Stock [Axis] Series C Convertible Preferred Stock [Member] Series D Convertible Preferred Stock [Member] Series C Convertible Preferred Stock and related accrued dividends [Member] Equity Components [Axis] Additional Paid-in Capital [Member] Accumulated Deficit [Member] Common Stock [Member] Geographical [Axis] United States [Member] Foreign [Member] Series D Convertible Preferred Stock [Member] Antidilutive Securities [Axis] Stock options to purchase common stock [Member] Title of Individual [Axis] Chief Executive Officer [Member] Concentration Risk Type [Axis] Customer A [Member] Concentration Risk Benchmark [Axis] Revenue [Member] Customer B [Member] Customer C [Member] Accounts Receivable [Member] Finite-Lived Intangible Assets by Major Class [Axis] Patents and trademarks [Member] Core Technology [Member] Property, Plant and Equipment, Type [Axis] Tools, molds and testing equipment [Member] Furniture and fixtures [Member] Information Technology Equipment [Member] Award Type [Axis] Stock Compensation Plan One [Member] Net Revenue [Member] Range [Axis] Minimum [Member] Patents and Trademarks [Member] Maximum [Member] Asset Class [Axis] Property, Plant and Equipment [Member] Variable Rate [Axis] London Interbank Offered Rate (LIBOR) [Member] Option Indexed to Issuer's Equity, Type [Axis] Option [Member] Income Statement Location [Axis] Selling, General and Administrative Expenses [Member] Research and Development Expense [Member] 2006 Plan [Member] Debt Instrument [Axis] PPP Loan with accrued interest [Member] Subsequent Event Type [Axis] Subsequent Event [Member] Business Acquisition [Axis] U.S. Small Business Administration Loan [Member] PPP Loan Second with accrued interest [Member] SBA Loan with accrued interest [Member] Document and Entity Information [Abstract] Entity Registrant Name Entity Central Index Key Trading Symbol Amendment Flag Current Fiscal Year End Date Document Type Document Period End Date Document Fiscal Period Focus Document Fiscal Year Focus Entity Well-known Seasoned Issuer Entity Voluntary Filers Entity Current Reporting Status Entity Filer Category Entity Shell Company Entity Ex Transition Period Entity Small Business Entity Emerging Growth Company Entity Public Float Entity Common Stock, Shares Outstanding Entity Interactive Data Current Entity Incorporation State Country Code Entity File Number Statement [Table] Statement [Line Items] ASSETS Current assets: Cash Accounts receivable, net of allowance for doubtful accounts of $4,789 Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Other assets, net Total assets LIABILITIES AND SHAREHOLDERS' (DEFICIT) Current liabilities: Trade accounts payable and other current liabilities Current portion of long-term debt Accrued Series C Preferred Stock Dividends Total current liabilities Lease liabilities payable Long-term debt Total liabilities Series B Redeemable Convertible Preferred Stock, $.01 par value; authorized: 1,000 shares; issued and outstanding: 0 shares Commitments and contingencies: Shareholders' (deficit): Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding Common stock, $.01 par value; authorized: 200,000,000 shares; 68,104,957 issued and outstanding Additional paid-in capital Accumulated deficit Total shareholders' (deficit) Total liabilities and shareholders' (deficit) Allowance for doubtful accounts Series B Redeemable Convertible Preferred Stock, par value Series B Redeemable Convertible Preferred Stock, shares authorized Series B Redeemable Convertible Preferred Stock, shares issued Series B Redeemable Convertible Preferred Stock, shares outstanding Preferred stock, par value Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Preferred stock, liquidation value Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenues Net product revenues License revenues and service related revenues Total revenues Cost of revenues Gross margin Patent Monetization Expenses Research and development expenses General, administrative and selling expenses Operating loss Interest expense, net Loss from operations before provision for income taxes Provision for income taxes Net loss Basic and diluted weighted average shares Basic and diluted net loss per share Beginning Balance Beginning Balance, shares Stock-based Compensation Expense related to Stock Option Grants Stock option exercises Stock option exercises, shares Conversion of Series C Convertible Preferred Stock Conversion of Series C Convertible Preferred Stock, shares Net loss Ending Balance Ending Balance, shares Statement of Cash Flows [Abstract] Cash flows from operating activities: Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Stock based compensation Inventory net realizable adjustment Provision for income tax withholding Amortization of right-of-use assets Deferred interest on PPP and SBA loans PIK interest, net Change in: Accounts receivable Inventories Prepaid expenses, other current assets and other assets Trade accounts payable and other current liabilities and lease liability payable Net cash used in operating activities Cash flows from investing activities: Purchases of property and equipment Purchases of patents and trademarks Net cash used in investing activities Cash flows from financing activities: Proceeds from PPP loan Proceeds from SBA loan Proceeds from long-term debt Net cash provided by financing activities Net increase (decrease) in cash Cash, beginning of year Cash, end of year Supplemental disclosures of cash flow information: Cash paid for: Income Taxes Non Cash Financing Activity: Conversion of Series C Convertible Preferred Stock and related dividends into common stock Organization, Consolidation and Presentation of Financial Statements [Abstract] ORGANIZATION AND BUSINESS Accounting Policies [Abstract] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Goodwill and Intangible Assets Disclosure [Abstract] INTANGIBLE ASSETS Inventory Disclosure [Abstract] INVENTORIES EX-101.CAL 12 andr-20201231_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.DEF 13 andr-20201231_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE XML 14 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 23, 2021	Jun. 29, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	ANDREA ELECTRONICS CORP
Entity Central Index Key	0000006494
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Public Float			$ 1,743,180
Entity Common Stock, Shares Outstanding		68,104,957
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	NY
Entity File Number	001-04324

XML 15 R2.htm IDEA: XBRL DOCUMENT

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash	$ 362,730	$ 335,790
Accounts receivable, net of allowance for doubtful accounts of $4,789	182,871	378,179
Inventories	114,393	210,161
Prepaid expenses and other current assets	110,235	42,446
Total current assets	770,229	966,576
Property and equipment, net	17,725	26,160
Intangible assets, net	212,619	231,123
Other assets, net	209,331	65,612
Total assets	1,209,904	1,289,471
Current liabilities:
Trade accounts payable and other current liabilities	419,591	390,558
Current portion of long-term debt	9,979
Accrued Series C Preferred Stock Dividends	19,168	19,168
Total current liabilities	448,738	409,726
Lease liabilities payable	159,794	15,221
Long-term debt	2,388,192	1,827,509
Total liabilities	2,996,724	2,252,456
Series B Redeemable Convertible Preferred Stock, $.01 par value; authorized: 1,000 shares; issued and outstanding: 0 shares
Commitments and contingencies:
Shareholders' (deficit):
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding
Common stock, $.01 par value; authorized: 200,000,000 shares; 68,104,957 issued and outstanding	681,050	681,050
Additional paid-in capital	78,086,910	78,086,910
Accumulated deficit	(80,563,852)	(79,740,017)
Total shareholders' (deficit)	(1,786,820)	(962,985)
Total liabilities and shareholders' (deficit)	1,209,904	1,289,471
Series C Convertible Preferred Stock [Member]
Shareholders' (deficit):
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding
Total shareholders' (deficit)
Series D Convertible Preferred Stock [Member]
Shareholders' (deficit):
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding	9,072	9,072
Total shareholders' (deficit)	$ 9,072	$ 9,072

