FiEE, Inc. 10-K

ITEM 1 – BUSINESS Overview Minim was founded in 1977 as a networking company and pivoted into delivering intelligent software to protect and improve the WiFi connections we depend on to work, learn, and live. Headquartered in Manchester, New Hampshire, Minim held the exclusive global license to design, manufacture, and sell consumer networking products under the Motorola brand until 2023. Our cable and WiFi products, with an intelligent operating system and bundled mobile app, were sold in leading retailers and e-commerce channels in the United States (“U.S.”). Our AI-driven cloud software platform and applications make network management and security simple for home and business users, as well as the service providers that assist them— leading to higher customer satisfaction and decreased support burden. Minim, Inc. and its wholly owned subsidiaries, MME Sub 1 LLC, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “Minim” or the “Company”. The Company currently supports and services intelligent networking products that connect homes and offices around the world. We were the exclusive global license holder to the Motorola brand for home networking hardware until 2023. The Company designed and manufactured products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax adapters, and mesh home networking devices. MME Sub 1 LLC, is a Florida corporation and a wholly-owned subsidiary of Minim (“Merger Sub”) that was recently incorporated solely for the purpose of entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”) on March 12, 2024, together with Minim and e2Companies LLC, a Florida limited liability company (“e2Companies”), and which provides for, among other things, the merger of Merger Sub with and into e2Companies, with e2Companies continuing as the surviving entity and a wholly owned subsidiary of Minim (following the consummation of the merger and the name change described below, the “combined company”), and pursuant to which, holders of the outstanding Class A common units and Class B common units of e2Companies (collectively, the “common units”) will receive such number of shares of common stock, par value $0.01 per share, of Minim (“Minim common stock”) representing 97% of the issued and outstanding shares of Minim common stock, on the terms and conditions set forth in the Merger Agreement for consummating the merger and the other transactions contemplated by the Merger Agreement. Merger Sub is not engaged in any business and has no material assets. Its principal executive offices have the same address and telephone number as Minim. In the merger, Merger Sub will merge with and into e2Companies, with e2Companies surviving as Minim’s wholly owned subsidiary, and Merger Sub will cease to exist. In connection with the consummation of the merger, Minim will amend and restate its amended and restated certificate of incorporation to, among other things, cause its name to be changed to “e2Companies, Inc.” e2companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility ® , is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues. e2Companies was founded in 2009 in Peoria, Illinois, and following its merger with and into e2Companies LLC, which was completed on January 27, 2022, became a Florida limited liability company. From its origins of helping companies comply with new EPA emissions regulations for diesel generators to solving today’s most pressing power reliability and sustainability challenges, it remains on the forefront of engineering new energy solutions. Over time, it has gradually expanded its range of solutions, services, and geographic footprint. Today, e2Companies provides power generation and state of the art monitoring systems, for customers in energy market programs and over 1,000 monitoring systems currently in place in the U.S. and Canada totaling over 113,880,000 monitoring hours. During this time, it has completed over 4,000 successful regulatory reviews for clients. e2Companies estimates that its products have generated over $2 billion in value to our customers. e2Companies operates through a number of subsidiaries. During 2019, e2Companies created a wholly owned subsidiary, e2comply Canada, ULC for the purpose of providing products and services throughout Canada. During 2020, e2Companies created a number of additional, wholly owned subsidiaries, including: (i) e2c Holdings Inc., which holds the ownership interests in e2company Canada, ULC; (ii) e2c DGU, LLC, which holds other ownership interests in e2c ESA Assets 1 LLC and e2c ESA Bond 1 LLC (“ESA Bond 1”); (iii) e2c Assets 1 LLC, which holds e2Companies Equipment (as defined below); (iv) ESA Bond 1, which raises bond capital to fund capital expenditures necessary for the equipment necessary for energy service agreements (“ESAs”) with customers; (v) e2 Mission Critical LLC (“Mission Critical”), which provides onsite generation, resilient, reliable and ready for demand integration; (vi) e2Comply Service LLC, which services e2Companies Equipment; (vii) e2c SERA LLC, which provides Internet of Things (“IoT”) data for system monitoring; (viii) e2c EPC LLC, which is the engineering, procurement and construction business for e2Companies equipment; and (ix) e2c Insure LLC, which provides regulatory compliance services to subsidiaries under e2Companies’ umbrella. 1 Our Merger with e2Companies Explanatory Note Regarding the Merger Agreement The following summary of the Merger Agreement, and the copy of the Merger Agreement attached as an exhibit to this Annual Report on Form 10-K, are intended only to provide information regarding the terms of the Merger Agreement. The Merger Agreement and the related summary are not intended to be a source of factual, business or operational information about e2Companies, Minim, or Minim’s subsidiaries, and the following summary of the Merger Agreement, and the copy thereof included as an exhibit hereto, are not intended to modify or supplement any factual disclosure about Minim in any documents Minim has or will publicly file with the Securities Exchange Commission (“SEC”). The Merger Agreement contains representations and warranties by, and covenants of, e2Companies, Minim and certain subsidiaries of Minim that were made only for purposes of the Merger Agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Minim’s public disclosures. The Merger Agreement On March 12, 2024, Minim, Inc., a Delaware corporation (the “Company”), and its wholly owned subsidiary, MME Sub 1 LLC, a Florida limited liability company (“Merger Sub”), entered into an Agreement and Plan of Merger (“Merger Agreement”) with e2Companies LLC, a Florida limited liability company (“e2Companies”). Pursuant to the Merger Agreement, Merger Sub will merge with and into e2Companies, with e2Companies remaining as the surviving entity (the “Merger”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), holders of the outstanding common units of e2Companies (“e2 Shares”) will receive such number of shares of common stock, par value $0.01 per share, of the Company (“Company Shares”) representing approximately 97% of the issued and outstanding Company Shares (on a fully-diluted basis). Pursuant to the terms of the Merger Agreement, the Company has agreed to appoint upon the Effective Time, two individuals selected by the Company to the Company’s board of directors. The Merger Agreement contains representations and warranties, closing deliveries and indemnification provisions customary for a transaction of this nature. The closing of the Merger is conditioned upon, among other things, (i) the Company Shares to be issued in the Merger (“Merger Consideration”) bein g approved for listing on the Nasdaq Capital Market (“Nasdaq”), (ii) the effectiveness of a registration statement on Form S-4 registering the Merger Consideration; (iii) any waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated; and (iv) the consent or approval of the Company’s stockholders, as applicable, of (a) the Merger, (b) the issuance of the Merger Consideration, and (c) an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to among other things, change the Company’s name to e2Companies, Inc. following the Merger (the “Stockholder Approvals”). The Merger Agreement may be terminated under certain customary and limited circumstances prior to the closing including by the mutual consent of the Company and e2Companies if the closing has not occurred by June 15, 2024, subject to the right of either party to gain a 30 day extension, and including, but not limited to, if the Stockholder Approvals have not been obtained, if the Company Shares are delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), upon uncured breaches of representations, warranties and covenants or if a court of competent jurisdiction permanently restrains the Merger from occurring. The foregoing description of the Merger Agreement is not complete and is qualified in all respects to the Merger Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference. 2 Lock-up Agreement Concurrently with the execution and delivery of the Merger Agreement, e2Companies and the Class A Unitholders of e2Companies (each a “Unitholder”) entered into lock-up agreements, pursuant to which each Unitholder and e2Companies agreed to a 180-day lockup on the sale or transfer of Company Shares, Series A Preferred Stock of the Company or any securities convertible into or exercisable or exchangeable for Company Shares received by each such holder in the Merger (the “Lock-up Agreement”). The foregoing description of the Lock-up Agreement is not complete and is qualified in all respects to the form of Lock-up Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference. Voting and Support Agreement Concurrently with the execution and delivery of the Merger Agreement, the Company and e2Companies entered into support agreements (the “Support Agreements”) with certain stockholders of the Company that beneficially own a majority of the outstanding Company Shares. Pursuant to the Support Agreements, among other things, such stockholders have agreed to vote or deliver (or cause to be delivered) a written consent, as applicable, with respect to all of their shares of capital stock of the Company owned by such holders in favor of the Stockholder Approvals. The foregoing description of the Support Agreements is not complete and is qualified in all respects to the form of Support Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference. Important Information about the Merger and Where to Find It In connection with the Merger, we will file relevant materials with the Securities and Exchange Commission (“SEC”), including a registration statement on Form S-4 that will include a consent solicitation or proxy statement, as applicable, pertaining to the Company and e2Companies. This Annual Report on Form 10-K does not contain all the information that should be considered concerning the Merger and is not a substitute for any other documents that the Company may file with the SEC. It is not intended to form the basis of any investment decision or any other decision in respect to the Merger. Investors and stockholders will be able to obtain free copies of the consent solicitation statement or proxy statement, as applicable. and other documents filed by the Company with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders should note that the Company communicates with investors and the public using its website (https://www.minim.com), where anyone will be able to obtain free copies of the consent solicitation statement or proxy statement and other documents filed by the Company with the SEC and stockholders are urged to read the consent solicitation statement or proxy statement, as applicable, and the other relevant materials when they become available before making any voting or investment decision with respect to the Merger. Minim ’ s Reasons for the Merger In evaluating strategic alternatives, the Minim Board of Directors consulted with Minim’s management and legal and financial advisors, reviewed a significant amount of information, and considered a number of factors, including, among others, the following factors regarding the combined company that the Minim Board of Directors viewed as supportive of its decision to approve the merger with e2Companies, as being in the best interests of Minim’s stockholders: ● The combined company will be led by an experienced senior management team from e2Companies and a board of directors, two members of which will be designated by Minim. ● e2Companies has the potential, if successful, to create value for the stockholders of the merged company and present e2Companies with additional fund-raising opportunities in the future. ● The Minim Board of Directors also reviewed the current plans of e2Companies for continuing to expand its business to confirm the likelihood that e2Companies would possess sufficient financial resources to allow management to continue to operate and develop e2Companies’ product and service offerings and expansion into new markets. ● The Minim Board of Directors considered the opportunity, as a result of the merger, for Minim stockholders to participate in the potential value that may result from development of the e2Companies business and the potential increase in value of e2Companies following the merger. 