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Item 1. Financial Statements

2024-05-20 compared with 2024-01-08 · 483 added, 481 removed, 160 unchanged (86% of the section changed)

FINANCIAL STATEMENTS

AND SUBSIDIARIES

Consolidated Balance Sheets

Condensed Consolidated Balance Sheets

Current assets

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowance of doubtful accounts of $ 0 and $ 138,331 as of September 30, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowance of doubtful accounts of $ 283,242 and $ 312,983 as of March 31, 2024 and December 31, 2023, respectively

Inventories, net

Prepaid expenses and other current assets

5 unchanged sentences

Current liabilities

Bank credit line

Accounts payable

Bridge loan agreement

Current maturities of operating lease liabilities

Accrued expenses

Deferred revenue, current

Total current liabilities

Operating lease liabilities, less current maturities

Deferred revenue, noncurrent

Total liabilities

7 unchanged sentences

issued and outstanding:

1,898,466 shares at September 30, 2023 and 1,877,970 shares at December 31, 2022 respectively

2,809,689 shares at March 31, 2024 and 2,632,809 shares at December 31, 2023 respectively

Additional paid-in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

AND SUBSIDIARIES

Consolidated Statements of Operations

Three Months Ended September 30,

Nine Months Ended September 30,

Condensed Consolidated Statements of Operations

Three Months Ended

Cost of goods sold

( 2,997,909 )

Operating expenses:

2 unchanged sentences

Research and development

Vendor liability forgiveness, net of asset transfers (Note 7)

Total operating expenses

2 unchanged sentences

( 3,925,470 )

( 16,107,331 )

( 10,692,812 )

Other expense:

Interest expense, net

Total other expense

Interest income (expense), net

Total other income (expense)

Loss before income taxes

1 unchanged sentence

( 4,070,457 )

( 16,463,974 )

( 10,954,614 )

Income taxes (benefit)

$ ( 6,820,287 )

$ ( 4,062,580 )

Income tax benefit

$ ( 3,258,955 )

$ ( 4,070,457 )

Net loss per share:

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Basic and diluted

Basic and diluted weighted average common and common equivalent shares

accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

the nine months ended September 30, 2023

Condensed Consolidated Statements of Stockholders’

For the three months ended March 31, 2024

Preferred Stock

Balance at December 31, 2023

2 unchanged sentences

( 3,258,955 )

Common stock issued for vested restricted units

Preferred stock issuance

Issuance of warrants

Stock-based compensation

1 unchanged sentence

$ ( 95,727,733 )

( 5,597,681 )

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at June 30, 2023

$ ( 84,502,992 )

( 6,820,287 )

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at September 30, 2023

$ ( 91,323,279 )

the nine months ended September 30, 2022

For the three months ended March 31, 2023

Preferred Stock

Balance at December 31, 2022

2 unchanged sentences

( 4,070,457 )

Stock option exercises

Common stock issued for vested restricted units

Stock-based compensation

1 unchanged sentence

$ ( 78,905,311 )

( 4,426,559 )

Stock option exercises, net

Stock-based compensation

Balance at June 30, 2022

$ ( 66,250,669 )

( 4,062,580 )

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at September 30, 2022

$ ( 70,313,249 )

accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Condensed Consolidated Statements of Cash

Three Months Ended

Cash flows used in operating activities:

5 unchanged sentences

Amortization of debt issuance costs

Amortization of sales contract costs

Stock based compensation

Provision (recovery) for accounts receivable allowances

Provision for inventory valuation adjustment

Provision for accounts receivable allowances

Vendor liability forgiveness, net of asset transfers

Changes in operating assets and liabilities:

Accounts receivable

( 1,428,785 )

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses

( 3,041,742 )

Deferred revenue

7 unchanged sentences

Cash flows from financing activities:

Net proceeds from (payment on) the bank credit line

( 3,891,682 )

Repayment of government loan

Proceeds from stock option exercises

Net cash provided by (used in) financing activities

( 3,891,682 )

Net increase (decrease) in cash and cash equivalents

( 11,132,689 )

Cash, cash equivalents, and restricted cash - Beginning

Cash, cash equivalents, and restricted cash - Ending

Net proceeds from the bank credit line

Proceeds from preferred stock issuance

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents - Beginning

Cash and cash equivalents - Ending

Supplemental disclosures of cash flow information:

Cash paid during the period for:

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

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

Cash and cash equivalents

1 unchanged sentence

Total cash, cash equivalents and restricted cash

accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

AND SUBSIDIARIES

to Consolidated Financial Statements

Notes to Consolidated Financial Statements

(1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

and its wholly owned subsidiaries, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively

referred to as “Minim” or the “Company”.

The Company delivers intelligent networking products that reliably and

securely connect homes and offices around the world.

We are the exclusive global license holder to the Motorola brand for home networking

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 delivers intelligent networking products that reliably and securely

connect homes and offices around the world.

We were the exclusive global license holder to the Motorola brand for home networking hardware

The Company designs and manufactures products including cable modems, cable modem/routers, mobile broadband modems, wireless

3 unchanged sentences

leading to higher customer satisfaction and decreased support burden.

January 21, 2022, Zoom Connectivity, Inc.

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

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

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

of Presentation

accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the requirements of the

Securities and Exchange Commission (“SEC”) for interim reporting.

As permitted under those rules, certain footnotes

or other financial information that are normally required by U.S.

generally accepted accounting principles (“GAAP”) can be

condensed or omitted.

