What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-31 compared with 2022-03-31 · 600 added, 792 removed, 623 unchanged (69% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2022 and 2021

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and the Board of Directors of Minim, Inc.

and the Board of Directors

on the Financial Statements

have audited the accompanying consolidated balance sheet of Minim, Inc.

and subsidiaries (the Company) as of December 31, 2021, the related

consolidated statements of operations, stockholders’ equity and cash flows, for the year then ended, and the related notes (collectively,

the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in conformity with

accounting principles generally accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Minim, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021,

the related consolidated statements of operations, stockholders’ equity, and cash flows, for the years then ended, and the related

notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years

then ended in conformity with accounting principles generally accepted in the United States of America.

Doubt About the Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1 to the financial statements, the Company has suffered recurring losses and negative cash flows from operations and will need additional

funding within the next twelve months.

This raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters also are described in Note 1.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

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and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

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is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

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

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Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

audits included performing procedures to assess the risks of material misstatement of the 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 financial statements.

Our audit also included evaluating the accounting principles used and significant

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

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described in Note 2 to the financial statements, the Company recognizes revenue when a customer obtains control of promised goods and

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange

The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange

for these goods and services.

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The Company must determine which promises are distinct performance obligations

and allocate the revenue to each performance obligation that is considered distinct based upon their relative stand-alone selling price.

Revenue allocated to the hardware is typically recognized at a point in time upon delivery and revenue allocated to the SaaS is recognized

over the estimated life of the customer, provided all other revenue recognition criteria are met.

and allocate the revenue to the performance obligations that are considered distinct based upon their relative Stand-alone Selling Price

Revenue allocated to hardware is recognized at a point in time upon delivery and revenue allocated to the SaaS is recognized over

time over the estimated life of the customer, provided all other revenue recognition criteria are met.

identified the identification of distinct performance obligations and the allocation of arrangement consideration as a critical audit

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the following, among others:

evaluated management’s significant accounting policies related to these customer arrangements for reasonableness.

selected a sample of customer agreements and performed the following procedures:

and read contract source documents for each selection, including master agreements, and certain other documents which were part of

the agreement

management’s identification and treatment of contract terms

management’s underlying assumptions and conclusions regarding the stand-alone selling price for each performance obligation

the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along

with their use of estimates, in the determination of revenue recognition conclusions

the mathematical accuracy of management’s calculations of revenue and the associated pattern of revenue recognized in the financial

management’s estimate of stand-alone selling price related to product offerings that are not sold separately for reasonableness

and tested the completeness and accuracy of the data used in determining the

stand-alone selling price.

evaluated management’s significant accounting policies related to these customer agreements for reasonableness.

obtained and read a sample of revenue contracts and evaluated the completeness of the performance obligations identified by management,

and performed an evaluation of whether these performance obligations were distinct and capable of being distinct.

tested the reasonableness of the allocation of the transaction price to each performance obligation by comparing management’s

allocation to the historical pricing for each performance obligations when they are sold separately.

each sample of revenue contracts with multiple performance obligations, we also tested the allocation of the transaction price to

each performance obligation based upon the SSP.

have served as the Company’s auditor since 2021.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of Zoom Telephonics, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Zoom Telephonics, Inc.

(the “Company”) as of December 31, 2020,

the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2020, and

the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and

its cash flows the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

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.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

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.

audit included performing procedures to assess the risks of material misstatement of the 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 financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the 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 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 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.

of the Merger Transaction between Zoom Telephonics, Inc.

and Minim Inc.

Audit Matter Description

discussed in Notes 1 and 3 to the consolidated financial statements, the Company entered into an Agreement and Plan of Merger (the “Merger

Agreement”) with Minim Inc.

(“Minim”) on November 12, 2020, which was consummated on December 4, 2020.

Upon consummation

of the transactions contemplated by the terms of the Merger Agreement, Minim became a wholly owned subsidiary of the Company.

prior to closing of the Merger Agreement, the majority stockholder of the Company was also the majority stockholder of Minim.

of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction and was outside

the scope of the business combination guidance in ASC 805-50.

The entities are deemed to be under common control as of October 9, 2020,

which was the date that the majority stockholder acquired control of the Company and, therefore, held control over both companies.

consolidated financial statements incorporate Minim’s financial results and financial information for the period from October 9,

2020 through December 31, 2020.

Assets acquired and liabilities assumed are reported at their historical carrying amounts and any difference

between the proceeds transferred is recognized in additional paid-in capital.

These consolidated financial statements include the historical

accounts of the Company since inception and the accounts of Minim since the date common control commenced on October 9, 2020.

identified the accounting for the acquisition of Minim Inc.

as a critical audit matter because of the significant audit effort necessary

to evaluate the Company’s conclusions, including the Company’s assessment if the transaction qualified as a common control

merger, of which entity represented the receiving entity, if the receiving entity was also the predecessor, if “push down”

accounting was required and the resulting characterization and overall basis of presentation of the Company’s consolidated financial

statements and disclosures.

the Critical Audit Matter Was Addressed in the Audit

audit procedures related to the Company’s accounting for the Business Combination included, among others:

and reviewed the Agreement and Plan of Merger documents to gain an understanding of the underlying

terms of the transaction.

the Company’s analysis of the merger and the accuracy of the information used in the

analysis and the judgements made by management.

management’s assessment of common control, including calculating the share ownership

in each entity by the controlling shareholder, as well as entities the shareholder controlled,

to determine when control of the entities occurred.

the assistance of professionals in our firm having expertise in accounting for business combinations,

we evaluated management’s conclusion regarding which entity was the receiving entity

and predecessor and the resulting characterization and overall basis of presentation which

reflects the merger as a common control merger.

and evaluated the financial statement presentation and disclosure regarding the merger with

the accounting reached and the disclosure requirements for a common control merger.

have served as the Company’s auditor since 2009 (such date takes into account the acquisition of a portion of UHY LLP by Marcum

LLP in April 2010) to 2021.

ME April 13, 2021

Massachusetts

BALANCE SHEETS

of December 31, 2022 and 2021

and cash equivalents

receivable, net of allowance for doubtful accounts of $ 236,819 and $ 173,603 as of December 31, 2021 and, 2020, respectively

expenses and other current assets

Current assets

lease right-of-use assets

AND STOCKHOLDERS’ EQUITY

maturities of government loan

maturities of operating lease liabilities

revenue, current

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowance for doubtful accounts of $ 138,331 and $ 236,819 as of December 31, 2022 and, 2021, respectively

Inventories, net

Prepaid expenses and other current assets

Total current assets

Equipment, net

Operating lease right-of-use assets

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

term government loan, less current maturities

lease liabilities, less current maturities

revenue, noncurrent

and Contingencies (Note 9)

Stockholders’

Stock, Authorized:

shares at $ 0.01

Bank credit line

Accounts payable

Current maturities of bridge loan agreement

Current maturities of long-term debt

Current maturities of operating lease liabilities

Accrued expenses

Deferred revenue, current

Total current liabilities

Operating lease liabilities, less current maturities

Deferred revenue, noncurrent

Total Liabilities

Commitments and Contingencies (Note 8)

Stockholders’ equity

Preferred Stock, Authorized:

2,000,000 shares at $ 0.01 par value;

0 shares issued and outstanding

shares and 40,000,000

shares at December 31, 2021 and 2020,

respectively, at $ 0.01

Common Stock:

60,000,000 shares at December 31, 2022 and 2021, at $ 0.01 par value;

issued and outstanding:

shares and 35,074,922

shares at December 31, 2021 and 2020,

paid-in capital

46,949,240 shares and 45,885,043 shares at December 31, 2022 and 2021, respectively

Additional paid-in capital

Accumulated deficit

( 74,834,854 )

( 59,285,610 )

stockholders’ equity

liabilities and stockholders’ equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

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Ended December 31, 2022 and 2021

of goods sold

and marketing

and administrative

and development

of Trademark, net

( 3,955,626 )

Cost of goods sold

Operating expenses:

Selling and marketing

General and administrative

Research and development

Sale of Trademark, net

( 3,955,626 )

Total operating expenses

Operating loss

( 15,045,040 )

income (expense):

on forgiveness of debt (Note 8)

( 1,928,745 )

Other income (expense):

before income taxes

Interest income

Interest expense

Gain on forgiveness of debt (Note 7)

Total other income (expense)

Loss before income taxes

( 15,436,896 )

( 2,134,894 )

tax provision

Income tax provision

$ ( 15,549,244 )

$ ( 2,198,667 )

and diluted net loss per share

average common and common equivalent shares:

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Basic and diluted

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

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Ended December 31, 2022 and 2021

at December 31, 2019

$ ( 40,596,638 )

( 3,858,415 )

investment offering, net of issuance costs of $237,030

issued in Zoom Connectivity Merger

Additional Paid-in

Balance at December 31, 2020

$ ( 57,086,943 )

of non-recourse promissory notes from Zoom Connectivity option holders (Note 4)

of Zoom Connectivity common stock (Note 4)

option exercises

at December 31, 2020

( 2,198,667 )

Stock option exercises

Public offering equity, net of issuance costs

Stock-based compensation

Balance at December 31, 2021

( 59,285,610 )

( 15,549,244 )

option exercises

offering equity, net of issuance costs

at December 31, 2021

( 15,549,244 )

Stock option exercises

Common stock issued for vested restricted units

Stock-Based Compensation

Balance at December 31, 2022

$ ( 74,834,854 )

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Ended December 31, 2022 and 2021

flows used in operating activities:

$ ( 3,586,740 )

$ ( 3,858,415 )

to reconcile net loss to net cash used in operating activities:

and amortization

of right-of-use assets

of debt issuance costs

of sales contract costs

for (recovery of) accounts receivable allowances

for inventory reserves

loan forgiveness

Cash flows used in operating activities:

$ ( 15,549,244 )

in operating assets and liabilities:

$ ( 2,198,667 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Amortization of right-of-use assets