3 The Minim Board of Directors also reviewed various factors impacting the financial condition, results of operations and prospects for Minim, including: ● the strategic alternatives of Minim to the merger, including potential transactions that could have resulted from discussions that Minim management conducted with other potential merger partners; ● the consequences of current market conditions, Minim’s current liquidity position, its depressed stock price and continuing net operating losses, and the likelihood that the resulting circumstances of Minim would not change for the benefit of the Minim stockholders in the foreseeable future on a stand-alone basis; ● the risks of continuing to operate Minim on a stand-alone basis, including the need to continue to support its current business with insufficient capital resources; and ● Minim’s management’s belief that it would be difficult to obtain additional equity or debt financing on acceptable terms, if at all. The Minim Board of Directors also reviewed the terms and conditions of the proposed Merger Agreement and associated transactions, as well as the safeguards and protective provisions included therein intended to mitigate risks, including: ● the exchange ratio used to establish the number of shares of Minim common stock to be issued in the merger, and the expected relative percentage ownership of Minim stockholders and e2Companies unitholders immediately following the completion of the merger; ● the limited number and nature of the conditions to the e2Companies obligation to consummate the merger and the limited risk of non-satisfaction of such conditions as well as the likelihood that the merger will be consummated on a timely basis; ● the respective rights of, and limitations on, Minim and e2Companies under the Merger Agreement to consider certain unsolicited acquisition proposals under certain circumstances should Minim or e2Companies receive a superior competing proposal; ● the Minim Voting Agreements, pursuant to which certain stockholders of Minim (solely in their respective capacities as Minim stockholders) beneficially owning a majority of the outstanding shares of Minim common stock agreed, solely in their capacity as stockholders, to vote or deliver (or cause to be delivered) a written consent, as applicable, in favor of the Minim Proposals; and ● the belief that the terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances. In its deliberations relating to the merger, the Minim Board of Directors also considered a variety of risks and other countervailing factors related to the merger, including: ● the substantial expenses to be incurred in connection with the merger; ● the possible volatility, at least in the short term, of the trading price of the Minim common stock resulting from the merger announcement; ● the risk that the merger might not be consummated in a timely manner, or at all, and the potential adverse effect of the public announcement of the merger or on the delay or failure to complete the merger on the reputation of Minim; ● the risk to Minim’s business, operations and financial results in the event the merger is not consummated; and ● the strategic direction of the continuing entity following the completion of the merger, which will be determined by a board of directors. 4 The Minim Board of Directors believes that, overall, the potential benefits to Minim stockholders of the Merger Agreement outweigh the risks and potential losses that Minim is expected to incur if it continues operating its current business without consummating the merger. Although this discussion of the information and factors considered by the Minim Board of Directors is believed to include the material facts it considered, it is not intended to be exhaustive and may not include all of the factors considered by the Minim Board of Director. The Minim Board of Directors did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination that the Merger Agreement and the transactions contemplated thereby are fair to, advisable, and in the best interests of Minim and its stockholders. The Minim Board of Directors based its determination on the totality of the information presented to it and factors considered by it. In addition, individual members of the Minim Board of Directors may have given differing weights to different factors. On March 11, 2024, Minim’s stockholders, who beneficially held a majority of Minim’s common stock, each entered into voting agreements (“Minim Voting Agreements”) pursuant to which, among other things, each of such stockholders agreed, solely in their capacity as a stockholder, to vote or deliver (or cause t o be delivered) a written consent, as applicable, in favor of the Minim Proposals with respect to: (i) all of their shares of Minim common stock and Minim Preferred Stock owned by such holder; and (ii) any subsequently acquired Minim common stock, including upon exercise of any options to purchase Minim common stock or settlement of warrants to purchase Minim common stock or otherwise, including, without limitation, by gift, succession, in the event of a stock split or as a dividend or distribution of any shares of Minim common stock owned by such holder. The Minim Voting Agreements also place certain restrictions on the transfer of the shares of Minim held by such stockholders. The merger requires the written consent of the holders of at least a majority of the outstanding shares of Minim common stock and Minim Preferred Stock on an as-converted basis, voting together as a single class. 5 Strategy Overview In addition to supporting our legacy cable and WiFi products, we sought to consider other strategic alternatives for our Company. On March 12, 2024, we and e2Companies entered into the Merger Agreement which is expected to close before June 30, 2024. In the merger, Merger Sub will merge with and into e2Companies, with e2Companies surviving as Minim’s wholly owned subsidiary, and Merger Sub will cease to exist. In connection with the consummation of the merger, Minim will amend and restate its amended and restated certificate of incorporation to, among other things, cause its name to be changed to “e2Companies, Inc.” e2companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility ® , is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues. e2Companies provides power generation and state of the art monitoring systems, for customers in energy market programs. e2Companies is dedicated to delivering energy resiliency, reliability and regulatory compliance for its customers to unlock savings and revenue opportunities. Currently, its target markets are the continental United States, Puerto Rico and Canada. Its growth strategy is to invest heavily in this market to capture greater market share. e2Companies has recently refocused sales efforts from a 15-year ESA model to an original equipment manufacturer (“OEM”) model for direct cash sales. The recent tax incentives from the Inflation Reduction Act (the “IRA”) and Investment Tax Credit (the “ITC”) make the OEM sales model very attractive for customers and investors. e2Companies expects the adjustment in sales strategy, which has been driven by feedback from customers, will lead to a shortening of the sales cycle and a corresponding increase in current revenue. e2Companies is also currently seeking to have certain ESA customers convert to OEM purchasers, however, e2Companies will continue to offer the ESA model to customers desiring to avoid the initial upfront cost of purchasing generation systems outright. In connection with adjustment of e2Companies’ sales strategy, e2Companies has implemented cost saving measures to increase the efficiency of revenue production. Products General We created innovative Internet access products that dependably connect people to the information they need and the people they love. Our hardware portfolio included: cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax Alliance (MoCA) adapters, and mesh home networking devices. Our SaaS platform included: mobile applications, a web application, API suites, and an open-source embedded agent for networking devices. We sold home networking products under the globally recognized Motorola brand, as well as under our previously owned ZOOM trademark. Our hardware and SaaS products were purchased by consumers to support and protect their family’s connected devices; ISPs to reduce support costs and increase revenue with digitally transformed support and value-added services; and by businesses to affordably support and secure satellite and remote worker networks. The 2020 License Agreement applied to a wide range of products, including consumer grade cellular modems and gateways, DSL modems and gateways, and MoCA adapters for networking and home security products and services. The Company had 5 systems of the Motorola Mesh Router Systems, including the latest generation of WiFi 6E technology. 6 Home Networking Hardware Our networking hardware products connect homes and small offices to the Internet, create wireless networks, and extend the wireless signal. These products were primarily available through retail and e-commerce channels in the U.S. ● Modems and Modem/Routers (“Gateways”), which are devices that convert cable service into Internet connectivity for ethernet-only connection (modems) or ethernet and wireless connections (modem/routers). Minim’s primary cable modem sales from 2016 through 2023 were of Motorola brand products. We have obtained CableLabs® certification for our currently marketed cable modems, and these cable modems have also received a number of cable service provider certifications . Required by most service providers for interoperability on their networks, all modem and modem/router products must pass this lengthy, expensive, and technically challenging certification process. Minim plans to extend its DOCSIS 3.1 product line, adding high-performance modem/routers including WiFi 6 and mesh-capable routers. ● Routers and Mesh Systems, which are devices that create WiFi networks. Mesh WiFi systems extend the signal throughout a wider area than a single router can typically cover. In 2020, Minim launched its first mesh WiFi system and plans to extend its mesh and router portfolio with WiFi 6 and WiFi 6E capabilities. ● Other Local Area Network Products, which are devices that create, extend, or enhance a Local Access Network. Minim currently offers MoCA adapters, which provides an Ethernet connection over coaxial cable between a MoCA-capable router and connected devices. SaaS The Minim SaaS platform offers three core software components: ● Minim mobile application for end users to personalize and monitor their home and office network with features such as speed testing, data usage tracking, security alerts, malware blocking, privacy settings, parental controls. ● Minim web application that enables technical support representatives in ISPs and businesses to offer efficient remote support with network insights. ● Minim API suite and MinimOS for third-party hardware vendors, ISPs, and other partners to integrate with the Minim platform, leverage Minim functionality, and manage their own account data. A foundational component of our SaaS is an open-source embedded agent for integration with any third-party router firmware. Products for Markets outside North America The vast majority of our sales were in North America from 2015 through 2023 because the business predominantly sold cable modem and modem/router products, and the U.S. is by far the largest market for cable modems sold through retailers. Networking hardware products for countries outside the U.S. typically differ from a similar product for the U.S. because of varied regulatory and certification requirements, country-specific phone jacks and AC power adapters, and language needs. As a result, the introduction of new products into markets outside North America can incur significant costs and time to market. 7 Support We developed quality products that are user-friendly and are designed to require minimal support. We typically support our claims of quality with product warranties of one to two years, depending upon the product. To address the needs of end-users and resellers who require assistance, there is a staff of technical support specialists. They provide telephone support six days per week in English and Spanish and aim to continuously expand languages, availability, and support channels. Our technical support specialists also maintain a significant Internet support facility that includes email, firmware and software downloads, and a digital knowledgebase. In 2023, we transferred our support services to Motorola to address the needs of our customers. Research and Development Our research and development efforts were focused on developing new products, enhancing the capabilities of existing products, and reducing production costs. We developed close collaborative relationships with certain of our Original Design Manufacturer (“ODM”) suppliers and component suppliers. We worked with these partners and other sources to identify and respond to emerging technologies and market trends by developing products that address those trends. We also developed all the hardware and firmware for certain products in-house, including some cellular modems and some future cellular sensors. The Company’s costs on research and development for the years ended December 31, 2023 and 2022 were $3.5 million and $5.8 million, respectively. As of December 31, 2023, we had no employees engaged in research and development. Our research and development team performed hardware design and layout, mechanical design, prototype construction and testing, component specification, firmware and software development, product testing, foreign and domestic regulatory certification efforts, end-user and internal documentation, and third-party software selection and testing. Manufacturing & Suppliers Our products were designed for high-volume automated assembly to help assure reduced costs, rapid market entry, short lead times, and reliability. High-volume assembly mostly occurred in Vietnam or China. Our contract manufacturers and original design manufacturers obtained some or all of the components required to assemble the products based upon a Minim approved vendor list and parts list. Our manufacturers inserted parts onto the printed circuit board, with most parts automatically inserted by machine, solder the circuit board, and test the completed assemblies. The contract manufacturer sometimes performed final packaging. For the U.S. and many other markets, packaging was often performed at our facilities in North America, allowing us to tailor the packaging and its contents for our customers immediately before shipping. This facility also performed warehousing, shipping, quality control, finishing and some software updates from time to time. We also performed circuit design, circuit board layout, and strategic component sourcing at our Boston area office. Our North American facility was located in Tijuana, Mexico. From time to time, we experienced certain challenges associated with the Tijuana facility, specifically relating to bringing products across the border between the U.S. and Mexico. We believed that this facility assisted us in cost- effectively providing rapid response to the needs of our U.S. customers. Historically, we have used one primary manufacturer for a given design. We had maintained back-up production tooling at a second manufacturer for our highest-volume products. Our manufacturers were normally adequate to meet reasonable and properly planned production needs; but a fire, natural calamity, strike, financial problem, the impacts from a pandemic or another significant event at an assembler’s facility could adversely affect our shipments and revenues. In 2023 and 2022, one and two suppliers, respectively, provided 86% and 93%, respectively, of our purchased inventory. 