XML 16 R3.htm IDEA: XBRL DOCUMENT

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Allowance for doubtful accounts	$ 4,789	$ 4,789
Series B Redeemable Convertible Preferred Stock, par value	$ 0.01	$ 0.01
Series B Redeemable Convertible Preferred Stock, shares authorized	1,000	1,000
Series B Redeemable Convertible Preferred Stock, shares issued	0	0
Series B Redeemable Convertible Preferred Stock, shares outstanding	0	0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,497,500	2,497,500
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	68,104,957	68,104,957
Common stock, shares outstanding	68,104,957	68,104,957
Series C Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,500	1,500
Preferred stock, shares issued	11.47	11.47
Preferred stock, shares outstanding	11.47	11.47
Preferred stock, liquidation value	$ 114,692	$ 114,692
Series D Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,500,000	2,500,000
Preferred stock, shares issued	907,144	907,144
Preferred stock, shares outstanding	907,144	907,144
Preferred stock, liquidation value	$ 907,144	$ 907,144

XML 17 R4.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Revenues
Net product revenues	$ 1,295,833	$ 1,852,322
License revenues and service related revenues	59,530	42,918
Total revenues	1,355,363	1,895,240
Cost of revenues	310,905	538,200
Gross margin	1,044,458	1,357,040
Patent Monetization Expenses	166,694	194,215
Research and development expenses	573,980	568,799
General, administrative and selling expenses	1,058,980	1,070,654
Operating loss	(755,196)	(476,628)
Interest expense, net	(68,020)	(70,133)
Loss from operations before provision for income taxes	(823,216)	(546,761)
Provision for income taxes	619	1,805
Net loss	$ (823,835)	$ (548,566)
Basic and diluted weighted average shares	68,104,957	68,104,957
Basic and diluted net loss per share	$ (0.01)	$ (0.01)

XML 18 R5.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT EQUITY - USD ($)	Series C Convertible Preferred Stock [Member]	Series D Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Beginning Balance at Dec. 31, 2018		$ 9,072	$ 681,050	$ 78,069,200	$ (79,191,451)	$ (432,129)
Beginning Balance, shares at Dec. 31, 2018	11.469249	907,144	68,104,957
Stock-based Compensation Expense related to Stock Option Grants				17,710		17,710
Net loss					(548,566)	(548,566)
Ending Balance at Dec. 31, 2019		$ 9,072	$ 681,050	78,086,910	(79,740,017)	(962,985)
Ending Balance, shares at Dec. 31, 2019	11.469249	907,144	68,104,957
Net loss					(823,835)	(823,835)
Ending Balance at Dec. 31, 2020		$ 9,072	$ 681,050	$ 78,086,910	$ (80,563,852)	$ (1,786,820)
Ending Balance, shares at Dec. 31, 2020	11.469249	907,144	68,104,957

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669625-108580

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=121586364&loc=d3e3602-108585

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

XML 19 R6.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (823,835)	$ (548,566)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	52,231	77,361
Stock based compensation		17,710
Inventory net realizable adjustment	(9,180)	16,978
Provision for income tax withholding	619	1,805
Amortization of right-of-use assets	48,965	47,974
Deferred interest on PPP and SBA loans	3,429
PIK interest, net	66,458	76,226
Change in:
Accounts receivable	194,689	38,697
Inventories	104,948	(14,083)
Prepaid expenses, other current assets and other assets	(67,789)	35,147
Trade accounts payable and other current liabilities and lease liability payable	(19,078)	(83,243)
Net cash used in operating activities	(448,543)	(333,994)
Cash flows from investing activities:
Purchases of property and equipment	(5,989)
Purchases of patents and trademarks	(19,303)	(16,737)
Net cash used in investing activities	(25,292)	(16,737)
Cash flows from financing activities:
Proceeds from PPP loan	142,775
Proceeds from SBA loan	158,000
Proceeds from long-term debt	200,000	200,000
Net cash provided by financing activities	500,775	200,000
Net increase (decrease) in cash	26,940	(150,731)
Cash, beginning of year	335,790	486,521
Cash, end of year	362,730	335,790
Cash paid for:
Income Taxes	$ 947	$ 2,473

XML 20 R7.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND BUSINESS

12 Months Ended

Dec. 31, 2020

ORGANIZATION AND BUSINESS

1. ORGANIZATION AND BUSINESS

XML 21 R8.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Liquidity

Principles of Consolidation

The consolidated financial statements include the accounts of Andrea and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Loss Per Share

	December 31,
	2020	2019
Total potentially dilutive common shares as of:
Stock options to purchase common stock (Note 13)	6,301,500	8,100,500
Series C Convertible Preferred Stock and related accrued dividends (Note 9)	524,736	524,736
Series D Convertible Preferred Stock (Note 10)	3,628,576	3,628,576

Total potentially dilutive common shares	10,454,812	12,253,812

Cash

Concentration of Risk

The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below:

	December 31,
	2020	2019
Customer A	31%	40%
Customer B	23%	18%
Customer C	15%	18%

________________________

*	Amounts are less than 10%

Allowance for Doubtful Accounts

Inventories

Property and Equipment, net

Other Intangible Assets

Andrea amortizes its core technology and patents and trademarks on a straight-line basis over their estimated useful lives that range from 10 to 20 years.

Long-Lived Assets

Revenue Recognition

1.	Identify the contract with a customer.

2.	Identify the performance obligations in the contract.

3.	Determine the transaction price of the contract.

4.	Allocate the transaction price to the performance obligations in the contract.

5.	Recognize revenue when the performance obligations are met or delivered.

The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed. At December 31, 2020, the Company did not have any deferred revenue. See Note 14 for additional description of the Company’s reportable business segments and the revenue reported in each segment.

Income Taxes

Stock-Based Compensation

Research and Development

Andrea expenses all research and development costs as incurred.

Advertising Expenses

Fair Value of Financial Instruments

Use of Estimates

Subsequent Events

XML 22 R9.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

3. INTANGIBLE ASSETS

Intangible assets, net, consisted of the following:

	December 31,
	2020			2019
Core Technology	$	8,567,448		$	8,567,448
Patents and trademarks		983,010			963,707
		9,550,458			9,531,155
Less: accumulated amortization		(9,337,839	)		(9,300,032	)
	$	212,619		$	231,123

The changes in the carrying amount of intangible assets during the years ended December 31, 2020 and 2019 were as follows:

Balance as of January 1, 2019	$	262,819
Additions during the period		16,737
Amortization		(48,433	)
Balance as of December 31, 2019		231,123
Additions during the period		19,303
Amortization		(37,807	)
Balance as of December 31, 2020	$	212,619

XML 23 R10.htm IDEA: XBRL DOCUMENT

INVENTORIES

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

INVENTORIES

4. INVENTORIES

Inventories consisted of the following:

	December 31,
	2020		2019
Raw materials	$	18,996	$	22,254
Finished goods		95,397		187,907
	$	114,393	$	210,161

XML 24 R11.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following:

	December 31,
	2020			2019
Information Technology Equipment	$	280,724		$	274,735
Furniture and fixtures		87,958			87,958
Tools, molds and testing equipment		212,366			212,366
		581,048			575,059
Less: accumulated depreciation and amortization		(563,323	)		(548,899	)
	$	17,725		$	26,160

Depreciation and amortization of property and equipment was $14,424 and $28,928 for the years ended December 31, 2020 and 2019, respectively.

