Item 2. Management’s Discussion and Analysis
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and involves numerous risks and uncertainties. Forward-looking statements may include, among others, statements relating to our ability to predict revenue and reduce costs related to our products or service offerings, our ability to forecast product and services sales volumes, the sufficiency of our capital resources and the availability of debt and equity financing, the continuing impact of uncertain global economic conditions on the demand for our products and services, our ability to maintain and scale adequate and secure software platform infrastructure, the impact of competition on demand for our products and services, our competitive position, our future financial position and results of operations, and our ability to grow in new and existing markets. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and generally contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “strives,” “goal,” “estimates,” “forecasts,” “projects” or “anticipates” and the negative of these terms or similar expressions. Our forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied by the forward-looking statement, due to reasons including, but not limited to, competition; the effectiveness of our strategies; general economic conditions including any impact from inflation; our ability to successfully implement our business strategy; the success of our initiatives to increase sales; changes in commodity, energy, labor and other costs; our ability to attract and retain management and employees; price and availability of commodities; consumer confidence and spending patterns; and weather conditions. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Special Note Regarding Forward-Looking Statements” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Overview
We historically delivered comprehensive WiFi/Software as a Service platform to make everyone’s connected home safe and supportive for life and work. We continue to grow and expand our Software as a Service (“SaaS”) operations as a digital service provider focused on integrating artificial intelligence and data analytics into content creation and brand management.
As part of our ongoing strategic initiatives, we are actively planning to develop and integrate blockchain technology into our operations in the future. This advancement is aimed at enhancing the security, transparency, and efficiency of our services and systems.
In line with our growth strategy, we are also targeting potential acquisitions in key sectors such as artificial intelligence (AI), hardware, and the Internet of Things (IoT). These acquisitions will enable us to strengthen our technological capabilities and expand our market presence.
Additionally, we are exploring entry into the Multi-Channel Network (MCN) business. Our goal is to serve as a bridge between influencers and the global market, facilitating valuable connections and expanding our reach in this rapidly evolving digital space.
These strategic initiatives reflect our commitment to innovation and expansion, positioning us for long-term growth and success in emerging industries.
Recent Developments
On June 30, 2025, FiEE (HK) Limited entered into an Asset Purchase Agreement with Hongyan Sun, Lin Lin, and Suzhou Yixuntong Network Technology Co., Ltd. (“Suzhou Yixuntong”), to acquire certain fixed assets and intellectual property, including patents and copyrights, of Suzhou Yixuntong. The total purchase price for the transaction was $1.4 million, which was partially paid as part of a simultaneous signing and closing transaction, completed on the same day. This transaction is expected to enhance the Company’s portfolio of intellectual property and fixed assets, aligning with its strategic goals.
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Key Factors Affecting Our Performance
Generally, our gross margin for a given product depends on a number of factors, including the type of customer to whom we were selling. The gross margin for products sold to retailers is generally higher than for some of our other customers; however, the cost of sales, support, returns, and other overhead costs associated with our products sold to retailers is generally higher than for some of our other customers.
Our future growth is largely dependent on our ability to acquire new customers, which is crucial for expanding our SaaS operations. This will rely on the effectiveness of our marketing and sales efforts to reach teams and organizations across diverse industries. The success of our growth strategy, as well as our future prospects, hinges on our ability to attract and retain new customers. While we see a substantial market opportunity in the MCN business, continued investment in sales and marketing, research and development, and customer support will be essential to further grow our international customer base.
In order to sustain and expand our existing customer base, we prioritize ensuring that our customers continue to derive value from our SaaS offerings. By building long-term, meaningful relationships, we aim to help customers leverage our services to establish stronger connections in the global marketplace. As they increasingly recognize the value we provide, we expect them to expand their usage and upgrade their service plans, driving revenue growth within our current customer base. This approach underpins our strategy to enhance both customer retention and revenue growth over time.
Results of Operations
The Company continues to experience losses, which in part is due to costs related to our new SaaS operating platform launched in Q1 2025. In the three and six months ended June 30, 2025 and 2024, we generated net sales of $45 thousand and $0, respectively, and $45 thousand and $640 thousand, respectively.
The following table sets forth certain financial data derived from our condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, presented in absolute dollars and as a percentage of net sales, with dollars and percentage change period over period:
Three
Months Ended
Six
Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
Net
sales
$
44,993
$
-
$
44,993
N/A
%
$
45,118
$
639,893
$
(594,775
)
(92.9
)%
Cost
of sales
43,930
-
43,930
N/A
44,680
432,634
(387,954
)
(89.7
)
Gross
profit
1,063
-
1,063
N/A
438
207,259
(206,821
)
(99.8
)
Operating
expenses:
Selling
and marketing
16,811
45,134
(28,323
)
(62.8
)
16,811
66,171
(49,360
)
(74.6
)
General
and administrative
603,744
566,514
37,230
6.6
944,240
1,585,030
(640,790
)
(40.4
)
Research
and development
17,419
40,864
(23,445
)
(57.4
)
47,419
113,294
(65,875
)
(58.1
)
Vendor
liability forgiveness, net of asset transfers
-
(164,026
)
164,026
(100.0
)
-
2,200,929
(2,200,929
)
(100
)
Total
operating expenses
637,974
488,486
149,488
30.6
1,008,470
3,965,424
(2,956,954
)
(74.6
)
Operating
loss
(636,911
)
(488,486
)
(148,425
)
30.4
(1,008,032
)
(3,758,165
)
2,750,133
(73.2
)
Total
other expense
(2,769
)
20
(2,789
)
(13,945.0
)
(5,558
)
82
(5,640
)
(6,878.0
)
Loss
before income taxes
(639,680
)
(488,466
)
(151,214
)
31.0
(1,013,590
)
(3,758,083
)
2,744,493
(73.0
)
Income
taxes
-
(554
)
554
(100.0
)
-
(11,216
)
11,216
(100.0
)
Net
loss
$
(639,680
)
$
(487,912
)
$
(151,768
)
31.1
%
$
(1,013,590
)
$
(3,746,867
)
$
2,733,277
(72.9
)%
19
Comparison of the three and six months ended June 30, 2025 to the three and six months ended June 30, 2024
The following table sets forth our revenues by product and the changes in revenues for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024:
Three Months Ended
Six Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
Cable modems & gateways
$
-
$
-
$
-
N/A
%
$
-
$
638,804
$
(638,804
)
(100
)%
Other network products
-
-
-
N/A
-
1,089
(1,089
)
(100
)
SaaS – MCN digital services
44,993
-
44,993
N/A
45,118
-
45,118
N/A
Total
$
44,993
$
-
$
44,993
N/A
%
$
45,118
$
639,893
$
(594,775
)
(93
)%
The majority of the Company’s revenues by geographic area are earned in North America for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2025, the Company recognized revenue under a service agreement executed in March 2025, which governs content creation, account operations, and commercial monetization services.
Net Sales
Our net sales increased by $45 thousand for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase in net sales primarily reflects the Company’s strategic transition from legacy hardware operations to software-as-a-service (SaaS) solutions, with a new business focus on integrating artificial intelligence and big data into content creation and brand management. Notably, during March 2025, the new Company successfully secured its first customer orders and generated initial sales, marking a critical milestone in the strategic pivot. Our target clients are individuals or entities seeking to grow their online presence as influencers or content creators. As of June 30, 2025, the Company onboarded 245 customers, corresponding to prepaid service fees totaling $1.5 million, which underscore the early traction of the Company’s SaaS offerings.
Cost of Sales, Gross Margin and Gross Profit (Loss)
Cost of sales consisted primarily of the following: the cost of direct labor; the cost of finished products from our third-party manufacturers; overhead costs, including purchasing, product planning, inventory control, warehousing and distribution logistics; third-party software licensing fees; inbound freight; import duties/tariffs; warranty costs associated with returned goods; write-downs for excess and obsolete inventory; amortization of certain acquired intangibles and software development costs; and costs attributable to the provision of service offerings.
The increase in gross profit was attributable to less sales in 2024, largely resulting from the termination of the Motorola license. Our gross margin can be affected by a number of factors, including fluctuation in labor cost, foreign exchange rates, sales returns, changes in average selling prices, end-user customer rebates and other channel sales incentives, changes in our cost of goods sold due to fluctuations and increases in prices paid for components, overhead costs, inbound freight and duty/tariffs, conversion costs, and charges for excess or obsolete inventory.
The following table presents net sales and gross margin, for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
Net sales
$
44,993
$
-
$
44,993
N/A
%
$
45,118
$
639,893
$
(594,775
)
(93
)%
Gross margin
2.4
%
-
%
1.0
%
32.4
%
20
Gross profit decreased in the six month ended June 30, 2025, compared to the six months ended in the prior fiscal year period, primarily due to insufficient sales levels necessary to cover fixed costs and certain variable costs.
The gross margin for the three and six months ended June 30, 2025 is not representative of future trends, as the new business was in its initial launch phase during this period, incurring elevated upfront costs associated with market entry, product deployment, and operational ramp-up. Forecasting gross margin percentages is difficult, and there are several risks related to our ability to maintain or improve our current gross margin levels. Our cost of goods sold, as a percentage of net sales, can vary significantly based upon factors such as: uncertainties surrounding revenue volumes, including future pricing and/or potential discounts as a result of the economy, competition, the timing of sales, and related production level variances; and changes in technology components.
Selling and Marketing
Selling and marketing expenses consist primarily of advertising, trade shows, corporate communications and other marketing expenses, product marketing expenses, outbound freight costs, amortization of certain intangibles, personnel expenses for sales and marketing staff, technical support expenses, and facility allocations. The following table presents sales and marketing expenses, for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
Selling and marketing
$
16,811
$
45,134
$
(28,323
)
(63
)%
$
16,811
$
66,171
$
(49,360
)
(75
)%
Selling and marketing expenses decreased by $28 thousand and $49 thousand in the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily due to reductions in sales support costs in 2024 and lower operational scale during the initial phases of business development in 2025.
For the remainder of the fiscal year 2025, we expect our selling and marketing expenses to fluctuate depending on sales levels achieved as certain expenses, such as commissions, and are determined based upon the net sales achieved. Forecasting selling and marketing expenses is highly dependent on expected net sales levels and could vary significantly depending on actual net sales achieved in any given quarter. Marketing expenses may also fluctuate depending upon the timing, extent and nature of marketing programs.
General and Administrative
General and administrative expenses consist of salaries and related expenses for executives, finance and accounting, human resources, information technology, professional fees, including legal costs associated with defending claims against us, allowance for doubtful accounts, facility allocations, and other general corporate expenses. The following table presents general and administrative expenses, for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
General and administrative
$
603,744
$
566,514
$
37,230
7
%
$
944,240
$
1,585,030
$
(640,790
)
(40
)%
21
General and administrative expenses increased by $37 thousand and decreased by $641 thousand in the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily due to the reallocation of our business operation from hardware - focus to software - focus and cost reduction effort in 2024, which significantly reduced expenses associated with personnel, administrative support, and related infrastructure. Expenses from new SaaS business launched in Q1 2025 remained within projected budget for market-entry initiatives during its startup phase.
Future general and administrative expense increases or decreases in absolute dollars are difficult to predict due to the lack of visibility of certain costs, including legal costs associated with defending claims against us, and other factors.
Research and Development
Research and development expenses consist primarily of personnel expenses, payments to suppliers for design services, safety and regulatory testing, product certification expenditures to qualify our products for sale into specific markets, prototypes, IT, and other consulting fees. Research and development expenses are recognized as they are incurred. Our research and development organization is focused on enhancing our ability to introduce innovative and easy-to-use products and services. The following table presents research and development expenses, for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
2025
June 30,
2024
$
Change
%
Change
June 30,
2025
June 30,
2024
$
Change
%
Change
Research and development
$
17,419
$
40,864
$
(23,445
)
(57
)%
$
47,419
$
113,294
$
(65,875
)
(58
)%
Research and development expenses decreased by $23 thousand and $66 thousand in the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024. The R&D expense incurred in 2025 were primarily used for software subscriptions and support costs.
Research and development expenses may fluctuate depending on the timing and number of development activities and could vary significantly as a percentage of net sales, depending on actual net sales achieved in any given year.
In 2025, we entered into a collaboration with a new vendor to develop the “FiEE All-in-One Media Operations SaaS Platform”, which is designed to provide content creation, multi-platform publishing, data analytics, and collaboration tools for media teams and individual creators. The total contract price is $300 thousand, as of June 30, 2025, payable under the contract is $90 thousand. Development costs incurred for internal-use software are capitalized only during the application development stage.
Liquidity and Capital Resources
Our principal sources of liquidity are cash and cash equivalents. As of June 30, 2025, we had cash and cash equivalents of $4.5 million as compared to $30 thousand on December 31, 2024. On June 30, 2025, we had no borrowings outstanding and working capital of $1.1 million. We have funded our operations and financing activities primarily through sale of our preferred stock and common stock. The Company’s ability to maintain adequate levels of liquidity depends in part on our ability to generate cash from operations and its ability to raise additional funds through equity or debt financing. The Company is evaluating options related to its liquidity. The Company will continue to monitor its costs in relation to its sales and adjust its cost structure accordingly.
Our historical cash outflows have primarily been associated with: (1) cash used for operating activities such as the purchase and growth of inventory, expansion of our sales and marketing and research and development infrastructure and other working capital needs; (2) expenditures related to increasing our manufacturing capacity and improving our manufacturing efficiency; (3) capital expenditures related to the acquisition of equipment; (4) cash used to repay our debt obligations and related interest expense; and (5) cash used for acquisitions. Fluctuations in our working capital due to timing differences of our cash receipts and cash disbursements also impact our cash inflows and outflows.
22
Our consolidated financial statements as of June 30, 2025 were prepared under the assumption that we will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt exists about our ability to continue as a going concern, and we will require additional liquidity to continue operations beyond the next 12 months.
Our consolidated financial statements as of June 30, 2025 do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if we were unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or part of their investment.
Cash Flows
The following table presents our cash flows for the periods presented:
For the
Six Months Ended
June 30,
2025
2024
Cash provided by (used in) operating activities
$
171,955
$
(2,878,506
)
Cash used in investing activities
-
-
Cash provided by (used in) financing activities
4,300,000
2,800,000
Effect of foreign exchange rate changes on cash
1,962
-
Net increase (decrease) in cash and cash equivalents
$
4,473,917
$
(78,506
)
Cash Flows from Operating Activities. Cash used from operating activities of $172 thousand during the six months ended June 30, 2025 reflected our net loss of $1 million, adjusted for non-cash expenses, consisting primarily of $91 thousand in depreciation and amortization expense. Uses of cash included increase in other receivables of $520 thousand. Sources of cash included an increase of contract liabilities of $1.5 million.
Cash used from operating activities of $2.9 million during the six months ended June 30, 2024 reflected our net loss of $3.7 million, adjusted for non-cash expenses, consisting primarily of $426 thousand of stock-based compensation expense, $238 thousand in depreciation and amortization expense, and $2.2 million in vendor forgiveness, net of asset transfers. Uses of cash included a decrease in accounts payable of $3.1 million. Sources of cash included primarily a decrease of accounts receivable of $731 thousand, inventories of $404 thousand, and accrued expenses of $16 thousand.
Cash Flows from Investing Activities. During each of the six months ended June 30, 2025 and 2024, the Company had no cash flows generated or used by investing activities.
Cash Flows from Financing Activities. Cash provided from financing activities during the six months ended June 30, 2025 consisted of proceeds from issuance of common stock of $4 million, net proceeds from the issuance of convertible note of $300 thousand.
Cash provided from financing activities during the six months ended June 30, 2024 consisted of proceeds from issuance of preferred stock of $2.8 million.
Future Liquidity Needs
Our primary short-term needs for capital, which are subject to change, include expenditures related to:
●
upgrades to our information technology infrastructure to enhance our capabilities and improve overall productivity;
23
●
support of our commercialization efforts related to our current and future products, including expansion of our direct sales force and field support resources;
●
the continued advancement of research and development activities.
Our capital expenditures are largely discretionary and within our control. We expect that our product sales and the resulting operating loss, as well as the status of each of our product development programs, will significantly impact our cash management decisions.
At June 30, 2025, we believe our current cash and cash equivalents may not be sufficient to fund working capital requirements, capital expenditures and operations during the next twelve months. Our ability to continue as a going concern will depend on our ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce or contain expenditures and increase revenues. Based on these factors, management determined that there is substantial doubt regarding our ability to continue as a going concern. The Company will continue to monitor its costs in relation to its sales and adjust accordingly.
Our future liquidity and capital requirements will be influenced by numerous factors, including the extent and duration of any future operating losses, the level and timing of future sales and expenditures, the results and scope of ongoing research and product development programs, working capital required to support our sales growth, funds required to service our debt, the receipt of and time required to obtain regulatory clearances and approvals, our sales and marketing programs, our need for infrastructure to support our sales growth, the continuing acceptance of our products in the marketplace, competing technologies and changes in the market and regulatory environment.
Our ability to fund our longer-term cash needs is subject to various risks, many of which are beyond our control—See “Risk Factors—We may require significant additional capital to pursue our growth strategy, and our failure to raise capital when needed could prevent us from executing our growth strategy.” Should we require additional funding, such as additional capital investments, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities. We cannot guarantee that such funding will be available in needed quantities or on terms favorable to us, if at all.
At June 30, 2025, we have Federal net operating loss carry forwards of approximately $70 million available to reduce future taxable income. A valuation allowance has been established for the full amount of deferred income tax assets as management has concluded that it is more-likely than-not that the benefits from such assets will not realize the benefits of our deferred tax assets. As a result, as of June 30, 2025 and December 31, 2024, we recorded a full valuation allowance against our net deferred tax assets.
To support the Company’s strategic transition to SaaS solutions and the scaling of its AI-driven platform, management anticipates requiring approximately $10 million in total funding over the next 3 years. The Company plans to allocate $3.0 million in 2025 to fund critical infrastructure development and initial operational scaling, laying the foundation for its SaaS transition, $4.0 million in 2026 to develop AI technology for content, build fan community and membership system, and $3.0 million in 2027 to enhance our SaaS system, and develop robust security for other IP protection technologies.
To provide for such liquidity needs over the next 3 years, on May 9, 2025, the Company entered into a Purchase Agreement with Helena Global Investment Opportunities I Ltd. (Helena Global Investment Opportunities I Ltd., “Helena”, and such purchase agreement, “Helena Purchase Agreement”) whereby the Company shall have the right to issue and sell to Helena, from time to time, and Helena shall purchase from the Company, up to $15,000,000 of the Common Stock.
Unless terminated earlier pursuant to Section 11.02 of the Helena Purchase Agreement, at any time between May 9, 2025 and the first day of the month next following the 36-month anniversary of May 9, 2025, the Company may require Helena to purchase Common Stock by delivering an Advance Notice to Helena and, in its sole discretion, select the amount of the Advance, not to exceed the Maximum Advance Amount, it desires to issue and sell to Helena in each Advance Notice and the time it desires to deliver each Advance Notice.
24
In no event shall the number of shares of Common Stock issuable to Helena pursuant to an Advance cause the aggregate number of shares of Common Stock beneficially owned by Helena and its affiliates as a result of previous issuances and sales of Common Stock to Helena under the Helena Purchase Agreement to exceed 9.99% of the then issued and outstanding Common Stock.
The closing of each Advance and each sale and purchase of Common Stock related to each Advance (each, a “Closing”) shall take place on the applicable Settlement Date, at a Purchase Price based on 95% of the lowest VWAP for the Common Stock, in respect of any Advance, during the three (3) Trading Days commencing on the date of Helena’s receipt of the shares of Common Stock relating to such Advance.
In consideration for Helena’s execution and delivery of the Helena Purchase Agreement, the Company shall issue or cause to be issued to Helenna, as a commitment fee, shares of Common Stock, having an aggregate value of $150,000, of which (i) $75,000 of such shares shall be issued on a date no later than three (3) Business Days from the Helena Purchase Agreement, and (ii) $75,000 of such shares shall be issued on the date which is ninety (90) days following such date.
On May 9, 2025, the Company also entered into, and simultaneously closed the transactions under, a Securities Purchase Agreement with Cao Yu, whereby the Company sold 1,585,366 shares of the Company’s Common Stock to Cao Yu, for an aggregate purchase price of $2,600,000.
On May 9, 2025, the Company also entered into, and simultaneously closed the transactions under, a Securities Purchase Agreement with Hu Bin, whereby the Company sold 853,659 shares of Common Stock to Hu Bin, for an aggregate purchase price of $1,400,000.
Commitments and Contractual Obligations
During the six months ended June 30, 2025, except as otherwise disclosed in this Form 10-Q, there were no material changes to our capital commitments and contractual obligations from those disclosed in our Form 10-K for the year ended December 31, 2024.
Off-Balance Sheet Arrangements
We did not have any material off-balance sheet arrangements as of June 30, 2025. See Note 5 to the accompanying consolidated financial statements for additional disclosure.
Recent Accounting Standards
See Note 2 Summary of Significant Accounting Policies, in Notes to Unaudited Consolidated Financial Statements in Item 1 of Part 1 of this Report on 10-Q, for a full description of recent accounting standards, including the expected dates of adoption and estimated effects on the financial condition and results of operations, which are hereby incorporated by reference.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. GAAP. These accounting principles require us to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. To the extent there are material differences between these estimates and actual results, our financial statements may be affected. Our management evaluates its estimates, assumptions and judgments on an ongoing basis.
Our critical accounting policies and estimates, which are revenue recognition, product returns, inventory valuation and costs of goods sold, warrants, valuation of deferred tax assets are described under “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. For the three and six months ended June 30, 2025, the Company’s critical accounting policies is revenue recognition, and no critical accounting estimates were identified.
25
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this Item.
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