In the opinion of management, the financial statements include all normal and recurring adjustments that are considered

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been

prepared in accordance with the requirements of the U.S.

Securities and Exchange Commission

(“SEC”) for interim reporting.

As permitted under those rules, certain footnotes or

other financial information that are normally required by U.S.

generally accepted

accounting principles (“GAAP”) can be condensed or omitted.

In the opinion of management,

the financial statements include all normal and recurring adjustments that are considered

necessary for the fair presentation of the Company’s financial position and operating results.

1 unchanged sentence

have been eliminated in consolidation.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with

the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

results of the Company’s operations can vary during each quarter of the year.

Therefore, the results and trends in these interim

financial statements may not be the same as those for the full year or any future periods.

prior year amounts have been reclassified to conform to the current year presentation.

None of the reclassifications impacted the condensed

consolidated statements of operations for the three-months and nine months ended September 30, 2023.

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

All shares and

associated amounts have been retroactively restated to reflect the stock split.

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

Since inception, the

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

During the nine months ended September 30, 2023, the

Company incurred a net loss of $ 16.5 million and had positive cash flows from operating activities of $ 3.7 million.

As of September 30,

2023, the Company had an accumulated deficit of $ 91.3 million and cash and cash equivalents of $ 0.5 million.

The Company implemented

cost reduction plans to align its cost structure to its sales and increase its liquidity.

The Company will continue to monitor its cost

in relation to its sales and adjust its cost structure accordingly.

The Company’s financial position and operating results raise

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

The Company believes it does not have sufficient

resources through its cash and cash equivalents, other working capital and borrowings under its SVB line-of-credit to continue as a going

concern through at least one year from the issuance of these financial statements.

The information included in this Quarterly

Report on Form 10-Q should be read in conjunction with the audited financial statements

included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The results of the Company’s operations can vary during each quarter of the year.

Therefore, the results and

trends in these interim financial statements may not be the same as those for the

full year or any future periods.

On April 17, 2023, the Company effected a 25:1 reverse stock split for each share of common

stock issued and outstanding.

All shares and associated amounts have been retroactively

restated to reflect the stock split.

The Company’s

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

Since inception, the Company has

incurred significant losses and negative cash flows from operations.

During the three months ended March 31, 2024, the Company

incurred a net loss of $3.3 3,258,955

million, and used cash from operations of $2.5 2,482,265

million, which was offset by $2.8 2,800,000

million in cash provided from financing activities.

As of March 31, 2024, the Company had an accumulated deficit of $95.7 95,727,733

million and cash and cash equivalents of $1.0 1,027,057 million.

The Company will continue to monitor its costs in relation to its

sales and adjust its cost structure accordingly.

Management of the Company believes it will not have sufficient resources to

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

Merger Agreement with e2 Companies, LLC

On March 12, 2024, the

“Company”, and its wholly owned subsidiary, MME Sub 1 LLC, a Florida limited liability company (“Merger Sub”),

formed in March 2024, 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 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.

of the Merger is conditioned upon, among other things, (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.

The Merger Agreement is subject to the right of either party to obtain a 30 day

extension, and including, but not limited to, Stockholder Approvals having not been obtained, Company Shares being 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.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

Issued Accounting Standards

June 2016, the FASB issued ASU No.

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

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

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

This ASU is effective for

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

The Company is currently assessing the potential impact that the

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

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

position, results of operations and cash flows .

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K

for the year ended December 31, 2023.

The Company’s significant accounting policies did not change during the three months ended March 31, 2024.

Recently Issued Accounting Standards

There have been no other new accounting pronouncements that have significance, or

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

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

is recognized for each distinct performance obligation as control is transferred to the customer.

Revenue attributable to hardware products

bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the

The transaction price allocated to the SaaS offering is recognized ratably beginning when the customer is expected to activate

their account and over a three-year period that the Company has estimated based on the expected replacement of the hardware.

Price Allocated to the Remaining Performance Obligations

remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially

unsatisfied as of the end of the reporting period.

Unsatisfied and partially unsatisfied performance obligations consist of contract

liabilities, in-transit orders with destination terms, and non-cancellable backlog.

Non-cancellable backlog includes goods for which

customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet

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

be longer than one year.

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

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

Total capitalized

costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our

condensed consolidated balance sheets.

Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one

year or less.

These costs include sales commissions on SaaS contracts with a contract period of one year or less as sales commissions

on contract renewals are commensurate with those paid on the initial contract.

Company records accounts receivable when it has an unconditional right to the consideration.

Contract liabilities consist of deferred

revenue, which represents payments received in advance of revenue recognition related to SaaS agreements and for prepayments for products

or services yet to be delivered.

terms vary by customer.

The time between invoicing and when payment is due is not significant.

For certain products or services and customer

types, payment is required before the products or services are delivered to the customer.

following table reflects the contract balances as of the periods ended:

SCHEDULE OF CONTRACT BALANCES

September 30,

Deferred revenue, current

Deferred revenue, noncurrent

the nine months ended September 30, 2023, the change in contract balances was as follows:

SCHEDULE OF CHANGE IN CONTRACT BALANCES

Balance at December 31, 2022

Revenue recognized

Balance at September 30, 2023

Disaggregation

following table sets forth our revenues by distribution channel:

Revenue recognized for each distinct performance obligation as control is transferred

to the customer.

Revenue attributable to hardware products bundled with Software-as-a-Service

(“SaaS”) offerings are recognized at the time control of the product transfers to

the customer.