Amortization of debt issuance costs

Amortization of sales contract costs

Stock-based compensation

Goodwill impairment charge

Intangible asset impairment charge

Provision for (recovery of) accounts receivable allowances

Provision for inventory reserves

Non-cash loan forgiveness

Changes in operating assets and liabilities:

Accounts receivable

( 18,030,117 )

Prepaid expenses and other current assets

Accounts payable

( 9,621,054 )

expenses and other current assets

Accrued expenses

( 2,261,266 )

lease liabilities

cash used in operating activities

Deferred revenue

Operating lease liabilities

Net cash used in operating activities

( 12,170,073 )

( 14,272,267 )

flows from investing activities:

acquired from merger (Note 4)

Certification

costs incurred and capitalized

software costs

cash used in investing activities

flows from financing activities:

proceeds from the SVB bank credit line

Cash flows from investing activities:

Purchases of equipment

Certification costs incurred and capitalized

Net cash used in investing activities

Cash flows from financing activities:

Net proceeds from the bank credit line

Proceeds from bridge loan agreement

Repayment of the Rosenthal bank credit line

( 2,442,246 )

associated with bank credit line

from (repayment of) government loan

from private placement offering, net of offering

from public offering, net of offering costs

from stock option exercises

from profit disgorgement

from non-recourse promissory notes issued by Zoom Connectivity option holders (Note 4)

cash provided by financing activities

change in cash, cash equivalents, and restricted cash

cash equivalents, and restricted cash - Beginning

cash equivalents, and restricted cash - Ending

disclosures of cash flow information:

paid during the period for:

financing activities:

share settlement from non-recourse promissory notes issued by Zoom Connectivity option holders (Note 4)

of Zoom Connectivity common stock (Note 4)

is reported on the consolidated statements of cash flows as follows:

and cash equivalents

cash, cash equivalents, and restricted cash

Costs associated with bank credit line

Repayment of government loan

Proceeds from stock option exercises

Proceeds from public offering, net of offering costs

Net cash provided by financing activities

Net change in cash, cash equivalents, and restricted cash

( 12,040,335 )

Cash, cash equivalents, and restricted cash - Beginning

Cash, cash equivalents, and restricted cash - Ending

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Cash is reported on the consolidated statements of cash flows as follows:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash

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

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NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Inc., formerly known as Zoom Telephonics, Inc., and its wholly owned subsidiaries, Zoom Connectivity, Inc., MTRLC LLC, and Minim Asia

and its wholly owned subsidiaries, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia

Private Limited, are herein collectively referred to as “Minim” or the “Company”.

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providers that assist them— leading to higher customer satisfaction and decreased support burden.

June 3, 2021, Zoom Connectivity, Inc.

filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate

of Incorporation to change its legal corporate name from “Minim, Inc.” to “Zoom Connectivity, Inc.”, effective

as of June 3, 2021.

Subsequently on June 3, 2021, the Company filed with the Secretary of State of the State of Delaware a Certificate

of Amendment to its Certificate of Incorporation to change its legal corporate name from “Zoom Telephonics, Inc.” to “Minim,

Inc.”, effective as of June 3, 2021.

July 7, 2021, the Company’s common stock, $ 0.01 par value per share (the “Common Stock”), ceased trading on the OTCQB

and commenced trading on The Nasdaq Capital Market under the ticker symbol “MINM.”

July 23, 2021, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated

Certificate of Incorporation to increase the number of authorized shares of capital stock to 62,000,000 shares, consisting of 60,000,000

shares of Common Stock and 2,000,000 shares of Preferred Stock.

Connectivity Merger

November 12, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Zoom Connectivity,

Inc., a Delaware corporation (“Zoom Connectivity”), that designs, develops, sells and supports an IoT security platform that

enables and secures a better-connected home.

Under the Merger Agreement, a wholly-owned subsidiary of the Company, was merged with and

into Zoom Connectivity in exchange for 10,784,534 shares of Common Stock of the Company.

As a result of the merger, effected December

4, 2020, Zoom Connectivity was the surviving entity and became a wholly-owned subsidiary of the Company.

prior to closing of the Merger Agreement, the majority stockholder of the Company was also the majority stockholder of Zoom Connectivity.

As a result of the common ownership upon closing of the transaction, the merger was considered a common-control transaction and was outside

the scope of the business combination guidance in ASC 805-50.

The entities are deemed to be under common control as of October 9, 2020,

which was the date that the majority stockholder acquired control of the Company and, therefore, held control over both companies.

consolidated financial statements incorporate Zoom Connectivity’s financial results and financial information for the period beginning

October 9, 2020, and the comparative information of the prior period does not include the financial results of Zoom Connectivity prior

to October 9, 2020.

The merger of the Company with Zoom Connectivity is referred to as the “Zoom Connectivity Merger” within

these Notes to the Consolidated Financial Statements.

January 21, 2022, Zoom Connectivity, Inc.

filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its

Certificate of Incorporation to change its legal corporate name from “Zoom Connectivity, Inc.” to “Cadence Connectivity,

Inc.”, effective as of January 21, 2022.

Going Concern

The Company’s

consolidated financial statements as of December 31, 2022 were prepared under the assumption that

the Company will continue as a going concern.

The going concern assumption contemplates the realization of assets and

satisfaction of liabilities in the normal course of business.

However, as of December 31, 2022, substantial doubt exists

about the Company’s ability to continue as a going concern.

The Company has incurred recurring losses and negative cash flows

from operations, and our ability to continue as a

going concern will depend on our ability to obtain additional equity or debt financing, attain further operating efficiencies,

reduce or contain expenditures and increase revenues.

The Company’s debt financing

arrangements through the SVB Loan Agreement and Bridge Loan Agreement expire on January 15, 2024, and we will need to refinance both

agreements prior to the expiration date.

As of December 31, 2022, the Company had cash and cash equivalents of $ 530 thousand and

during the year ended December 31, 2022, the Company recorded a net loss of $ 15.5 million.

The Company will require additional liquidity to continue operations beyond the next 12 months.

Company is evaluating strategies to obtain the required additional funding for future operations.

These strategies may include but are not limited to equity offerings, debt financings, and cost reductions.

However, given a variety

of external factors including the impact of the recent economic downturn in the U.S.

and global financial markets, the Company may be

unable to access further equity or debt financing when needed.

The Company may engage in cost-cutting measures in an attempt to extend

its cash resources.

As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under

acceptable terms, if at all.

The Company believes that it can be successful in obtaining debt refinancing;

however, no assurance can

be provided that it will be able to do so.

Company’s consolidated financial statements as of December 31, 2022, do not include

any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the

Company were unable to continue as a going concern.

If the Company is unable to raise additional capital and is therefore unable to

continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried

on its consolidated financial statements, and it is likely that investors will lose all or part of their investment.

Company’s operations have historically been financed through the issuance of common stock and borrowings.

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During the year ended December 31, 2022, the Company

incurred a net loss of $ 3.6 million

and had negative cash flows from operating activities of $ 14.3

As of December 31, 2021, the Company

had an accumulated deficit of $ 60.7

million and cash and cash equivalents of $ 12.6

Management of the Company believes it

has sufficient resources to continue as a going concern through at least one year from the issuance of these financial statements.

incurred a net loss of $ 15.5 million and used cash in operations of $ 12.2 million.

As of December 31, 2022, the Company had an accumulated

deficit of $ 74.8 million and cash and cash equivalents of $ 530 thousand and restricted cash of $ 500 thousand.

The SVB Loan Agreement

and Bridge Loan expire on January 15, 2024, and the Company will have to refinance both debt arrangements prior to the expiration date.

In the first quarter of 2023, the Company has implemented cost reduction plans to align its cost structure to its

sales and increase its liquidity.

The Company will continue to monitor its cost in relation to its sales and adjust its cost structure

Management of the

Company believes it will not have sufficient resources to continue as a going concern through at least one year from the issuance of these financial

of Presentation

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preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make judgements, estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated

financial statements and the reported amounts of revenue and expense during the reporting period.

These judgements, estimates and assumptions

made by the Company include, but are not limited to revenue recognition, the allowance for doubtful accounts (collectability);

liabilities (sales returns);

asset valuation allowance for deferred income tax assets;

write-downs of inventory for slow-moving

and obsolete items, and market valuations;

stock-based compensation;

and estimated life of intangible assets.

The Company evaluates its

estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions

when facts and circumstances dictate.

GAAP requires management to make judgments, estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period.

judgments, estimates and assumptions made by the Company include, but are not limited to revenue recognition, the allowance for

doubtful accounts (collectability);

contract liabilities (sales returns);

valuation allowance for deferred income tax assets;

write-downs of inventory for slow-moving and obsolete items and stock-based compensation.

The Company evaluates its estimates and

assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts

and circumstances dictate.

Actual results may differ from those estimates under different assumptions or conditions and the

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principally in transactions denominated in foreign currencies, which exposes the Company to risks of foreign currency fluctuations.

Foreign currency transaction gains (losses) are included in the consolidated statements of operations under other income (expense).

currency transaction gains (losses) are included in the consolidated statements of operations under other income (expense).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents and Restricted Cash

of December 31, 2021 and 2020, the restricted cash balance of $ 500 thousand and $ 800 thousand, respectively, relates to letters of credit

to support a bond on tariffs.

of December 31, 2022 and 2021, the restricted cash balance of $ 500 thousand, respectively, relates to letters of credit to support a

bond on tariffs.

Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to

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Substantially all the Company’s cash and cash equivalents and restricted cash are held at one financial

institution in the U.S.

that management believes is of high credit quality.

Such deposits may, at times, exceed federally insured limits

or may not be covered by deposit insurance at all.

The Company has not experienced any credit losses on its cash and cash equivalents

and restricted cash through December 31, 2021.

the year ended December 31, 2021, two customers accounted for 10% or greater individually, and 92 %

in the aggregate of the Company’s total net sales.

