chyron_10q-033110.htm

[ x ]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2010

[ ]	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________to _________.

Commission File Number 001-09014
Chyron Corporation
(Exact name of registrant as specified in its charter)

PART I	FINANCIAL INFORMATION	Page

Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2010 (unaudited)
	and December 31, 2009	3
	Consolidated Statements of Operations (unaudited) for the Three
	Months ended March 31, 2010 and 2009	4
	Consolidated Statements of Cash Flows (unaudited) for the Three
	Months ended March 31, 2010 and 2009	5
	Notes to Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4(T).	Controls and Procedures	17

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 6.	Exhibits	18

	Unaudited
	March 31,			December 31,
Assets	2010			2009
Current assets:
Cash and cash equivalents	$	4,858		$	5,238
Accounts receivable, net		4,560			3,477
Inventories, net		2,486			2,515
Deferred taxes		2,331			2,490
Prepaid expenses and other current assets		855			943
Total current assets		15,090			14,663

Property and equipment, net		1,983			2,106
Intangible assets, net		855			885
Goodwill		2,066			2,066
Deferred taxes		17,721			17,705
Other assets		137			148
TOTAL ASSETS	$	37,852		$	37,573

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued expenses	$	3,357		$	3,059
Deferred revenue		2,518			2,442
Current portion of term loan		326			326
Capital lease obligations		35			35
Total current liabilities		6,236			5,862

Pension liability		2,457			2,327
Deferred revenue		739			634
Term loan		380			461
Other liabilities		217			205
Total liabilities		10,029			9,489

Commitments and contingencies

Shareholders' equity:
Preferred stock, par value $1.00, without designation
Authorized - 1,000,000 shares, Issued - none
Common stock, par value $.01
Authorized - 150,000,000 shares
Issued and outstanding - 15,914,437 at March 31, 2010
and 15,864,205 at December 31, 2009		159			159
Additional paid-in capital		80,493			80,087
Accumulated deficit		(52,115	)		(51,461	)
Accumulated other comprehensive loss		(714	)		(701	)
Total shareholders' equity		27,823			28,084
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	37,852		$	37,573

		2010			2009
Product revenues	$	5,360		$	5,133
Service revenues		1,512			1,137
Total revenues		6,872			6,270

Cost of sales		2,045			2,050
Gross profit		4,827			4,220

Operating expenses:
Selling, general and administrative		3,626			3,454
Research and development		1,658			1,830

Total operating expenses		5,284			5,284

Operating loss		(457	)		(1,064	)

Interest expense		(17	)		(5	)

Other (loss) income, net		(22	)		(35	)

Loss before taxes		(496	)		(1,104	)

Income tax (expense) benefit, net		(158	)		226

Net loss	$	(654	)	$	(878	)

Net loss per share - basic and diluted	$	(0.04	)	$	(0.06	)

Weighted average shares outstanding:
Basic		15,897			15,682
Diluted		15,897			15,682

		2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(654	)	$	(878	)
Adjustments to reconcile net loss to net cash from
operating activities:
Depreciation and amortization		255			214
Deferred income tax expense (benefit)		143			(236	)
Inventory provisions		-			154
Share-based payment arrangements		405			425
Other		57			43
Changes in operating assets and liabilities:
Accounts receivable		(1,083	)		(757	)
Inventories		29			142
Prepaid expenses and other assets		95			34
Accounts payable and accrued expenses		230			544
Deferred revenue		181			245
Other liabilities		151			101
Net cash (used in) provided by operating activities		(191	)		31

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment		(101	)		(55	)
Net cash used in investing activities		(101	)		(55	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options		1			-
Payments on capital lease obligations		(8	)		(8	)
Payments on term loan		(81	)		-
Net cash used in financing activities		(88	)		(8	)

Change in cash and cash equivalents		(380	)		(32	)
Cash and cash equivalents at beginning of period		5,238			5,322
Cash and cash equivalents at end of period	$	4,858		$	5,290

SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	14		$	2
Stock issued for 401(k) match		66			47

Chyron provides sophisticated graphics offerings that include Chyron's AXIS Graphics online content creation software, HD/SD switchable on-air graphics systems, clip servers, channel branding and telestration systems, graphic asset management and XMP integration solutions, and the WAPSTR mobile phone newsgathering application. As a pioneer of Graphics as a Service for digital video media, Chyron addresses the world of digital and broadcast graphics with web, mobile, HD, 3D and newsroom integration solutions.