The transaction price allocated to the SaaS offering is recognized ratably

beginning when the customer is expected to activate their account and over a three-year

period that the Company has estimated based on the expected replacement of the hardware.

Transaction Price Allocated to the Remaining Performance Obligations

The remaining performance obligations represent the transaction price allocated to

performance obligations that are unsatisfied or partially unsatisfied as of the end

of the reporting period.

Unsatisfied and partially unsatisfied performance obligations

consist of contract liabilities, in-transit orders with destination terms, and non-cancellable

Non-cancellable backlog includes goods for which customer purchase orders

have been accepted, that are scheduled or in the process of being scheduled for shipment,

and that are not yet invoiced.

Contract costs

The Company recognizes the incremental costs of obtaining a contract with a customer

if the Company expects the benefit of those costs to be longer than one year.

Company has determined that certain sales commissions meet the requirements to be

capitalized, and the Company amortizes these costs on a consistent basis with the

pattern of transfer of the goods and services in the contract.

Total capitalized costs

to obtain a contract were immaterial during the periods presented and are included

in other current and long-term assets on our condensed consolidated balance sheets.

The Company applies a practical expedient to expense costs as incurred for costs to

obtain a contract when the amortization period is one year or less.

These costs include

sales commissions on SaaS contracts with a contract period of one year or less as

sales commissions on contract renewals are commensurate with those paid on the initial

Contract Balances

The Company records accounts receivable when it has an unconditional right to the

consideration.

The Company did no t have contract liabilities at March 31, 2024 and December 31, 2023.

Disaggregation of Revenue

The following table sets

forth our revenues by distribution channel:

Schedule of disaggregation of revenue by distribution channel

Three Months Ended September 30,

Nine Months Ended September 30,

following table sets forth our revenues by product:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended

The following table sets forth our revenues by product:

Three Months Ended

Cable modems & gateways

1 unchanged sentence

(4) BALANCE SHEET COMPONENTS

net consists of the following:

Inventories, net consists

of the following:

Schedule of inventories

1 unchanged sentence

Finished goods

goods includes consigned inventory held by our customers of $ 0 million and $ 4.2 million at September 30, 2023 and December 31, 2022,

respectively.

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

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

The inventory reserves were $ 1.6 million

and $ 2.5 million as of September 30, 2023 and December 31, 2022, respectively.

expenses consist of the following:

The Company did no t have consigned inventory held by our customers or in-transit inventory

at March 31, 2024 and December 31, 2023.

The Company reviews inventory for obsolete and slow-moving products each quarter and

makes provisions based on its estimate of the probability that the material will not

be consumed or that it will be sold below cost.

The inventory reserves were $ 0 million and $ 1.7 million as of March 31, 2024 and December 31, 2023, respectively.

Accrued expenses

Accrued expenses consist

of the following:

Schedule of accrued expenses

Inventory purchases

Payroll & related benefits

Professional fees

Royalty costs

Board of director fees

Sales allowances

Sales and use tax

Vendor contingent payments (Note 7)

Total accrued other expenses

(5) BANK CREDIT LINES AND GOVERNMENT LOANS

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

(the “SVB Loan Agreement”).

Bank Credit Line

On March 12, 2021, the Company terminated its Financing Agreement and entered into a loan and

security agreement with Silicon Valley Bank (the “SVB Loan Agreement”).

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

“First Amendment”).

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

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

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

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

The SVB Loan Agreement, as amended, provides for a revolving facility

up to a principal amount of $ 25.0 million.

The borrowing base equals the sum of (a)

85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent

of the value of eligible inventory (valued at cost), (ii) 85% of the net orderly liquidation

value of inventory, and (iii) $6.2 million in each, as determined by SVB from the

Company’s most recent borrowing base statement;

provided that SVB has the right to decrease

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

may adversely affect the collateral or its value.

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

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

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

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

the foregoing percentages in its good faith business judgment to mitigate the impact

of events, conditions, contingencies, or risks which may adversely affect the collateral

or its value.

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

Loans under the credit facility bear interest at a rate per

annum equal to (i) at all times when a streamline period is in effect, the greater

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

of one percent (3.75%) and (ii) at all times when a streamline period is not effect,

the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter

of one percent (4.25%).

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

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

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

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

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

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

These origination costs

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

Amortization of debt issuance costs

was $ 8 thousand and $ 18 thousand for the three months ended September 30, 2023 and 2022, respectively.

Amortization of debt issuance

costs was $ 29 thousand and $ 53 thousand for the nine months ended September 30, 2023 and 2022, respectively.

of September 30, 2023, the Company had $ 0.9 million outstanding, net of origination costs of $ 0 thousand, under the SVB Loan Agreement,

and this credit line had availability of $ 0 thousand.

interest rate on the bank credit lines was 9.5 % as of September 30, 2023.

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

Valley Bridge Bank.

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

to the Company.

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

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

The Company has had no business service interruptions or funding issues due to the bank transfer.

October 18, 2023, the Company fully paid the $ 0.9 million outstanding balance and accrued interest, and the SVB Loan Agreement was immediately

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

The First Amendment required the Company to maintain

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

period ending on the last day of each quarter.

On December 12, 2022, the Company entered into its second Amendment to the SVB Loan Agreement (the

“Second Amendment”).