For the year ended December 31, 2020, two customers accounted for 10%

or greater individually, and 76 %

in the aggregate of the Company’s total net sales.

institution, Silicon Valley Bank, which was placed into receivership by the FDIC on March 9, 2023.

On March 10, 2023, the Silicon Valley

Bank depositor accounts and loan facilities, including the Company’s bank accounts and line of credit, were transferred to Silicon

Valley Bridge Bank.

Through Silicon Valley Bridge Bank, the Company’s bank balances are fully insured by the FDIC and the line

of credit facility remains operational, allowing the Company to draw from it as required.

The Company has not experienced any credit

losses on its cash and cash equivalents and restricted cash through December 31, 2022 and has not experienced any credit losses as of

the date of filing this Form 10-K

the year ended December 31, 2022, two customers accounted for 10% or greater individually, and 87 % in the aggregate of the Company’s

total net sales.

For the year ended December 31, 2021, two customers accounted for 10% or greater individually, and 92 % in the aggregate

of the Company’s total net sales.

Accounts receivable are unsecured and the Company does not require collateral;

however, the Company does assess the collectability of accounts receivable based on a number of factors, including past transaction history

with, and the creditworthiness of, the customer.

however, the Company

does assess the collectability of accounts receivable based on a number of factors, including past transaction history with, and the

creditworthiness of, the customer.

Accordingly, the Company is exposed to credit risk associated with accounts receivable.

At December 31, 2021 four customers with an accounts receivable balance of 10% or greater individually accounted for a combined

of the Company’s accounts receivable.

At December 31, 2020, three customers with an accounts receivable balance of 10% or

greater individually accounted for a combined 85 %

of the Company’s accounts receivable.

To reduce risk, the Company closely monitors the amounts due from its customers and assesses

the financial strength of its customers through a variety of methods that include, but are not limited to, engaging directly with customer

operations and leadership personnel, visiting customer locations to observe operating activities, and assessing customer longevity and

reputation in the marketplace.

As a result, the Company believes that its accounts receivable credit risk exposure is limited.

31, 2022, two customers with an accounts receivable balance of 10% or greater individually accounted for a combined 75 % of the Company’s

accounts receivable.

At December 31, 2021, four customers with an accounts receivable balance of 10% or greater individually accounted

for a combined 86 % of the Company’s accounts receivable.

To reduce risk, the Company closely monitors the amounts due from its

customers and assesses the financial strength of its customers through a variety of methods that include, but are not limited to, engaging

directly with customer operations and leadership personnel, visiting customer locations to observe operating activities, and assessing

customer longevity and reputation in the marketplace.

As a result, the Company believes that its accounts receivable credit risk exposure

Company depends on many third-party suppliers for key components contained in its product offerings.

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During 2022 and 2021, the Company

had one and two suppliers that provided 97 % and 99 %, respectively, of the Company’s purchased inventory.

had two and one suppliers that provided 93 % and 97 %, respectively, of the Company’s purchased inventory.

Receivable, Net

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or unmarketable, based upon assumptions about future demand and market conditions.

net is stated at cost, net of accumulated depreciation.

Depreciation is generally computed using the straight-line method based on the

estimated useful lives of the assets, which is generally three to five years.

is stated at cost, net of accumulated depreciation.

Depreciation is generally computed using the straight-line method based on the estimated

useful lives of the assets, which is generally three to five years.

Maintenance and repairs are charged to expense as incurred.

Significant improvements that substantially enhance the useful life of an asset are capitalized and depreciated.

When assets are retired

or disposed of, the cost together with related accumulated depreciation is removed from the balance sheet and any resulting gain or loss

is reflected in the Company’s statements of operations in the period realized.

improvements that substantially enhance the useful life of an asset are capitalized and depreciated.

When assets are retired or disposed

of, the cost together with related accumulated depreciation is removed from the balance sheet and any resulting gain or loss is reflected

in the Company’s statements of operations in the period realized.

Company records goodwill when consideration paid in a business acquisition exceeds the value of the net assets acquired.

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Assumptions may be incomplete or inaccurate and unanticipated events or circumstances may occur, which may affect

the accuracy of validity of such assumptions, estimates or actual results.

the accuracy or validity of such assumptions, estimates or actual results.

Goodwill is not amortized but rather is tested for impairment

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of the goodwill impairment test requires judgments, including identification of the reporting units, assigning goodwill to reporting

units, a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of each reporting

unit which often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows

and outflows, discount rates, asset lives and market multiples, among other items.

There is no assurance that the actual future earnings

or cash flows of the reporting unit will not decline significantly from the projections used in the impairment analysis.

Goodwill impairment

charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macroeconomic

environment and industry, deterioration in the Company’s performance or its future projections, or changes in plans for its reporting

units, a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of each

reporting unit which often involves the use of significant estimates and assumptions, including assumptions with respect to future

cash inflows and outflows, discount rates, asset lives and market multiples, among other items.

There is no assurance that the

actual future earnings or cash flows of the reporting unit will not decline significantly from the projections used in the

impairment analysis.

As part of the Company’s annual impairment test, which determined that the carrying amount of its single reporting unit exceeded its fair value, the Company recorded a goodwill impairment charge of

thousand for the year ended December 31, 2022.

Assets and Long-Lived Assets

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Capitalized implementation costs are amortized on a straight-line basis over its estimated useful

life, however there were no capitalized costs incurred during the years ended December 31, 2022 and 2021, respectively.

Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount

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any indicators of impairment are present, including, but not limited to:

there has been a significant adverse change in the business climate that affects the value

there has been a significant adverse change in the business climate that affects the value of an asset:

there has been a significant change in the extent or way an asset is used;

there is an expectation that the asset will be sold or disposed of before the end of its

originally estimated useful life.

Company did not identify any events or changes in business circumstances that the carrying amount of the assets may not be fully recoverable

or that the useful lives of these assets are no longer appropriate during the year ended December 31, 2021.

there is an expectation that the asset will be sold or disposed of before the end of its originally estimated useful life.

the year ended December 31, 2022, the Company recorded an impairment charge of $ 67 thousand related to its customer relationships, which

is associated with the Company’s ISP business that is being discontinued.

The Company’s other intangible assets and long-lived assets were determined to

not be impaired as of December 31, 2022.

Company determines if an arrangement is a lease at inception by assessing whether the arrangement contains an identified asset and whether

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As of December 31, 2022 and 2021, the balance outstanding

for long-term insurance policies, net of accumulated amortization, was $ 142

thousand and $ 119

thousand, respectively.

for long-term insurance policies, net of accumulated amortization, was $ 71 thousand and $ 142 thousand, respectively.

compute deferred income taxes based on the differences between the financial statement and tax basis of assets and liabilities using

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for income tax in the consolidated statements of operations.

(Loss) Per Common Share

earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding.

Per Common Share

loss per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding.

Diluted earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares

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The Company accounts for point-of-sale taxes on a net basis.

Company also sells and earns revenues from Software as a Service (“SaaS”), including services that enables and secures

a better-connected home with the AI-driven smart home WiFi management and security platform.

Company also sells and earns revenues from Software as a Service (“SaaS”), including services that enables and secures a

better-connected home with the AI-driven smart home WiFi management and security platform.

Customers do not have the contractual right

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Performance Obligations

the year ended December 31, 2021, the Company introduced new hardware products that include SaaS services as a bundled product.

accounts for these sales in accordance with the multiple performance obligation guidance of ASC Topic 606.

For multiple performance obligation

contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct.

Performance obligations

are determined to be distinct if they are both capable of being distinct and distinct within the context of the contract.

In determining

whether performance obligations meet the criteria of being distinct, the Company considers a number of factors, such as degree of interrelation

and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or

service in the contract.

SaaS included with certain hardware products is considered distinct from the hardware, and therefore the hardware

and SaaS offerings are treated as separate performance obligations.

Company has hardware products that include SaaS services as a bundled product.

The Company accounts for these sales in accordance with

the multiple performance obligation guidance of ASC Topic 606.

For multiple performance obligation contracts, the Company accounts for

the promises separately as individual performance obligations if they are distinct.

Performance obligations are determined to be distinct

if they are both capable of being distinct and distinct within the context of the contract.

In determining whether performance obligations

meet the criteria of being distinct, the Company considers a number of factors, such as degree of interrelation and interdependence between

obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract.

included with certain hardware products is considered distinct from the hardware, and therefore the hardware and SaaS offerings are treated

as separate performance obligations.

identifying the separate performance obligations, the transaction price is allocated to the separate obligations on a relative standalone

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to adjust revenue.

Returned goods are a form of variable consideration and under ASC Topic 606 are estimated and recognized as

a reduction of revenue as performance obligations are satisfied (e.g., upon shipment of goods).

The sales returns accrual was $ 1.6

million and $ 775

thousand at December

31, 2021 and 2020, respectively.

● Warranties -

the Company does not offer its customers a separate warranty for purchase.

Therefore, there is no separate performance obligation.

Returned goods are a form of variable consideration and under ASC Topic 606 are estimated and recognized as a reduction

of revenue as performance obligations are satisfied (e.g., upon shipment of goods).

The sales returns accrual was $ 982 thousand and $ 1.6

million at December 31, 2022 and 2021, respectively.

Warranties - the Company does not offer its customers a separate warranty for purchase.

Therefore, there is no separate performance

The Company accrues for assurance-type warranties, which do not include any additional distinct services other than the assurance

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The warranty reserve was not material at December 31, 2022 and December 31, 2021.

● Price protection - if the Company

reduces the price on any products sold to the customer, the Company will guarantee an account credit for the price difference for all

quantities of that product that the customer still holds.

Price protection is variable and under ASC Topic 606 is estimated and recognized

as a reduction of revenue as performance obligations are satisfied (e.g., upon shipment of goods).

The price protection accrual was not

material at December 31, 2021 and December 31, 2020.