XML 25 R12.htm IDEA: XBRL DOCUMENT

REVENUE SHARING, NOTE PURCHASE AGREEMENT

12 Months Ended

Dec. 31, 2020

Revenue Sharing, Note Purchase Agreement and Long-Term Debt [Abstract]

REVENUE SHARING, NOTE PURCHASE AGREEMENT

6. REVENUE SHARING, NOTE PURCHASE AGREEMENT

Revenue Sharing and Note Purchase Agreement

XML 26 R13.htm IDEA: XBRL DOCUMENT

LONG TERM DEBT

12 Months Ended

Dec. 31, 2020

Long-term Debt, Unclassified [Abstract]

LONG TERM DEBT

7. LONG TERM DEBT

On July 13, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of July 13, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The Company intends to use the proceeds of the SBA Loan for such purpose.

	December 31,
	2020			2019
Additional Notes	$	1,884,422		$	1,684,422
PIK interest		209,545			143,087
PPP Loan with accrued interest		143,703			-
SBA Loan with accrued interest		160,501			-
Total long-term debt		2,398,171			1,827,509
Less: current maturities of long-term debt		(9,979	)		-
Long-term debt, net of current maturities	$	2,388,192		$	1,827,509

On March 12, 2021 $100,000 of Additional Notes were issued to AND34.

XML 27 R14.htm IDEA: XBRL DOCUMENT

TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

8. TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Trade accounts payable and other current liabilities consisted of the following:

	December 31,
	2020		2019
Trade accounts payable	$	49,182	$	87,524
Payroll and related expenses		39,290		7,788
Patent monetization expenses		120,105		107,605
Current lease liabilities		44,630		47,364
Deferred revenue		34,178		-
Professional and other service fees		132,206		140,277
Total trade accounts payable and other current liabilities	$	419,591	$	390,558

XML 28 R15.htm IDEA: XBRL DOCUMENT

SERIES C CONVERTIBLE PREFERRED STOCK

12 Months Ended

Dec. 31, 2020

Series C Convertible Preferred Stock [Abstract]

SERIES C CONVERTIBLE PREFERRED STOCK

9. SERIES C CONVERTIBLE PREFERRED STOCK

XML 29 R16.htm IDEA: XBRL DOCUMENT

SERIES D CONVERTIBLE PREFERRED STOCK

12 Months Ended

Dec. 31, 2020

Series D Convertible Preferred Stock [Abstract]

SERIES D CONVERTIBLE PREFERRED STOCK

10. SERIES D CONVERTIBLE PREFERRED STOCK

As of December 31, 2020, there were 907,144 shares of Series D Preferred Stock outstanding which were convertible into 3,628,576 shares of Common Stock.

XML 30 R17.htm IDEA: XBRL DOCUMENT

INCOME TAXES

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

11. INCOME TAXES

The provision for income tax consisted of the following:

	For the Years Ended December 31,
	2020			2019
Current:
Federal	$	-		$	-
Foreign		619			1,805
State and Local		-			-
Total Current		619			1,805
Deferred
Federal		1,731,000			1,337,000
Foreign		-			-
State and Local		(9,000	)		25,000
Adjustment to valuation allowance related to net deferred tax assets		(1,722,000	)		(1,362,000	)
Total Deferred		-			-
Provision for income taxes	$	619		$	1,805

Loss before income taxes is comprised of the following:

	For the Years Ended December 31,
	2020			2019
Domestic	$	(826,359	)	$	(555,843	)
Foreign		3,143			9,082
Net loss before income taxes	$	(823,216	)	$	(546,761	)

A reconciliation between the effective rate for income taxes and the amount computed by applying the statutory Federal income tax rate to loss before provision for income taxes is as follows:

	For the Years Ended December 31,
	2020		2019
Tax provision at statutory rate	(21	)%	(21	)%
State and local taxes	(3	)%	(3	)%
Incentive Stock Option Expense	-		1	%
Change in valuation allowance for net deferred tax assets	24	%	23	%
	-	%	-	%

The components of temporary differences that give rise to significant portions of the deferred tax asset, net, are as follows:

	For the Years Ended December 31,
	2020			2019
Deferred tax assets:
Accrued expenses	$	16,000		$	17,000
Allowance for doubtful accounts		1,000			1,000
Deferred revenue		8,000			-
Reserve for obsolescence		23,000			25,000
Expense associated with non-qualified stock options		37,000			37,000
Revenue Sharing Agreement		210,000			234,000
General business credit		1,004,000			1,198,000
NOL carryforward		5,732,000			7,241,000
		7,031,000			8,753,000
Less: valuation allowance		(7,031,00	)		(8,753,000	)
Deferred tax asset, net	$	-		$	-

The change in the valuation allowance for deferred tax assets are summarized as follows:

	For the Years Ended December 31,
	2020			2019
Beginning Balance	$	8,753,000		$	10,115,000
Change in Allowance		(1,722,000	)		(1,362,000	)
Ending Balance	$	7,031,000		$	8,753,000

Commitments and Contingencies Disclosure [Abstract]

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

XML 31 R18.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

12. COMMITMENTS AND CONTINGENCIES

Leases

Supplemental balance sheet information related to leases was as follows:

Operating Leases

	December 31, 2020		December 31, 2019
Other Assets	$	204,081	$	60,362

Trade accounts payable and other current liabilities	$	44,630	$	47,364
Lease liabilities payable non-current		159,794		15,221
Total operating lease liabilities	$	204,424	$	62,585

Weighted-average remaining lease term		56 months		17 months
Weighted-average discount rate		4.00%		7.34%

As of December 31, 2020, maturities of operating lease liabilities were as follows:

2021	$	51,787
2022		45,071
2023		42,389
2024		43,743
2025		40,344
Total		223,334
Less: interest		(18,910	)
Total Lease Payments	$	204,424

Employment Agreements

Legal Proceedings

The New York Litigation is stayed pending the final outcome of Apple’s IPR proceedings against the Company’s U.S. Patent No. 6,363,345.

Andrea intends to vigorously prosecute the New York Litigation and the ongoing IPR proceedings.

XML 32 R19.htm IDEA: XBRL DOCUMENT

STOCK PLANS AND STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

STOCK PLANS AND STOCK-BASED COMPENSATION

13. STOCK PLANS AND STOCK-BASED COMPENSATION

No options were granted during the year ended December 31, 2020 or 2019.

