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Item 1. Financial Statements

2024-08-20 compared with 2024-05-20 · 229 added, 463 removed, 180 unchanged (79% of the section changed)

4 unchanged sentences

Cash and cash equivalents

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

Accounts receivable, net of allowance of doubtful accounts of $ 0 and $ 312,983 as of June 30, 2024 and December 31, 2023, respectively

Inventories, net

4 unchanged sentences

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

5 unchanged sentences

Commitments and Contingencies (Note 7)

Stockholders’ equity

Stockholders’ equity (deficit)

Preferred Stock, authorized:

4 unchanged sentences

issued and outstanding:

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

2,809,689 shares at June 30, 2024 and 2,632,809 shares at December 31, 2023 respectively

Additional paid-in capital

Accumulated deficit

( 95,727,733 )

( 92,468,778 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to condensed consolidated financial statements.

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

1 unchanged sentence

Three Months Ended

Six Months Ended

Cost of goods sold

3 unchanged sentences

Research and development

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

Vendor liability forgiveness, net of asset transfers

Total operating expenses

Operating loss

( 3,269,679 )

( 3,925,470 )

Other expense:

Other income (expense):

Interest income (expense), net

1 unchanged sentence

Loss before income taxes

( 3,269,617 )

( 4,070,457 )

Income tax benefit

$ ( 3,258,955 )

$ ( 4,070,457 )

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Income tax expense (benefit)

Net loss per share:

Basic and diluted

See accompanying notes to condensed consolidated financial statements.

Basic and diluted weighted average common and common equivalent shares

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’

For the three months ended March 31, 2024

Condensed Consolidated Statements of Stockholders’ Equity (deficit)

For the six months ended June 30, 2024

Preferred Stock

Balance at December 31, 2023

$ ( 92,468,778 )

( 3,258,955 )

Preferred stock issuance

2 unchanged sentences

Balance at March 31, 2024

$ ( 95,727,733 )

For the three months ended March 31, 2023

Preferred Stock

Preferred stock issuance

Issuance of warrants

Stock-based compensation

Balance at June 30, 2024

For the six months ended June 30, 2023

Balance at December 31, 2022

$ ( 74,834,854 )

( 4,070,457 )

Common stock issued for vested restricted units

1 unchanged sentence

Balance at March 31, 2023

$ ( 78,905,311 )

See accompanying notes to condensed consolidated financial statements.

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at June 30, 2023

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash

Three Months Ended

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Cash flows used in operating activities:

$ ( 3,258,955 )

$ ( 4,070,457 )

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

9 unchanged sentences

Accounts payable

( 3,157,987 )

Accrued expenses

2 unchanged sentences

Net cash provided by (used in) operating activities

( 2,482,265 )

Cash flows from investing activities:

3 unchanged sentences

Cash flows from financing activities:

Net proceeds from the bank credit line

Net payment on the bank credit line

Proceeds from preferred stock issuance

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents - Beginning

6 unchanged sentences

Total cash, cash equivalents and restricted cash

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

1 unchanged sentence

(1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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

routers, Multimedia over Coax (“MoCA”) adapters and mesh home networking devices.

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.

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 support and services intelligent networking products that reliably and securely connect homes and offices around the world that it previously sold.

We were the exclusive global license holder to the Motorola brand for home networking hardware until 2023.

The Company supports and services products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh home networking devices.

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.

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.

All intercompany balances and transactions

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, 2023.

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.

All intercompany balances and transactions 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, 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.

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

2 unchanged sentences

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

During the six months ended June 30, 2024, the Company incurred

a net loss of $3.7 ( 3,746,867 )

million, and used cash from operations of $2.9 ( 2,878,506 )

1 unchanged sentence

million in cash provided from financing activities.

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

As of June 30, 2024, the Company had an accumulated deficit of $96.2 ( 96,215,645 )

million and cash and cash equivalents of $0.6 630,816 million.

4 unchanged sentences

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.

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.

The closing 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.

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.

On June 17, 2024, the Company and Merger Sub entered into a First Amendment to the Agreement and Plan of Merger (“Amendment”) with e2Companies Pursuant to the Amendment, e2Companies and the Company have mutually agreed to terminate the “no-shop” provisions in the Merger Agreement, and to grant the Company permission to seek alternate business combination candidates, while solely requiring that the Company provide two (2) Business Days’ prior written notice advising e2Companies that it intends to effect such alternate business combination and allow for additional negotiation with e2Companies to enable the parties to determine whether to propose revisions to the terms of the Merger Agreement.

The Merger Agreement has not yet been terminated as of the date hereof.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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 six months ended June 30, 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 .

In 2023, the FASB issued ASU 2023 - 09 – Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures.

This update is required to be effective for the Company for fiscal periods beginning after December 15, 2025.

The Company is evaluating the effect that ASU 2023-09 will have on its financial statements and disclosures.

The FASB also issued ASU 2023 - 07:

Segment Reporting Topic 280 - Improvements to Reportable Segment Disclosures.

This update requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

This update will be effective for fiscal years beginning after December 15, 2024, and is to be applied retrospectively to all periods presented in the financial statements.

Early adoption is permitted.

The Company is evaluating the effect that ASU 2023 - 07 will have on its financial statements and disclosures and believes it will not have a material impact on the Company’s consolidated financial statements.

On March 21, 2024, the FASB issued Accounting Standards Update (ASU) 2024 - 01, Compensation—Stock Compensation (Topic 718 ):

Scope Application of Profits Interest and Similar Awards, which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC Topic 718, Compensation — Stock Compensation .

The Company believes it will not have a material impact on the Company’s consolidated financial statements.

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

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.

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.

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 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 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

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.

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.

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.

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.

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

The Company did no t have contract liabilities at June 30, 2024 and December 31, 2023.

Disaggregation of Revenue

The following table sets

forth our revenues by distribution channel:

The following table sets forth our revenues by distribution channel:

Schedule of disaggregation of revenue by distribution channel

Three Months Ended

Six Months Ended

The following table sets forth our revenues by product:

Three Months Ended

Six Months Ended

Cable modems & gateways

1 unchanged sentence

(4) BALANCE SHEET COMPONENTS

Inventories, net consists

of the following:

Inventories, net consists of the following:

Schedule of inventories

1 unchanged sentence

Finished goods

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.

The Company did no t have consigned inventory held by our customers or in-transit inventory at June 30, 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 June 30, 2024 and December 31, 2023, respectively.

Accrued expenses

Accrued expenses consist

of the following:

Accrued expenses consist of the following:

Schedule of accrued expenses

8 unchanged sentences

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 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.

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 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.

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%).

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.

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%).

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 June 30, 2024 and 2023, respectively.

Amortization of debt issuance costs was $ 0 thousand and $ 21 thousand for the six months ended June 30, 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 June 30, 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.

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

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 Capital.

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:

Subject 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.

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

As of June 30, 2024, the Company’s leased office space has terminated and was not renewed.

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.

The components of lease costs were as follows:

Schedule of components of lease costs

Three Months Ended

Six Months Ended

Operating lease costs

1 unchanged sentence

Total lease costs

The 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

Three Months Ended

Operating leases:

1 unchanged sentence

Weighted average discount rate

Supplemental 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

Three Months Ended

Six Months Ended

Operating cash flow information:

2 unchanged sentences

ROU asset obtained in exchange for lease liability

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, 2024 (remainder)

Total lease payments

imputed interest

Present value of operating lease liabilities

Operating lease liabilities, current

Operating lease liabilities, noncurrent

As of June 30, 2024, the Company does not have future lease payments after its office lease expired in May 2024.

( 7) COMMITMENTS AND CONTINGENCIES

(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 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.

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.

Royalty expense under the License Agreement amounted to $ 0 and $ 1.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0 and $ 3.4 million for the six months ended June 30, 2024 and 2023, respectively.

The royalty expense 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.

Pursuant 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.

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.

After the collection of customer receivables, the contingent amount was amended to $ 0.3 million during the period ended June 30, 2024.

As of June 30, 2024, the contingent amount has not been paid and is accounted in accrued expenses on the accompanying condensed consolidated balance sheets.

In July 2024, the Company paid the contingent amount of $ 0.3 million to its vendors.

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.

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 June 30, 2024, 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.

In 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.

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

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 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.

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.

In the three months ended June 30, 2024, the Company did not have sales or outstanding accounts receivable balance that accounted for 10% of greater individually of the Company’s total net sales and accounts receivable, respectively.

In the three months ended June 30, 2023, two companies, including a marketplace facilitator, accounted for 10% or greater individually and 82 % in the aggregate of the Company’s total net sales.

At June 30, 2023, two companies with an accounts receivable balance of 10% or greater individually accounted for a combined 77 % of the Company’s accounts receivable.

The 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.

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.

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.

During the three months ended June 30, 2024, the Company did not have any concentration of suppliers.

During the three months ended June 30, 2023, the Company had one supplier that provided 97 % 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

During the three and six months ended June 30, 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 June 30, 2024 and December 31, 2023, we recorded a full valuation allowance against our net deferred tax assets.

As of June 30, 2024 and

December 31, 2023, the Company had federal net operating loss carry forwards of approximately $ 79.2

million and $ 76.9

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

2 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, the Company had state net operating

loss carry forwards of approximately $ 47.9

million and $ 44.9

3 unchanged sentences

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

For the three months ended

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

For the three months ended June

30, 2024 and 2023, income tax expense was $0 ( 554 ) thousand

and $24 24,976

thousand, respectively.

For the six months ended June 30, 2024 and 2023, income tax expense (benefit) was $(11) ( 11,216 )

thousand and $24

1 unchanged sentence

(10) RELATED PARTY TRANSACTIONS

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

is an affiliate entity owned by Mr.

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

The landlord is an affiliate entity owned by Mr.

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

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 .

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 Company terminated the lease during the period ended June 30, 2024.

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

For the three-months period ended June 30, 2024 and 2023, the rent expense was $ 0 thousand and $ 9 thousand, respectively.

For the six-months period ended June 30, 2024 and 2023, the rent expense was $ 14 thousand and $ 18 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 .