In the opinion of management of Chyron Corporation (the "Company" or "Chyron"), the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position of the Company as of March 31, 2010 and the consolidated results of its operations and its cash flows for the periods ended March 31, 2010 and 2009. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2010. In addition, management is required to make estimates and assumptions that affect the amounts reported and related disclosures. Estimates made by management include inventory valuations, stock and bonus compensation, allowances for doubtful accounts, income taxes, pension assumptions and reserves for warranty and incurred but not reported health insurance claims. Estimates, by their nature, are based on judgment and available information. Also, during interim periods, certain costs and expenses are allocated among periods based on an estimate of time expired, benefit received, or other activity associated with the periods. Accordingly, actual results could differ from those estimates. The Company has not segregated its cost of sales between costs of products and costs of services as it is not practicable to segregate such costs. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. The December 31, 2009 figures included herein were derived from such audited consolidated financial statements.

In June 2009, the FASB issued authoritative guidance for variable interest entities, which was effective for the Company beginning January 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. The adoption of this new guidance did not have any impact on our financial position, results of operations or cash flows for the three months ended March 31, 2010.

Effective January 1, 2010, we adopted the amendment to authoritative literature that modifies the revenue recognition guidance for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable in the arrangement based on the fair value of the elements. The fair value for each deliverable is based on vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE nor TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis.

Also on January 1, 2010, we adopted the amendment to authoritative literature that modifies the revenue recognition guidance for the sale of tangible products that contain software that is more than incidental to the functionality of the product as a whole. More specifically, the revised accounting guidance indicates that when a product has tangible and software components that function together to deliver the essential functionality of the product as a whole, that product should be excluded from the scope of software revenue accounting guidance, as opposed to the previous accounting guidance where such an instrument would be subject to the rules detailed in the software revenue guidance.

Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the sum of the weighted average number of common shares outstanding and common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted earnings per share when their effect is anti-dilutive. Shares excluded from the calculation are as follows (in thousands):

Pursuant to the 2008 Long-term Incentive Plan (the “Plan”), we may grant stock options (non-qualified or incentive), stock appreciation rights, restricted stock, restricted stock units and other share-based awards to employees, directors and other persons who serve the Company. The Plan is overseen by the Compensation Committee of the Board of Directors, which approves the timing and circumstances under which share-based awards may be granted. We issue new shares to satisfy the exercise or release of share-based awards.

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on the U.S. Treasury issues with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. The fair values of the options granted during the three months ended March 31, 2010 and 2009, were estimated based on the following weighted average assumptions:

During the quarter ended March 31, 2010 we issued 116,240 restricted stock units, or RSU’s, at a weighted average grant-date fair value of $2.10. RSU’s are equity awards that are granted to employees entitling the holder to shares of common stock as the award vests. We measure the value of RSU’s at fair value based on the number of shares of common stock underlying the RSUs granted and the closing market price of our common stock at date of grant. We amortize the fair value, net of estimated forfeitures, as share-based compensation expense over the vesting period on a straight line basis which resulted in an expense of $78 thousand in the first quarter of 2010. All RSU’s are required to be settled in shares.

On March 24, 2010 the Company entered into an amendment to its credit facility with a U.S. bank which extends its terms until March 30, 2011. The credit facility continues to provide for a $1.5 million revolving line of credit (“revolver”) with an advance rate of up to 80% of eligible accounts receivable. At March 31, 2010 available borrowings were approximately $1.5 million based on this formula. The revolver bears interest at Prime +1.75%. The credit facility also provides for a $0.5 million equipment line of credit to finance eligible equipment purchases. Advances under the equipment line of credit will become a term loan (“term loan”) bearing interest at Prime +2%. Advances on the equipment line of credit shall be made within 120 days of purchase in minimum draws of $100,000 through December 31, 2010. A term loan from advances on the line will be repaid in thirty-six equal monthly installments of principal plus interest.