Option activity during 2020 is summarized as follows:

	Options Outstanding							Options Exercisable
	Options Outstanding		Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life	Options Exercisable	Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life
At January 1, 2020	8,100,500		$	0.07	$	0.07	4.80 years	8,100,500	$	0.07	$	0.07	4.80 years
Canceled	(1,799,000	)	$	0.11	$	0.11
At December 31, 2020	6,301,500		$	0.06	$	0.06	4.98 years	6,301,500	$	0.06	$	0.06	4.98 years

XML 33 R20.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

14. SEGMENT INFORMATION

The following represents selected consolidated financial information for Andrea’s segments for the years ended December 31, 2020 and 2019:

2020 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2020
Net product revenues	$	-		$	1,295,833		$	1,295,833
Service related revenues		-			45,200			45,200
License revenues		554			13,776			14,330
Loss from operations		(362,254	)		(392,942	)		(755,196	)
Depreciation and amortization		18,908			33,323			52,231
Purchases of property and equipment		-			5,989			5,989
Purchases of patents and trademarks		9,651			9,652			19,303
Assets		279,437			930,467			1,209,904
Total long lived assets		106,296			333,379			439,675

2019 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2019
Net product revenues	$	-		$	1,852,322		$	1,852,322
Service related revenues		-			17,271			17,271
License revenues		950			24,697			25,647
Loss from operations		(397,200	)		(79,428	)		(476,628	)
Depreciation and amortization		24,220			53,141			77,361
Purchases of patents and trademarks		8,369			8,368			16,737
Assets		257,685			1,031,786			1,289,471
Total long lived assets		115,562			207,333			322,895

Geographic Data	2020		2019
Total Revenues:
United States	$	1,043,384	$	1,420,447
Foreign⁽¹⁾		311,979		474,793
	$	1,355,363	$	1,895,240
Accounts receivable:
United States	$	157,725	$	218,935
Foreign		25,146		159,244
	$	182,871	$	378,179

____________________

(1)	Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

Principles of Consolidation

XML 34 R21.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Liquidity

The consolidated financial statements include the accounts of Andrea and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Loss Per Share

	December 31,
	2020	2019
Total potentially dilutive common shares as of:
Stock options to purchase common stock (Note 13)	6,301,500	8,100,500
Series C Convertible Preferred Stock and related accrued dividends (Note 9)	524,736	524,736
Series D Convertible Preferred Stock (Note 10)	3,628,576	3,628,576

Total potentially dilutive common shares	10,454,812	12,253,812

Cash

Concentration of Risk

The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below:

	December 31,
	2020	2019
Customer A	31%	40%
Customer B	23%	18%
Customer C	15%	18%

________________________

*	Amounts are less than 10%

Allowance for Doubtful Accounts

Inventories

Property and Equipment, net

Other Intangible Assets

Andrea amortizes its core technology and patents and trademarks on a straight-line basis over their estimated useful lives that range from 10 to 20 years.

Long-Lived Assets

Revenue Recognition

1.	Identify the contract with a customer.

2.	Identify the performance obligations in the contract.

3.	Determine the transaction price of the contract.

4.	Allocate the transaction price to the performance obligations in the contract.

5.	Recognize revenue when the performance obligations are met or delivered.

The Company disaggregates its revenues into three contract types: (1) product revenues, (2) service related revenues and (3) license revenues and then further disaggregates its revenues by operating segment. Generally, product revenue is comprised of microphones and microphone connectivity product revenues. Product revenue is recognized when the Company satisfies its performance obligation by transferring promised goods to a customer. Product revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods to the customer. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. Customer product orders are fulfilled at a point in time and not over a period of time. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no sales incentive programs. Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter. Under this accounting policy, the licensing revenues reported are not based upon estimates. In addition, service related revenues, which are short-term in nature, are generally performed on a time-and-material basis under separate service arrangements and the corresponding revenue is generally recognized as the services are performed. At December 31, 2020, the Company did not have any deferred revenue. See Note 14 for additional description of the Company’s reportable business segments and the revenue reported in each segment.

Income Taxes

Stock-Based Compensation

Research and Development

Andrea expenses all research and development costs as incurred.

Advertising Expenses

Fair Value of Financial Instruments

Use of Estimates

Reclassifications

Subsequent Events

XML 35 R22.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of antidilutive securities excluded from computation of earnings per share

	December 31,
	2020	2019
Total potentially dilutive common shares as of:
Stock options to purchase common stock (Note 13)	6,301,500	8,100,500
Series C Convertible Preferred Stock and related accrued dividends (Note 9)	524,736	524,736
Series D Convertible Preferred Stock (Note 10)	3,628,576	3,628,576

Total potentially dilutive common shares	10,454,812	12,253,812

Schedule of concentration of credit risk, customer as a percentage of total revenues

The following customers accounted for 10% or more of Andrea’s consolidated total revenues during at least one of the periods presented below:

	December 31,
	2020	2019
Customer A	31%	40%
Customer B	23%	18%
Customer C	15%	18%

________________________

*	Amounts are less than 10%

XML 36 R23.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets, net, consisted of the following:

	December 31,
	2020			2019
Core Technology	$	8,567,448		$	8,567,448
Patents and trademarks		983,010			963,707
		9,550,458			9,531,155
Less: accumulated amortization		(9,337,839	)		(9,300,032	)
	$	212,619		$	231,123

Schedule of changes in the carrying amount of intangible assets

The changes in the carrying amount of intangible assets during the years ended December 31, 2020 and 2019 were as follows:

Balance as of January 1, 2019	$	262,819
Additions during the period		16,737
Amortization		(48,433	)
Balance as of December 31, 2019		231,123
Additions during the period		19,303
Amortization		(37,807	)
Balance as of December 31, 2020	$	212,619

XML 37 R24.htm IDEA: XBRL DOCUMENT

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consisted of the following:

	December 31,
	2020		2019
Raw materials	$	18,996	$	22,254
Finished goods		95,397		187,907
	$	114,393	$	210,161

XML 38 R25.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

Property and equipment, net, consisted of the following:

	December 31,
	2020			2019
Information Technology Equipment	$	280,724		$	274,735
Furniture and fixtures		87,958			87,958
Tools, molds and testing equipment		212,366			212,366
		581,048			575,059
Less: accumulated depreciation and amortization		(563,323	)		(548,899	)
	$	17,725		$	26,160

XML 39 R26.htm IDEA: XBRL DOCUMENT

LONG TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2020

Long-term Debt, Unclassified [Abstract]

Schedule of long term debt

	December 31,
	2020			2019
Additional Notes	$	1,884,422		$	1,684,422
PIK interest		209,545			143,087
PPP Loan with accrued interest		143,703			-
SBA Loan with accrued interest		160,501			-
Total long-term debt		2,398,171			1,827,509
Less: current maturities of long-term debt		(9,979	)		-
Long-term debt, net of current maturities	$	2,388,192		$	1,827,509

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

Other Liabilities Disclosure [Abstract]

XML 40 R27.htm IDEA: XBRL DOCUMENT

TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of trade accounts payable and other current liabilities

Trade accounts payable and other current liabilities consisted of the following:

	December 31,
	2020		2019
Trade accounts payable	$	49,182	$	87,524
Payroll and related expenses		39,290		7,788
Patent monetization expenses		120,105		107,605
Current lease liabilities		44,630		47,364
Deferred revenue		34,178		-
Professional and other service fees		132,206		140,277
Total trade accounts payable and other current liabilities	$	419,591	$	390,558

XML 41 R28.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of provision for income tax

The provision for income tax consisted of the following:

	For the Years Ended December 31,
	2020			2019
Current:
Federal	$	-		$	-
Foreign		619			1,805
State and Local		-			-
Total Current		619			1,805
Deferred
Federal		1,731,000			1,337,000
Foreign		-			-
State and Local		(9,000	)		25,000
Adjustment to valuation allowance related to net deferred tax assets		(1,722,000	)		(1,362,000	)
Total Deferred		-			-
Provision for income taxes	$	619		$	1,805