● Volume Rebates and Promotion Programs

- volume rebates are variable dependent upon the volume of goods sold-through the Company’s customers to end-users and under

ASC Topic 606 are estimated and recognized as a reduction of revenue as performance obligations are satisfied (e.g., upon shipment of

The rebate and promotion accrual were $ 175

thousand and $ 384 thousand

at December 31, 2021 and 2020, respectively.

Price protection - if the Company reduces the price on any products sold to the customer, the Company will guarantee an account

credit for the price difference for all quantities of that product that the customer still holds.

Price protection is variable and under

ASC Topic 606 is estimated and recognized as a reduction of revenue as performance obligations are satisfied (e.g., upon shipment of

The price protection accrual was not material at December 31, 2022 and December 31, 2021.

Volume Rebates and Promotion Programs - volume rebates are variable dependent upon the volume of goods sold-through the Company’s

customers to end-users and under ASC Topic 606 are estimated and recognized as a reduction of revenue as performance obligations are

satisfied (e.g., upon shipment of goods).

The rebate and promotion accrual was no t material at December 31, 2022, and $ 175 thousand at

December 31, 2021, respectively.

receivable is recorded when the Company has an unconditional right to the consideration.

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Company reported advertising costs of approximately $ 4.0 million and $ 2.8 million in 2022 and 2021, respectively.

Company provides a standard warranty obligation, and the warranty costs are assumed by the Company’s manufacturers.

As of December

31, 2021 and 2020, warranty costs and related reserves were not material.

and Freight Costs

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Issued Accounting Standards

June 2016, the FASB issued ASU No.

2016-13, “ Financial Instruments Credit Losses —Measurement of Credit Losses on Financial

” ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be

presented at the net amount expected to be collected, which includes the Company’s accounts receivable.

This ASU is effective for

the Company for reporting periods beginning after December 15, 2022.

The Company is currently assessing the potential impact that the

adoption of this ASU will have on its consolidated financial statements.

November 2021, the FASB issued ASU No.

2021-10, “Government Assistance” .

ASU 2021-10 includes tax credits, but not

within Topic 740, “Income Taxes”, c ash grants, grants of other assets and project grants.

The ASU excludes transactions

in which a government is a customer within ASC Topic 606, “Revenue from Contracts with Customers”.

is effective for fiscal years beginning after December 15, 2021, with early adoption permitted.

The Company is currently assessing the

potential impact that the adoption of this ASU will have on its consolidated.

financial statements.

the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance,

or potential significance, to the Company’s financial position, results of operations and cash flows .

In June 2016, the FASB issued

2016-13, “ Financial Instruments Credit Losses — Measurement of Credit Losses on Financial Instruments.

ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount

expected to be collected, which includes the Company’s accounts receivable.

This ASU is effective for the Company for reporting

periods beginning after December 15, 2022.

The Company is currently assessing the potential impact that the adoption of this ASU will

have on its consolidated financial statements.

have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial

position, results of operations and cash flows .

PUBLIC OFFERINGS AND PRIVATE PLACEMENTS

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Stock through the Public Offering.

May 26, 2020, the Company entered into a Stock Purchase Agreement (the “2020 Stock Purchase Agreement”) with certain accredited

investors, including certain independent investment funds, members of the Company’s management and its Board of Directors, and

certain co-founders of the Company, in a private placement pursuant to which the Company sold an aggregate of 2,237,103

shares of common stock, par value $ 0.01

per share, at a purchase price of $ 1.52

In connection with the 2020

Stock Purchase Agreement, the Company incurred $ 237

thousand of expenses which has been recorded

as a reduction of additional paid in capital as presented in the consolidated statements of stockholders’ equity.

The net proceeds

to the Company at the closing of the private placement were $ 3.2

October 9, 2020, one of the accredited investors under the 2020 Stock Purchase Agreement sold his shares originally purchased under the

2020 Stock Purchase Agreement in a private sale transaction.

The private sale of the investor’s shares constituted a short

swing transaction, whereby, and as defined by Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”),

the investor was deemed a corporate insider who sold the shares within six months after the purchase of those shares.

As required by

the Exchange Act, the investor was required to disgorge $ 196

thousand in profits from the private sale.

Company received and recorded the funds from disgorgement to additional paid in capital.

(4) COMMON CONTROL MERGER OF ZOOM CONNECTIVITY, INC.

November 12, 2020, Minim executed an Agreement and Plan of Merger (the “Merger Agreement”) with Zoom Connectivity, Inc.

Connectivity”), a privately held company based in Manchester, New Hampshire that designs, develops, sells and supports an IoT security

platform that enables and secures a better- connected home.

Upon closing of the Merger Agreement on December 4, 2020, an acquisition

subsidiary of the Company merged into Zoom Connectivity with Zoom Connectivity being the surviving entity of the merger.

Upon completion

of the merger, all property, assets, other legal rights, debts, obligations, and all other liabilities of Zoom Connectivity transferred.

The Agreement was structured as a non-cash, stock transaction.

The stockholders of Zoom Connectivity received 10,784,534 shares of the

Company’s common stock in exchange for the cancellation of 100 % of the issued and outstanding shares of common stock of Zoom Connectivity.

In addition, the holders of Zoom Connectivity stock options received 1,657,909 of the Company’s stock options in exchange for 2,069,644

Zoom Connectivity stock options.

The vesting terms of the Zoom Connectivity stock options agreements were transferred to stock option

agreements under the Zoom stock options issued.

prior to execution of the Merger Agreement, the majority stockholder of the Company was also the majority stockholder of Zoom

Connectivity.

As a result of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction

and was outside the scope of the business combination guidance in ASC 805-50.

The entities are deemed to be under common control as of

October 9, 2020, which was the date that the majority stockholder acquired control of the Company and, therefore, held control over both

to ASC 250-10 and ASC 805-50, the transaction did not result in a change in the reporting entity and was recognized retrospectively for

all periods during which the entities were under common control.

For common-control transactions where both receiving entity and the

transferring entity were not under common control during the entire reporting period, it is necessary to determine which entity is the

The predecessor is the reporting entity deemed to be the receiving entity for accounting purposes in a common-control transaction.

The predecessor is not always the entity that legally receives the net assets or equity interests transferred.

Comparative financial

information shall only be adjusted for periods during which the entities were under common control.

Since common control between the

Company and Zoom Connectivity occurred as of October 9, 2020, the consolidated financial statements incorporate Zoom Connectivity’s

financial results and financial information for the period beginning October 9, 2020, and the comparative information of the prior period

does not include the financial results of Zoom Connectivity prior to October 9, 2020.

Accordingly, for periods in which the combining

entities were not under common control, the comparative financial statements presented are those of the entity that is determined to

be the predecessor up to the date at which the entities became under common control.

was determined to be the predecessor

entity and, therefore, was deemed to be the receiving entity for accounting purposes.

Additionally, the consolidated financial statements

and financial information presented for prior periods are not required to be restated to reflect the financial position and results of

operations of Zoom Connectivity.

The merger of the Company with Zoom Connectivity is referred to as the “Zoom Connectivity Merger”

within these Notes to the Consolidated Financial Statements.

acquired and liabilities assumed are reported at their historical carrying amounts and any difference between the proceeds transferred

is recognized in additional paid-in capital.

These consolidated financial statements include the historical accounts of the Company since

inception and the accounts of Zoom Connectivity since the date common control commenced.

following table summarizes the historical balances of the assets acquired and liabilities assumed as of October 9, 2020:

ASSETS ACQUIRED AND LIABILITIES ASSUMED

Assets acquired

Cash and cash equivalents

Accounts receivable, net

Total current assets acquired

Equipment, net

Operating lease right-of-use asset, net

Intangible assets, net

Total assets acquired

Liabilities assumed

Accounts Payables

Current maturities of long-term debt

Current maturities of operating lease liabilities

Accrued other expenses

Total current liabilities

Connectivity held $ 551

thousand an aggregate principal amount of promissory

notes issued by employees during 2019 and 2018 in connection with the exercise of Zoom Connectivity stock options.

In connection with

the transactions contemplated by the Merger Agreement, the $ 551

thousand aggregate principal amount of the promissory

notes was repaid in full.

thousand, the Company received $ 320

thousand in cash.

The remaining balance of $ 230

thousand was net settled with 103,842

shares of Zoom Connectivity common stock shares.

These shares of common stock are incorporated in the issuance of 10,784,534

shares of the Company’s common stock that

were issued to Zoom Connectivity stockholders.

This repayment occurred before the merger effective date of December 4, 2020 but after

the October 9, 2020 commencement of common control.

thousand repayment is represented in the consolidated

statement of stockholders’ equity and consolidated statement of cash flows for the year end December 31, 2020.

Connectivity repurchased 33,809 shares of Zoom Connectivity common stock for $ 15 thousand from a stockholder who is an immediate family

member to the Company’s Chairman of the Board.

This repurchase remained unpaid as of December 31, 2020 and is recorded in accrued

expenses in the consolidated balance sheet as of December 31, 2020.

This repurchase occurred before the merger effective date of December

4, 2020 but after the October 9, 2020 commencement of common control.

The $ 15 thousand repurchase is represented in the consolidated

statement of stockholders’ equity and consolidated statement of cash flows under accrued expenses as the amount was not paid as

of December 31, 2020.

During 2021, the Company made the payment of the $ 15 thousand to the stockholder.

Company incurred transaction costs of $ 1.6 million related to this common control merger which were expensed as incurred and are included

in general and administrative expenses in the Company’s consolidated statements of operations for the year ended December 31, 2020.

SALE OF ZOOM® TRADEMARK

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to sell, and sold, all of the Company’s

right, title and interest in the ZOOM® trademark for cash consideration in the amount of $ 4.0

million, net of legal costs incurred of $ 44

The Company did not have a carrying

basis in the trademark that was subject to the agreement and recorded income of approximately $ 4.0

million, which is recorded in income from continuing

operations pursuant to ASC 360-10, Impairment or Disposal of Long-Lived Assets.