8 About e2Companies Overview e2Companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility ® , is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues. e2Companies’ products and regulatory services come with full power systems monitoring services on an open architecture that allow for smart building integration, microgrid integration, artificial intelligence and full asset optimization through a private network on our Grid Response Optimization of Virtual Energy (“Grove”) platform. It serves diverse industries, including commercial, manufacturing, retail, healthcare and data centers. e2Companies creates electricity micro-grids offered to hospitals, data centers, schools and mission critical businesses to provide reliable power without reliance on the grid or the large initial capital outlay associated with the purchase of traditional independent power systems. e2Companies’ Products Virtual Utility ® For decades, diesel generation has been the traditional back-up power sources for facilities to keep critical processes running during outages. Given increasing emissions restrictions and state and federal regulations shifting requirements for on-site generation, natural gas generation and energy storage systems are gaining favor. To maximize the total cost of ownership, while reducing emissions, improving utility power quality, providing an uninterruptible power supply (“UPS”) to all connected loads, generating revenue in market-based programs, all with the cleanest and lowest operating cost turnkey technology available, there are not many turn-key options in today’s market. e2Companies is the creator of the industry’s first Virtual Utility ® , the industry’s first utility-grade network located on the customer’s site. Virtual Utility ® is an independent source of power that optimizes the existing grid and reduces utility dependence, driving energy choice and taking the guesswork out of electric utility for customers. It does so by enhancing the stability of the electric grid and providing behind-the-meter cost flexibility based on variable inputs and market pricing. 9 The heart of Virtual Utility ® is e2Companies’ patented R3Di ® System, a self-contained, lithium-iron phosphate battery energy storage system, providing up to one megawatt of power, or enough power for about 100 households, which is modular in design. Matched with a prime-rated, natural gas generator, or any possible electron producing source, it acts as an onsite utility grade system with a synthetic BUS. Its double conversion inverter system (“Double Conversion System”) provides continuous power conditioning and uninterruptible power transfer, while its lithium iron phosphate battery chemistry offers higher energy density, allowing delivery of power to a customer’s facility 24 hours a day, 7 days a week, 365 days a year. The system is ETL certified to UL 9540 and operates in sync with the grid and independently of it simultaneously, giving facility managers the flexibility to generate power on-site whenever needed, during utility outages, storm avoidance, when utilities experience peak demand or when energy prices are high. At the same time, The R3Di ® ’s dual isolation transformers provide clean conditioned power to all connected loads, ensuring power sensitive equipment avoids voltage sags or spikes that can impact critical operation. Figure 1: Stocked R3Di ® Design 10 R3Di ® System By itself, a diesel generator will not provide a “noblip” experience at a facility when there is a loss of utility power. Traditionally, pairing a diesel generator with a UPS provides instantaneous, uninterruptible power to only the facility’s sensitive electronic loads. The purpose of the UPS is to bridge the time between loss of utility and the transfer to the generator. All other loads (HVAC, lighting, etc.) lose power while the generator comes up to rated voltage and frequency and connects to the bus. With the R3Di ® , all facility loads, not just the sensitive electronic loads, can be connected to the R3Di ® ’s instantaneous, uninterruptible power system. This is possible due to the R3Di ® ’s High C-rate, or the rate at which a battery is discharged relative to its maximum capacity, fast discharging battery system. Most traditional UPS systems utilize battery systems that are designed for an instantaneous slow discharge maximizing their availability. This limits those batteries’ ability to deliver power to loads that require high inrush currents such as pump motors, elevators, and large transformers. Due to the lithium iron phosphate (“LiFePO4”) chemistry and cathode design of the R3Di ® ’s battery system, the high discharge capability allows highly inductive loads to connect to the battery instantly without voltage or frequency sags. Traditional UPS composition consists of lead acid batteries, needing replacement after a five-year lifecycle due to power constantly flowing through the batteries, which leads to quicker degradation. The R3Di ® battery energy storage system (“BESS System”) is designed to a twenty-year life, with an extended battery life due to the composition of LiFePO4 and High-C discharging capabilities. Electricity does not continuously flow through the batteries in the R3Di ® , extending their life to twenty years or 10,000 cycles. Any generation source is paired to pick up load as the batteries begin to deplete, then recharges the batteries once they have dropped to a selectable depth of discharge. Like a traditional UPS system, the R3Di ® ’s Double Conversion System helps smooth transient loading, providing power conditioning and quality, with a seamless (sub-cycle) transfer of power with no interruption to facility’s load. Unlike conventional UPS systems, the R3Di ® utilizes bidirectional, full four-quadrant insulated-gate bipolar transistors inverters in both the ACDC rectification and DC-AC conversion stages. A stand-alone diesel would not be able to protect a company’s sensitive equipment from any transient voltage sags or surges. Beyond on-site power generation for reliability, the R3Di ® System can play the role of grid assurance, by firming renewables without intermittent power loss with its power conditioning abilities. 11 The R3Di ® ’s LiFePO4 battery chemistry is safer than other systems that utilize lithium ion (Li+), valve regulated lead acid (“VRLA”) or lead acid. All batteries store and release electrical energy through electrochemical reactions. When a battery purposely discharges electrical energy, ions move from one electrode to the other through a liquid medium called electrolyte. If during this process the battery undergoes some stress, e.g., an internal short, abnormal heat, etc., the cobalt present in the cathode can release fire-sustaining oxygen. This can result in “thermal runaway”, which is a heat generating reaction that is greater than the ability of a battery cell to release. In lithium cobalt oxide batteries, thermal runaway can result from the omission of the cobalt with its negative temperature coefficient. The LiFePO4 battery, as found in the R3Di ® System does not use cobalt, greatly reducing the risk of fire ignition or propagation. LiFePO4 is thermally and chemically stable, making it less prone to explosions or fires due to misuse or structural damage. The R3Di ® ’s BESS takes up considerably less space than that of a Half-C or 1-C battery system. Where space is restricted, the R3Di ® System can be configured in a smaller footprint by moving the UPS outdoors and stacking it above the generator, as shown in Figure 2, meaning no interior building space is required. Figure 2: Side and Front View of the R3Di ® System Generator and BESS The R3Di ® System can be paralleled with additional units, in 1MW increments. It is intended to be modular and eliminates, or greatly reduces, balance of plant versus diesel or other systems. Facilities that have experienced a prolonged outage are impacted by the loss of production, stored product, machinery, and sensitive equipment, as well as the man-hours to reset processes and restore the facility. Even so much as a voltage sag/surge can affect equipment. The seamless conditioning the R3Di ® provides protects sensitive equipment and sustains operations during long-term outages. A diesel generator can support the facility, but due to the emissions profile of the diesel engine, it cannot run in prime applications. 12 Environmental Social Governance (ESG), Societal Return on Investment (SROI) & Tax The R3Di ® System operates as an on-site utility and can do so with drastically reduced emissions and lower operating costs as compared to a similar sized emergency backup diesel generator. The R3Di ® System has the lowest emissions profile available amongst comparable reciprocating engines based on independent third-party review with a globally recognized ESG firm. The R3Di ® System saves 19,322 tons of emissions cradle-to-gate, as compared to battery storage systems, a net present value of $645,695. For a 1MW solutions, emissions reductions as compared to diesel are as follows: ● 99% reduction in NOx; ● 99% reduction in PM; ● 88% reduction in CO; and ● 61% reduction in VOC. This is a prime-rated application with no additional after-treatment system, such as a catalytic reduction (SCR), needed. New initiatives to reduce carbon emissions include tax benefits for those companies that proactively plan to reduce their footprint. The societal return on investment (“SROI”), a method for measuring values that are not traditionally reflected in financial statements, including social, economic and environmental factors, considers the present value of project costs, project revenues, and socioeconomic benefits and costs. This financial benefit is used to measure a company’s value creation and positive impact for its community. Reductions in emissions from cradle-to-gate increase companies’ SROI; benefitting the greater good and health of our society. The R3Di ® System, as compared to diesel, has significantly higher SROI as calculated by a third party and detailed in the following table: Total Present Value of SROI is approximately a $7MM benefit compared to a diesel generator. R3Di ® System Diesel Difference Tons of CO2e released during gen. run time (based on 200 hours run time) 6,641 19,702 (13,061) Present Value of CO2e released by gen. run time 1 $0.23M $0.80M ($0.53M) Total Present Value of Societal Cost $0.12M $0.84M ($0.72M) 1. Cantrell. Direct Use of Natural Gas Versus Electrification. 2022. SGA e2Companies are also thinking about the future. Anticipating any future changes in emissions standards and stricter emissions restrictions, today the R3Di ® System is hydrogen ready up to 20% and can run on multiple fuel sources like liquid natural gas and renewable natural gas. The R3Di ® System is designed to be future proofed as alternate sources of power develop, such as fuel cells. Grid Response Optimization of Virtual Energy (Grove) The other part of Virtual Utility ® is e2Companies’ GROVE platform, the operational hub for all distributed assets, including R3Di ® . Grove provides a specialized team dedicated to developing personalized operational strategies for the R3Di ® System, such as devising a customized playbook that outlines the optimal use of power from public utilities, employing historical data, energy market pricing, and other pertinent factors aligned with specific goals. Grove provides real-time grid information, asset health monitoring, and remote dispatching capabilities. 