What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-11-13 · 98 added, 148 removed, 455 unchanged (35% of the section changed)

FINANCIAL STATEMENTS

AND SUBSIDIARIES

Consolidated Balance Sheets

Current assets

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowance of doubtful accounts of $ 209,710 and $ 138,331 as of June 30, 2023 and December 31, 2022, respectively

Prepaid expenses and other current assets

and cash equivalents

receivable, net of allowance of doubtful accounts of $ 209,710 and $ 138,331 as of March 31, 2023 and December 31, 2022, respectively

Prepaid expenses and

other current assets

Total current assets

Equipment, net

Operating lease right-of-use assets, net

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Bank credit line

Accounts payable

Bridge loan agreement

Current maturities of operating lease liabilities

Accrued expenses

lease right-of-use assets, net

AND STOCKHOLDERS’ EQUITY

maturities of bridge loan agreement

maturities of operating lease liabilities

Deferred revenue, current

Total current liabilities

Operating lease liabilities, less current maturities

current liabilities

lease liabilities, less current maturities

Deferred revenue, noncurrent

Total liabilities

Commitments and Contingencies (Note 7)

Stockholders’ equity

Preferred Stock, authorized:

and Contingencies (Note 7)

Stockholders’

Stock, authorized:

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

0 shares issued and outstanding

Common Stock, authorized:

Stock, authorized:

60,000,000 shares at $ 0.01 par value;

issued and outstanding:

1,888,274 shares at June 30, 2023 and 1,877,970 shares at December 31, 2022 respectively

Additional paid-in capital

1,887,535 shares at March 31, 2023 and 1,877,970

shares at December 31, 2022 respectively

paid-in capital

Accumulated deficit

( 84,502,992 )

( 74,834,854 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Operations

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

Cost of goods sold

7 unchanged sentences

( 2,454,403 )

( 9,385,602 )

( 6,740,271 )

Other expense:

4 unchanged sentences

( 2,532,500 )

( 9,643,162 )

( 6,908,341 )

$ ( 5,597,681 )

$ ( 4,426,559 )

Income tax provision

$ ( 4,070,457 )

$ ( 2,538,500 )

Net loss per share:

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Basic and diluted

Basic and diluted weighted average common and common equivalent shares

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Stockholders’ Equity

the six months ended June 30, 2023

the three months ended March 31, 2023

Balance at December 31, 2022

6 unchanged sentences

$ ( 78,905,311 )

( 5,597,681 )

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at June 30, 2023

$ ( 84,502,992 )

the six months ended June 30, 2022

the three months ended March 31, 2022

Balance at December 31, 2021

6 unchanged sentences

$ ( 63,212,183 )

( 4,426,559 )

Stock option exercises, net

Stock-based compensation

Balance at June 30, 2022

$ ( 66,250,669 )

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Three Months Ended March 31,

Cash flows used in operating activities:

1 unchanged sentence

$ ( 2,538,500 )

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

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation and amortization

4 unchanged sentences

Provision for accounts receivable allowances

Provision for inventory valuation adjustment

Provision for inventory reserves

Changes in operating assets and liabilities:

Accounts receivable

( 1,383,166 )

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses

( 2,311,414 )

Deferred revenue

7 unchanged sentences

Cash flows from financing activities:

Net proceeds from (payment on) the bank credit line

( 2,347,336 )

Net proceeds from the bank credit line

Repayment of government loan

Proceeds from stock option exercises

Net cash provided by (used in) financing activities

( 2,347,336 )

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

4 unchanged sentences

Cash paid during the period for:

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

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

Cash and cash equivalents

37 unchanged sentences

None of the reclassifications impacted the condensed

consolidated statements of operations for the three-months and six months ended June 30, 2023.

consolidated statements of operations for the three- month period ended March 31, 2023.

April 17, 2023, the Company effected a 25:1 reverse stock split for each share of common stock issued and outstanding.

4 unchanged sentences

Company has incurred significant losses and negative cash flows from operations.