Under the terms on the agreement, the Company is allowed

to use and sell the product under ZOOM® trademark until February 11, 2022.

right, title and interest in the ZOOM® trademark for cash consideration in the amount of $ 4.0 million, net of legal costs incurred

of $ 44 thousand.

The Company did not have a carrying basis in the trademark that was subject to the agreement and recorded income of

approximately $ 4.0 million, which is recorded in income from continuing operations pursuant to ASC 360-10, Impairment or Disposal of

Long-Lived Assets.

Under the terms on the agreement, the Company was allowed to use and sell the product under the ZOOM® trademark

until February 11, 2022.

REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

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of December 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations related to SaaS

performance obligation that are unsatisfied or partially unsatisfied was $ 735 thousand, which is recorded as deferred revenue on the

performance obligations that are unsatisfied or partially unsatisfied was $ 1.4 million, which is recorded as deferred revenue on the

Company’s consolidated balance sheets.

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31, 2023, and $ 772 thousand thereafter.

Company recognizes the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs

to be longer than one year.

The Company has determined that certain sales commissions meet the requirements to be capitalized, and the

Company amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract.

Company recognizes the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to

be longer than one year.

The Company has determined that certain sales commissions meet the requirements to be capitalized, and the Company

amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract.

Total capitalized

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Deferred revenue - noncurrent

there was no deferred revenue prior to January 1, 2021, there is no revenue recognized in the year ended December 31, 2021 that was included

in the deferred revenue balance at the beginning of the year.

the year ended December 31, 2021, the change in contract balances was as follows:

the year ended December 31, 2022, the change in deferred revenue was as follows:

OF CHANGE IN CONTRACT BALANCES

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goods includes consigned inventory held by our customers of $ 4.2 million and $ 4.5 million at December 31, 2022 and 2021, respectively.

and includes in-transit inventory of $ 6.3 million and $ 6.2 million at December 31, 2021 and 2020, respectively.

The Company reviews inventory

for obsolete and slow-moving products each quarter and makes provisions based on its estimate of the probability that the material will

not be consumed or that it will be sold below cost.

The inventory reserves were $ 275 thousand and $ 480 thousand for the years ended December

31, 2021 and 2020, respectively.

There was no in-transit inventory in the finished good balance at December 31, 2022, however the December 31, 2021 balance included $ 6.3

The Company reviews inventory for obsolete and slow-moving products each quarter and makes provisions based on its estimate

of the probability that the material will not be consumed or that it will be sold below cost.

The inventory reserves were $ 2.5 million and $ 800 thousand for the years ended December 31, 2022, and 2021, respectively.

net consists of the following:

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Office furniture and fixtures

Accumulated depreciation

( 1,852,777 )

1 unchanged sentence

expense was $ 403 thousand and $ 255 thousand for the years ended December 31, 2022 and 2021, respectively.

December 2018, Zoom Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network management platform.

The acquisition expanded Zoom Connectivity’s subscriber base and thereby offered sales opportunities of Zoom Connectivity’s

SaaS to these subscribers.

Zoom Connectivity recorded $ 58

thousand of goodwill related to this acquisition

in its historical accounts of December 2018.

In accordance with the accounting of a common control transaction (Note 4), the Company

recorded $ 58

thousand of goodwill at Zoom Connectivity’s

historical carrying amount as of October 9, 2020.

December 2018, Zoom Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network management platform.

The acquisition expanded Zoom Connectivity’s subscriber base and thereby offered sales opportunities of Zoom Connectivity’s

December 2018, Cadence Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network

management platform.

The acquisition expanded Cadence Connectivity’s subscriber base and thereby offered sales opportunities

of Cadence Connectivity’s SaaS to these subscribers.

Cadence Connectivity recorded $ 58

thousand of goodwill related to this acquisition in its historical accounts of December 2018.

As of December 31, 2022, the Company

determined that the goodwill was impaired after the annual impairment test indicated that the carrying amount of the Company’s

single reporting unit exceeded the estimated fair value and accordingly recorded a $ 59

thousand impairment charge to general and administrative expense in the statement of operations.

As of December 31, 2021, the

Company had no

December 2018, Cadence Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network management

The acquisition expanded Cadence Connectivity’s subscriber base and thereby offered sales opportunities of Cadence Connectivity’s

SaaS to these subscribers.

Zoom Connectivity recorded $ 122

thousand of customer relationships related to

this acquisition in its historical accounts of December 2018.

In accordance with the accounting of a common control transaction (Note

4), the Company recorded Zoom Connectivity’s historical carrying amounts as of October 9, 2020.

Cadence Connectivity recorded $ 122 thousand of customer relationships related to this acquisition in its historical

accounts of December 2018.

As of December 31, 2022, the Company determined that the intangible asset of customer relationships was impaired

as result of the Company’s discontinuation of the ISP business to which these customers are associated and accordingly recorded

a $ 67 thousand impairment, net of accumulated amortization, to sales and marketing expense in the statement of operations.

As of December

31, 2021, the Company had no impairment.

assets consisted of the following at December 31, 2022 and 2021:

OF INTANGIBLE ASSETS

of December 31, 2021

of December 31, 2020

internal use software

As of December 31, 2022

As of December 31, 2021

Customized internal use software

$ ( 207,399 )

relationships

$ ( 115,306 )

expense was $ 125 thousand and $ 25 thousand in the years ended December 31, 2021 and 2020, respectively.

estimated annual amortization expense for each of the five succeeding years and thereafter is as follows:

Customer relationships

Acquired web domain

$ ( 243,537 )

$ ( 176,575 )

expense was $ 122 thousand and $ 125

in the years ended December 31, 2022 and 2021, respectively.

estimated annual amortization expense for each of the three succeeding years and thereafter is as follows:

OF ANNUAL AMORTIZATION EXPENSES

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Sales and use tax

accrued other expenses

Total accrued other expenses

BANK CREDIT LINE AND GOVERNMENT LOANS

December 18, 2012, the Company entered into a Financing Agreement with Rosenthal & Rosenthal, Inc.

(the “Financing Agreement”).

The Financing Agreement, as amended, provided for up to $ 5.0 million of revolving credit, subject to a borrowing base formula and other

terms and conditions as specified therein.

March 12, 2021, the Company terminated its Financing Agreement and entered into a loan and security agreement with Silicon Valley Bank

(the “SVB Loan Agreement”).

On November 1, 2021, the Company entered into the First Amendment to the SVB Loan Agreement.

The SVB Loan Agreement, as amended, provides for a revolving facility up to a principal amount of $ 25.0 million.

The borrowing base equals

the sum of (a) 85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent of the value of eligible inventory

(valued at cost), (ii) 85% of the net orderly liquidation value of inventory, and (iii) $6.2 million in each, as determined by SVB from

the Company’s most recent borrowing base statement;

provided that SVB has the right to decrease the foregoing percentages in its

good faith business judgement to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the collateral

or its value.

SVB Loan Agreement matures, and all outstanding amounts become due and payable on November 1, 2023.

The SVB Loan Agreement is secured

by substantially all of the Company’s assets but excludes the Company’s intellectual property.

Loans under the credit facility

bear interest at a rate per annum equal to (i) at all times when a streamline period is in effect, the greater of (a) one-half of one

percent (0.50%) above the Prime Rate or (b) three and three-quarters of one percent (3.75%) and (ii) at all times when a streamline period

is not effect, the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter of one percent (4.25%).

substantial terms, including the commercial credit card line of $ 1.0 million, of the SVB Loan Agreement remain unchanged.

Company incurred $ 143

thousand in origination costs in connection with

entering into the SVB Loan Agreement.

These origination costs were recorded as a debt discount and are being expensed over the remaining

term of the facility.

Interest expense was $ 70

thousand and $ 43

thousand for the years ended December

31, 2021 and 2020, respectively.

On November 1, 2021, the Company entered into the first amendment to the SVB Loan Agreement (the

“First Amendment”).

The SVB Loan Agreement, as amended, provides for a revolving facility up to a principal amount of $ 25.0

The borrowing base equals the sum of (a) 85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent

of the value of eligible inventory (valued at cost), (ii) 85% of the net orderly liquidation value of inventory, and (iii) $6.2 million

in each, as determined by SVB from the Company’s most recent borrowing base statement;

provided that SVB has the right to decrease

the foregoing percentages in its good faith business judgement to mitigate the impact of events, conditions, contingencies, or risks

which may adversely affect the collateral or its value .

SVB Loan Agreement is secured by substantially all of the Company’s assets but excludes the Company’s intellectual property.

Loans under the credit facility bear interest at a rate per annum equal to (i) at all times when a streamline period is in effect, the

greater of (a) one-half of one percent (0.50%) above the Prime Rate or (b) three and three-quarters of one percent (3.75%) and (ii) at

all times when a streamline period is not effect, the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter

of one percent (4.25%) .

December 12, 2022, the Company entered into its second Amendment to the SVB Loan Agreement (the “Second Amendment”).

Second Amendment (i) reduced the aggregate amount available under the revolving credit line from $ 25 million to $ 10 million, (ii) extends

maturity to January 15, 2024, and (iii) provides a waiver for an existing default under the SVB Loan Agreement by virtue of the Company

having entered into a Bridge Loan and Security Agreement dated as of November 23, 2022 by and among Borrower and Slingshot Capital, LLC,

under which Borrower incurred certain Indebtedness and granted a Lien to Slingshot Capital.

Company incurred $ 143 thousand in origination costs in connection with entering into the SVB Loan Agreement.

These origination costs

were recorded as a debt discount and are being expensed over the remaining term of the facility.

Interest expense was $ 71 thousand and

$ 70 thousand for the years ended December 31, 2022 and 2021, respectively.

of December 31, 2022, the Company had $ 4.8 million outstanding, net of origination costs of $ 30 thousand, under the SVB Loan Agreement,

and this credit line had availability of $ 38 thousand.

interest rate on the bank credit lines was 4.25 %

as of December 31, 2021 and 2020, respectively.