The credit facility is collateralized by the Company’s assets, except for its intellectual property rights which are subject to a negative pledge arrangement with the bank. The Company is required to maintain financial covenants based on an adjusted quick ratio of at least 1.5 to 1.0, measured at month end, and minimum tangible net worth of $22 million, increased by 60% of the sum of the gross proceeds received by the Company from any sale of its equity or incurrence of subordinated debt and any positive quarterly net income earned, measured at quarter end (both as defined as per the credit facility). As is usual and customary in such lending agreements, the agreements also contain certain nonfinancial requirements, such as required periodic reporting to the bank and various representations and warranties. The lending agreement also restricts our ability to pay dividends without the bank’s consent. The Company has been in compliance with all debt covenants since inception of the credit facility.

Our policy is to fund the minimum contributions required under the Employee Retirement Income Security Act (ERISA), and, subject to cash flow levels, it is the Company's intention to make additional contributions to the Pension Plan to reduce the unfunded liability. The Company anticipates that no contribution will be required in 2010 in order to comply with ERISA, nor will any discretionary contribution be made.

We provide product warranties for our various products, typically for one year. Liabilities for the estimated future costs of repair or replacement are established and charged to cost of sales at the time the sale is recognized. We established our reserve based on historical data, taking into consideration specific product information. The following table sets forth the movement in the warranty reserve (in thousands):

In accordance with accounting standards, the Company has not recorded a deferred tax asset related to the settlement of share-based awards in the accompanying financial statements because it will not result in the reduction of income taxes payable, due to the existence of net operating loss carryforwards. The cumulative amount of unrecognized tax benefits at March 31, 2010 and December 31, 2009 was approximately $0.8 million, and if the Company is able to utilize this benefit in the future it would result in a credit to additional paid in capital.

At March 31, 2010, we had U.S. federal net operating loss carryforwards ("NOLs") of approximately $50 million expiring between the years 2012 through 2027. We file U.S. federal income tax returns as well as income tax returns in various states and two foreign jurisdictions. We may be subject to examination by the Internal Revenue Service ("IRS") for calendar years 2006 through 2009 under the normal statute of limitations. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the IRS. Generally, for state tax purposes, the Company's 2005 through 2009 tax years remain open for examination by the tax authorities under a four year statute of limitations, however, certain states may have a statute of limitations of six to ten years.

On December 1, 2009, one of our customers, International Broadcast Consultants, Inc., or IBC, filed a lawsuit against us in the Superior Court of the State of California for the County of Los Angeles, which was subsequently removed to the United States District Court for the Central District of California on January 4, 2010. IBC’s complaint, as amended, asserts claims for defamation, intentional interference with contractual relationship, intentional interference with prospective business advantage, negligent interference with prospective business advantage, and unfair business practices relating to an email that one of our employees sent to a customer of IBC that expressed the employee’s belief that IBC may have ceased operations, which IBC alleges caused it to lose business from that customer and other damages. IBC seeks exemplary and punitive damages in an amount up to $30 million. On March 22, 2010, the court set a trial date of December 14, 2010. On May 6, 2010, the Court granted in part and denied in part the Company’s motion to dismiss IBC’s claims for intentional interference with contractual relationship, negligent interference with prospective business advantage, and unfair business practices, but granted IBC an opportunity to amend the deficient claims. Because the case and discovery are in the early stages, we cannot predict the possible outcome of the litigation, but we believe IBC’s claims lack merit and we intend to defend against them vigorously.

We provide sophisticated graphics offerings that include our AXIS Graphics online content creation software, HD/SD switchable on-air graphics systems, clip servers, channel branding and telestration systems, graphic asset management and XMP integration solutions, and the WAPSTR mobile phone newsgathering application. As a pioneer of Graphics as a Service for digital video media, Chyron aims to address the world of digital and broadcast graphics with web, mobile, HD, 3D and newsroom integration solutions.