During the nine months ended June 30, 2023, the Company

During the three months ended March 31, 2023, the Company

incurred a net loss of $ 4.0 million and had positive cash flows from operating activities of $ 1.3 million.

As of June 30, 2023, the Company

had an accumulated deficit of $ 84.5 million and cash and cash equivalents of $ 0.3 million.

The Company 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 accordingly.

The Company’s financial position and operating

results raise substantial doubt about the Company’s ability to continue as a going concern.

The Company believes it does

not have sufficient resources through its cash and cash equivalents, other working capital and borrowings under its SVB line-of-credit

As of March 31, 2023, the

Company had an accumulated deficit of $ 78.9 million and cash and cash equivalents of $ 0.8 million.

The Company 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 accordingly.

The Company’s financial position

and operating results raise substantial doubt about the Company’s ability to continue as a going concern.

The Company believes

it does not have sufficient resources through its cash and cash equivalents, other working capital and borrowings under its SVB line-of-credit

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

1 unchanged sentence

Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022.

The Company’s significant accounting policies did not change during the six months ended June 30, 2023.

The Company’s significant accounting policies did not change during the three months ended March 31, 2023.

Issued Accounting Standards

43 unchanged sentences

SCHEDULE OF CONTRACT BALANCES

June 30, 2023

December 31, 2022

Deferred revenue, current

Deferred revenue, noncurrent

the six months ended June 30, 2023, the change in contract balances was as follows:

the three months ended March 31, 2023, the change in contract balances was as follows:

SCHEDULE OF CHANGE IN CONTRACT BALANCES

1 unchanged sentence

Revenue recognized

Balance at June 30, 2023

Balance at March 31, 2023

Disaggregation

1 unchanged sentence

SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended March 31,

following table sets forth our revenues by product:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended March 31,

Cable modems & gateways

5 unchanged sentences

Finished goods

goods includes consigned inventory held by our customers of $ 3.5 million and $ 4.2 million at June 30, 2023 and December 31, 2022, respectively,

and includes $ 0 in-transit inventory at June 30, 2023 and December 31, 2022, respectively.

goods includes consigned inventory held by our customers of $ 3.6 million and $ 4.2 million at March 31, 2023 and December 31, 2022, respectively,

and includes $ 0 in-transit inventory at March 31, 2023 and December 31, 2022, respectively.

The Company reviews inventory for obsolete

1 unchanged sentence

or that it will be sold below cost.

The inventory reserves were $ 2.2 million and $ 2.5 million as of June 30, 2023 and December 31, 2022,

The inventory reserves were $ 2.5 million and $ 2.5 million as of March 31, 2023 and December 31, 2022,

respectively.

34 unchanged sentences

Amortization of debt issuance costs

was $ 6 thousand and $ 18 thousand for the three months ended June 30, 2023 and 2022, respectively.

Amortization of debt issuance costs

was $ 21 thousand and $ 35 thousand for the six months ended June 30, 2023 and 2022, respectively.

of June 30, 2023, the Company had $ 2.4 million outstanding, net of origination costs of $ 8 thousand, under the SVB Loan Agreement, and

this credit line had availability of $ 25 thousand.

interest rate on the bank credit lines was 9.25 % as of June 30, 2023.

was $ 15 thousand and $ 18 thousand for the three months ended March 31, 2023 and 2022, respectively.

of March 31, 2023, the Company had $ 3.8 million outstanding, net of origination costs of $ 15 thousand, under the SVB Loan Agreement,

and this credit line had availability of $ 395 thousand.

interest rate on the bank credit lines was 9.00 % as of March 31, 2023.

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

33 unchanged sentences

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

As of June 30, 2023, the accrued interest is $ 69 thousand and is included

in accrued expenses in the condensed consolidated balance sheet.

As of March 31, 2023, the accrued interest is $ 33 thousand and is

included in accrued expenses in the condensed consolidated balance sheet.