SVB Loan Agreement includes a minimum interest expense per month of $ 20

thousand and requires the Company to maintain

certain levels of minimum adjusted EBITDA, which is tested on the last day of each calendar quarter and measured for the trailing 3-month

interest rate on the bank credit lines was 8.50 % as of December 31, 2022.

March 10, 2023, Silicon Valley Bank went into receivership with the Federal Deposit Insurance Corporation (FDIC) and is now the Silicon

Valley Bridge Bank.

The SVB Loan Agreement has been transferred to Silicon Valley Bridge Bank, and the revolving facility remains accessible

to the Company.

On March 27, 2023, the SVB Loan Agreement was transferred to First-Citizens Bank & Trust Company (“First-Citizens”)

upon First-Citizens entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank.

SVB Loan Agreement includes a minimum interest expense per month of $ 20 thousand.

The First Amendment required the Company to maintain

certain levels of minimum adjusted EBITDA, which were tested on the last day of each calendar quarter and measured for the trailing 3-month

period ending on the last day of each quarter.

The Second Amendment removed the minimum EBITDA covenants.

addition, pursuant to the SVB Loan Agreement, the Company cannot pay any dividends without the prior written consent of SVB.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted to provide financial

aid to family and businesses impacted by the COVID-19 pandemic.

The Company participated in the CARES Act, and on April 15, 2020, the

Company received a $ 583 thousand 23-month unsecured loan from Primary Bank, under the Small Business Administration (“SBA”)

Paycheck Protection Program (“PPP”), at a fixed rate of 1 % per annum with interest deferred for six months.

Under the terms

of the PPP loan, the Company received forgiveness of $ 513 thousand principal amount of the PPP loan.

The Company used the proceeds from

the PPP loan for qualifying expenses as defined under the PPP.

March 11, 2020, Zoom Connectivity received a $ 545 thousand 23-month unsecured loan from Primary Bank under the PPP at a fixed interest

rate of 1 % per annum with interest deferred for six months.

Under the terms of the PPP loan, the Company received forgiveness in November

2020 of $ 545 thousand principal amount of, and $ 3 thousand in accrued interest under, the PPP loan.

The Company used the proceeds from

the PPP loan for qualifying expenses as defined under the PPP.

February 2021, the Company received additional forgiveness of $ 20 thousand related to the Economic Injury Disaster Loan Advance received

with the PPP loan.

the fiscal year ended December 31, 2021, the Company has recorded $ 34

thousand of PPP loans in current maturities of

long-term government loans in the balance sheets.

For the fiscal year ended December 31, 2020, the Company had recorded $ 65

thousand of PPP loans in current maturities of

long-term government loans and $ 15

thousand in long-term government loans

in the consolidated balance sheets.

COMMITMENTS AND CONTINGENCIES

(a) Lease Obligations

November 30, 2022 (the “Effective Date”), the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered

into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a

bridge loan in the principal amount up of up to $ 1,500,000 .

In conjunction with the Bridge Loan Agreement, the Company executed a bridge

term note (the “Bridge Term Note”) in favor of Slingshot Capital.

The Company has drawn down $ 1,000,000 under the Bridge

Loan Agreement.

Subject to Slingshot Capital’s sole discretion, the other $ 500,000 may be drawn by the Company.

amounts borrowed under the Bridge Loan Agreement bear interest for the period from the Effective Date until February 28, 2023 of 8.00 %

Unpaid principal after February 28, 2023 bear an interest of 14.00 % per annum until paid in full.

In the event of default,

all outstanding principal and interest shall bear interest at an annual rate of 18 %.

connection with the Bridge Loan Agreement, the Company, Slingshot Capital, and Silicon Valley Bank (the “Senior Lender”)

executed a subordination agreement (the “Subordination Agreement”) on November 30, 2022.

The Loan Agreement is subordinated

to the outstanding indebtedness and obligations under the Company’s senior credit facility.

Subject to the Senior Lender’s

written consent, the Company shall grant Slingshot Capital a second-priority security interest in all of the Company’s collateral,

which shall be subordinated to any and all security interests granted to the Senior Lender and at all times shall be limited to the same

collateral granted to the Senior Lender under the senior credit facility.

and interest are not due and payable until the maturity date, which is January 15, 2024, unless the Company’s senior credit facility

with the Senior Lender is paid in full in cash on an earlier date.

Company reimbursed Slingshot Capital $ 20,000 for its reasonable and documented expenses and fees related to the negotiations, documentation,

and execution of the Bridge Loan Agreement, Subordination Agreement, and Bridge Term Note.

Capital is owned by the Company’s Chairperson of the Board and a Board of Director, Jeremy Hitchcock and Elizabeth Hitchcock, respectively.

Company participated in the Coronavirus Aid, Relief, and Economic Security Act and received an aggregate $ 1,128,000 in unsecured loans

under the Small Business Administration Paycheck Protection Program, at a fixed rate of 1 % per annum.

Under the terms of the loans, the

Company received forgiveness of an aggregate $ 20,000 and $ 1,048,000 in 2021 and 2020, respectively.

The Company repaid $ 34,000 and $ 26,000

in 2022 and 2021, respectively.

As of December 31, 2022, the Company had no outstanding balances under the loans.

Company performs most of the final assembly, testing, packaging, warehousing and distribution at two production and warehouse facilities,

totaling approximately 24,000

square feet, in Tijuana, Mexico.

2021, the Company entered into operating lease agreements extending each lease through November 30, 2023.

Lease payments total $ 9

thousand per month.

Rent expense was $ 105

thousand and $ 106

thousand for the years ended December 31, 2021

totalling approximately 24,000 square feet, in Tijuana, Mexico.

In November 2021, the Company entered into operating lease agreements

extending each lease through November 30, 2023.

Lease payments total approximately $ 9 thousand per month.

Rent expense was $ 110 thousand

and $ 105 thousand for the years ended December 31, 2022 and 2021, respectively.

May 2020, the Company signed a two -year lease agreement for 3,218 square feet of office space at 275 Turnpike Executive Park in Canton,

The agreement includes a one-time option to cancel the second year of lease with three months advance notice .

The location is currently

utilized by the Company’s research and development group.

Rent expense was $ 54 thousand and $ 53 thousand for the year ended December

31, 2022, and 2021, respectively.

May 2020, the Company signed a two -year

lease agreement for 3,218 square

feet of office space at 275 Turnpike Executive Park in Canton, MA.

agreement includes a one-time option to cancel the second year of lease with three months advance notice.

location is currently utilized by the Company’s research and development group.

Rent expense was $ 53

thousand and $ 31

thousand for the year ended December 31, 2021,

On December 1, 2021, the Company executed an amendment to extend the lease from June 2022 to May 2024

with monthly payments of approximately $ 5 thousand.

Company leases the facility that comprises its headquarters at 848 Elm Street in Manchester, NH.

The facility lease agreement was effective

from August 1, 2019 to July 31, 2021 and was renewed for a one year extension until July 31, 2022.

On July 18, 2022, the lease agreement

was amended to a month-to-month lease arrangement and may be terminated by either party with a 60-day notice.

The facility lease agreement

provides for the lease of 2,656 square feet of office space.

Rent expense was $ 33 thousand and $ 30 thousand for the years ended December

31, 2022 and 2021, respectively.

On December 1, 2021, the Company executed an amendment to extend the lease from June 2022 to May 2024 with monthly

payments of approximately $ 5

connection with the Zoom Connectivity Merger, the Company assumed Zoom Connectivity’s office facility lease located at the 848

Elm Street in Manchester, NH.

The original facility lease agreement was effective from August 1, 2019 to July 31, 2021 and was renewed

for a one year extension until July 31, 2022.

The facility lease agreement provides for the lease of 2,656 square feet of office space.

Rent expense was $ 30 thousand and $ 7 thousand for the year ended December 31, 2021 and for the period from October 9, 2020 to December

31, 2020, respectively.

Company also had a lease for approximately 1,550 square feet in Boston, MA that expired on October 31, 2019 and was terminated effective

June 30, 2020.

The Company had another lease for approximately 1,500 square feet in Boston, MA that was terminated effective July 31,

The Company has elected to apply the short-term lease exception for both of these leases under ASC 842.

Rent expense for these

leases was $ 77 thousand for the year ended December 31, 2020.

components of lease costs were as follows:

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OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

ended December 31,

Years ended December 31,

Operating leases:

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SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES

ended December 31,

Years ended December 31,

Operating cash flow information:

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Operating lease liabilities, noncurrent

the lease extension of the Canton, MA office was executed in December 2021, the lease extension is not included in the operating lease

liabilities because the commencement date begins on June 1, 2022.

The operating lease payments are $ 32

thousand, $ 55

thousand, and $ 23

thousand for the years ending December 31, 2022,

2023, and 2024, respectively.

These payments are off-balance sheet obligations until the June 1, 2022 commencement.

(b) Contingencies

COMMITMENTS AND CONTINGENCIES

Contingencies

Company is a party to various lawsuits and administrative proceedings arising in the ordinary course of business.

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The Company expenses its legal fees as incurred.

January 23, 2020, William Schulze filed a complaint, and subsequently filed an amended complaint on April 3, 2020 (collectively the “Schulze

Complaint”) as lead plaintiff on behalf of purchasers of Zoom modems in a putative class action lawsuit against Zoom in the U.S.

District Court for the District of Massachusetts.

The Schulze Complaint alleged that Zoom modems were sold as new despite containing

refurbished parts.

On July 28, 2020, the lead plaintiff filed a Stipulation of Dismissal that dismissed the Schulze Complaint with prejudice.

the ordinary course of their business, the Company and its subsidiaries are subject to lawsuits, arbitrations, claims, and other legal

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Management believes that the Company has adequate

legal defenses with respect to the legal proceedings to which it is a defendant or respondent and that the outcome of these pending proceedings

legal defences with respect to the legal proceedings to which it is a defendant or respondent and that the outcome of these pending proceedings

is not likely to have a material adverse effect on the financial condition, results of operations, or cash flows of the Company.

the Company is unable to predict the outcome of these matters.