Schedule of loss before income taxes

Loss before income taxes is comprised of the following:

	For the Years Ended December 31,
	2020			2019
Domestic	$	(826,359	)	$	(555,843	)
Foreign		3,143			9,082
Net loss before income taxes	$	(823,216	)	$	(546,761	)

Schedule of effective rate for income taxes

A reconciliation between the effective rate for income taxes and the amount computed by applying the statutory Federal income tax rate to loss before provision for income taxes is as follows:

	For the Years Ended December 31,
	2020		2019
Tax provision at statutory rate	(21	)%	(21	)%
State and local taxes	(3	)%	(3	)%
Incentive Stock Option Expense	-		1	%
Change in valuation allowance for net deferred tax assets	24	%	23	%
	-	%	-	%

Schedule of components of temporary differences of deferred tax asset, net

The components of temporary differences that give rise to significant portions of the deferred tax asset, net, are as follows:

	For the Years Ended December 31,
	2020			2019
Deferred tax assets:
Accrued expenses	$	16,000		$	17,000
Allowance for doubtful accounts		1,000			1,000
Deferred revenue		8,000			-
Reserve for obsolescence		23,000			25,000
Expense associated with non-qualified stock options		37,000			37,000
Revenue Sharing Agreement		210,000			234,000
General business credit		1,004,000			1,198,000
NOL carryforward		5,732,000			7,241,000
		7,031,000			8,753,000
Less: valuation allowance		(7,031,00	)		(8,753,000	)
Deferred tax asset, net	$	-		$	-

Schedule of change in valuation allowance for deferred tax assets

The change in the valuation allowance for deferred tax assets are summarized as follows:

	For the Years Ended December 31,
	2020			2019
Beginning Balance	$	8,753,000		$	10,115,000
Change in Allowance		(1,722,000	)		(1,362,000	)
Ending Balance	$	7,031,000		$	8,753,000

XML 42 R29.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Operating Leases

Supplemental balance sheet information related to leases was as follows:

Operating Leases

	December 31, 2020		December 31, 2019
Other Assets	$	204,081	$	60,362

Trade accounts payable and other current liabilities	$	44,630	$	47,364
Lease liabilities payable non-current		159,794		15,221
Total operating lease liabilities	$	204,424	$	62,585

Weighted-average remaining lease term		56 months		17 months
Weighted-average discount rate		4.00%		7.34%

Schedule of Maturities of Operating Lease Liabilities

As of December 31, 2020, maturities of operating lease liabilities were as follows:

2021	$	51,787
2022		45,071
2023		42,389
2024		43,743
2025		40,344
Total		223,334
Less: interest		(18,910	)
Total Lease Payments	$	204,424

XML 43 R30.htm IDEA: XBRL DOCUMENT

STOCK PLANS AND STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of stock option activity

Option activity during 2020 is summarized as follows:

	Options Outstanding							Options Exercisable
	Options Outstanding		Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life	Options Exercisable	Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life
At January 1, 2020	8,100,500		$	0.07	$	0.07	4.80 years	8,100,500	$	0.07	$	0.07	4.80 years
Canceled	(1,799,000	)	$	0.11	$	0.11
At December 31, 2020	6,301,500		$	0.06	$	0.06	4.98 years	6,301,500	$	0.06	$	0.06	4.98 years

XML 44 R31.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Schedule of selected consolidated financial information for Andrea's segments

The following represents selected consolidated financial information for Andrea’s segments for the years ended December 31, 2020 and 2019:

2020 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2020
Net product revenues	$	-		$	1,295,833		$	1,295,833
Service related revenues		-			45,200			45,200
License revenues		554			13,776			14,330
Loss from operations		(362,254	)		(392,942	)		(755,196	)
Depreciation and amortization		18,908			33,323			52,231
Purchases of property and equipment		-			5,989			5,989
Purchases of patents and trademarks		9,651			9,652			19,303
Assets		279,437			930,467			1,209,904
Total long lived assets		106,296			333,379			439,675

2019 Twelve Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			Total 2019
Net product revenues	$	-		$	1,852,322		$	1,852,322
Service related revenues		-			17,271			17,271
License revenues		950			24,697			25,647
Loss from operations		(397,200	)		(79,428	)		(476,628	)
Depreciation and amortization		24,220			53,141			77,361
Purchases of patents and trademarks		8,369			8,368			16,737
Assets		257,685			1,031,786			1,289,471
Total long lived assets		115,562			207,333			322,895

Schedule of total revenues and accounts receivable by geographic area

Geographic Data	2020		2019
Total Revenues:
United States	$	1,043,384	$	1,420,447
Foreign⁽¹⁾		311,979		474,793
	$	1,355,363	$	1,895,240
Accounts receivable:
United States	$	157,725	$	218,935
Foreign		25,146		159,244
	$	182,871	$	378,179

____________________

(1)	Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.

XML 45 R32.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)				1 Months Ended			12 Months Ended
	Feb. 05, 2021 USD ($)	Jul. 13, 2020 USD ($)	May 08, 2020 USD ($)	Jan. 31, 2021 USD ($)	Jan. 18, 2021 USD ($)	Apr. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) Institutions	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Summary of Significant Accounting Policies (Textual)
Maturity date for notes							Aug. 31, 2022
Number of financial institutions where cash is held \| Institutions							4
Description of revenue from contracts with customers							Service related and licensing revenues are recognized based on the terms and conditions of individual contracts using the five step approach listed above, which identifies performance obligations and transaction price. Typically, Andrea receives licensing reports from its licensees approximately three months in arrears due to the fact that its agreements require customers to report revenues between 30-60 days after the end of the quarter.
Loss before income taxes							$ (823,216)	$ (546,761)
Non-cash depreciation and amortization expenses							52,000
Cash							362,730	335,790	$ 486,521
Positive working capital							321,491
Advertising and marketing expenses							$ 6,000	$ 12,000
Net Revenue [Member]
Summary of Significant Accounting Policies (Textual)
Concentration of credit risk, customers accounted							10% or more
Accounts Receivable [Member] \| Customer A [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk percentage							32.00%	39.00%
Accounts Receivable [Member] \| Customer B [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk percentage							14.00%	17.00%
Accounts Receivable [Member] \| Customer C [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk percentage							17.00%	31.00%
Minimum [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of property and equipment							3 years
Minimum [Member] \| Patents and Trademarks [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of intangible assets							10 years
Minimum [Member] \| Core Technology [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of intangible assets							10 years
Maximum [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of property and equipment							10 years
Maximum [Member] \| Patents and Trademarks [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of intangible assets							20 years
Maximum [Member] \| Core Technology [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life of intangible assets							20 years
U.S. Small Business Administration Loan [Member]
Summary of Significant Accounting Policies (Textual)
Proceeds from loan		$ 150,000				$ 8,000
Maturity period		30 years
Interest rate of loan		3.75%
Maturity date for notes		Jul. 13, 2050
PPP Loan with accrued interest [Member]
Summary of Significant Accounting Policies (Textual)
Proceeds from loan			$ 142,775
Maturity period			2 years
Maturity date for notes			May 08, 2022
PPP Loan with accrued interest [Member] \| Subsequent Event [Member]
Summary of Significant Accounting Policies (Textual)
Loan forgiveness amount				$ 8,000	$ 8,000
PPP Loan Second with accrued interest [Member] \| Subsequent Event [Member]
Summary of Significant Accounting Policies (Textual)
Proceeds from loan	$ 142,777