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

5 unchanged sentences

the Company received forgiveness of an aggregate $ 1,068,000 .

The Company repaid $ 34,000 during the six months ended June 30, 2022.

of June 30, 2023, the Company had no outstanding balances under the government loans.

The Company repaid $ 30,000 during the three months ended March 31, 2022

and had $ 4,000 of an outstanding balance as of March 31, 2022.

The Company fully repaid the remaining $ 4,000 balance as of April 30,

As of March 31, 2023, the Company had no outstanding balances under the government loans.

Company has entered into agreements to lease its warehouses and distribution centers and certain office space under operating leases.

3 unchanged sentences

components of lease costs were as follows:

OF COMPONENTS OF LEASE COSTS

Three Months Ended June 30,

Six Months Ended June 30,

SCHEDULE OF COMPONENTS OF LEASE COSTS

Three Months ended March 31,

Operating lease costs

2 unchanged sentences

weighted-average remaining lease term and discount rate were as follows:

OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

Period Ended June 30,

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

Period Ended March 31,

Operating leases:

3 unchanged sentences

SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES

Six Months ended June 30,

Three Months ended March 31,

Operating cash flow information:

2 unchanged sentences

ROU asset obtained in exchange for lease liability

maturity of the Company’s operating lease liabilities as of June 30, 2023 were as follows:

OF MATURITY OF OPERATING LEASE LIABILITIES

maturity of the Company’s operating lease liabilities as of March 31, 2023 were as follows:

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES

Years ended December 31,

18 unchanged sentences

2023 (remaining)

expense under the License Agreement was $ 1.7 million and $ 1.7 million for the three months ended June 30, 2023 and 2022, respectively,

and $ 3.4 million and $ 3.3 million for the six months ended June 30, 2023 and 2021, respectively.

Royalty expense is included in selling

and marketing expenses on the accompanying condensed consolidated statements of operations.

As of June 30, 2023 and June 30, 2022, the

Company had $ 4.4 million and $ 1.7 million, respectively, outstanding in royalty payments and are included in accounts payable ($ 4.4 million

and $ 0 million, respectively) and accrued expenses ($ 0.0 million and $ 1.7 million, respectively) in the condensed consolidated balance

expense under the License Agreement was $ 1.7 million and $ 1.6 million for the three months ended March 31, 2023 and 2022, respectively

and is included in selling and marketing expenses on the accompanying condensed consolidated statements of operations.

As of March 31,

2023 and March 31, 2022, the Company had $ 2.7 million and $ 1.6 million, respectively, outstanding in royalty payments and are included

in accounts payable ($ 1.0 million and $ 0 million, respectively) and accrued expenses ($ 1.7 million and $ 1.6 million, respectively) in

the condensed consolidated balance sheets.

Contingencies

11 unchanged sentences

the estimate of the amount of the loss or range of losses, that the amount is not material, or that an estimate of the loss cannot be

At June 30, 2023, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in

management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s

At March 31, 2023, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company,

in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s

business, operating results or financial condition taken as a whole.

12 unchanged sentences

few companies account for a substantial portion of the Company’s revenues.

In the three months ended June 30, 2023, two companies,

In the three months ended March 31, 2023, two companies,

including a marketplace facilitator, accounted for 10% or greater individually and 88 % in the aggregate of the Company’s total

At June 30, 2023, two companies with an accounts receivable balance of 10% or greater individually accounted for a combined

At March 31, 2023, two companies with an accounts receivable balance of 10% or greater individually accounted for a combined

84 % of the Company’s accounts receivable.

In the three months ended June 30, 2022, two companies, including a marketplace facilitator,

In the three months ended March 31, 2022, two companies, including a marketplace facilitator,

accounted for 10% or greater individually and 90 % in the aggregate of the Company’s total net sales.

At June 30, 2022, three companies

At March 31, 2022, two companies

with an accounts receivable balance of 10% or greater individually accounted for a combined 88 % of the Company’s accounts receivable.