The Second Amendment (i) reduced the aggregate amount available

under the revolving credit line from $ 25 million to $ 10 million, (ii) extends maturity

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

by virtue of the Company having entered into a Bridge Loan and Security Agreement

dated as of November 23, 2022 by and among Borrower and Slingshot Capital, LLC, under which Borrower incurred

certain Indebtedness and granted a Lien to Slingshot Capital.

The Company incurred $ 143 thousand in origination costs in connection with entering

into the SVB Loan Agreement.

These origination costs were recorded as a debt discount

and are being expensed over the remaining term of the facility.

Amortization of debt

issuance costs was $ 0 thousand and $ 15 thousand for the three months ended March 31, 2024 and 2023, respectively.

On October 18, 2023, the Company paid in full the outstanding balance and immediately terminated

the SVB Loan Agreement.

As of March 31, 2024 and December 31, 2023, the Company had $ 0 outstanding under the SVB Loan Agreement.

The SVB Loan Agreement

included a minimum interest expense of $ 20

thousand per month.

The First Amendment required the Company to maintain certain levels of minimum adjusted EBITDA, which were

tested on the last day of each calendar quarter and measured for the trailing 3-month period ending on the last day of each quarter.

The Second Amendment removed the minimum EBITDA covenants.

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

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

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

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

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

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

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

Loan Agreement.

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

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

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

In the event of default,

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

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

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

The Loan Agreement is subordinated

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

Subject to the Senior Lender’s

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

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

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

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

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

As of September 30, 2023, the accrued interest is $ 104 thousand and

is included in accrued expenses in the condensed consolidated balance sheet.

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

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

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

December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal

and accrued but interest, which aggregated to $ 1,125,778 ,

was converted to 734,343

common stock of the Company.

Upon the execution of the debt conversion agreement and issuance of the common stock, the Bridge Loan

Agreement and Bridge Term Note were terminated.

2020, the Company participated in the Coronavirus Aid, Relief, and Economic Security Act and received an aggregate $ 1,128,000 in unsecured

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

Under the terms of the loans,

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

The Company repaid $ 34,000 during the nine months ended September 30, 2022.

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

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

The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Right-of-use (“ROU”)

assets and lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less.

components of lease costs were as follows:

In addition, pursuant to the SVB Loan Agreement, the Company cannot pay any dividends

without the prior written consent of SVB.

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

Capital”) entered into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant

to which Slingshot Capital agreed to make available a bridge loan in the principal

amount up of up to $ 1,500,000 .

In conjunction with the Bridge Loan Agreement, the

Company executed a bridge term note (the “Bridge Term Note”) in favor of Slingshot

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

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

Principal amounts borrowed

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

Unpaid principal after February 28, 2023 bear an interest of 14.00 %

per annum until paid in full.

In the event of default, all outstanding principal and interest shall bear interest at an annual

rate of 18 % .

In connection with the Bridge Loan Agreement, the Company, Slingshot Capital, and

Silicon Valley Bank (the “Senior Lender”) executed a subordination agreement (the

“Subordination Agreement”) on November 30, 2022.

The Loan Agreement is subordinated to the outstanding indebtedness and obligations

under the Company’s senior credit facility.

Subject to the Senior Lender’s written consent, the Company shall grant Slingshot Capital a second-priority security

interest in all of the Company’s collateral, which shall be subordinated to any and all security interests granted

to the Senior Lender and at all times shall be limited to the same collateral granted

to the Senior Lender under the senior credit facility.

Principal and interest are not due and payable until the maturity date, which is January 15, 2024, unless the Company’s senior credit facility with the Senior Lender is paid in full in cash on an earlier

The Company reimbursed Slingshot Capital $ 20,000 for its reasonable and documented

expenses and fees related to the negotiations, documentation, and execution of the

Bridge Loan Agreement, Subordination Agreement, and Bridge Term Note.

On December 6, 2023, the Company and Slingshot Capital entered into a Debt Conversion Agreement

(“Conversion Agreement”) pursuant to which the Company agreed to issue 734,343 shares

of the Company’s common stock (based on $ 1.533 per share) (the “Shares”) in exchange for the cancellation

of a total principal amount of $ 1,000,000 (“Principal Amount”) outstanding under the

Bridge Loan Agreement and Bridge Term Note (collectively, the “Loan Agreements”),

with Slingshot Capital, plus $ 125,778 in accrued and unpaid interest on such Principal

Amount as of December 6, 2023.

The price per share used in the exchanged was determined by the weighted average

price per share and trade volume on September 13, 2023 and November 28, 2023.

Slingshot Capital is owned by the Company’s former Chairperson of the Board and a former Board of Director, Jeremy Hitchcock

and Elizabeth Hitchcock, respectively.

The Company has entered into

agreements to lease certain office space as well as its former warehouses and distribution centers under operating leases.

recognizes lease expense for these leases on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and lease

liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease

costs were as follows:

Schedule of components of lease costs

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended

Operating lease costs

1 unchanged sentence

Total lease costs

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

The weighted-average remaining

lease term and discount rate were as follows:

Schedule of weighted average remaining lease term and discount rate

Period Ended September 30,

Three Months Ended

Operating leases:

1 unchanged sentence

Weighted average discount rate

cash flow information and non-cash activity related to our operating leases are as follows:

Supplemental cash flow

information and non-cash activity related to our operating leases are as follows:

Schedule of supplemental cash flow information related to operating leases

Nine Months ended September 30,

Three Months Ended

Operating cash flow information:

2 unchanged sentences

ROU asset obtained in exchange for lease liability

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

The maturity of the Company’s operating lease liabilities as of March 31, 2024 were as follows:

Schedule of maturity of operating lease liabilities

Years ended December 31,

2023 (remainder)

Years ended December 31, 2024 (remainder)

Total lease payments

4 unchanged sentences

( 7) COMMITMENTS AND CONTINGENCIES

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

trademarks owned by Motorola Trademark Holdings, LLC for the manufacture, sale and marketing of consumer cable modem products, consumer

routers, WiFi range extenders, MoCa adapters, cellular sensors, home powerline network adapters, and access points worldwide through

a wide range of authorized sales channels.