Our mission is to offer visionary, responsive and cost-effective solutions to the community of professionals involved in the creation, management and distribution of media content. By uniting creativity, business and technology, our focus is to reduce our clients’ operating costs. We are dedicated to developing solutions that achieve these goals by transitioning our customers’ business models from high fixed costs to lower, variable costs that can be scaled up or down as required. One of our primary goals is to leverage our experience and expertise in our traditional hardware product offerings for television stations and networks into becoming a leading provider of web-based software solutions, or a Cloud Services Provider, to the multimedia industry.

Net Sales. Total revenues for the quarter ended March 31, 2010 were $6.9 million, an increase of $0.6 million, or 10%, from the $6.3 million reported for the quarter ended March 31, 2009. Total revenues derived from U.S. customers were $5.8 million in the first quarter of 2010 as compared to $4.9 million in the respective quarter of 2009. Total revenues derived from international customers were $1.1 million and $1.4 million in the quarters ended March 31, 2010 and 2009, respectively.

Product revenues were $5.4 million in the first quarter of 2010 as compared to $5.1 million in the first quarter of 2009, an increase of 4%. The improvement in our product revenues is a result of increased capital spending by broadcasters as they resume their HD implementation and planned upgrade programs that were previously put on hold due to economic uncertainty. We expect that our new business opportunities will continue to grow in 2010.

Service revenues were $1.5 million in the first quarter of 2010 as compared to $1.2 million in the first quarter of 2009, an increase of 33%. Our service revenues have increased due to the growing demand for our AXIS online graphics creation platform and increased sales of software and hardware maintenance contracts for our broadcast graphics products. We believe that AXIS provides a variable cost business model that is an appealing alternative to our broadcast customers’ current up-front fixed cost business model for graphics creation. We expect that our service revenues will continue to grow in 2010 as our customers look to recoup the benefits of cloud computing on content creation workflows, with our AXIS service.

Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses increased $0.2 million in the first quarter of 2010 to $3.6 million as compared to $3.4 million in the first quarter of 2009. The increase in spending is primarily due to increased sales commissions of $0.1 million on higher revenues and $0.1 million in legal fees relating to the lawsuit filed against us, as discussed in the notes to the consolidated financial statements.

Research and Development Expenses. Research and development ("R&D") expenses decreased $0.2 million in the first quarter of 2010 to $1.6 million as compared to $1.8 million in the first quarter of 2009. The primary reason for the decrease is staff mix. While R&D headcount was the same at the end of both quarters, a rebalancing of staff with different expertise resulted in lower paid newly hired engineers replacing some higher paid engineers resulting in $0.1 million lower compensation costs. Additionally, allocated overhead expenses were lower in the first quarter of 2010 by approximately $0.1 million.

Income tax (expense) benefit, net. In the first quarter of 2010, we recorded an income tax expense of $0.2 million as compared to an income tax benefit of $0.2 million in the first quarter of 2009. This increase is primarily due to the increased amount of expense associated with our share-based payment arrangements as we utilize our common stock, in lieu of cash, for management incentive programs, that does not result in a tax benefit in the accompanying financial statements because it will not result in the reduction of income taxes payable, due to the existence of net operating loss carryforwards.

At March 31, 2010, we had cash and cash equivalents on hand of $4.9 million and working capital of $8.9 million. In the first quarter of 2010 the Company used approximately $0.2 million in cash for operations, primarily caused by an increase in accounts receivable from the December 31, 2009 balance. This was due to an advance customer payment received in late 2009 which lowered the balance more than would have been expected based on quarterly sales. The Company also invested approximately $0.1 million in 2010 for new equipment and used $0.1 million in cash for payments on its term loan.

On March 24, 2010 the Company entered into an amendment to its credit facility with a U.S. bank to extend its terms until March 30, 2011. The credit facility continues to provide for a $1.5 million revolving line of credit ("revolver"), with an advance rate of up to 80% of eligible accounts receivable. At March 31, 2010 available borrowings were approximately $1.5 million based on this formula. The credit facility also provides for a $0.5 million equipment line of credit to finance eligible equipment purchases through December 31, 2010. In the second quarter of 2009 the Company borrowed $0.98 million to finance capital equipment under the then existing credit facility, of which $0.70 million remains outstanding at March 31, 2010. The equipment term loan will be repaid in thirty-six equal installments of principal plus interest, and is scheduled to be repaid in full by May 2012. The Company is required to maintain financial covenants based on an adjusted quick ratio of at least 1.5 to 1.0, measured at month-end, and minimum tangible net worth of $22 million, increased by 60% of the sum of the gross proceeds received by the Company from any sale of its equity or incurrence of subordinated debt and any positive quarterly net income earned, measured at quarter-end (as defined in the credit facility). As is usual and customary in such lending agreements, the agreements also contain certain non-financial requirements, such as required periodic reporting to the bank and various representations and warranties. The lending agreement also restricts our ability to pay dividends without the bank's consent. The Company has been in compliance with all debt covenants since inception of the credit facility.

We anticipate that no contribution to our Pension Plan will be required under ERISA in 2010, nor will any additional discretionary contributions be made. The Company’s Pension Plan investments were valued at $4.2 million at December 31, 2009 and $3.7 million at March 31, 2010. The Company’s investment strategy remains the same and we believe that the Plan’s investments are more than adequate to meet Plan obligations for the next twelve months.

In the first quarter of 2010 we saw some recovery in our products business and growing interest in our services offerings. Our strategy is to seek to gain market share in broadcast and online graphics content workflow solutions and expand the use and penetration of our AXIS online graphics creation platform. We believe that AXIS provides a variable cost business model that is an appealing alternative to our broadcast customers’ current up-front fixed cost business model for graphics creation. We also believe that because our addressable market opportunity is no longer restricted to broadcast television, we have additional opportunities for growth. However, our future growth and success will depend to a significant degree on our ability to generate sales of our newer, non-broadcast products in our existing and in new markets. We operate in a rapidly changing environment and must remain responsive to changes as they occur. In the event that revenues are significantly below forecasted revenues, we believe we have the ability to reduce or delay discretionary expenditures, including capital purchases, and reduce headcount, so that we will have sufficient cash resources. However, there can be no assurance that we will be able to adjust our costs in sufficient time to respond to revenue and cash shortfalls, should that occur.

Our long-term success will depend on our ability to achieve and sustain profitable operating results and our ability to raise additional capital on acceptable terms should such additional capital be required. In the event that we are unable to achieve expected goals of profitability or raise sufficient additional capital, if needed, we may have to scale back or eliminate certain parts of our operations.

If these sources of funds are not sufficient, we may need to reduce, delay or terminate our existing or planned products and services. We may also need to raise additional funds through one or more capital financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or products, or grant licenses on terms that are not favorable to us.

There can be no assurance that additional funds will be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate development activities for one or more of our products or services; or delay, limit, reduce or terminate our sales and marketing capabilities or other activities that may be necessary to commercialize one or more of our products or services.

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements in connection with any discussion of future financial performance, liquidity and capital resources, business prospects, technological developments, changes in the industry, new products, research and development activities and similar matters are identified by use of words such as "may," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning. Such statements are based on management's expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such forward-looking statements.

These risks include, but are not limited to: product concentration in a mature market, dependence on the emerging digital market and the industry's transition to digital television and high definition television, our ability to integrate our AXIS online graphics creation solution into our product offerings or to develop other product and service offerings and to generate profits from them, rapid technological changes, continued growth, use and improvement of the Internet, new technologies that could render certain of our products and services to be obsolete, competitors with significantly greater financial resources, new product and service introductions by competitors, seasonality, ability to maintain adequate levels of working capital, our ability to successfully maintain the level of operating costs, expansion into new markets, the Company's belief that it has started building the foundation for future growth and pushed forward with reinventing its core business from products to services, the Company's belief that it has built a stronger business, the Company's efforts to reinvent its core business by transitioning from a products company to a services company, the Company's confidence in the adequacy of its balance sheet, working capital and ability to generate sufficient cash from operations to fund its current growth strategy, the Company's business continuing to improve in the second quarter of 2010 and the Company's confidence that the worst media recession in the past 50 years may now be behind it, the Company's belief that it is in a stronger position to benefit from any economic recovery, and, the Company's optimism that its efforts can provide sustainable competitive advantage and help position it to be better able to seize market share in future years. Please also see the discussion under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009 for more details regarding these and other risks.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009, on December 1, 2009, one of our customers, International Broadcast Consultants, Inc., or IBC, filed a lawsuit against us in the Superior Court of the State of California for the County of Los Angeles, which was subsequently removed to the United States District Court for the Central District of California on January 4, 2010. IBC’s complaint, as amended, asserts claims for defamation, intentional interference with contractual relationship, intentional interference with prospective business advantage, negligent interference with prospective business advantage, and unfair business practices relating to an email that one of our employees sent to a customer of IBC that expressed the employee’s belief that IBC may have ceased operations, which IBC alleges caused it to lose business from that customer and other damages. IBC seeks exemplary and punitive damages in an amount up to $30 million. On March 22, 2010, the court set a trial date of December 14, 2010. On May 6, 2010, the Court granted in part and denied in part the Company’s motion to dismiss IBC’s claims for intentional interference with contractual relationship, negligent interference with prospective business advantage, and unfair business practices, but granted IBC an opportunity to amend the deficient claims. Because the case and discovery are in the early stages, we cannot predict the possible outcome of the litigation, but we believe IBC’s claims lack merit and we intend to defend against them vigorously.

Exhibit No.	Description of Exhibit
10.1	Third Loan Modification Agreement between Silicon Valley Bank and Chyron Corporation dated March 24, 2010 and effective as of March 31, 2010 (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on March 30, 2010 (File No. 001-09014) and incorporated herein by reference).
31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *filed herewith

New York		11-2117385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
5 Hub Drive, Melville, New York		11747
(Address of principal executive offices)		(Zip Code)
(631) 845-2000
(Registrant's telephone number, including area code)

Large accelerated filer [ ]		Accelerated filer [ ]

Non-accelerated filer [ ] (do not check if a smaller reporting company)		Smaller reporting company [x]

	Three Months Ended
	March 31,
	2010		2009

Weighted average shares which are not included in
the calculation of diluted earnings (loss) per
share because their impact is anti-dilutive:
Stock options		3,317		2,999
Restricted stock units		306		-
		3,623		2,999

	Three Months Ended
	March 31,
	2010			2009
Expected volatility		82.23	%		93.91	%
Risk-free interest rate		2.79	%		2.23	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		6.0			6.0
Estimated fair value per option granted	$	1.57		$	0.77

	March 31,		December 31,
	2010		2009
Finished goods	$	496	$	492
Work-in-progress		280		308
Raw material		1,710		1,715
	$	2,486	$	2,515

	2010			2009
Service cost	$	101		$	103
Interest cost		82			75
Expected return on plan assets		(64	)		(71	)
Actuarial loss		16			-
Amortization of prior service cost		(6	)		(6	)
	$	129		$	101

	Foreign						Accumulated
	Currency			Pension			Other
	Translation			Benefit			Comprehensive
	Adjustments			Costs			Income (Loss)
January 1, 2010	$	(13	)	$	(688	)	$	(701	)
Change for period		(13	)		-			(13	)
March 31, 2010	$	(26	)	$	(688	)	$	(714	)

	2010			2009
Current:
State and foreign	$	(15	)	$	(10	)

Deferred:
State		(6	)		11
Federal		(137	)		225
		(143	)		236
Income tax benefit (expense)	$	(158	)	$	226

		CHYRON CORPORATION
		(Registrant)

May 10, 2010		/s/ Michael Wellesley-Wesley
(Date)		Michael Wellesley-Wesley
		President and Chief Executive Officer


May 10, 2010		/s/ Jerry Kieliszak
(Date)		Jerry Kieliszak
		Senior Vice President and Chief Financial Officer