XML 46 R33.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of antidilutive securities) (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Summary of antidilutive securities excluded from computation of earnings per share
Total potentially dilutive common shares	10,454,812	12,253,812
Series C Convertible Preferred Stock and related accrued dividends [Member]
Summary of antidilutive securities excluded from computation of earnings per share
Total potentially dilutive common shares	524,736	524,736
Series D Convertible Preferred Stock [Member]
Summary of antidilutive securities excluded from computation of earnings per share
Total potentially dilutive common shares	3,628,576	3,628,576
Stock options to purchase common stock [Member]
Summary of antidilutive securities excluded from computation of earnings per share
Total potentially dilutive common shares	6,301,500	8,100,500

XML 47 R34.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of concentration of credit risk, percentage of total revenues) (Details) - Revenue [Member]	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Customer A [Member]
Summary of concentration of credit risk, customer as a percentage of total revenues
Concentration risk percentage	31.00%	40.00%
Customer B [Member]
Summary of concentration of credit risk, customer as a percentage of total revenues
Concentration risk percentage	23.00%	18.00%
Customer C [Member]
Summary of concentration of credit risk, customer as a percentage of total revenues
Concentration risk percentage	15.00%	18.00%

XML 48 R35.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	12 Months Ended
INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Intangible Assets (Textual)
Amortization expense	$ 37,807	$ 48,433
Estimated amortization expense of intangible assets, Year One	30,000
Estimated amortization expense of intangible assets, Year Two	28,000
Estimated amortization expense of intangible assets, Year Three	26,000
Estimated amortization expense of intangible assets, Year Four	26,000
Estimated amortization expense of intangible assets, Year Five	$ 26,000
Patents and trademarks [Member] \| Minimum [Member]
Intangible Assets (Textual)
Estimated useful life of intangible assets	10 years
Patents and trademarks [Member] \| Maximum [Member]
Intangible Assets (Textual)
Estimated useful life of intangible assets	20 years

XML 49 R36.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Schedule of intangible assets) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary of finite lived Intangible assets
Intangible assets, Gross	$ 9,550,458	$ 9,531,155
Less: accumulated amortization	(9,337,839)	(9,300,032)
Intangible assets, net	212,619	231,123	$ 262,819
Core Technology [Member]
Summary of finite lived Intangible assets
Intangible assets, Gross	8,567,448	8,567,448
Patents and trademarks [Member]
Summary of finite lived Intangible assets
Intangible assets, Gross	$ 983,010	$ 963,707

XML 50 R37.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Schedule of changes in the carrying amount of intangible assets) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Summary of changes the carrying amount of finite lived intangible assets of Patents and Trademarks
Beginning balance	$ 231,123	$ 262,819
Additions during the period	19,303	16,737
Amortization	(37,807)	(48,433)
Ending balance	$ 212,619	$ 231,123

XML 51 R38.htm IDEA: XBRL DOCUMENT

INVENTORIES (Schedule of inventories) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Inventory Net
Raw materials	$ 18,996	$ 22,254
Finished goods	95,397	187,907
Inventories, net	$ 114,393	$ 210,161

XML 52 R39.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment, net (Textual)
Depreciation and amortization of property and equipment	$ 563,323	$ 548,899
Property, Plant and Equipment [Member]
Property and Equipment, net (Textual)
Depreciation and amortization of property and equipment	$ 14,424	$ 28,928

XML 53 R40.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT, NET (Schedule of property and equipment, net) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, net, gross	$ 581,048	$ 575,059
Less: accumulated depreciation and amortization	(563,323)	(548,899)
Property and equipment, net	17,725	26,160
Information Technology Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, net, gross	280,724	274,735
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, net, gross	87,958	87,958
Tools, molds and testing equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, net, gross	$ 212,366	$ 212,366

XML 54 R41.htm IDEA: XBRL DOCUMENT

REVENUE SHARING, NOTE PURCHASE AGREEMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2016
Debt Instrument [Line Items]
Advance from revenue sharing agreement				$ 3,500,000
Additional notes outstanding	$ 1,884,422	$ 1,684,422
Percentage of monetization revenue applied for payment of accrued and unpaid interest	100.00%
Additional notes an aggregate amount		11,500,000	$ 7,500,000
Maturity date for notes	Aug. 31, 2022
PIK interest	$ 209,545	$ 143,087
Minimum [Member]
Debt Instrument [Line Items]
Percentage of revenue allocated to revenue participants	20.00%
Maximum [Member]
Debt Instrument [Line Items]
Percentage of revenue allocated to revenue participants	50.00%

XML 55 R42.htm IDEA: XBRL DOCUMENT

LONG TERM DEBT (Narrative) (Details) - USD ($)					1 Months Ended			12 Months Ended
LONG TERM DEBT (Narrative) (Details) - USD ($)	Mar. 12, 2021	Feb. 05, 2021	Jul. 13, 2020	May 08, 2020	Jan. 31, 2021	Jan. 18, 2021	Apr. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Maturity date for notes								Aug. 31, 2022
Note issued								$ 200,000	$ 200,000
Remaining amount of Additional Notes								$ 3,700,000
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Annual interest rate								2.00%
Description of interest rate								The unpaid principal amount of the Additional Notes (including any PIK interest) has an interest rate equal to LIBOR (as defined in the Revenue Sharing Agreement) plus 2% per annum, (totaling 3.00% and 4.10% at December 31, 2020 and 2019, respectively); provided that upon and during the continuance of an Event of Default (as set forth in the Revenue Sharing Agreement), the interest rate will increase an additional 2% per annum.
Subsequent Event [Member]
Debt Instrument [Line Items]
Note issued	$ 100,000
U.S. Small Business Administration Loan [Member]
Debt Instrument [Line Items]
Proceeds from loan			$ 150,000				$ 8,000
Maturity date for notes			Jul. 13, 2050
Maturity period			30 years
Interest rate of loan			3.75%
PPP Loan with accrued interest [Member]
Debt Instrument [Line Items]
Proceeds from loan				$ 142,775
Annual interest rate				1.00%
Maturity date for notes				May 08, 2022
Maturity period				2 years
PPP Loan with accrued interest [Member] \| Subsequent Event [Member]
Debt Instrument [Line Items]
Loan forgiveness amount					$ 8,000	$ 8,000
PPP Loan Second with accrued interest [Member] \| Subsequent Event [Member]
Debt Instrument [Line Items]
Proceeds from loan		$ 142,777

XML 56 R43.htm IDEA: XBRL DOCUMENT

LONG TERM DEBT (Schedule of Long Term Debt) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Additional Notes	$ 1,884,422	$ 1,684,422
PIK interest	209,545	143,087
Total long-term debt	2,398,171	1,827,509
Less: current maturities of long-term debt	(9,979)
Long-term debt, net of current maturities	2,388,192	1,827,509
PPP Loan with accrued interest [Member]
Debt Instrument [Line Items]
Total long-term debt	143,703
SBA Loan with accrued interest [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 160,501