The license agreement has a term ending December 31, 2025.

connection with the License Agreement, the Company has committed to reserve a certain percentage of wholesale prices for use in advertising,

merchandising and promotion of the related products.

Additionally, the Company is required to make quarterly royalty payments equal to

a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments as follows:

SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS

Years ended December 31,

2023 (remaining)

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

and $ 5.1 million and $ 5.0 million for the nine months ended September 30, 2023 and 2022, respectively.

Royalty expense is included in

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

As of September 30, 2023 and September

30, 2022, the Company had $ 6.1 million and $ 1.7 million, respectively, outstanding in royalty payments and are included in accounts payable

($ 6.1 million and $ 0 million, respectively) and accrued expenses ($ 0.0 million and $ 1.7 million, respectively) in the condensed consolidated

balance sheets.

Contingencies

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

The Company evaluates

such lawsuits and proceedings on a case-by-case basis, and its policy is to vigorously contest any such claims which it believes are

without merit.

Company reviews the status of its legal proceedings and records a provision for a liability when it is considered probable that both

a liability has been incurred and the amount of the loss can be reasonably estimated.

This review is updated periodically as additional

information becomes available.

If both of the criteria are not met, the Company reassesses whether there is at least a reasonable possibility

that a loss, or additional losses, may be incurred.

If there is a reasonable possibility that a loss may be incurred, the Company discloses

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

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

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

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

The Company expenses its legal fees as incurred.

the ordinary course of its business, the Company is subject to lawsuits, arbitrations, claims, and other legal proceedings in connection

with their business.

Some of the legal actions include claims for substantial or unspecified compensatory and/or punitive damages.

substantial adverse judgment or other unfavorable resolution of these matters could have a material adverse effect on the Company’s

financial condition, results of operations, and cash flows.

Management believes that the Company has adequate legal defenses with respect

to the legal proceedings to which it is a defendant or respondent and that the outcome of these pending proceedings is not likely to

have a material adverse effect on the financial condition, results of operations, or cash flows of the Company.

However, the Company

is unable to predict the outcome of these matters.

(a) Commitments

The Company was a party to a license agreement with Motorola Mobility LLC pursuant

to which the Company has an exclusive license to use certain trademarks owned by Motorola

Trademark Holdings, LLC for the manufacture, sale and marketing of consumer cable

modem products, consumer routers, WiFi range extenders, MoCa adapters, cellular sensors,

home powerline network adapters, and access points worldwide through a wide range

of authorized sales channels.

The license agreement had a term ending December 31, 2025 prior to its cancellation in 2023.

In connection with the license agreement, the Company had committed to reserve a certain

percentage of wholesale prices for use in advertising, merchandising and promotion

of the related products.

Additionally, the Company was required to make quarterly

royalty payments equal to a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments.

Following the Company’s agreement with Motorola Mobility LLC on January 22, 2024, the Company’s quarterly royalty payments, in addition to current and future obligations, were satisfied in exchange

for certain assets of the Company.

Royalty expense under the License Agreement amounted to $ 0 and $ 1.7 million for the three months ended March 31, 2024 and 2023, respectively, and is reported in selling and marketing expense on the accompanying condensed consolidated statements of operations.

On January 22, 2024, the Company, entered into a Letter Agreement re Product Purchase (the “Letter

Agreement”) and a Debt Settlement Agreement (the “Settlement Agreement,” and

the Letter Agreement, the “Agreements”) with Motorola Mobility, LLC (“Motorola”).

Pursuant to the Letter Agreement, the Company (A) initially transferred a portion

of its inventory to Motorola and (B) agreed to transfer the reminder of such inventory

upon receipt of certain funding in order to satisfy liabilities owed to Motorola,

while agreeing to continue to provide certain customer and technical support.

to the Settlement Agreement, the Company agreed (i) to pay Motorola a settlement amount

of $1,167,071 and (ii) to transfer additional funds as collected from the Company’s customers in an amount up to $263,752.

The Company believes that the Agreements,

together with arrangements it has finalized with other major vendors, will allow the

Company to streamline its operations while reducing its current liabilities.

(b) Vendor Obligation Releases

In its efforts to manage its

liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023

who comprised $ 5.0

million of outstanding accounts payable as of December 31, 2023.

In aggregate, the executed release agreements resulted in a

reduction of outstanding accounts payable obligations by $3.6 million from $5.0 million to $1.4 million.

The executed release

agreements became effective and are contingent upon payment of the $ 1.4

million negotiated amounts received during the period of Q1 2024.

In addition, the Company agreed to pay certain vendors an

additional $ 0.4

million contingent upon successful collection of customer receivables.

As of March 31, 2024, the contingent amount has not been

paid and is accounted in accrued expenses on the accompanying condensed consolidated balance sheets.

The Company is party to various lawsuits and administrative proceedings arising in

the ordinary course of business.