20 unchanged sentences

During the three months ended

June 30, 2023 and 2022, the Company had one supplier and two suppliers, respectively, that provided 97 % and 98 %, respectively, of the

March 31, 2023 and 2022, the Company had one supplier and two suppliers, respectively, that provided 90 % and 99 %, respectively, of the

Company’s purchased inventory.

the three and six months months ended June 30, 2023, we recorded no income tax benefits for the net operating losses incurred or for

the research and development tax credits generated due to the uncertainty of realizing a benefit from those items.

the three months ended March 31, 2023, we recorded no income tax benefits for the net operating losses incurred or for the research and

development tax credits generated due to the uncertainty of realizing a benefit from those items.

have evaluated the positive and negative evidence bearing upon the Company’s ability to realize its deferred tax assets, which

3 unchanged sentences

than not that we will not realize the benefits of our deferred tax assets.

As a result, as of June 30, 2023 and December 31, 2022, we

As a result, as of March 31, 2023 and December 31, 2022, we

recorded a full valuation allowance against our net deferred tax assets.

of June 30, 2023 and December 31, 2022, the Company had federal net operating loss carry forwards of approximately $ 59.8 million and

of March 31, 2023 and December 31, 2022, the Company had federal net operating loss carry forwards of approximately $ 57.9 million and

$ 60.6 million, respectively, which are available to offset future taxable income.

1 unchanged sentence

Federal net operating losses occurring after December 31, 2017, of approximated $ 23.4 million may be carried forward indefinitely.

As of June 30, 2023 and December 31, 2023, the Company had state net operating loss carry forwards of approximately $ 34.2 million and

As of March 31, 2023 and December 31, 2023, the Company had state net operating loss carry forwards of approximately $ 31.6 million and

$ 29.8 million, respectively, which are available to offset future taxable income.

2 unchanged sentences

We recorded minimum state income taxes and taxes related to our operations in Mexico.

For the three months ended June 30,

For the three months ended March

31, 2023 and 2022, income tax expense was $ 6 thousand and $ 6 thousand, respectively.

5 unchanged sentences

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

For the three-months period ended June 30, 2023 and 2022, the rent expense

For the three-months period ended March 31, 2023 and 2022, the rent expense

was $ 9 thousand and $ 8 thousand, respectively.

For the six-months period ended June 30, 2023 and 2022, the rent expense was $ 18 thousand

and $ 16 thousand, respectively.

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

11 unchanged sentences

EARNINGS (LOSS) PER SHARE

loss per share for the three and six months ended June 30, 2023 and 2022, respectively, are as follows:

loss per share for the three months ended March 31, 2023 and 2022, respectively, are as follows:

SCHEDULE OF NET INCOME (LOSS) PER SHARE

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Three Months Ended

Six Months Ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

$ ( 5,597,681 )

$ ( 4,426,559 )

Three Months ended March 31,

$ ( 4,070,457 )

3 unchanged sentences

Weighted average common shares – dilutive

Basic and diluted

loss per common share for the three and six months ended June 30, 2023 and 2022 excludes the effects of 22,717 and 1,350,839 common share

equivalents, respectively, since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock

issuable upon exercise of outstanding stock options.

Basic and diluted net loss per share

loss per common share for the three months ended March 31, 2023 and 2022 excludes the effects of 49,402 and 9,981 common share equivalents,

respectively, since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock issuable upon

exercise of outstanding stock options.

SUBSEQUENT EVENTS

19 unchanged sentences

awards exercisable into common stock in these consolidated financial statements have been adjusted, on a retroactive basis, to reflect

the reverse stock split in quarter ending June 30, 2023.

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

24 unchanged sentences

will be completed.

Company has evaluated subsequent events from June 30, 2023 through the date of this filing and has determined that there are no such

Company has evaluated subsequent events from March 31, 2023 through the date of this filing and has determined that there are no such

events, other than those noted above, requiring recognition or disclosure in the financial statements.

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-Q

Item 1. Financial Statements