XML 57 R44.htm IDEA: XBRL DOCUMENT

TRADE ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Schedule of trade payable and other current liabilities) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Other Current Liabilities
Trade accounts payable	$ 49,182	$ 87,524
Payroll and related expenses	39,290	7,788
Patent monetization expenses	120,105	107,605
Current lease liabilities	44,630	47,364
Deferred revenue	34,178
Professional and other service fees	132,206	140,277
Total trade accounts payable and other current liabilities	$ 419,591	$ 390,558

XML 58 R45.htm IDEA: XBRL DOCUMENT

SERIES C CONVERTIBLE PREFERRED STOCK (Details) - USD ($)	1 Months Ended	12 Months Ended
	Oct. 10, 2000	Dec. 31, 2020	Dec. 31, 2019
Series C Convertible Preferred Stock (Textual)
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding
Accrued Series C Preferred Stock Dividends		$ 19,168	$ 19,168
Series C Convertible Preferred Stock and related accrued dividends [Member]
Series C Convertible Preferred Stock (Textual)
Proceed from issuance of private placement	$ 7,500,000
Preferred stock, $.01 par value; authorized: 2,497,500 shares; none issued and outstanding	10,000
Increase in stated value of preferred stock	$ 1,671
Additional increase per annum value of preferred stock	5.00%
Preferred stock, conversion price	$ 0.2551
Description of additional stated value		The additional amount of $1,671 represents the 5% per annum from October 10, 2000 through February 17, 2004.
Number of common stock shares conversion of preferred stock		524,736
Shares, outstanding		11.469249

XML 59 R46.htm IDEA: XBRL DOCUMENT

SERIES D CONVERTIBLE PREFERRED STOCK (Details) - USD ($)	1 Months Ended		12 Months Ended
	Jun. 04, 2004	Feb. 23, 2004	Dec. 31, 2020	Dec. 31, 2019	Feb. 17, 2004
Series D Convertible Preferred Stock (Textual)
Investment amount under agreement					$ 2,500,000
Preferred stock, shares outstanding
Series D Convertible Preferred Stock [Member]
Series D Convertible Preferred Stock (Textual)
Shares purchased under agreement amount	$ 1,250,000	$ 1,250,000
Shares purchased under agreement shares	1,250,000	1,250,000
Number of common stock for exercise of warrant	2,500,000	2,500,000
Conversion price	$ 0.25	$ 0.25
Description of registration delay payment			This payment is to be paid in cash and is equal to the product of (i) the stated value of such Preferred Shares multiplied by (ii) the product of (1) .0005 multiplied by (2) the number of days that sales cannot be made pursuant to the Registration Statement.
Preferred stock, shares outstanding			907,144
Number of common stock shares conversion of preferred stock	5,000,000	5,000,000	3,628,576
Exercise warrant, period	Warrants were exercisable at any time after December 4, 2004 and before June 4, 2009.	Warrants were exercisable at any time after August 17, 2004.
Warrants, exercise price	$ 0.17	$ 0.38
Warrants expiration date	Jun. 04, 2009	Feb. 23, 2009

XML 60 R47.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Narrative) (Details) - USD ($)	12 Months Ended
INCOME TAXES (Narrative) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Income Taxes (Textual)
Operating loss and credit carryforwards expiration, Description	As of December 31, 2020, Andrea federal had net operating loss carryforwards of approximately $27,000,000. $2,400,000 of these federal net operating loss carryforwards are carried forward indefinitely, the remaining $24,600,000 expire in varying amounts beginning in 2021 through 2036. Andrea has state net operating loss carryforwards of approximately $3,700,000 expiring in varying amounts beginning in 2035. Andrea has general business credits of approximately $1,000,000 expiring in varying amounts beginning in 2021 through 2039
General business credits expiration, Description	Andrea has general business credits of approximately $1,000,000 expiring in varying amounts beginning in 2021 through 2039.
Provision for income taxes	$ 619	$ 1,805
Operating loss carry-forwards	$ 5,732,000	$ 7,241,000

Summary of total revenues and accounts receivable by geographic area

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

XML 61 R48.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Schedule of provision for income tax) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal
Foreign	619	1,805
State and Local
Total Current	619	1,805
Deferred
Federal	1,731,000	1,337,000
Foreign
State and Local	(9,000)	25,000
Adjustment to valuation allowance related to net deferred tax assets	(1,722,000)	(1,362,000)
Total Deferred
Provision for income taxes	$ 619	$ 1,805

XML 62 R49.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Schedule of loss before income taxes) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Schedule of loss before income taxes
Domestic	$ (826,359)	$ (555,843)
Foreign	3,143	9,082
Net loss before income taxes	$ (823,216)	$ (546,761)

XML 63 R50.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Schedule of effective rate for income taxes) (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Schedule of reconciliation between effective income taxes rate and statutory federal tax rate
Tax provision at statutory rate	(21.00%)	(21.00%)
State and local taxes	(3.00%)	(3.00%)
Incentive Stock Option Expense		1.00%
Change in valuation allowance for net deferred tax assets	24.00%	23.00%
Effective income tax rate

XML 64 R51.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Schedule of components of temporary differences of deferred tax asset, net) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Accrued expenses	$ 16,000	$ 17,000
Allowance for doubtful accounts	1,000	1,000
Deferred revenue	8,000
Reserve for obsolescence	23,000	25,000
Expense associated with non-qualified stock options	37,000	37,000
Revenue Sharing Agreement	210,000	234,000
General business credit	1,004,000	1,198,000
NOL carryforward	5,732,000	7,241,000
Deferred tax assets, gross	7,031,000	18,753,000
Less: valuation allowance	(7,031,000)	(18,753,000)	$ (10,115,000)
Deferred tax asset, net

XML 65 R52.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Schedule of change in valuation allowance for deferred tax assets) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Beginning Balance	$ 18,753,000	$ 10,115,000
Change in Allowance	(1,722,000)	(1,362,000)
Ending Balance	$ 7,031,000	$ 18,753,000

XML 66 R53.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($)	1 Months Ended
	Aug. 31, 2014	Nov. 11, 2008	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies (Textual)
Employment agreements, description		The Company entered into an amended and restated change in control agreement with Corisa L. Guiffre, Vice President, Chief Financial Officer and Assistant Corporate Secretary of the Company. The change in control agreement provides Ms. Guiffre with a severance benefit upon termination in connection with a change in control (as defined in the agreement). If Ms. Guiffre is terminated following a change in control, the Company will pay Ms. Guiffre a sum equal to three times Ms. Guiffre’s average annual compensation for the five preceding taxable years. All restrictions on any restricted stock will lapse immediately and incentive stock options and stock appreciation rights, if any, will become immediately exercisable in the event of a change in control of the Company. Upon the occurrence of a change in control followed by Ms. Guiffre’s termination of employment, the Company will continue life, medical, dental and disability coverage for 36 full calendar months following the date of termination.
Assets and corresponding operating lease liabilities			$ 77,547
Lease terms			56 months	17 months
Property, Plant and Equipment [Member] \| Minimum [Member]
Commitments and Contingencies (Textual)
Lease terms			1 year
Property, Plant and Equipment [Member] \| Maximum [Member]
Commitments and Contingencies (Textual)
Lease terms			2 years
Chief Executive Officer [Member]
Commitments and Contingencies (Textual)
Term of employment agreement	The effective date of the original employment agreement was August 1, 2014 and it currently expires on July 31, 2021, subject to renewal as approved by the Compensation Committee of the Board of Directors.
Annual base salary	$ 216,000
Percentage of quarterly bonus	5.00%
Maximum quarterly bonus	$ 12,500
Percentage of annual bonus	9.00%
Annual pre-bonus net after tax earnings, Minimum	$ 300,000
Annual pre-bonus net after tax earnings, Maximum	$ 3,000,000
Percentage of adjusted pre-annual bonus	3.00%
Annual pre-bonus adjusted net after tax earnings, Maximum	$ 3,000,000
Description of employment agreement with Mr. Andrea	Mr. Andrea is entitled to a change in control payment equal to twelve months of Mr. Andrea’s most recent base salary plus a pro-rated portion of Mr. Andrea's most recent annual and four quarterly bonuses paid immediately preceding the change of control, continuation of health and medical benefits for twelve months and immediate vesting of all stock options in the event of a change in control during the term of his agreement and subsequent termination of his employment within twelve months following the change of control. In the event of his termination without cause or resignation with the Company’s consent, Mr. Andrea is entitled to a severance payment equal to two months of his base salary, plus the two months pro-rated portion of his most recent annual and quarterly bonuses, payment of $12,500 (the un-paid bonus for the quarter ended September 30, 2017) and a continuation of health insurance coverage for Mr. Andrea and his dependents for 6 months.
Future minimum cash commitments			$ 126,000