The Company evaluates such lawsuits and proceedings

on a case-by-case basis, and its policy is to vigorously contest any such claims which

it believes are without merit.

The Company reviews the status of its legal proceedings and records a provision for

a liability when it is considered probable that both a liability has been incurred

and the amount of the loss can be reasonably estimated.

This review is updated periodically

as additional information becomes available.

If both criteria are not met,

the Company reassesses whether there is at least a reasonable possibility that a loss,

or additional losses, may be incurred.

If there is a reasonable possibility that a

loss may be incurred, the Company discloses the estimate of the amount of the loss

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

cannot be made.

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

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

adverse effect on the Company’s business, operating results or financial condition taken as a whole.

expenses its legal fees as incurred.

In the ordinary course of its business, the Company is subject to lawsuits, arbitrations,

claims, and other legal proceedings in connection with their business.

legal actions include claims for substantial or unspecified compensatory and/or punitive

A substantial adverse judgment or other unfavorable resolution of these matters

could have a material adverse effect on the Company’s financial condition, results of operations, and cash flows.

Management believes

that the Company has adequate legal defenses with respect to the legal proceedings

to which it is a defendant or respondent, and that the outcome of these pending proceedings

is not likely to have a material adverse effect on the financial condition, results

of operations, or cash flows of the Company.

However, the Company is unable to predict

the outcome of these matters.

(8) SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS

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

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

including a marketplace facilitator, accounted for 10% or greater individually and 80 % in the aggregate of the Company’s total

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

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

In the three months ended March 31, 2024, two companies, including a marketplace facilitator, accounted for 10% or greater

individually and 100 % in the aggregate of the Company’s total net sales.

At March 31, 2024, one company with an accounts receivable balance of 10% or greater individually accounted for

100 % of the Company’s accounts receivable.

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

facilitator, accounted for 10% or greater individually and 87 % in the aggregate of the Company’s total net sales.

30, 2022, three companies with an accounts receivable balance of 10% or greater individually accounted for a combined 91 % of the Company’s

accounts receivable.

Company’s customers generally do not enter into long-term agreements obligating them to purchase products.

The Company may not

continue to receive significant revenues from any of these or from other large customers.

A reduction or delay in orders from any of

the Company’s significant customers, or a delay or default in payment by any significant customer could materially harm the Company’s

business and prospects.

In the three months ended March 31, 2023, two companies, including a marketplace facilitator, accounted for 10% or greater

individually and 88 % in the aggregate of the Company’s total net sales.

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

accounted for a combined 84 % of the Company’s accounts receivable.

The Company’s customers generally do not enter into long-term agreements obligating them to purchase

The Company may not continue to receive significant revenues from any of

these or from other large customers.

A reduction or delay in orders from any of the

Company’s significant customers, or a delay or default in payment by any significant customer

could materially harm the Company’s business and prospects.

Because of the Company’s significant customer concentration, its net sales and operating income could fluctuate

significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any

of the Company’s significant customers.

The Company participates in the PC peripherals industry, which is characterized by aggressive

pricing practices, continually changing customer demand patterns and rapid technological developments.

The Company’s operating

results could be adversely affected should the Company be unable to successfully anticipate customer demand accurately;

manage its product

transitions, inventory levels and manufacturing process efficiently;

distribute its products quickly in response to customer demand;

differentiate its products from those of its competitors or compete successfully in the markets for its new products.

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

For some of these components, the

Company may only use a single source supplier, in part due to the lack of alternative sources of supply.

During the three months ended

September 30, 2023 and 2022, the Company had one supplier and two suppliers, respectively, that provided 100 % and 91 %, respectively,

of the Company’s purchased inventory.

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

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

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

primarily consist of net operating loss carryforwards and research and development tax credits.

We considered the history of cumulative

net losses, estimated future taxable income and prudent and feasible tax planning strategies and we have concluded that it is more likely

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

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

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

of September 30, 2023 and December 31, 2022, the Company had federal net operating loss carry forwards of approximately $ 62.0 million

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

They are due to expire in varying amounts from

2023 to 2041.

Federal net operating losses occurring after December 31, 2017, of approximated $ 27.6 million may be carried forward indefinitely.

As of September 30, 2023 and December 31, 2022, the Company had state net operating loss carry forwards of approximately $ 37.3 million

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

significantly due to changes in political or economic conditions, or the loss, reduction

of business, or less favorable terms for any of the Company’s significant customers.

The Company participates in the PC peripherals industry,

which is characterized by aggressive pricing practices, continually changing customer

demand patterns and rapid technological developments.

The Company’s operating results could be adversely affected should the Company be unable to successfully

anticipate customer demand accurately;

manage its product transitions, inventory levels

and manufacturing process efficiently;

distribute its products quickly in response

to customer demand;

differentiate its products from those of its competitors or compete

successfully in the markets for its new products.

The Company depends on many third-party suppliers for key components contained in

its product offerings.

For some of these components, the Company may only use a single

source supplier, in part due to the lack of alternative sources of supply.

the three months ended March 31, 2024, the Company did not have any concentration of suppliers.

During the three months ended March 31, 2023, the Company had one supplier that provided 90 % of the Company’s purchased inventory.

(9) INCOME TAXES

During the three months ended March 31, 2024, we recorded no income tax benefits for the net operating losses incurred or for

the research and development tax credits generated due to the uncertainty of realizing

a benefit from those items.