13 Grove includes a dedicated energy management team that can help a customer achieve energy goals by reducing energy consumption from utility during peak times, using a custom procurement strategy and analyzing utility bills to avoid hidden fees. Using historical data and advanced analytics, the Grove team predicts peak demand times so you can avoid increased charges. e2Companies also work with a vast network of suppliers to secure the most competitive rates and terms based on the customer’s needs. Our utility bill management services provide additional oversight and insight, resolving billing issues and investigating opportunities for savings. In addition, e2Companies’ centralized services department handles all preventative maintenance and quickly responds to any emergency maintenance request. Other Products and Services e2Companies have 15 years of experience developing products and services for regulatory compliance. From simple catalyst systems to Best Available Control Technology (“BACT”) for large stationary power systems including monitoring with remote start and diagnostics, we have the solutions to help the customers’ business. e2Companies’ products are made to order and all of e2Companies’ products are outsourced for production. In 2019, e2Companies started to assemble its monitoring equipment in its new building at 8901 Quality Dr, Bonita Springs, FL 34135. In addition to R3Di ® System, e2Companies current product offerings are listed below: ● Facility Remote Monitoring; ● Continuous Parametric Monitoring Systems; ● RICE NESHAP Systems; ● Diesel Particulate Filter; ● Selective Catalytic Reduction; ● Three-Way Catalyst; and ● Diesel Oxidation Catalyst. Compliance and Monitoring Services e2Companies is a compliance products and services company innovating value through technology-driven risk management using compliance as a service (“CaaS”). e2Companies offers a complete turnkey business model for energy, utility, industrial, and commercial customers. e2Companies compliance products and services help its customer to: ● Simplify compliance : automating compliance and eliminating manual processes, shortening and eliminating third party consulting, reducing paperwork, including through the Mission Critical platform. ● Minimize risk : protecting clients’ brands with world-class quality assurance, eliminating liability for process deviations, increasing safety for employees and customers. ● Increase efficiency : optimizing resource allocation, reducing functional overlap, increasing asset efficiency, including through the energy management platform. In addition to providing a performance warranty that products will meet emissions standards over their useful life, e2Companies also include service offerings that guarantee compliance with state and federal regulatory requirements such as notification, reporting, testing, and monitoring. e2Companies Step2Comply management tool speeds up a customer’s ability to understand the complex federal, state, and local regulatory environment. Step2Comply includes a proprietary database for the ever-changing landscape of emissions regulations. Further, as an extension of environmental services, e2Companies completes all required reporting and actions required for many regulatory items, including the CAA and CWA. 14 e2Companies cloud monitoring solution, ICe2c, addresses the need for remote access to real-time information. This information is the keystone for proactive operations and maintenance. ICe2c makes managing any set of assets a possibility, including optimizing operations, managing risks, and leveraging artificial intelligence to detect data patterns and drive efficiency and preventive maintenance schedules. e2Companies also offer full indemnification for all its products and services, including regulatory monitoring and reporting. These services are combined with remote monitoring, cloud reporting and proprietary software that checks for regulatory changes every second on over a hundred federal, state and local required posting sites. e2Companies supports its products and service offering with insurance that covers each customer from regulatory-based fines and penalties due to violations of environmental standards resulting from its performance. e2Companies current services offering include the below: ● U.S. Environmental Protection Agency Program Services ‒ Compliance/Site assessment – definition of need to meet EPA rules ‒ Application Requirements – site-specific systems with engineering review ‒ Permitting – obtain or amend operating permits as required per federal, state and local authorities. ‒ Compliance Mitigation – complete site-specific system and components ‒ Field Installation & Start-up – install and provide startup services of monitoring and control systems ensuring compliance with a 3-year performance warranty and guarantee. ● Environmental Health & Safety Program Services ‒ Regulatory Conformity/Compliance Assessment; ‒ Evaluation of Operation with existing and proposed regulations; ‒ Performance Auditing; ‒ Quality Assurance/Quality Control, including best management practices and standard operating procedures; ‒ Good Housekeeping Procedures; ‒ Personnel Training, including with respect to permitting and reporting/recordkeeping; ‒ Facility Specific Training; ‒ Development and Implementation of Environmental & Safety Management System, including (i) ISO 9000/14001/18001 standards, (ii) business approach to environmental and safety issues, (iii) performance auditing, (iv) pollution prevention, (v) improved carbon footprint; and (vi) implementation of green programs; ‒ Universal and Hazardous Waste Management; and ‒ EH&S Personnel Staffing (full or part-time). 15 e2Companies Brands e2Companies is the creator of the industry’s first Virtual Utility ® and a leading provider of integrated solutions for power generation, distribution, and energy economics. e2 Mission Critical Ltd. is a global organization focused on providing essential energy for critical environments in EMEA such as data centers, hospitals, industrial facilities, and retail centers. e2Companies’ energy management team provides industry-leading utility and energy market experience to drive real-time asset optimization and unmatched customer service. Competition The Internet access and networking industries are intensely competitive and characterized by aggressive pricing practices, continually changing customer demand patterns, rapid technological advances, and emerging industry standards. These characteristics result in frequent introductions of new products with added capabilities and features, and continuous improvements in the relative functionality and price of modems and other communications products. Many of our competitors and potential competitors have more extensive financial, engineering, product development, manufacturing, and marketing resources than we do. The principal competitive factors for the products include the following: ● product performance, features, reliability and quality of service; ● price; ● brand image; ● product availability and lead times; ● size and stability of operations; ● breadth of product line; ● sales and distribution capability, including retailer and distributor relationships; ● technical support and service; ● product documentation and product warranties; ● relationships with providers of broadband access services; and ● certifications evidencing compliance with various requirements. Prior to the Motorola License Agreement cancellation, we believed that we provided a competitive mix of the above factors for our products, particularly when they are sold through retailers, computer product distributors, small to medium sized Internet service providers, and system integrators. We have been less successful in selling directly to large telecommunication providers and other large providers of broadband access services. 16 Successfully penetrating the broadband modem market presents a number of challenges, including: ● the current limited retail market for broadband modems, as most consumer broadband users get their modem from their service provider; ● the relatively small number of cable, telecommunications and Internet service providers that make up the majority of the market for broadband modems in the U.S., our largest market; ● the significant bargaining power and market dominance of these large service providers; ● the time-consuming, expensive and uncertain certification processes of the various cable, mobile broadband service providers; and ● the strong relationships with service providers enjoyed by some incumbent equipment providers, including ARRIS for cable modems and Huawei for DSL and mobile broadband modems. e2Companies Market Considerations and Competitive Conditions Market Considerations The push for electrification is rapidly driving implementation of smart technology to enhance customer experience in everything from electric vehicles (“EVs”) and home energy management systems to industrial automation. At the same time, consumers have less choice over both where their power comes from and when. According to the U.S. Department of Energy recently published report on virtual power plans (“VPP”) 1 , the U.S. electric grid will need to add enough new capacity to serve over 200 gigawatts (“GW”) of peak demand by 2030. With this increased load on the grid, businesses are even more susceptible to power interruptions. Short-duration blackouts can cause large-scale damage to products and manufacturing lines. A single power blip can disrupt businesses that depend on automation like robotics, that then have to wait for their machines to reboot. In addition to rising demand for electric grid capacity, energy prices continue to increase. The U.S. Bureau of Labor Statistics revealed that the average utility bill in the United States increased by 16% from August 2021 to August 2022, and many energy experts expect electricity prices to continue increasing. As a result of these trends, commercial and industrial customers, who have historically used diesel, batteries, and solar, are looking to outside resources to overcome the limitations of these power sources. Furthermore, many commercial and industrial customers value cost savings, capital strategies, reliability, and sustainability. Until now, no single product has served those needs. Instead, companies have incorporated various projects, which have often been technically challenging, cost prohibitive, or limited in some other way. According to the U.S. Department of Energy, VPPs will play an important role in the race to find energy solutions that meet the grid needs of tomorrow without compromising on environmental impact. VPPs are a distributed energy resource (“DER”), a smaller-scale power source relative to the public utility and is usually located on-site or closer to the end user. DERs can include anything as small as a solar panel or battery, or as large as a VPP. According to U.S. Department of Energy, tripling the current scale of VPPs could address 10-20% of the projected peak demand. This could avoid approximately $10 billion in annual grid costs, and much of the money that is spent on VPPs would flow back to participating consumers. e2Companies believes that the Virtual Utility ® product will benefit from the projected rising demand for VPPs and, further, offers several competitive advantages. Both Virtual Utility ® and VPPs are considered DERs and place an emphasis on lowering costs and providing reliable and resilient power. But there are some important differences, one of the main ones being that while VPPs are owned and operated by a utility, Virtual Utility ® gives the customer complete energy choice. In addition, Virtual Utility ® provides other advantages addressing specific challenges and requirements associated with implementing a VPP. A more detailed comparison of VPP and Virtual Utility ® features is detailed in the following chart: 1 U.S. Department of Energy. The Pathway to: Virtual Power Plans Commercial LiftOff. Available at: https://liftoff.energy.gov/vpp/ 17 Virtual Power Plant Virtual Utility ® Utility owns and operates portfolio of VPPs, sometimes with third-party software Customer can own and operate the DERs that comprise the VU, such as the R3Di ® system Manufacturer/retailer of DER enrolls and manages. Customer can own the DER and VU can manage for customer, if desired. Dispersed Centrally located Aggregates disparate assets to be controlled by the utility company Customer has complete autonomy with public utility’s optionality Bundle of technical assets that can be turned on and off. Someone else controls electricity generation. You have full control over your electricity generation mix + optional monitoring and optimization service. A group of decentralized assets with disparate data sources that are pooled together to mimic a centralized power plant. Data is aggregated in one central platform (Grove365), designed to give end-users complete SCADA control. Can be vulnerable to cyber-attacks due to cloud computing and the accessibility of the physical location of the hardware. Triple-redundant security protocols, with verification of end-user controls, independent of cloud computing. Broad definition - can refer to many different types of networks and physical assets. Tangible, specific - refers to one, unified transmission and distribution network. Aggregates many DERs to reduce demand during peaks Streamlines all power, generation, delivery, billing, and supply management in a compact footprint to give the consumer complete energy autonomy In addition to rising energy prices and capacity demands, e2Companies are also benefiting from positive trends in the specific industries they are serving. Retail - Additional Value with Electric Vehicle Adoption As electrification of vehicles becomes standard, there will be a need for 1.2 million public chargers. 2 By 2030, it is estimated that EV charging demand will surge from 11 billion kWh to 230 billion kWh. 3 With thousands of gigawatts of demand from those chargers, there will be a need for additional power capacity to support the grid. Our R3Di ® System allows for on-site DC Fast Charging (“DCFC”) for EV cars, trucks, fleets, etc. which is something that diesel generation cannot do. DCFC provides a quick recharge for EVs but has substantial power requirements as shown in the below table. The R3Di ® System provides excess generation to power EV chargers directly or support the facility and the EV chargers during power outages or when experiencing power quality issues. Figure 3: EV Charging Levels 2 Kampshoff, Kumar, Peloquin, Sahdec. Building the electric-vehicle charging infrastructure America needs. McKinsey & Company, April 18, 2022. P.1. (“McKinsey & Company Report”). 3 McKinsey & Company Report. 