XML 67 R54.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES (Schedule of Operating Leases) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Other Assets	$ 204,081	$ 60,362
Trade accounts payable and other current liabilities	44,630	47,364
Lease liabilities payable non-current	159,794	15,221
Total operating lease liabilities	$ 204,424	$ 62,585
Weighted-average remaining lease term	56 months	17 months
Weighted-average discount rate	4.00%	7.34%

XML 68 R55.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES (Schedule of Maturities of Operating Lease Liabilities) (Details)	Dec. 31, 2020 USD ($)
Maturities of operating lease liabilities
2021	$ 51,787
2022	45,071
2023	42,389
2024	43,743
2025	40,344
Total	223,334
Less: interest	(18,910)
Total Lease Payments	$ 204,424

XML 69 R56.htm IDEA: XBRL DOCUMENT

STOCK PLANS AND STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Aug. 31, 2019	Oct. 31, 2006
Stock Plans and Stock-Based Compensation (Textual)
Total compensation expense recognized related to stock option awards		$ 17,710
Selling, General and Administrative Expenses [Member]
Stock Plans and Stock-Based Compensation (Textual)
Total compensation expense recognized related to stock option awards		15,659
Research and Development Expense [Member]
Stock Plans and Stock-Based Compensation (Textual)
Total compensation expense recognized related to stock option awards		$ 2,051
Option [Member]
Stock Plans and Stock-Based Compensation (Textual)
Common stock fair value	$ 0.04
Option outstanding aggregated intrinsic value	$ 6,301,500
Stock Compensation Plan One [Member]
Stock Plans and Stock-Based Compensation (Textual)
Stock options vesting periods	4 years
Stock options contractual terms	10 years
Stock option exercisable			10,000,000	18,000,000

XML 70 R57.htm IDEA: XBRL DOCUMENT

STOCK PLANS AND STOCK-BASED COMPENSATION (Schedule of Stock Option Activity) (Details) - 2006 Plan [Member]	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Summary of stock options activity
Options Outstanding, Beginning balance \| shares	8,100,500
Options Outstanding, Canceled \| shares	(1,799,000)
Options Outstanding, Ending balance \| shares	6,301,500
Options Outstanding, Weighted Average Exercise Price, Beginning balance	$ 0.07
Options Outstanding, Weighted Average Exercise Price, Canceled	0.11
Options Outstanding, Weighted Average Exercise Price, Ending balance	0.06
Options Outstanding, Weighted Average Fair Value, Beginning balance	$ 0.07
Options Outstanding, Weighted Average Fair Value, Canceled \| shares	0.11
Options Outstanding, Weighted Average Fair Value, Ending balance	$ 0.06
Options Outstanding, Weighted Average Remaining Contractual Life, Beginning balance	4 years 9 months 18 days
Options Outstanding, Weighted Average Remaining Contractual Life, Ending balance	4 years 11 months 23 days
Options Exercisable, Beginning balance \| shares	8,100,500
Options Exercisable, Ending balance \| shares	6,301,500
Options Exercisable, Weighted Average Exercise Price, Beginning balance	$ 0.07
Options Exercisable, Weighted Average Exercise Price, Ending balance	0.06
Options Exercisable, Weighted Average Fair Value, Beginning balance	0.07
Options Exercisable, Weighted Average Fair Value, Ending balance	$ 0.06
Options Exercisable, Weighted Average Remaining Contractual Life, Beginning balance	4 years 9 months 18 days
Options Exercisable, Weighted Average Remaining Contractual Life, Ending balance	4 years 11 months 23 days

XML 71 R58.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Narrative) (Details)	12 Months Ended
SEGMENT INFORMATION (Narrative) (Details)	Dec. 31, 2020 Segments
Segment Information (Textual)
Number of operating segments	2
Percentage of net revenues	10.00%

XML 72 R59.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Schedule of selected consolidated financial information for Andrea's segments) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Summary of condensed consolidated interim financial information for Andrea's segments
Net product revenues	$ 1,295,833	$ 1,852,322
Service related revenues	45,200	17,271
License revenues	59,530	42,918
Loss from operations	(755,196)	(476,628)
Depreciation and amortization	52,231	77,361
Purchases of property and equipment	5,989
Purchases of patents and trademarks	19,303	16,737
Assets	1,209,904	1,289,471
Total long lived assets	439,675	322,895
Patent Monetization [Member]
Summary of condensed consolidated interim financial information for Andrea's segments
Net product revenues
Service related revenues
License revenues	554	950
Loss from operations	(362,254)	(397,200)
Depreciation and amortization	18,908	24,220
Purchases of property and equipment
Purchases of patents and trademarks	9,651	8,369
Assets	279,437	257,685
Total long lived assets	106,296	115,562
Andrea Dsp Microphone and Audio Software Products [Member]
Summary of condensed consolidated interim financial information for Andrea's segments
Net product revenues	1,295,833	1,852,322
Service related revenues	45,200	17,271
License revenues	13,776	24,697
Loss from operations	(392,942)	(79,428)
Depreciation and amortization	33,323	53,141
Purchases of property and equipment	5,989
Purchases of patents and trademarks	9,652	8,368
Assets	930,467	1,031,786
Total long lived assets	$ 333,379	$ 207,333

XML 73 R60.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Schedule of total revenues and accounts receivable by geographic area) (Details) - USD ($)

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Total Revenues

$ 1,355,363

$ 1,895,240

Accounts receivable

182,871

378,179

United States [Member]

Summary of total revenues and accounts receivable by geographic area

Total Revenues

1,043,384

1,420,447

Accounts receivable

157,725

218,935

Foreign [Member]

Summary of total revenues and accounts receivable by geographic area

Total Revenues

^[1]

311,979

474,793

Accounts receivable

$ 25,146

$ 159,244

[1]	Net revenues to any one foreign country did not exceed 10% for the years ended December 31, 2020 or 2019.

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(1))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227