Company is party to a license agreement with Motorola Mobility LLC pursuant to which the Company has an exclusive license to use certain

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consisting of 60,000,000 shares of Common Stock and 2,000,000 shares of Preferred Stock (see Note 1).

Company is authorized to issue 2,000,000

shares of preferred stock at $ 0.01

par value per share.

of December 31, 2021 and 2020, no

preferred stock was outstanding.

Company is authorized to issue 2,000,000 shares of preferred stock at $ 0.01 par value per share.

As of December 31, 2022 and 2021, no

shares of preferred stock was outstanding.

Board of Directors may determine the rights, preferences, privileges, qualifications, limitations and restrictions granted or imposed

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Directors Option Plan”) (collectively, the “2019 Plans”, and together with the Prior Plans, the “Plans”).

The purpose of the 2019 Plans is to provide certain incentive and non-statutory stock options to employees, directors and certain

non-employees.

The purpose of the 2019 Plans is to provide certain incentive and non-statutory stock options to employees, directors and certain non-employees.

As a result, the Company may not grant any additional awards under the Prior Plans.

The Prior Plans will continue to govern

outstanding stock option previously granted thereunder.

The Company has initially reserved 4,000,000

shares and 1,000,000

shares of common stock for issuance of awards

under the 2019 Stock Option Plans and the 2019 Directors Option Plan, respectively.

In conjunction with the Zoom Connectivity Merger

on December 4, 2020, the Company converted 1,432,018

options to Minim option holders in exchange for

1,787,654 stock

The Prior Plans will continue to govern outstanding

stock options previously granted thereunder.

The Company has initially reserved 4,000,000 shares and 1,000,000 shares of common stock

for issuance of awards under the 2019 Stock Option Plans and the 2019 Directors Option Plan, respectively.

2019 Plans authorize grants to purchase shares of authorized but unissued common stock.

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The 2019 Plans

permits incentive stock options, or ISOs and non-qualified stock options, or NSOs.

permit incentive stock options, or ISOs and non-qualified stock options, or NSOs.

If the stock options are granted to a 10 % stockholder,

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Compensation Plan (collectively, the “2021 Equity Plans”) and terminated the 2019 Plans.

The purpose of the 2021 Equity

Plans is to provide certain incentive and non-statutory stock options, restricted stock, restricted stock units, and stock

appreciation rights to employees, directors, and certain non-employees.

As a result, the Company may not grant any additional awards

under the 2019 Plans.

The purpose of the 2021 Equity Plans

is to provide certain incentive and non-statutory stock options, restricted stock, restricted stock units, and stock appreciation rights

to employees, directors, and certain non-employees.

As a result, the Company may not grant any additional awards under the 2019 Plans.

The Prior Plans and the 2019 Plans will continue to govern outstanding stock options previously granted thereunder.

The Company has initially reserved 3,000,000

shares and 1,250,000

shares of common stock for issuance of awards

under the Omnibus Incentive Compensation Plan and Non-Employee Directors Compensation Plan, respectively.

As of December 31, 2021, the

2021 Equity Plans have not been approved by the Company’s shareholders and will be subject to shareholder approval in the Company’s

2022 annual shareholder meeting.

Unless and until shareholder approval has been received, the Company may grant awards

under the 2021 Equity Plans but such grants shall not vest or be settled in shares.

The Company has initially

reserved 3,000,000 shares and 1,250,000 shares of common stock for issuance of awards under the Omnibus Incentive Compensation Plan and

Non-Employee Directors Compensation Plan, respectively.

On June 9, 2022, the 2021 Equity Plans were approved by the Company’s shareholders.

Option Activity

option activity under the 2019 Stock Option Plan was as follows:

option activity under Stock Option Plans was as follows:

OF STOCK OPTION ACTIVITY

Outstanding at December 31, 2020

Assumed with Zoom Connectivity Merger

( 1,123,357 )

Outstanding at December 31, 2021

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Exercisable at December 31, 2022

weighted average grant date fair value of options granted was $ 2.00 and $ 1.91 per share during the years ended December 31, 2021 and

2020, respectively.

The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $ 1.3 million

and $ 1.0 million, respectively.

The intrinsic value is the difference between the estimated fair value of the Company’s common

stock at the time of exercise and the exercise price of the stock option.

total fair value of options that vested during the years ended December 31, 2021 and 2020 was $ 1.0 million and $ 1.5 million, respectively.

As of December 31, 2021, the total unrecognized stock-based compensation expense related to the stock options was $ 2.9 million, which

were no options granted during 2022 under the stock option plan.

The weighted average grant date fair value of options granted was $ 2.00

per share during the year ended December 31, 2021.

The total intrinsic value of options exercised during the years ended December 31,

2022 and 2021 was $ 140 thousand and $ 1.3 million, respectively.

The intrinsic value is the difference between the estimated fair value

of the Company’s common stock at the time of exercise and the exercise price of the stock option.

total fair value of options that vested during the years ended December 31, 2022 and 2021 was $ 710 thousand and $ 1.0 million, respectively.

As of December 31, 2022, the total unrecognized stock-based compensation expense related to the stock options was $ 536 thousand, which

will be recognized over a weighted-average period of approximately 2.1 years.

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OF STOCK BASED VALUATION ASSUMPTIONS

ended December 31,

Years ended December 31,

Expected term (in years)

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Dividend yield

of December 31, 2021, the Company has granted

RSUs with a total fair value of $ 1.4

million under the 2021 Equity Plans.

* During 2022 there

were no stock options granted

2022, the Company granted 851,992 RSUs with a total fair value of $ 523 thousand under the 2021 Equity Plans.

As of December 31, 2022,

31, 2021, there were no vested RSUs.

The Company recorded $ 73

thousand in stock-based compensation expense

there were 633,282 RSUs vested with a fair value of $ 203 thousand.

The Company recorded $ 692 thousand in stock-based compensation expense

for the year ended December 31, 2022.

As of December 31, 2021, the total unrecognized stock-based compensation expense was $ 1.4

million, which will be recognized over a

weighted-average period of approximately 3.4

As of December 31, 2022, the total unrecognized stock-based compensation expense was $ 739 thousand,

which will be recognized over a weighted-average period of approximately 3.1 years.

summary of plan activity for the 2021 Equity Plans is as follows:

OF RESTRICTED STOCK UNITS

Grant Date Fair value

Unvested at December 31, 2020

Unvested at December 31, 2021

Unvested at December 31, 2022

* There was no RSU plan

prior to 2021

Compensation Expense

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SCHEDULE OF DEFERRED TAX ASSETS

income tax assets:

research and development

operating loss and tax credit carry forwards

and equipment

– interest expense

deferred income tax assets

Accounts receivable

Accrued expenses

Net operating loss and tax credit carry forwards

Plant and equipment

Stock compensation

Lease accounting

Other – interest expense

Total deferred income tax assets

Valuation allowance

( 16,491,780 )

( 16,559,671 )

Net deferred tax assets

of December 31, 2021, the Company had Federal net operating loss carry forwards of approximately $ 65.0

million which are available to offset future

taxable income.

deferred tax assets

of December 31, 2022, the Company had Federal net operating loss carry forwards of approximately $ 60.6 million which are available to

offset future taxable income.

They are due to expire in varying amounts from 2023 to 2040.

Federal net operating losses occurring after December 31,

2018, of approximated $ 16.8 million

may be carried forward indefinitely.

As of December 31, 2021, the Company had state net operating loss carry forwards of approximately

million which are available to offset future

taxable income.

They are due to expire in varying amounts from 2033 through 2040.

A valuation allowance has been established for the

full amount of net deferred income tax assets as management has concluded that it is more-likely than-not that the benefits from

such assets will not be realized.

Federal net operating losses occurring after

December 31, 2017, of approximated $ 22.1 million may be carried forward indefinitely.

As of December 31, 2022, the Company had state

net operating loss carry forwards of approximately $ 29.8 million which are available to offset future taxable income.

They are due to

expire in varying amounts from 2033 through 2040.

A valuation allowance has been established for the full amount of net deferred income

tax assets as management has concluded that it is more-likely than-not that the benefits from such assets will not be realized.

valuation allowance increased by $ 1.3 million from December 31, 2021 to December 31, 2022.

Federal and state NOLs may be subject to certain limitations under Section 382 of the Internal Revenue Code, which could significantly

restrict the Company’s ability to use the NOLs to offset taxable income in subsequent years.

following is a reconciliation of the statutory Federal income tax rate to the actual effective income tax rate for continuing

of changes made by the Tax Cuts and Jobs Act of 2017, that became effective as of January 1, 2022, the company is now required to capitalize

for tax purposes certain research and development expenses and amortize domestic expenses over a 5 year period and foreign expenses over

a 15 year period, resulting in a deferred tax asset for the capitalized amounts as reflected in the above table.

following is a reconciliation of the statutory Federal income tax rate to the actual effective income tax rate for continuing operations:

OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE

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Tax positions must meet a “more-likely-than-not” recognition threshold.

31, 2021 and 2020, the Company did no t

have any material uncertain tax positions.

interest and penalties related to uncertain tax

31, 2022 and 2021, the Company did not have any material uncertain tax positions.

No interest and penalties related to uncertain tax

positions were accrued at December 31, 2022 and 2021.

2 unchanged sentences

Federal and state tax reporting purposes.

Tax years subsequent to 2015 remain subject to examination for Mexico tax

reporting purposes.

The foreign income tax reported represents tax on operations for the Company that is located in a special economic

zone in Mexico.

Other than the Mexico facility, the Company has an India operation and has no other operations in a foreign location.

The India operation had no tax obligations as of December 31, 2021.

Tax years subsequent to 2015 remain subject to examination for Mexico tax reporting purposes.

The foreign income tax reported represents tax on operations for the Company that is located in a special economic zone in Mexico.

than the Mexico facility, the Company has an India operation and has no other operations in a foreign location.