18 The R3Di ® system integrates with current EV and fleet chargers. There’s no impact to the provider facility as the system only uses excess capacity for charging. Commercial Commercial buildings are responsible for as much as 40% of US energy consumption, and a significant percentage of it is wasted by unused or underutilized buildings. Owners and operators face increasing pressure to reduce their carbon footprint. Our R3Di ® System offers an attractive solution, saving an average of 19,322 tons of emissions over its lifetime compared to traditional battery storage systems. Data Centers According to Frost & Sullivan research, global data center energy consumption is projected to grow 27% by 2030 to 353 terawatt hours (“TWh”) and is soon expected to hit 8% of global energy consumption. As the volume of data increases exponentially and AI-powered applications require vastly more computing power, supplying reliable power to keep data centers running and keep servers cool has become a compounding challenge. This added demand, combined with unpredictable weather patterns, means that resolving critical power issues while adhering to environmental regulations is increasingly difficult. e2Companies believe that Virtual Utility ® can help increase resiliency through reliable, uninterruptible power, while also enabling the data centers to operate independently of the grid and facilitating compliance with applicable laws and regulations. Manufacturing Manufacturers face increasing pressure to reduce their carbon footprint. The U.S. Energy Information Administration predicts the industrial sector will see a 26% increase in emissions by 2050. In addition to monitoring and facilitating reduction in emissions and providing data verified by a third party, e2Companies offer manufacturing customers personalized assistance with developing ESG strategies that meet environmental compliance regulations and expectations from stakeholders. Healthcare Worldwide, the health care sector is responsible for as much as 4.6 percent of total greenhouse gas emissions, which include carbon dioxide, methane, and ozone, among others. 4 In the United States, where the share is 8.5%, the health care system is becoming more, not less, polluting: emissions increased 6% from 2010 to 2018. 5 Most hospitals and healthcare facilities rely on a combination of traditional backup diesel generators and battery storage systems, which only provide power to the most critical equipment and aren’t designed for long-duration outages. Virtual Utility ® offers a competitive solution by providing on-site power generation and energy storage systems combined with continuous monitoring of energy market pricing, weather and grid conditions. e2Companies integrated solution can also help reduce the emissions of existing diesel generators by at least 70% to meet EPA standards. e2Companies Competition e2Companies encounter stiff competition in all aspects of their business and compete head on with many other companies who provide compliance products and services to the energy industry. e2Companies competition primarily consists of manufacturers and distributors of power generation and heavy electrical equipment including switchgear companies, electrical contractors, electrical engineering firms and companies involved in providing utilities with demand response and load curtailment products and services. Electric utilities could also offer their own DER solutions, which would decrease e2Companies’ base of potential customers. Additionally, several well-established companies have developed microturbines used in DER, and a number of companies are also developing alternative generation technology such as wind, fuel cells and solar energy systems. Several large companies are also becoming leaders in uninterruptible power supply system technology, and companies developing and marketing their proprietary smart grid technologies are also potential competitors. Many of these technologies are eligible for and supported by governmental financial incentives. Additionally, technologies that make commercial, institutional and industrial operations more efficient result in lower electricity use, reducing the benefits of using the Virtual Utility ® product. 4 The Commonwealth Fund. How the U.S. Health Care System Contributes to Climate Change. 2022. Available at: https://www.commonwealthfund.org/publications/explainer/2022/apr/how-us-health-care-system-contributes- climate-change (“The Commonwealth Fund”). 5 The Commonwealth Fund. 19 e2Companies also compete with numerous providers of transmission and distribution construction and maintenance firms. Many of these firms have broader customer bases, strong track records of performance and larger resources of personnel and equipment. Competitors in this area are diverse, consisting of both large and small firms on regional and national levels. The markets for e2Companies’ products, services and technology are competitive and are characterized by rapidly changing technology, new and emerging products and services, frequent performance improvements and evolving industry and regulatory standards. e2Companies expect the intensity of competition to increase in the future because the growth potential of the energy market has attracted and is anticipated to continue to attract many new competitors, including new businesses as well as established businesses from different industries. As a result of increased competition, e2Companies may have to reduce the price of products and services, and may experience reduced gross margins, loss of market share or inability to penetrate or develop new markets, or increases in operating expenses or capital investment required to develop and maintain competitive product offerings, any one of which could adversely affect operating results. e2Companies competitors may have far greater capital, human resources, technology, and name recognition. e2Companies primary competitors include engine OEMs and uninterruptible power source OEMS as well as PowerSecure, Inc. and Enchanted Rock Ltd. e2Companies believe that its primary competitive advantages include the following: ● Financing: e2Companies supply and/or own all necessary assets secured with DER and Utility contracts managed by third party aggregators and/or utility bill management companies. ● Installation : turnkey capacity components are installed to meet building and zoning requirements to place generation assets into Utility programs and meet customer load requirements. ● Asset Management : service, maintenance, fuel and potential start/stop requirements to insure performance under the agreements for DER/Utility programs and return. ● Monitoring : 24/7/365 electronic monitoring of all essential capacity parameters, including engine, battery, oil, water and switchgear. ● Compliance : review of regulatory requirements to proceed with DER contracts and ongoing compliance plans for continued compliance through the term of the applicable contract. ● Indemnification : full indemnification of fines and penalties, including all necessary reporting during the term of the applicable contract. ● Resiliency : asset is available for grid outages or poor-quality grid issues for e2Companies customers and we insure losses (limited) if it does not perform as intended. In order to be successful in the future, e2Companies must continue to respond promptly and effectively to the challenges of technological change and to e2Companies competitors’ innovations. While e2Companies believes that it competes favorably with respect to the above factors, no assurance can be provided that e2Companies products and services will continue to compete favorably in the future against current and future competitors or that e2Companies will be successful in responding to changes in other markets including new products and services and enhancements to existing products and services introduced by our existing competitors or new competitors entering the market. Intellectual Property Rights We have trademarks and copyrights for our firmware (software on a chip), printed circuit board artwork, instructions, packaging, and literature, and intelligent software. We also have three active patents that expire in 2031. There cannot be any assurance that the validity of a patent will not be challenged. Moreover, our means of protecting our proprietary rights may not be adequate and our competitors may independently develop comparable or superior technologies. 20 Intellectual Property rights of e2Companies e2Companies’ success depends in part on its ability to obtain intellectual property protection for its proprietary technology, information, algorithms, processes and know-how to prevent others from infringing, misappropriating, or otherwise violating our intellectual property rights, to defend and enforce our intellectual property rights, and to operate without infringing, misappropriating, or otherwise violating valid and enforceable intellectual property rights of others. e2Companies currently uses and owns a number of patents, trademarks, copyrights and similar intellectual property in connection with its businesses and owns registrations and applications to register them both domestically [and internationally]. e2Companies relies on a strategy that combines the use of copyright, patents, trademarks, trade secret laws, know-how, and license agreements, as well as other intellectual property laws, employment, confidentiality and contractual protections, to establish and protect its intellectual property rights. Patents In February 2022, e2Companies’ flagship technology, the R3Di system, was patent approved. The U.S. Patent and Trademark Office accepted e2Companies’ claims and approved all 19 claims in e2Companies’ patent request. This makes e2Companies the sole supplier of a high-capacity discharge open transition system, which is now protected by a full patent for 20 years. This system is a full replacement for the more expensive uninterruptible power supply systems with shorter life spans and increased toxic landfill waste. It also gives a customer fully conditioned power to their entire property and enables renewable equipment or electric vehicle charging stations to be easily added. Trademarks e2Companies’ trademark portfolio is designed to protect intellectual property, technology applications, and any future products. As of April 10, 2024, e2Companies owns three trademarks across three countries, with two additional trademarks pending. Trade Secrets e2Companies’ also relies on trade secrets relating to its proprietary information, including its algorithms, and it maintains the confidentiality of such proprietary information to protect aspects of its business that are not amenable to, or that it does not consider appropriate for, patent protection. e2Companies seeks to protect its trade secrets and know-how by relying on trade secret laws, client license agreements, employee and third-party nondisclosure agreements and other methods with parties who have access to such information. Such agreements generally provide that all confidential information concerning e2Companies’ business or financial affairs developed or made known to the individual during the course of the individual’s relationship with e2Companies are to be kept confidential and not disclosed to third parties except in specific circumstances. 21 Human Capital As of December 31, 2023, Minim had 1 employee, who served in an administrative function, and five consultants, who support administrative, operations, and management information management systems. Our Board of Directors, through our Compensation Committee, provides oversight on employee matters. The Compensation Committee receives updates on activities, strategies and initiatives related to our employees. As of the date hereof, e2Companies has 43 full-time employees. None of its employees are covered by a collective bargaining agreement and they have not experienced any work stoppage and consider relations with employees to be good. Corporate Information We are incorporated in Delaware under the name Minim, Inc. Minim, Inc. was originally incorporated in New York in 1977 and changed its state of incorporation to Delaware in 1993. Cadence Connectivity, Inc., a wholly owned subsidiary of Minim, Inc., is a corporation organized in Delaware. MTRLC LLC, a wholly owned subsidiary of Minim, Inc., is a limited liability company organized in Delaware that focuses on the sale of our Motorola brand products. Our common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol MINM. Our principal executive offices are located at 848 Elm Street, Manchester, NH 03101, and our telephone number is (617) 423-1072. Our main website is www.Minim.com . Information contained on our website does not constitute part of this report. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on our website home page as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (“SEC”). Copies of the materials filed by the Company with the SEC are also available on the SEC’s website at www.sec.gov . A copy of our Code of Conduct and Ethics is posted on our website at ir.Minim.com . Any changes to or waiver from, this Code of Conduct and Ethics will be posted on that website. e2Companies’ principal executive offices are located at 8901 Quality Rd, Bonita Springs, Florida 34135, its telephone number is (833) 682-7273, and its website is located at www.e2companies.com. Information on or accessed through e2Companies’ website is not incorporated into this Annual Report. 22 ITEM 1A. – RISK FACTORS Risks Related to the Merger with e2Companies The announcement and pendency of an Agreement and Plan of Merger with e2Companies LLC may result in disruptions to our business, and the Merger could divert management’s attention, and result in negative publicity or legal proceedings, any of which could negatively impact our operating results and ongoing business. On March 12, 2024, we entered into an Agreement and Plan of Merger (“Merger Agreement”) with e2Companies LLC (“e2Companies”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), holders of the outstanding common units of e2Companies (“e2 Shares”) will receive such number of shares of common stock, par value $0.01 per share, of the Company (“Company Shares”) representing approximately 97% of the issued and outstanding Company Shares (on a fully-diluted basis). Pursuant to the Merger Agreement, MME Sub 1 LLC (“Merger Sub”), a subsidiary of Minim, Inc., will merge with and into e2Companies, with e2Companies remaining as the surviving entity (the “Merger”). The pursuit of the proposed Merger has placed an increased burden on management and internal resources, which may have a negative impact on our ongoing business. It also diverts management’s time and attention from the day-to-day operation of our business. This could adversely affect our financial results. Any of the foregoing, individually or in combination, could materially and adversely affect our business, our financial condition and our results of operations and prospects. The Merger may not be completed within the expected timeframe, or at all, for a variety of reasons, including the possibility that the Merger Agreement is terminated, and the failure to complete the Merger could adversely affect our business, results of operations, financial condition, and the market price of our common stock. There can be no assurance that the Merger will be completed in the expected timeframe, or at all. The Merger Agreement contains a number of customary closing conditions that must be satisfied or waived prior to the completion of the Merger, including, among others, (i) the Company Shares to be issued in the Merger (“Merger Consideration”) being approved for listing on the Nasdaq Capital Market (“Nasdaq”), (ii) the effectiveness of a registration statement on Form S-4 registering the Merger Consideration; (iii) any waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated; and (iv) the consent or approval of the Company’s stockholders, as applicable, of (a) the Merger, (b) the issuance of the Merger Consideration, and (c) an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to among other things, change the Company’s name to e2Companies, Inc. following the Merger (the “Stockholder Approvals”). The Merger Agreement may be terminated under certain customary and limited circumstances prior to the closing including by the mutual consent of the Company and e2Companies if the closing has not occurred by June 15, 2024, subject to the right of either party to gain a 30 day extension, and including, but not limited to, if the Stockholder Approvals have not been obtained, if the Company Shares are delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), upon uncured breaches of representations, warranties and covenants or if a court of competent jurisdiction permanently restrains the Merger from occurring. If the Merger is not completed within the expected timeframe or at all, we may be subject to a number of material risks, including: - the market price of our common stock may decline to the extent that current market prices reflect a market assumption that the Merger will be completed; 23 - some costs related to the Merger must be paid whether or not the Merger is completed, and we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the proposed transaction with e2Companies, as well as the diversion of management and resources towards the Merger, for which we will have received little or no benefit if completion of the Merger does not occur; and - we may experience negative publicity and/or reactions from our investors and various business relationships. Stockholder litigation could prevent or delay the closing of the pending Merger or otherwise negatively impact our business, operating results and financial condition. We may incur additional costs in connection with the defense or settlement of stockholder litigation in connection with the pending Merger. Such litigation may adversely affect our ability to complete the pending Merger. We could incur significant costs in connection with such litigation, including costs associated with the indemnification obligations to our directors and officers. Such litigation may be distracting to management and may require us to incur additional, significant costs. Such litigation could result in the Merger being delayed and/or enjoined by a court of competent jurisdiction, which could prevent the Merger from becoming effective. The issuance of shares of Minim common stock to e2Companies unitholders in the merger will substantially dilute the voting power of current Minim stockholders. Having a minority share position will reduce the influence that current stockholders have on the management of Minim. Pursuant to the terms of the Merger Agreement, at the effective time of the merger, Minim will issue (or reserve for future issuance) shares of its common stock to e2Companies unitholders as merger consideration. As a result, upon completion of the merger, the current Minim stockholders will hold approximately an amount of shares currently expected to be approximately 3% of the fully diluted equity of the combined company. Accordingly, the issuance of the shares of Minim common stock to e2Companies unitholders in the merger will significantly reduce the ownership stake and relative voting power of each share of Minim common stock held by current Minim stockholders. Consequently, following the merger, the ability of Minim’s current stockholders to influence the management of Minim will be substantially reduced. The issuance, or expected issuance, of Minim common stock in connection with the merger could decrease the market price of Minim common stock. In connection with the merger and as part of the merger consideration, Minim expects to issue shares of Minim common stock to e2Companies’ unitholders. The anticipated issuance of Minim common stock in the merger may result in fluctuations in the market price of Minim common stock, including a stock price decrease. In addition, the perception in the market that the holders of a large number of shares of Minim common stock may intend to sell shares could reduce the market price of Minim common stock. The intended benefits of the merger may not be realized. The merger poses risks for Minim’s and e2Companies’ ongoing operations, including, among others: ● that senior management’s attention may be diverted from the management of Minim’s and e2Companies’ current operations and development of its products; ● costs and expenses associated with any undisclosed or potential liabilities; and ● unforeseen difficulties may arise in integrating e2Companies’ and Minim’s business in the combined company. 24 As a result of the foregoing, the combined company may be unable to realize the full strategic and financial benefits currently anticipated from the merger, and Minim or e2Companies cannot assure you that the merger will be accretive to Minim or e2Companies in the near term or at all. Furthermore, if Minim or e2Companies fails to realize the intended benefits of the merger, the market price of the combined company’s common stock could decline to the extent that the market price reflects those benefits. Minim’s stockholders will have experienced substantial dilution of their ownership interests in Minim without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the merger. If the merger is completed, e2Companies executive officers and e2Companies appointees to the combined company ’ s board of directors will have the ability to significantly influence the combined company ’ s management and business affairs, as well as matters submitted to the combined company ’ s board of directors or stockholders for approval, especially if they decide to act together with the current e2Companies unitholders. Upon completion of the merger, the former e2Companies unitholders will own approximately 97% of the combined company on a fully diluted basis. If the merger is completed, the combined company is expected to be led by e2Companies executive officers. Furthermore, the combined company’s anticipated board of directors will consist of seven members, five of which will be appointed by e2Companies pursuant to the terms of the Merger Agreement. As a result, such persons, if they choose to act together, will have the ability to significantly influence the combined company’s management and business affairs, as well as matters submitted to the combined company’s board of directors or stockholders for approval. The announcement and pendency of the merger could have an adverse effect on Minim’s or e2Companies’ business, financial condition, results of operations or business prospects. The announcement and pendency of the merger could disrupt Minim’s and/or e2Companies’ businesses in the following ways, among others: ● Minim’s or e2Companies’ current and prospective employees could experience uncertainty about their future roles within the combined company, and this uncertainty might adversely affect Minim’s or e2Companies’ ability to retain, recruit and motivate key personnel; ● the attention of Minim’s or e2Companies’ management may be directed towards the completion of the merger and other transaction-related considerations and may be diverted from the day-to-day business operations of Minim or e2Companies, as applicable, and matters related to the merger may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Minim or e2Companies, as applicable; ● customers, prospective customers, suppliers, collaborators and other third parties with business relationships with Minim or e2Companies may decide not to renew or may decide to seek to terminate, change or renegotiate their relationships with Minim or e2Companies as a result of the merger, whether pursuant to the terms of their existing agreements with Minim or e2Companies; and ● the market price of Minim’s common stock may decline to the extent that the current market price reflects a market assumption that the proposed merger will be completed. Should they occur, any of these matters could adversely affect the businesses of, or harm the financial condition, results of operations or business prospects of, Minim or e2Companies. 25 During the pendency of the merger, Minim or e2Companies may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain actions because of restrictions in the Merger Agreement. Covenants in the Merger Agreement impede the ability of Minim or e2Companies to make dispositions or acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the merger, potential spin-off of all or a portion of Minim’s assets prior to the consummation of the merger, excluding certain permitted financings as set forth in the Merger Agreement. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors. In addition, while the Merger Agreement is in effect and subject to limited exceptions, Minim is prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to the entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition, a tender offer, a merger or other business combination outside the ordinary course of business. These restrictions may prevent Minim from pursuing otherwise attractive business opportunities or other capital structure alternatives and making other changes to its business or executing certain of its business strategies prior to the completion of the merger, which could be favorable to Minim stockholders. Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement. The terms of the Merger Agreement prohibit Minim from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances if the Minim Board of Directors determines in good faith, after consultation with its independent financial advisor and outside counsel, that an unsolicited competing proposal constitutes, or would reasonably be expected to result in, a superior competing proposal and that failure to take such action would be reasonably likely to result in a breach of the fiduciary duties of the Minim Board of Directors. In the event that the Minim Board of Directors withdraws or modifies its recommendation for approval of the merger based on such superior competing proposal, e2Companies may terminate the Merger Agreement. The exchange ratio is not adjustable based on the market price of Minim common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed. The Merger Agreement has set the exchange ratio formula for the e2Companies common units, and the exchange ratio is only adjustable upward or downward to reflect Minim’s and e2Companies’ equity capitalization as of immediately prior to the effective time of the merger. Any changes in the market price of common stock before the completion of the merger will not affect the number of shares e2Companies unitholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the merger, the market price of Minim common stock declines from the market price on the date of the Merger Agreement, then e2Companies unitholders could receive merger consideration with substantially lower value. Similarly, if before the completion of the merger, the market price of Minim common stock increases from the market price on the date of the Merger Agreement, then e2Companies unitholders could receive merger consideration with substantially more value for their shares of e2Companies common units than the parties had negotiated for in the establishment of the exchange ratio. Minim is expected to incur substantial expenses related to the merger with e2Companies. Minim has incurred, and expects to continue to incur, substantial expenses in connection with the merger, as well as operating as a public company. Minim will incur significant fees and expenses relating to legal, accounting, financial advisory and other transaction fees and costs associated with the merger. Actual transaction costs may substantially exceed Minim’s estimates and may have an adverse effect on the combined company’s financial condition and operating results. Failure to complete the merger could negatively affect the value of Minim common stock and the future business and financial results of both Minim and e2Companies. If the merger is not completed, the ongoing businesses of Minim and e2Companies could be adversely affected. Moreover, each of Minim and e2Companies will be subject to a variety of risks associated with the failure to complete the merger, including without limitation the following: ● diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the merger; 26 ● reputational harm due to the adverse perception of any failure to successfully complete the merger; and ● having to pay certain costs relating to the merger, such as legal, accounting, financial advisory, filing and printing fees. If the merger is not completed, the market price of Minim common stock and the business and financial results of both Minim (including the cessation of its operations) and e2Companies could be materially affected. The merger is expected to result in a limitation on the combined company ’ s ability to utilize its net operating loss carryforward. Under Section 382 of the Code, use of Minim’s net operating loss carryforwards (“NOLs”) will be limited if Minim experiences a cumulative change in ownership of greater than 50% in a moving three-year period. At December 31, 2023, Minim had approximately $76.9 million of net operating loss. Minim will experience an ownership change as a result of the merger and therefore its ability to utilize its NOLs and certain credit carryforwards remaining at the effective time of the merger will be limited. The limitation will be determined by the fair market value of Minim’s common stock outstanding prior to the ownership change, multiplied by the applicable federal rate. It is expected that the merger will impose a limitation on Minim’s NOLs. Limitations imposed on Minim’s ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes or other causes. In general, either party can refuse to complete the merger if there is a material adverse effect (as defined in the Merger Agreement) affecting the other party between March 12, 2024, the date of the Merger Agreement, and the closing of the merger. However, some types of changes do not permit either party to refuse to complete the merger, even if such changes would have a material adverse effect on Minim or e2Companies, as the case may be: ○ general conditions affecting the industry in which each party operates; ○ changes generally affecting the United States or global economy or capital markets as a whole; ○ any changes (after the date of the Merger Agreement) in GAAP or applicable law or other legal requirement; ○ any hurricane, flood, tornado, earthquake, or other natural disaster, epidemic, plague, pandemic or other public health event or any other force majeure event, or any national or international calamity or crisis; ○ the public announcement of the Merger Agreement or the pendency of the transactions contemplated thereunder; or ○ the taking of any action, or the failure to take any action, by either party that is expressly required by the terms of the Merger Agreement. If adverse changes occur but Minim and e2Companies must still complete the merger, the market price of Minim common stock may suffer. Minim and e2Companies may become involved in securities litigation or stockholder derivative litigation in connection with the merger, and this could divert the attention of Minim and e2Companies management and harm the combined company ’ s business, and insurance coverage may not be sufficient to cover all related costs and damages. Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction. Minim and e2Companies may become involved in this type of litigation in connection with the merger, and the combined company may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the business of Minim, e2Companies and the combined company. 27 Risks Related to the Combined Company Following the Merger Minim stockholders and e2Companies unitholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger. If the combined organization is unable to realize the full strategic and financial benefits currently anticipated from the merger, Minim stockholders and e2Companies unitholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined organization is able to realize only part of the strategic and financial benefits currently anticipated from the merger. Furthermore, if the combined company fails to realize the intended benefits of the merger, the market price of Minim common stock could decline to the extent that the market price reflects those benefits. The market price of the combined company ’ s common stock after the merger may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses. There has not been a public market for the combined company’s common stock. The market price of the combined company’s common stock could be subject to significant fluctuation following the merger. The current business of Minim differs from that of e2Companies in important respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s common stock following the merger may be affected by factors different from those currently affecting the results of operations of Minim. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of the combined company’s common stock, regardless of the actual operating performance of the combined company. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate include: ● investors reacting negatively to the effect on the combined company’s business and prospects from the merger; ● the announcement of new products, new developments, services or technological innovations by the combined company or the combined company’s competitors; ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in the combined company’s business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by the combined company or the combined company’s competitors; ● conditions or trends in the power services and communications industries; ● changes in the economic performance or market valuations of other power services and communications companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to the combined company’s performance or financial condition; ● sale of the combined company’s common stock by stockholders, including executives and directors; 28 ● volatility and limitations in trading volumes of the combined company’s common stock; ● volatility in the market prices and trading volumes of the communications stocks; ● the combined company’s ability to finance its business; ● ability to secure resources and the necessary personnel to pursue the plans of the combined company; ● failure to meet external expectations or management guidance; ● changes in the combined company’s capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of common stock by stockholders; ● the combined company’s cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● investigations by regulators into the operations of the combined company or those of the combined company’s competitors; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of the combined company’s control. In the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigation has often been instituted against these companies. Litigation of this type, if instituted against the combined company, could result in substantial costs and a diversion of management’s attention and resources of the combined company. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that the combined company make significant payments. If the merger is consummated, the business operations, strategies and focus of the combined company will fundamentally change, and these changes may not result in an improvement in the value of its common stock. Pending the consummation of the merger it is currently anticipated that the combined company would focus its resources on executing e2Companies’ current business plan. If the merger is consummated, an investment in Minim’s common stock will primarily represent an investment in the business operations, strategies and focus of e2Companies. The failure to successfully commercialize or to develop and market other products will significantly diminish the anticipated benefits of the merger and have a material adverse effect on the business of the combined company. There is no assurance that the combined company’s business operations, strategies or focus will be successful following the merger, and the merger could depress the value of the combined company’s common stock. 29 The combined company may issue additional equity securities in the future, which may result in further dilution to existing investors. To the extent the combined company raises additional capital by issuing equity securities, the combined company’s stockholders may experience substantial dilution. The combined company may, from time to time, sell additional equity securities in one or more transactions at prices and in a manner it determines. If the combined company sells additional equity securities, existing stockholders may be materially diluted. In addition, new investors could gain rights superior to existing stockholders, such as liquidation and other preferences. In addition, the number of shares available for future grants under the combined company’s equity compensation plans may be increased in the future. In addition, the exercise or conversion of outstanding options or warrants to purchase shares of capital stock may result in dilution to the combined company’s stockholders upon any such exercise or conversion. All of Minim’s outstanding shares of common stock are, and any shares of Minim common stock that are issued in the merger are expected to be, freely tradable without restrictions or further registration under the Securities Act, except for any shares held by affiliates of the combined company, as defined in Rule 144 under the Securities Act. Rule 144 defines an affiliate as a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the combined company and would include persons such as the combined company’s directors and executive officers and large stockholders. In turn, resales, or the perception by the market that a substantial number of resales could occur, could have the effect of depressing the market price of the combined company’s common stock. The concentration of the capital stock ownership with insiders of the combined company after the merger will likely limit the ability of the stockholders of the combined company to influence corporate matters. Following the merger, the executive officers, directors, five percent or greater stockholders, and the respective affiliated entities of the combined company will, in the aggregate, beneficially own a significant majority of the combined company’s outstanding common stock. As a result, these stockholders, acting together, will have control over matters that require approval by the combined company’s stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a corporate transaction that other stockholders may view as beneficial. Certain stockholders could attempt to influence changes within Minim, which could adversely affect Minim ’ s operations, financial condition and the value of Minim ’ s common stock. The combined company’s stockholders may from time to time seek to acquire a controlling stake in the combined company, engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes. Campaigns by stockholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming and could disrupt the combined company’s operations and divert the attention of the combined company’s board of directors and senior management from the pursuit of the proposed merger transaction. These actions could adversely affect the combined company’s operations, financial condition, ability to consummate the merger and the value of the combined company’s common stock. The sale or availability for sale of a substantial number of shares of common stock of the combined company after the merger could adversely affect the market price of such shares after the merger. Sales of a substantial number of shares of common stock of the combined company in the public market after the merger and other legal restrictions on resale, or the perception that these sales could occur, could adversely affect the market price of such shares and could materially impair the combined company’s ability to raise capital through equity offerings in the future. Minim and e2Companies are unable to predict what effect, if any, market sales of securities held by significant stockholders, directors or officers of the combined company or the availability of these securities for future sale will have on the market price of the combined company’s common stock after the merger. 30 The combined company also intends to register all of the shares of common stock issuable upon the exercise of any options or other equity incentives the combined company may grant in the future, for public resale under the Securities Act. Accordingly, these shares will be able to be freely sold in the public market upon issuance as permitted by any applicable vesting requirements. If securities analysts do not publish research or reports about the business of the combined company, or if they publish negative evaluations, the price of the combined company ’ s common stock could decline. The trading market for the combined company’s common stock will rely in part on the availability of research and reports that third-party industry or financial analysts publish about the combined company. Furthermore, if one or more of the analysts who do cover the combined company (if any) downgrades its stock, its stock price would likely decline. If one or more of these analysts cease coverage of the combined company, the combined company could lose visibility in the market, which in turn could cause its stock price to decline. Additionally, if securities analysts publish negative evaluations of competitors in the combined company’s industries, the comparative effect could cause the combined company’s stock price to decline. The combined company ’ s management will be required to devote substantial time to comply with public company regulations. As a public company, the combined company will incur significant legal, accounting and other expenses that e2Companies did not incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), as well as rules implemented by the SEC and Nasdaq, impose various requirements on public companies, including those related to corporate governance practices. The combined company’s management and other personnel will need to devote a substantial amount of time to these requirements. Moreover, these rules and regulations will increase the combined company’s legal and financial compliance costs relative to those of e2Companies and will make some activities more time-consuming and costly. The Sarbanes-Oxley Act requires, among other things, that the combined company maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, the combined company must perform system and process evaluation and testing of its internal control over financial reporting to allow management and the combined company’s independent registered public accounting firm to report on the effectiveness of its internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”). The combined company’s compliance with these requirements will require that it incur substantial accounting and related expenses and expend significant management efforts. The combined company will likely need to hire additional accounting and financial staff to satisfy the ongoing requirements of Section 404. The costs of hiring such staff may be material and there can be no assurance that such staff will be immediately available to the combined company. Moreover, if the combined company is not able to comply with the requirements of Section 404, or if the combined company or its independent registered public accounting firm identifies deficiencies in its internal control over financial reporting that are deemed to be material weaknesses, investors could lose confidence in the accuracy and completeness of the combined company’s financial reports, the market price of the combined company’s common stock could decline and the combined company could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. The combined company may not be able to timely and effectively implement controls and procedures required by Section 404 that will be applicable to the combined company after the merger. e2Companies is not currently subject to Section 404. However, following the merger, the combined company will be subject to Section 404. The standards required for a public company under Section 404 are significantly more stringent than those required of e2Companies as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to the combined company after the merger. If management is not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, it may not be able to assess whether its internal control over financial reporting is effective, which may subject the combined company to adverse regulatory consequences and could harm investor confidence and cause the market price of the combined company’s common stock to decline. 31 Subsequent to the consummation of the merger, the combined company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment. Although Minim and e2Companies have conducted due diligence on each other, there can be no assurances that their diligence revealed all material issues that may be present in the other company’s business, that all material issues through a customary amount of due diligence will be uncovered, or that factors outside of Minim’s and e2Companies’ control will not later arise. As a result, the combined company may be forced to later write down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with each company’s preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on liquidity, the fact that the combined company reports charges of this nature could contribute to negative market perceptions about the combined company or its securities. In addition, charges of this nature may make future financing difficult to obtain on favorable terms or at all. Minim and e2Companies do not anticipate that the combined company will pay any cash dividends in the foreseeable future. The current expectation is that the combined company will retain its future earnings, if any, to fund the development and growth of the combined company’s business. As a result, capital appreciation, if any, of the common stock of the combined company will be your sole source of gain, if any, for the foreseeable future. In the event that the combined company fails to satisfy any of the listing requirements of The Nasdaq Capital Market, its common stock may be delisted, which could affect its market price and liquidity. Following the merger, the combined company’s common stock is expected to be listed on The Nasdaq Capital Market. For continued listing on The Nasdaq Capital Market, the combined company will be required to comply with the continued listing requirements, including the minimum market capitalization standard, the corporate governance requirements and the minimum closing bid price requirement, among other requirements. In the event that the combined company fails to satisfy any of the listing requirements of The Nasdaq Capital Market, its common stock may be delisted. If the combined company is unable to list on The Nasdaq Capital Market, it would likely be more difficult to trade in or obtain accurate quotations as to the market price of the combined company’s common stock. If the combined company’s securities are delisted from trading on The Nasdaq Capital Market, and the combined company is not able to list its securities on another exchange or to have them quoted on Nasdaq, the combined company’s securities could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, the combined company could face significant adverse consequences including: ● a limited availability of market quotations for its securities; ● a determination that its common stock is a “penny stock,” which will require brokers trading in its common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the combined company’s securities; ● a limited amount of news and analyst coverage for the combined company; and ● a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or to obtain additional financing in the future. 32 An active trading market for combined company common stock may not develop. The listing of combined company common stock on The Nasdaq Capital Market does not assure that a meaningful, consistent and liquid trading market exists. An active trading market for shares of combined company common stock may never develop or be sustained. If an active market for the combined company common stock does not develop, it may be difficult for investors to sell their shares either without depressing the market price for the shares or at all. The combined company may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions. The combined company may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that it believes will complement or augment its existing business. If the combined company acquires businesses with promising markets or technologies, it may not be able to realize the benefit of acquiring such businesses if it is unable to successfully integrate them with its existing operations and company culture. The combined company may encounter numerous difficulties in developing, manufacturing, and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent it from realizing their expected benefits or enhancing its business. There is no assurance that, following any such acquisition, the combined company will achieve the synergies expected to justify the transaction, which could result in a material adverse effect on the combined company’s business and prospects. 33 Risks Related to the Minim Business and to the Company There is substantial doubt about our ability to continue as a going concern, which may affect our ability to obtain future financing and may require us to curtail or cease our operations. Our consolidated financial statements as of December 31, 2023 were prepared under the assumption that we will continue as a going concern. At December 31, 2023, we had cash and cash equivalents of $709,000. We estimate that our existing cash resources will not be sufficient to fund our operations into the first quarter of 2025. 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. Based on these factors, management determined that there is substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm expressed substantial doubt as to our ability to continue as a going concern in its report dated April 12, 2024 included elsewhere in this Form 10-K. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that investors will lose all or part of their investment. When we seek additional financing to fund our business activities as a result of the substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. We may be unsuccessful in integrating the operations of the business we expect to acquire in the future . We may not effectively assimilate the business or product offerings of acquired companies into our business or within the anticipated costs or timeframes, retain key customers and suppliers or key employees of acquired businesses, or successfully implement our business plan for the combined business. In addition, our final determinations and appraisals of the estimated fair value of assets acquired and liabilities assumed in our acquisitions may vary materially from earlier estimates and we may fail to realize fully anticipated cost savings, growth opportunities or other potential synergies. We cannot assure that the fair value of acquired businesses or investments will remain constant. We may require additional funding, which may be difficult to obtain on favorable terms, if at all. Over the next 12 months we may require additional funding if, for instance, we continue to experience losses. As of December 31, 2023, the Company does not have a borrowing facility in place after it fully repaid and terminated the revolving facility with Silicon Valley Bank in October 2023. Epidemic and pandemic diseases (including the COVID-19 pandemic) could have a material adverse effect on our business, financial condition, results of operations, cash flows, and ability to comply with regulatory requirements. Outbreaks of epidemic, pandemic, or contagious diseases, such as COVID-19, could cause disruptions in our business and the businesses of third parties who we depend upon for manufacturing and other services. These disruptions could include disruptions in our ability to manufacture our products, distribute our products, or obtain services. These disruptions have caused, and could cause further, closures of our facilities or the facilities of our suppliers. Any disruption of the businesses of our suppliers or manufacturers would likely impact our sales and operating results. In addition, a significant outbreak of epidemic, pandemic, or contagious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products. Any of these events could have a material adverse effect on our business, financial condition, results of operations, or cash flows. Additionally, such outbreaks could disrupt our ability to timely file periodic reports required by the Securities and Exchange Commission or the stock exchanges on which our common stock is listed, which may lead to the delisting or downgrading of our common stock on such stock exchanges. 34 Risks Related to Our Products, Technology and Intellectual Property We may be subject to product returns resulting from defects or from overstocking of our products. We are exposed to the risk of product returns from our customers. Overstocking has led in the past and may lead in the future to higher-than-normal customer returns. Security breaches and data loss may expose us to liability, harm our reputation and adversely affect our business. As part of our business operations, we collect, store, process, use and disclose sensitive data relating to our business, including in connection with the provision of our cloud services and in our information systems and data centers (including third-party data centers). We also engage third-party providers to assist in the development of our products and for services that may include the collection, handling, processing and storage of personal data on our behalf. In addition, we host our customers’ subscriber data in third-party data centers in the course of providing our products and cloud-based platform solutions and services to our customers. While we and our third-party providers apply multiple layers of security to control access to data and use encryption and authentication technologies to secure data from unauthorized access, use, alteration and disclosure, these security measures may be compromised. Malicious hackers may attempt to gain access to our network or data centers; steal proprietary information related to our business, products, employees and customers; or interrupt our systems and services or those of our customers or others. In particular, there has been a spike in cybersecurity attacks during the COVID-19 pandemic and work-from-home environment. We may experience costs and senior management distractions due to patent-related matters. Many of our products incorporate patented technology. We attempt to license appropriate patents either directly or through our integrated circuit suppliers. However, we are subject to costs and senior management distractions due to patent-related litigation. Patent litigation matters are complex and time consuming and expose Minim to potential material obligations. It is impossible to assess the potential cost and senior management distraction associated with patent litigation matters that are currently outstanding or may occur in the future. We could infringe the intellectual property rights of others. Particular aspects of our technology could be found to infringe on the intellectual property rights or patents of others. Other companies may hold or obtain patents on inventions or may otherwise claim proprietary rights to technology necessary to our business. We cannot predict the extent to which we may be required to seek licenses. We cannot assure you that the terms of any licenses we may be required to seek will be reasonable. We are often indemnified by our suppliers relative to certain intellectual property rights. However, these indemnifications do not cover all possible suits, and there can be no assurance that a relevant indemnification will be honored by the indemnifying party or that the indemnifying party has the financial resources to meet its indemnification obligation. 35 ITEM 1B. – UNRESOLVED STAFF COMMENTS None.