We have evaluated the positive and negative evidence bearing upon the Company’s ability to realize its deferred tax assets, which primarily consist of net operating

loss carryforwards and research and development tax credits.

We considered the history

of cumulative net losses, estimated future taxable income and prudent and feasible

tax planning strategies and we have concluded that it is more likely than not that

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

As a result, as of March 31, 2024 and December 31, 2023, we recorded a full valuation allowance against our net deferred tax assets.

As of March 31, 2024

and December 31, 2023, the Company had federal net operating loss carry forwards of approximately $ 79.1 million

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

They are due to expire in varying amounts from 2025 to

Federal net operating losses occurring after December 31, 2018, of approximated $ 38.5

million may be carried forward indefinitely.

As of March 31, 2024 and December 31, 2023, the Company had state net

operating loss carry forwards of approximately $ 47.9

million and $ 44.9

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

They are due to expire in varying amounts from 2033

1 unchanged sentence

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

For the three months ended September

30, 2023 and 2022, income tax benefit was $ 1 thousand and income tax expense was $ 16 thousand, respectively.

For the three months ended

March 31, 2024 and 2023, income tax expense (benefit) was $(11)

10,662 thousand and $ 0

thousand, respectively.

(10) RELATED PARTY TRANSACTIONS

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

The landlord is an affiliate entity owned by Mr.

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

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

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

is an affiliate entity owned by Mr.

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

On July 18, 2022, the lease agreement was amended to a month-to-month lease arrangement and

may be terminated by either party with a 60-day notice.

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

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

expense was $ 9 thousand and $ 8 thousand, respectively.

For the nine-months period ended September 30, 2023 and 2022, the rent expense

was $ 27 thousand and $ 24 thousand, respectively.

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

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

up of up to $ 1,500,000 .

For the three-months period ended

March 31, 2024 and 2023, the rent expense was $ 14 thousand and $ 9 thousand, respectively.

On November 30, 2022, the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into

a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot

Capital agreed to make available a bridge loan in the principal amount up of up to

$ 1,500,000 .

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

Subject to Slingshot Capital’s sole

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

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

respectively.

April 7, 2023, the previous principal executive officer Mehul Patel, resigned from Minim Inc.

Jeremy Hitch, Executive Chairman of the

Board became the acting principal executive officer of the Company.

December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal

and accrued but interest, which aggregated to $ 1,125,778 ,

was converted to 734,343

common stock of the Company.

Upon the execution of the debt conversion agreement and issuance of the common stock, the Bridge Loan

Agreement and Bridge Term Note were terminated.

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

On December 6, 2023, the Company and Slingshot Capital entered into a Debt Conversion Agreement

(“Conversion Agreement”) pursuant to which the Company agreed to issue 734,343 shares

of the Company’s common stock (based on $ 1.533 per share) (the “Shares”) in exchange for the cancellation

of a total principal amount of $ 1,000,000 (“Principal Amount”) outstanding under the

Bridge Loan Agreement and Bridge Term Note (collectively, the “Loan Agreements”),

with Slingshot Capital, plus $ 125,778 in accrued and unpaid interest on such Principal

Amount as of December 6, 2023.

The price per share used in the exchanged was determined by the weighted average

price per share and trade volume on September 13, 2023 and November 28, 2023.

Slingshot Capital is owned by the Company’s former Chairperson of the Board and a former Board Member, Jeremy Hitchcock

and Elizabeth Hitchcock, respectively.

(11) EARNINGS (LOSS) PER SHARE

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

Net loss per share for

the three months ended March 31, 2024 and 2023, respectively, are as follows:

Schedule of net income (loss) per share

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Three Months Ended

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

$ ( 3,258,955 )

$ ( 4,070,457 )

$ ( 16,488,425 )

$ ( 11,027,640 )

Weighted average common shares – basic

1 unchanged sentence

Weighted average common shares – dilutive

Basic and diluted

loss per common share for the three and nine months ended September 30, 2023 and 2022 excludes the effects of 2,080 and 1,257,581 common

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

The common share equivalents consist of shares of common

stock issuable upon exercise of outstanding stock options.

REVERSE STOCK SPLIT

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

approved a 1-for-25 reverse split of the Company’s common stock to be effected

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

The Amendment did not

effect the number of shares of authorized common stock.

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

took place on March 28, 2023.

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

The Company’s definitive proxy

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

April 17, 2023, Minim, Inc.

completed a 1-for-25 share reverse stock split of its common stock.

As a result, Minim shareholders at the

effective time received 1 new share of Minim common stock for every 25 shares that they held.

Minim did not issue any fractional shares

as a result of the reverse split.

Instead, all shareholders with fractional shares, received, upon surrendering to the exchange agent

of certificate(s) representing such pre-Reverse Stock Split shares, to a cash payment in lieu thereof.

of the Company’s historical shares and per share information related to issued and outstanding common stock and outstanding equity

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

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

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

the reverse stock been as of December 31, 2022.

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

to be a projection of future operating results.

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION

Selected financial information

Preferred Stock authorized

Preferred Stock issued

Common Stock authorized

Common Stock issued

$ ( 15,549,244 )

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Basic and diluted

Diluted loss per common share for the three months ended March 31, 2024 and 2023 excludes the effects of 5,230,769 and 49,402 common share equivalents, respectively, since such inclusion would be anti-dilutive.

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

of outstanding preferred stock, warrants, restricted stock units, and stock options.

Preferred Stock and Warrants

On January 23, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”)

with David Lazar (“Lazar”), a member of our Board of Directors, whereby, at the closing

of the transactions contemplated by the Purchase Agreement (the “Closing”), the Company sold and Lazar (or to any transferee of Lazar’s which acquires the Securities Purchase Rights, as defined below, hereinafter a “Lazar

Transferee”) purchased two million 2,000,000 shares of the Company’s preferred stock, $ 0.001 par value per share (the “Preferred Stock”), at a price per

share of $ 1.40 , for an aggregate purchase price of $ 2,800,000 , subject to the conditions

described below, pursuant to the exemptions afforded by the Securities Act of 1933,

as amended, and Regulation S thereunder.

Under the Purchase Agreement, the Company agreed to designate 2,000,000 of the Preferred Stock as Series A Preferred Stock

(the “Series A Preferred Stock”) for the sale to Lazar (or a Lazar Transferee).

share of Series A Preferred Stock shall be convertible, at the option of the holder,

into 1.4 shares of common stock of the Company, $.01 par value per share (the “Common

Stock”), and vote on an “as-if-converted” basis and shall have full ratchet protection

in any subsequent offerings.

Pursuant to the Purchase Agreement, the Company shall

also issue Lazar (or a Lazar Transferee) warrants to purchase up to an additional

2,800,000 shares of Common Stock, with an exercise price equal to $1.00 per share,

subject to adjustment therein (the “Warrants”, and together with the Series A Preferred

Stock, the “Purchased Securities”).

Company evaluated the Series A Preferred Stock and Warrants for liability or equity classification in accordance with the provisions of

ASC 480, Distinguishing Liabilities from Equity , and determined that equity treatment was appropriate because neither the

Series A Preferred Stock nor the Warrants met the definition of liability instruments.

Warrants are classified as component of permanent equity because they are freestanding financial instruments that are legally detachable

and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an

obligation for the Company to repurchase its shares, and permit the holder to receive a fixed number of shares of common stock upon exercise.

In addition, the Warrants do not provide any guarantee of value or return.

The Company valued the Warrants at issuance using the Black-Scholes

option pricing model and determined the fair value of the Warrants to purchase 2,800,000 shares of the Company’s common stock at

$ 4.7 million.

The key inputs to the valuation model included a weighted average volatility of 162.0 % and an expected term of 3 .0 years.

proceeds from the issuance of the Series A Preferred Stock to the Company were allocated based on the relative fair value of the Warrants

as compared to the fair value of the Series A Preferred Stock.

The fair value of the Warrants incorporates assumptions regarding our common

stock price, dividend yield, stock price volatility, as well as assumptions regarding the risk-free interest rate.

Using this model, the

Warrants was valued at $ 1.4 million at January 23, 2024 and was included in additional paid in capital on our condensed consolidated balance

The fair value of the Series A Preferred Stock was determined based on assumptions that incorporated

our common stock price and dividend rate.

The Company valued the Series A Preferred Stock at $ 4.5 million.

Based on the fair value model

to allocate the Series A Preferred Stock proceeds, the Series A Preferred Stock was valued at $ 1.4 million at January 23, 2024 and was

included in Series A Preferred Stock on our condensed consolidated balance sheet.

February 26, 2024, the Company held a special meeting of stockholders, who voted and approved (i) the issuance of shares of our common

stock, par value $0.01 per share (“Common Stock”) upon conversion of Series A Preferred Stock or exercise of the Warrants

to be issued at Closing of the Purchase Agreement, which conversions or exercise would result in a “change of control” of

the Company under the applicable rules of Nasdaq and (ii) an amendment to the Company’s Amended and Restated Certificate of Incorporation

to effect the increase in authorized shares of Preferred Stock to 10,000,000

(13) SUBSEQUENT EVENTS

letter of intent that may result in the Company being acquired

September 29, 2023, the Company entered into a non-binding letter of intent with an investor whereby the investor would purchase $ 2.4

million of convertible preferred stock and warrants, which, on a fully-diluted basis, would constitute a majority of the Company’s

outstanding common stock and the proceeds of which would be used for the sole purpose of settling all of the Company’s and its

subsidiaries’ liabilities (the “Transaction”).

the Transaction were to occur, the Letter of Intent contemplates the investor would be appointed as the Company’s chief executive

officer and the investor and its nominees would be appointed to the Company’s board of directors to which they would constitute

a majority of the then-board of directors.

Company and the investor are working on completing definitive transaction documents regarding the Transaction, but, as the Letter of

Intent is non-binding, there can be no assurances that such definitive transaction documentation will be executed or that the Transaction

will be completed.

of SVB Loan Agreement

October 18, 2023, the Company fully paid the $ 0.9 million outstanding balance and accrued interest on its revolving facility under the

SVB Loan Agreement, which was immediately terminated upon full repayment.

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

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

of Bridge Loan Agreement

December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal and

accrued but interest, which aggregated to $ 1,125,778 , was converted to 734,343 common stock of the Company.

Upon the execution of the

debt conversion agreement and issuance of the common stock, the Bridge Loan Agreement and Bridge Term Note were terminated.

its efforts to manage its liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain

vendors in Q4 2023.

In aggregate, the executed release agreements resulted in a reduction of outstanding accounts payable obligations

by $ 3.0 million.

The Company has evaluated subsequent events from March 31, 2024, through the date of this filing and has determined that there are no such events,

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

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

What changed 10-Q

Item 1. Financial Statements