The India operation had

no tax obligations as of December 31, 2022.

RETIREMENT PLAN

Company has a 401(k) retirement savings plan (the “401(k) Plan”) for employees.

Under the 401(k) Plan, the Company matches

25 % of an employee’s contribution, up to a maximum of $ 350 per employee per year.

The Company matching contributions charged to

expense were $ 23 thousand and $ 11 thousand in fiscal 2021 and fiscal 2020, respectively.

On February 1, 2021, the Zoom

Connectivity 401(k) Plan merged into the Minim 401(k) Plan.

November 28, 2021, the Company amended the 401(k) Plan to increase the Company match to an amount not to exceed 3 % of an employee’s

Company sponsors a 401(k) retirement savings plan for employees.

On February 1, 2021, the Cadence Connectivity 401(k) Plan merged into

the Minim 401(k) Plan.

Effective January 1, 2022, the Company increased the Company match to an amount not to exceed 3 % of an employee’s

contribution.

This amendment becomes effective January 1, 2022.

Employees could contribute to the 401(k) up to 100 % of their wages with a maximum of $ 20,500 for 2022.

Under the Economic

Growth and Tax Relief Reconciliation Act, employees who are age 50 or older could contribute an additional $ 6,500 per year for a maximum

of $ 27,000 for 2022.

Contributions by the employees are invested in one or more funds at the direction of the employee;

however, employee

contributions cannot be invested in Company stock.

Contributions by the Company are made in accordance with the investment elections

made by each participant for his or her deferral contributions.

The matching contribution is applied to the employee accounts after each

In the year ended December 31, 2021, the Company matched 25 % of an employee’s contribution, up to a maximum of $ 350 per

employee per year.

The Company matching contributions charged to expense were $ 179 thousand and $ 23 thousand in the years ended December

31, 2022, and 2021, respectively.

RELATED PARTY TRANSACTIONS

November 12, 2020, the Company entered into the Merger Agreement pursuant to which the Company and Zoom Connectivity merged and combined

their businesses.

Zoom Connectivity offers a cloud WiFi management platform that enables and secures a better-connected home by providing

AI-driven WiFi management and IoT security platform for homes, small and medium-sized businesses, and broadband service providers.

Jeremy Hitchcock was Chairman and, together with his spouse Ms.

Elizabeth Hitchcock, a controlling stockholder of Zoom Connectivity.

Prior to the Zoom Connectivity Merger, the Company had licensed Zoom Connectivity software products and, upon completion of the Zoom

Connectivity Merger, the Company integrated the Zoom Connectivity software with the Company’s hardware products and combined the

Zoom Connectivity’s business-to-business sales channels with the Company’s retail channels.

Immediately prior to execution

of the Merger Agreement, Mr.

Hitchcock, the Company’s Chairman of the Board of Directors, and Ms.

Hitchcock, a director of the

Company, were, through investment vehicles jointly beneficially owned by them, the majority stockholders of both the Company and Zoom

Connectivity.

Connectivity Relationship

July 25, 2019, the Company entered into a Master Partnership Agreement with Zoom Connectivity together with a related Statement of Work,

License, Collaborative Agreement, Software/Service Availability Agreement and Software/Service Support Level Agreement (collectively,

the “Partnership Agreement”).

Hitchcock was the Chairman of Zoom Connectivity.

Under the Partnership Agreement, the Company

would integrate software and services into certain hardware products distributed by the Company, and Zoom Connectivity would be entitled

to certain fees and a portion of revenue received from the end users of such services and software.

The Company and Zoom Connectivity

entered into an additional Statement of Work on December 31, 2019 providing for further integration of Zoom Connectivity services, with

a monthly minimum payment of $ 5 thousand payable by the Company to Zoom Connectivity starting in January 2020 for a period of 36 months

and a requirement for Zoom Connectivity to purchase at least $ 90 thousand of the Company’s hardware by December 2022.

Minimum monthly

payments under this agreement increased to $ 15 thousand in July 2020.

During the period from January 1, 2020 to October 9, 2020, $ 90

thousand of payments were made by the Company to Zoom Connectivity under the Partnership Agreement.

The Company recorded $ 90 thousand

of expenses for the period from January 1, 2020 to October 9, 2020.

The Partnership Agreement terminated upon completion of the Zoom

Connectivity Merger.

As of December 30, 2020, no amounts were due from or to the Company under the former Partnership Agreement.

Company leases office space located at the 848 Elm Street, Manchester, NH.

Company leases office space located at 848 Elm Street, Manchester, NH.

The landlord is an affiliate entity owned by Mr.

The two-year facility lease agreement was effective from August 1, 2019, to July 31, 2021 and has been extended to July 31, 2022.

facility lease agreement provides for 2,656 square feet at an aggregate annual rental price of $ 30 thousand.

For the twelve-month period

ended December 31, 2021, the rent expense was $ 30 thousand.

For the period from October 9, 2020 to December 31, 2020, the rent expense

was $ 7 thousand.

November 30, 2020, the Chief Executive Officer of the Company fully paid $ 264,000 to Zoom Connectivity for a promissory note related

to the exercise of Zoom Connectivity stock options in December 2019 (Note 4).

November 20, 2020, Zoom Connectivity agreed to repurchase 33,809 shares of Zoom Connectivity common stock for $ 14,860 from a stockholder

who is an immediate family member to the Company’s executive chairman of the Board and subsequent to the Zoom Connectivity Merger

became a member of the Company’s Board of Directors.

The $ 14,860 was accrued as of December 31, 2020 (Note 4) and was paid in 2021.

two-year facility lease agreement was effective from August 1, 2019, to July 31, 2021 and was extended to July 31, 2022.

2022, the lease agreement was amended to a month-to-month lease arrangement and may be terminated by either party with a 60-day notice.

The facility lease agreement provides for 2,656 square feet.

For the twelve-months period ended December 31, 2022 and 2021, the rent

expense was $ 33 thousand and $ 30 thousand, respectively.

November 30, 2022, the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into a Bridge Loan Agreement (the

“Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a bridge loan in the principal amount

up of up to $ 1,500,000 .

The Company has drawn down $ 1,000,000 under the Bridge Loan Agreement.

Subject to Slingshot Capital’s sole

discretion, the other $ 500,000 may be drawn by the Company.

Capital is owned by the Company’s Chairperson of the Board and a Board of Director, Jeremy Hitchcock and Elizabeth Hitchcock, respectively.

SUBSEQUENT EVENTS

January 21, 2022, Zoom Connectivity, Inc.

filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its

Certificate of Incorporation to change its legal corporate name from “Zoom Connectivity, Inc.” to “Cadence Connectivity,

Inc.”, effective as of January 21, 2022.

than above, management of the Company has reviewed subsequent events from December 31, 2021 through the date of filing and has concluded

that there were no other subsequent events requiring adjustment to or disclosure in these consolidated financial statements.

Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements

to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.

The Company evaluated

all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, except

as described below.

Valley Bank (“SVB”) was closed on March 10, 2023, by the California Department of Financial Protection and Innovation, which

appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

To protect depositors, the FDIC transferred all

the deposits and substantially all of the assets of SVB to Silicon Valley Bridge Bank, N.A.

(Bridge), a newly formed bridge bank that

will be operated by the FDIC as it markets the institution to potential bidders.

On March 12, 2023, the Department of the Treasury, Federal

Reserve, and FDIC (collectively, the Agencies) announced that they were invoking the Systemic Risk Exception to the Federal Deposit Insurance

Act to permit the FDIC to take action to fully protect all depositors of SVB, regardless of their deposit insurance coverage.

the Agencies also announced that SVB depositors would have access to all their money starting March 13, 2023, with the revolving facility

still accessible to the Company.

of March 10, 2023, the Company had approximately $ 1

million of cash and restricted cash on deposit with SVB, which represents approximately 100% of the Company’s total cash and

cash equivalents as of December 31, 2022.

The Company also had an outstanding line-of-credit facility with SVB with a maximum

borrowing limit of $ 10.0

million, of which approximately $ 4.8

million was drawn as of December 31, 2022.

Immediately prior to SVB’s closure on March 10, 2023, the Company had drawn $ 4.4

million and $ 4

thousand was available under the credit facility.

As a result, the Company is working to identify replacement lenders for this

credit facility, which may be at less favorable terms, including higher interest rates and costs and more stringent financial and

operating covenants due to investor concerns regarding the U.S.

financial system.

These factors may make it more challenging for the

Company to acquire financing on acceptable terms or at all.

March 30, 2023, the Board of Directors of Minim, Inc.

approved a 1-for-25 reverse split of the Company’s

common stock to be effected through an amendment to the Company’s Restated Certificate of Incorporation (the “Amendment”).

The Amendment will not effect the number of shares of authorized common stock.

reverse stock split was subject to shareholder approval at a Special Shareholders Meeting (the “Special Meeting”), which

took place on March 28, 2023.

A majority of shareholders voted in favor of the reverse stock split.

The Company’s definitive

proxy statement relating to the Special Meeting filed on March 14, 2023, includes additional details regarding the

reverse stock split is expected to begin on a split-adjusted basis in April 2023 as the Company works with Regulatory authorities to

All of the Company’s

historical shares and per share information related to issued and outstanding common stock and outstanding equity awards exercisable into

common stock in these consolidated financial statements will be adjusted, on a retroactive basis, to reflect the reverse stock split

in quarter ending March 31, 2023.

following unaudited pro forma selected financial information reflects the impact of the reverse stock split had the effective date of

the reverse stock been as of December 31, 2022.

The pro forma results have been prepared for comparative purposes only and are not intended

to be a projection of future operating results.

OF PRO FORMA FINANCIAL INFORMATION

As reported for the year ended December 31, 2022

Effect of the Reverse Stock Split

as of December 31, 2022 (Pro Forma, Unaudited)

Authorized shares of common stock

Common stock issued and outstanding

Basic and diluted net loss per share

Weighted average shares common and common equivalent shares

Basic and diluted

9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk