Minim, Inc. (“Minim”, the “Company”, “we”, “our” and similar terms) is filing this Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2022 to amend and restate certain items presented in our Annual Report on Form 10-K/A for the year ended December 31, 2021 which was filed with the Securities and Exchange Commission (“SEC”) on August 19, 2022. The original Annual Report on Form 10-K for the year ended December 31, 2021 was filed on March 31, 2022 (the “Original Form 10-K”). The original Quarterly Report on Form 10-Q for the period ended March 31, 2022 was filed with the SEC on May 12, 2022 (the “Original 10-Q”).

The Form 10-Q/A contains our restated annual financial statements as of and for the period ended March 31, 2022 and year ended December 31, 2021. This Form 10-Q/A includes a restatement of our consolidated balance sheet as of March 31, 2022 and December 31, 2021 and the related consolidated statements of stockholders’ equity for the periods then ended. This Form 10-Q/A also includes amendments to:

(2) Part I, Item 1 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of and for the period ended March 31, 2022,

(3) management’s determinations with respect to disclosure controls and procedures and internal control over financial reporting for the period ended March 31, 2022 contained in Part I, Item 4, “Controls and Procedures”; and

(4) the Chief Executive Officer and Chief Financial Officer certifications in Exhibits 31.1, 31.2, and 32.1 and the financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.

See below and Part I, Item 1, Note 12, “Restatement of Previously Issued Consolidated Financial Statements” in the notes to the consolidated financial statements included in this Form 10-Q/A, for a detailed discussion of the effect of the restatement on the previously issued financial statements as of and for the period ended March 31, 2022.

Other than as described above, this Form 10-Q/A does not reflect adjustments for events occurring after the filing of the Original Form 10-Q except to the extent that they are otherwise required to be included and discussed herein.

For the convenience of the reader, we have included all items in this Form 10-Q/A which supersedes in its entirety the Original Form 10-Q.

On August 3, 2022, the Audit Committee of the Company, after consultation with the Company’s management, concluded that the following financial statements previously filed by the Company with the Securities and Exchange Commission (“SEC”) should no longer be relied upon due to errors in such financial statements relating to the recording and reporting of inventory costing, inventory reserves, and related internal controls (the “Inventory Costing Errors”):

(2) the fiscal quarter ended March 31, 2022 (collectively, the “Non-Reliance Periods”).

Accordingly, investors should no longer rely upon the Company’s previously released financial statements for the Non-Reliance Periods and should rely instead on the 10-K/A as well as this 10-Q/A filed for the fiscal quarter ended March 31, 2022. In addition, investors should no longer rely upon earnings releases for these periods and other communications relating to these financial statements. The Company’s management identified the Inventory Costing Errors during its inventory testing procedures for the preparation of the Company’s financial statements for the quarterly period ended June 30, 2022.

The correction of the Inventory Costing Errors resulted in the determination that customer returned inventory was not properly valued and inventory for the year ended December 31, 2021 was understated by $1,912,817. The Company, upon conducting an analysis of the impact of insufficient reserves on previously reported financial results in conjunction with the customer returned inventory error, determined that the inventory reserves for the year ended December 31, 2021 were understated by $524,744. The aggregate net impact of the Inventory Costing Errors to the year ended December 31, 2021 increases inventory and reduces net loss by $1,388,073. The Inventory Costing Errors did not result in required adjustments to the consolidated statement of operations and consolidated statement of cash flows for the period ended March 31, 2022. The aggregate net impact of $1,338,073 amended and accounted for in the year ended December 31, 2021 resulted in amending the consolidated balance sheet for the period ended March 31, 2022 by increasing inventory and reducing accumulated deficit by $1,338,073.

For the period ended March 31, 2022, the foregoing changes did not have any impact on the Company’s cash position, cash flows, revenues, statement of operations, or liquidity and did not affect compliance with the financial covenants contained in the Company’s credit facility or compliance with any other agreement of the Company.

Management has considered the effect of the Inventory Costing Errors on the Company’s prior conclusion to the adequacy of its internal controls over financial reporting and disclosure controls and procedures as of the end of December 31, 2021 and March 31, 2022. As a result of the Inventory Costing Errors, management has determined that material weaknesses existed in the Company’s internal control over financial reporting as of the end of December 31, 2021 and March 31, 2022. See Part II Item 9A – Controls and Procedures in the Company’s Form 10-K/A for the year ended December 31, 2021 for a description of these matters.

As a result of the restatement included herein caused by the Inventory Costing Errors, the Company is reporting herein inventories, net, for the period ended March 31, 2022 and year ended December 31, 2021 of $31,345,231 and $33,891,287, respectively, compared to the originally reported $29,957,158 and $32,503,214, respectively. Accumulated deficit for the period ended March 31, 2022 and year ended December 31, 2021 is amended to $61,824,110 and $59,285,610, respectively, from originally reported $63,212,183 and $60,673,683, respectively.

The following table summarizes the effects of the restatement on certain key items of the Company’s previously issued consolidated financial statements for the period ended March 31, 2022:

	March 31, 2022 (Unaudited, As Restated)			December 31, 2021 (As Restated)

ASSETS
Current assets
Cash and cash equivalents	$	10,048,871		$	12,570,445
Restricted cash		500,000			500,000
Accounts receivable, net of allowance of doubtful accounts of $246,534 and $236,819 as of March 31, 2022 and December 31, 2021, respectively		5,202,262			4,880,663
Inventories, net		31,345,231			33,891,287
Prepaid expenses and other current assets		641,374			587,885
Total current assets		47,737,738			52,430,280

Equipment, net		805,679			762,818
Operating lease right-of-use assets, net		195,821			241,626
Goodwill		58,872			58,872
Intangible assets, net		232,312			262,698
Other assets		645,557			544,738
Total assets	$	49,675,979		$	54,301,032

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Bank credit line	$	7,071,901		$	5,065,074
Accounts payable		8,208,513			12,458,246
Current maturities of government loan		7,731			34,237
Current maturities of operating lease liabilities		123,891			143,486
Accrued expenses		4,749,664			5,279,917
Deferred revenue, current		404,453			291,296
Total current liabilities		20,566,153			23,272,256

Operating lease liabilities, less current maturities		72,198			98,811
Deferred revenue, noncurrent		427,571			443,452
Total liabilities		21,065,922			23,814,519

Commitments and Contingencies (Note 6)		-			-

Stockholders’ equity
Preferred Stock, authorized: 2,000,000 shares at $0.01 par value; 0 shares issued and outstanding		—			—
Common Stock, authorized: 60,000,000 shares at $0.01 par value; issued and outstanding: 46,065,817 shares at March 31, 2022 and 45,885,043 shares at December 31, 2021 respectively		460,657			458,850
Additional paid-in capital		89,973,510			89,313,273
Accumulated deficit		(61,824,110	)		(59,285,610	)
Total stockholders’ equity		28,610,057			30,486,513
Total liabilities and stockholders’ equity	$	49,675,979		$	54,301,032

See accompanying notes to ~~condensed~~ consolidated financial statements.

~~ZOOM TELEPHONICS,~~

MINIM, INC.

~~Condensed~~ AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net sales
$8,582,076
$5,990,432
$20,556,157
$12,688,142
Cost of goods sold
  5,515,753
  4,064,834
  13,561,520
  8,727,755
Gross profit
  3,066,323
  1,925,598
  6,994,637
  3,960,387





Operating expenses:




Selling
  1,812,921
  1,473,787
  5,341,239
  3,520,030
General and administrative
  383,475
  354,237
  1,153,753
  1,236,239
Research and development
  457,309
  352,849
  1,367,718
  1,154,789

  2,653,705
  2,180,873
  7,862,710
  5,911,058





Operating income (loss)
  412,618
  (255,275)
  (868,073)
  (1,950,671)





Other income (expense):




Interest income
  22
  21
  59
  238
Interest expense
  (30,636)
  (27,778)
  (87,178)
  (32,115)
Other, net
  65
  41,482
  (11,072)
  42,232
Total other income (expense)
  (30,549)
  13,725
  (98,191)
  10,355





Income (loss) before income taxes
  382,069
  (241,550)
  (966,264)
  (1,940,316)





Income taxes
  4,984
  2,034
  14,123
  3,312





Net income (loss)
$377,085
$(243,584)
$(980,387)
$(1,943,628)





Net income (loss) per share:




              Basic
$0.03
$(0.02)
$(0.07)
$(0.14)
             Diluted
$0.02
$(0.02)
$(0.07)
$(0.14)










Basic weighted average common and common equivalent shares
  14,953,285
  13,877,407
  14,851,229
  13,722,680
Diluted weighted average common and common equivalent shares
  16,419,374
  13,877,407
  14,851,229
  13,722,680

	2022			2021
	Three Months Ended
	March 31,
	2022			2021
Net sales	$	13,299,255		$	15,017,574
Cost of goods sold		9,108,018			9,913,784
Gross profit		4,191,237			5,103,790

Operating expenses:
Selling and marketing		3,652,026			3,173,950
General and administrative		1,451,032			1,077,368
Research and development		1,542,582			1,388,170
Total operating expenses		6,645,640			5,639,488
Operating loss		(2,454,403	)		(535,698	)

Other income (expense):
Interest expense, net		(78,097	)		(28,322	)
Gain on forgiveness of debt (Note 5)		—			20,000
Total other income (expense)		(78,097	)		(8,322	)

Loss before income taxes		(2,532,500	)		(544,020	)

Income tax provision		6,000			1,500
Net loss	$	(2,538,500	)	$	(545,520	)

Basic and diluted net loss per share	$	(0.06	)	$	(0.02	)

Weighted average common and common equivalent shares: Basic and diluted		46,003,232			35,254,243

See accompanying notes to ~~condensed~~ consolidated financial statements.

MINIM, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Unaudited)

For the three months ended March 31, 2022


	Common Stock				Additional Paid In		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance at December 31, 2021 (as restated)		45,885,043	$	458,850	$	89,313,273	$	(59,285,610	)	$	30,486,513

Net loss		—		—		—		(2,538,500	)		(2,538,500	)
Stock option exercises		180,774		1,807		97,362		—			99,169
Stock-based compensation		—		—		562,875		—			562,875
Balance at March 31, 2022 (as restated)		46,065,817	$	460,657	$	89,973,510	$	(61,824,110	)	$	28,610,057

For the three months ended March 31, 2021

	Common Stock				Additional Paid In		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance at December 31, 2020		35,074,922	$	350,749	$	64,526,664	$	(57,086,943	)	$	7,790,470

Net loss		—		—		—		(545,520	)		(545,520	)
Stock option exercises		287,932		2,879		376,268		—			379,147
Stock-based compensation		—		—		404,718		—			404,718
Balance at March 31, 2021		35,362,854	$	353,628	$	65,307,650	$	(57,632,463	)	$	8,028,815

See accompanying notes to consolidated financial statements.

~~ZOOM TELEPHONICS,~~

MINIM, INC.

~~Condensed~~ AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended
September 30,

2017

2016

Cash flows from operating activities:

Net income (loss)
$(980,387)
$(1,943,628)



Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:


Depreciation and amortization
  391,181
  389,487
Stock based compensation
  170,074
  164,795
Provision for accounts receivable allowances
  540
  8,988
Provision for inventory reserves
  186,440
  10,450
Changes in operating assets and liabilities:


Accounts receivable
  393,164
  (1,801,446)
Inventories
  (566,490)
  (1,454,910)
Prepaid expenses and other assets
  (327,462)
  (193,245)
Accounts payable and accrued expenses
  1,421,963
  1,084,228
Net cash provided by (used in) operating activities
  689,023
  (3,735,281)



Cash flows from investing activities:





Cost of other assets
  (75,000)
  (295,000)
Additions to plant and equipment
  (93,849)
  (32,303)
Net cash provided by (used in) investing activities
  (168,849)
  (327,303)



Cash flows from financing activities:


     Net funds received from (to) bank credit lines
  (711,842)
  2,141,799
     Proceeds from stock option exercises
  102,675
  249,389
                    Net cash provided by (used in) financing activities
  (609,167)
  2,391,188



Net change in cash
  (88,993)
  (1,671,396)



Cash and cash equivalents at beginning of period
  179,846
  1,846,704



Cash and cash equivalents at end of period
$90,853
$175,308



Supplemental disclosures of cash flow information:





Cash paid during the period for:


Interest
$87,178
$32,115
Income taxes
$14,123
$3,312

	2022			2021
	Three Months Ended March 31,
	2022			2021
Cash flows used in operating activities:
Net loss	$	(2,538,500	)	$	(545,520	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		130,727			167,293
Amortization of right-of-use assets		45,805			18,916
Amortization of debt issuance costs		17,605			2,418
Amortization of sales contract costs		9,605			5,566
Stock based compensation		562,875			404,718
Provision for accounts receivable allowances		9,714			—
Provision for inventory reserves		40,266			—
Non-cash loan forgiveness		—			(20,000	)
Changes in operating assets and liabilities:
Accounts receivable		(331,313	)		557,314
Inventories		2,505,790			(1,479,232	)
Prepaid expenses and other current assets		(53,489	)		(3,624	)
Other assets		17,778			(110,447	)
Accounts payable		(4,179,887	)		(1,365,295	)
Accrued expenses		(600,100	)		(2,811,777	)
Deferred revenue		97,276			228,436
Operating lease liabilities		(46,208	)		(18,513	)
Net cash used in operating activities		(4,312,056	)		(4,969,747	)

Cash flows from investing activities:
Purchases of equipment		(115,103	)		(257,563	)
Certification costs capitalized		(156,300	)		—
Net cash used in investing activities		(271,403	)		(257,563	)

Cash flows from financing activities:
Net proceeds from the SVB bank credit line		1,989,222			7,009,270
Repayment of the Rosenthal bank credit line		—			(2,442,246	)
Costs associated with bank credit line		—			(92,905	)
Repayment of government loan		(26,506	)		—
Proceeds from stock option exercises		99,169			379,147
Net cash provided by financing activities		2,061,885			4,853,266

Net decrease in cash and cash equivalents		(2,521,574	)		(374,044	)
Cash, cash equivalents, and restricted cash - Beginning		13,070,445			1,571,757

Cash, cash equivalents, and restricted cash - Ending	$	10,548,871		$	1,197,713

Supplemental disclosures of cash flow information:

Cash paid during the period for:
Interest	$	78,331		$	25,945
Income taxes	$	6,000		$	1,500

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

Cash and cash equivalents	$	10,048,871		$	397,713
Restricted cash		500,000			800,000
Total cash, cash equivalents and restricted cash	$	10,548,871		$	1,197,713

See accompanying notes to ~~condensed~~ consolidated financial statements.

~~ZOOM TELEPHONICS,~~

MINIM, INC.

AND SUBSIDIARIES

Notes to ~~Condensed~~ Consolidated Financial Statements

(Unaudited)

(1) ~~Summary~~NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Minim, Inc. and its wholly owned subsidiaries, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “Minim” or the “Company”. The Company delivers intelligent networking products that reliably and securely connect homes and offices around the world. We are the exclusive global license holder to the Motorola brand for home networking 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.

On January 21, 2022, Zoom Connectivity, Inc. filed with the Secretary of ~~Significant Accounting Policies~~

State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to change its legal corporate name from “Zoom Connectivity, Inc.” to “Cadence Connectivity, Inc.”, effective as of January 21, 2022.

Restatement

Subsequent to the issuance of the financial statements for the period ended March 31, 2022, the Company’s management identified the Inventory Costing Errors during its inventory testing procedures for the preparation of the Company’s financial statements for the quarterly period ended June 30, 2022. In connection with this review, the Company identified that customer returned product was not properly valued due to incorrect costs per unit being applied, resulting in a $1,912,817 in undervalued inventory for the year ended December 31, 2021. The ~~accompanying condensed~~Company’s enterprise resource planning (“ERP”) system requires manual, rather than systematic, inputted costs per unit on certain inventory transactions. In conjunction with the inventory costing review, the Company conducted an analysis on inventory reserves and identified additional inventory reserves and provisions of $524,744. The inventory reserves are specific to the inventory costing error and excess product on hand for a product. The aggregate net impact of the Inventory Costing Errors for the year ended December 31, 2021 increases inventory and reduces net loss by $1,388,073. The Inventory Costing Errors did not result in adjustments to the consolidated statement of operations and consolidated statement of cash flows for the period ended March 31, 2022. The aggregate net impact of $1,338,073 amended and accounted in the year ended December 31, 2021 results in amended consolidated balance sheet for the period ended March 31, 2022 by increasing inventory and reducing accumulated deficit by $1,338,073.

The Inventory Costing Errors did not impact the period ended March 31, 2021.

For the period ended March 31, 2022, the foregoing changes did not have any impact on the Company’s cash position, cash flows, revenues, statement of operations, or liquidity and does not affect compliance with the financial covenants contained in the Company’s credit facility or compliance with any other agreement of the Company.

The following table summarizes the effects of the restatement on certain key items of the Company’s previously issued consolidated financial statements (“for the period ended March 31, 2022:

SCHEDULE OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS


	Period ended March 31, 2022
	As Previously Reported			Inventory Costing Errors		Inventory Reserve Error			As Restated
Selected balance sheet amounts
Inventories, net	$	29,957,158		$	1,912,817	$	(524,744	)	$	31,345,231
Total assets		48,287,906			1,912,817		(524,744	)		49,675,979
Accumulated deficit		(63,212,183	)		1,912,817		(524,744	)		(61,824,110	)
Total stockholders’ equity		27,221,984			1,912,817		(524,744	)		28,610,057


	Year ended December 31, 2021
	As Previously Reported			Inventory Costing Errors		Inventory Reserve Error			As Restated
Selected balance sheet amounts
Inventories, net	$	32,503,214		$	1,912,817	$	(524,744	)	$	33,891,287
Total assets		52,912,959			1,912,817		(524,744	)		54,301,032
Accumulated deficit		(60,673,683	)		1,912,817		(524,744	)		(59,285,610	)
Total stockholders’ equity		29,098,440			1,912,817		(524,744	)		30,486,513

Basis of Presentation

The accompanying unaudited consolidated financial ~~statements”~~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 ~~unaudited. However, the~~normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed ~~consolidated balance sheet as of December 31, 2016 was derived from audited financial statements.~~or omitted. In the opinion of management, the ~~accompanying~~ financial statements include all normal and recurring adjustments that are considered necessary ~~adjustments to present fairly~~for the ~~condensed consolidated~~fair presentation of the Company’s financial position ~~results of operations~~ and ~~cash flows of Zoom Telephonics, Inc. (the “Company” or “Zoom”). The adjustments are of a normal, recurring nature.~~

The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. The Company has evaluated subsequent events from September 30, 2017 through the date of this filingoperating results. All intercompany balances and ~~determined that there are no such events requiring recognition or disclosure in the financial statements.~~

~~The financial statements of the Company presented herein~~transactions have been ~~prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports~~eliminated in consolidation. The information included in this Quarterly Report on Form ~~10-Q and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America. These financial statements~~10-Q/A should be read in conjunction with the audited financial statements ~~and notes thereto~~included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, ~~2016 included~~2021.

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 ~~Company's 2016~~same as those for the full year or any future periods.

Certain prior year amounts have been reclassified to conform to the current year presentation. None of the reclassifications impacted the consolidated statements of operations for the three- month period ended March 31, 2021.

Liquidity

The Company’s operations have historically been financed through the issuance of common stock and borrowings. Since inception, the Company has incurred significant losses and negative cash flows from operations. During the three months ended March 31, 2022, the Company incurred a net loss of $2.5million and had negative cash flows from operating activities of $4.3 million. As of March 31, 2022, the Company had an accumulated deficit of $61.8million and cash and cash equivalents of $10.0 million. The Company believes it has sufficient resources through its cash and cash equivalents, other working capital and borrowings under its SVB line-of-credit to continue as a going concern through at least one year from the issuance of these financial statements.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in its Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, ~~2016.~~

2021. The Company’s significant accounting policies did not change during the three months ended March 31, 2022.

Recently Adopted Accounting Standards

None

Recently Issued Accounting Standards

In ~~March~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted ASU 2016-09 as of January 1, 2017 and elected an accounting policy to record forfeitures as they occur. The impact of this change in accounting policy had an insignificant effect on accumulated deficit as of January 1, 2017. ASU 2016-09 also provides that companies no longer record excess tax benefits or certain tax deficiencies in additional paid-in capital. Instead, all excess tax benefits and tax deficiencies are recorded as income tax expense or benefit in the statement of operations. There was no financial statement impact of adopting this provision of ASU 2016-09 as the Company is currently in a net operating loss position and the excess tax benefits that existed from options previously exercised had a full valuation allowance. The effects of adopting the remaining provisions in ASU 2016-09 affecting the classification of awards as either equity or liabilities when an entity partially settles the award in cash in excess of the employer’s minimum statutory withholding requirements and classification in the statement of cash flows did not have a significant impact on the Company’s financial position, results of operations or cash flows.

~~Recently Issued Accounting Standards~~

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 605-35, “Revenue Recognition - Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readers of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods of retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application.

There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)," was issued in March 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, "Identifying Performance Obligations and Licensing," issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. ASU 2016-12, "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients" provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. Finally, ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," was issued in December 2016, and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU 2014-09, the Companu will also consider the impact on its financial statements related to the updated guidance provided by these four new ASUs. The Company will adopt the new guidance in fiscal 2018, and anticipates using the modified retrospective method. The Company is in the final process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition and its contracts with customers to determine the effect the guidance will have on its financial statements and what changes to systems and controls may be warranted.

In March 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the balance sheets, a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (the lease asset). For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted.~~The Company is currently evaluating the potential impact that the adoption of ASU 2016-02 may have on its consolidated financial statements.~~

~~In June 2016, the FASB issued ASU~~ No. 2016-13, ~~"Financial~~“Financial Instruments Credit Losses —Measurement of Credit Losses on Financial ~~Instruments."~~Instruments.” ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be ~~collected.~~collected, which includes the Company’s accounts receivable. This ASU ~~2016-13~~ is effective for ~~public business entities~~the Company for reporting periods beginning after December 15, 2022. The Company is currently assessing the potential impact that ~~are SEC filers~~the adoption of this ASU will have on its consolidated financial statements.

In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance”. ASU 2021-10 includes tax credits, but not within Topic 740, “Income Taxes”, cash grants, grants of other assets and project grants. The ASU excludes transactions in which a government is a customer within ASC Topic 606, “Revenue from Contracts with Customers”. This ASU is effective for fiscal years beginning after December 15, ~~2019, including interim periods within those fiscal years. Early~~2021, with early adoption is permitted in any interim or annual period for fiscal years beginning after December 15, 2018. An entity should apply the amendments in ASU 2016-13 through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (modified-retrospective approach).permitted. The Company is currently ~~evaluating~~assessing the potential impact that the adoption of this ASU ~~2016-13 may have on its consolidated financial statements.~~

In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity should account for the effects of a modification unless all of the following criteria are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. Disclosure requirements remain unchanged. ASU 2017-09 is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted as described in ASU 2017-09. The Company is currently evaluating the potential impact that the adoption of ASU 2017-09 will have on its ~~consolidated~~consolidated. financial statements.

~~(2) Liquidity~~

~~The~~

With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s ~~cash~~financial position, results of operations and cash ~~equivalents balance on September 30, 2017 was approximately $91 thousand, down from $180 thousand on December 31, 2016. Major uses~~flows.

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

Revenue is recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of ~~cash were~~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 $980 thousand loss for the nine months ended September 30, 2017, a decrease of approximately $712 thousand in bank debt, an increase of approximately $380 thousand in inventory, and an increase of approximately $284 thousand in prepaid expenses. These were offset by an increase of approximately $1.4 million in accounts payable and accrued expenses, a decrease of approximately $394 thousand in accounts receivable, and a decrease of approximately $190 thousand in other assets.

On September 30, 2017 the Company had approximately $595 thousand in bank debt for a $3.0 million asset-based credit line and had working capital of approximately $2.9 million, including approximately $91 thousand in cash and cash equivalents. On December 31, 2016 the Company had working capital of approximately $3.4 million including approximately $180 thousand in cash and cash equivalents. The Company’s current ratio at September 30, 2017 was 1.5 compared to 1.7 at December 31, 2016.

~~Although~~three-year period that the Company has ~~experienced losses~~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 backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the ~~past, the Company has experienced dramatic growth over the last year~~process of being scheduled for shipment, and ~~one-half. Sales in 2016 were up 65% over sales in 2015 and sales in the first nine months of 2017 were up 62% over sales in the first nine months of 2016.~~ that are not yet invoiced.

Contract costs

The Company ~~believes that year-over-year growth is likely to continue for~~recognizes the ~~foreseeable future due to~~incremental costs of obtaining a number of factors including the strength of the Motorola brand, new product introductions, increased shelf space, growing online retailer sales, and international expansion. Because of projected sales increases, the associated improved net income, and its Financing Agreement (as defined below)contract with~~Rosenthal & Rosenthal, Inc.~~, a customer if the Company expects the benefit of those costs to ~~maintain acceptable levels of liquidity~~be longer than one year. The Company has determined that certain sales commissions meet the requirements to ~~meet its obligations as they become due for at least twelve months from~~be capitalized, and the ~~date of our quarterly filing of this Form 10-Q~~Company amortizes these costs on a consistent basis with the ~~Securities Exchange Commission.~~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 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. Contract liabilities consist of deferred revenue, which represents payments received in advance of revenue recognition related to SaaS agreements and for prepayments for products or services yet to be delivered.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

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

SCHEDULE OF CONTRACT BALANCES

	March 31,		December 31,
	2022		2021

Accounts receivable	$	5,202,262	$	4,880,663
Total contract assets	$	5,202,262	$	4,880,663

Deferred revenue, current	$	404,453	$	291,296
Deferred revenue, noncurrent		427,571		443,452
Total contract liabilities	$	832,024	$	734,748

During the three months ended March 31, 2022, the change in contract liabilities balances was as follows:

SCHEDULE OF CHANGE IN CONTRACT BALANCES

Balance at December 31, 2021	$	734,748
Billings		177,759
Revenue recognized		(80,483	)
Balance at March 31, 2022	$	832,024

Disaggregation of Revenue

The following table sets forth our revenues by distribution channel:

SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL

	Three Months Ended March 31,
	2022		2021
Retailers	$	12,341,289	$	13,791,518
Distributors		307,207		913,150
Other		650,759		312,906
	$	13,299,255	$	15,017,574

The following table sets forth our revenues by product:

	Three Months Ended March 31,
	2022		2021
Cable modems & gateways	$	12,883,047	$	14,587,090
Other networking products		272,566		305,812
SaaS		143,642		124,672
	$	13,299,255	$	15,017,574

~~(3)~~

(4) BALANCE SHEET COMPONENTS

Inventories

Inventories consist of :

September 30,
2017

December 31,
2016

Materials
$1,287,621
$888,830
Work in process
  209,694
  27,708
Finished goods
  3,809,347
  4,010,074
Total
$5,306,662
$4,926,612

Inventories, net consists of the following:

SCHEDULE OF INVENTORIES

	March 31, 2022 (As Restated)		December 31, 2021 (As Restated)
Raw materials	$	1,601,870	$	1,047,156
Finished goods		29,743,361		32,844,131
Total	$	31,345,231	$	33,891,287

Finished goods includes consigned inventory held by our customers of ~~$835,800~~$4.8 million and $4.5 million at ~~September 30, 2017~~March 31, 2022 and ~~$442,300 at~~ December 31, ~~2016.~~2021, respectively and includes in-transit inventory of $2.2 million and $6.3 million at March 31, 2022 and December 31, 2021, respectively. The Company reviews inventory for obsolete and ~~slow moving~~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 ~~provision for~~ inventory reserves were $835 thousand and $800 thousand as of March 31, 2022 and December 31, 2021, respectively.

Accrued expenses

Accrued expenses consist of the following:

SCHEDULE OF ACCRUED EXPENSES

	March 31, 2022		December 31, 2021
Inventory purchases	$	164,545	$	287,571
Payroll & related benefits		300,595		210,495
Professional fees		319,758		229,597
Royalty costs		1,649,999		1,588,025
Sales allowances		1,397,104		1,958,050
Sales and use tax		55,819		50,916
Other		861,844		955,263
Total accrued other expenses	$	4,749,664	$	5,279,917

(5) BANK CREDIT LINES AND GOVERNMENT LOANS

Bank Credit Line

On December 18, 2012, the Company entered into a Financing Agreement with Rosenthal & Rosenthal, Inc. (the “Financing Agreement”). The Financing Agreement, as amended, provided for up to $5.0 million of revolving credit, subject to a borrowing base formula and other terms and conditions as specified therein.

On March 12, 2021, the Company terminated its Financing Agreement with Rosenthal & Rosenthal 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 SVB Loan Agreement, as amended, provides for a revolving facility up to a principal amount of $25.0 million, which is subject to a borrowing base formula. The SVB Loan Agreement matures, and all outstanding amounts become due and payable on November 1, 2023. The SVB Loan Agreement is secured by substantially all the Company’s assets but excludes the Company’s intellectual property. All other substantial terms, including the commercial credit card line of $1.0 million, of the SVB Loan Agreement remain unchanged.

The Company incurred $143 thousand of origination costs in connection with the SVB Loan Agreement. These origination costs were recorded as debt discount and are being expensed over the remaining term of the SVB Loan Agreement. Amortization of debt issuance costs was ~~$60,096 for~~$18 thousand and $2 thousand in the three months ended ~~September 30, 2017~~March 31, 2022 and ~~$7,838~~2021, respectively.

As of March 31, 2022, the Company had $7.1 million outstanding, which is net of origination costs of $84 thousand, on its SVB Loan, with availability of $1.1 million. The interest rate was 4.5% as of March 31, 2022.

Government Loans

On April 15, 2020, the Company entered into a note payable with Primary Bank, a bank under the Small Business Administration (“SBA”), Paycheck Protection Program (“PPP”), in the amount of $583 thousand, which matures on April 15, 2022. Under the terms of the PPP note, the Company was able to apply for and receive forgiveness of $513 thousand of the original principal balance in 2020.

In February 2021, the Company received an additional forgiveness of $20 thousand related to the Economic Injury Disaster Loan Advance received with the PPP note.

(6) COMMITMENTS AND CONTINGENCIES

(a) Lease Obligations

The Company has entered into agreements to lease its warehouses and distribution centers and certain office space under operating leases. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease costs were as follows:

SCHEDULE OF COMPONENTS OF LEASE COSTS

	2022		2021
	Three Months ended March 31,
	2022		2021

Operating lease costs	$	48,231	$	20,774
Short-term lease costs		—		29,764
Total lease costs	$	48,231	$	50,538

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 March 31,
	2022			2021
Operating leases:
Weighted average remaining lease term (years)		1.5			1.1
Weighted average discount rate		5.6	%		9.0	%

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

	2022		2021
	Three Months ended March 31,
	2022		2021
Operating cash flow information:
Amounts included in measurement of lease liabilities	$	48,632	$	20,372
Non-cash activities:
ROU asset obtained in exchange for lease liability	$	—	$	—

The maturity of the Company’s operating lease liabilities as of March 31, 2022 were as follows:

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES

Years ended December 31,
2022 (remainder)	$	101,487
2023		100,673
Total lease payments	$	202,160
Less: imputed interest		(6,071	)
Present value of operating lease liabilities	$	196,089
Operating lease liabilities, current	$	123,891
Operating lease liabilities, noncurrent	$	72,198

The lease extension for the ~~three months ended September 30, 2016.~~Canton, MA office that was executed in December 2021 is not included in the operating lease liabilities because the commencement date begins on June 1, 2022. The ~~provision for inventory reserves was $186,440~~operating lease payments are $32 thousand, $55 thousand, and $23 thousand for the ~~nine months ended September 30, 2017~~years ending December 31, 2022, 2023, and ~~$10,450 for~~2024, respectively. These payments are off-balance sheet obligations until the ~~nine months ended September 30, 2016.~~

~~(4)~~commencement date of June 1, 2022.

(b) Commitments ~~and Contingencies~~

~~(a) Contingencies~~

~~From time to time the~~

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 that it believes are without merit. The Company's management believes that the ultimate resolution of such matters will not materially and adversely affect the Company's business, financial position, or results of operations.

On May 17, 2016, Magnacross LLC ("Magnacross") filed a complaint in the U.S. District Court for the Eastern District of Texas (U.S.D.C., E.D.Tex.) against the Company alleging infringement of U.S. Patent No. 6,917,304 (“the ’304 patent”) entitled “Wireless Multiplex Data Transmission System.” Magnacross alleged that the Company’s wireless routers, including its Model 5363, 5360, and 5354 (N300, N600, and AC1900) Routers, infringe the '304 patent. In its complaint, Magnacross sought injunctive relief and unspecified compensatory damages. The case was resolved on February 2, 2017 with the entry by the judge of an Order of Dismissal with Prejudice.

~~(b) Commitments~~

~~In May 2015 Zoom entered into a License Agreement~~license agreement with Motorola Mobility LLC ~~(the “License Agreement”). The License Agreement provides Zoom with~~pursuant to which the Company has an exclusive license to use certain trademarks owned by Motorola Trademark Holdings, ~~LLC.~~LLC for the manufacture, sale and marketing of consumer cable modem products, ~~in the United States and Canada through certain authorized sales channels.~~

In August 2016 Zoom entered into an amendment to the License Agreement with Motorola Mobility LLC (the “2016 Amendment”). The 2016 Amendment expands Zoom’s exclusive license to use the Motorola trademark to a wide range of authorized channels worldwide, and expands the license from cable modems and gateways to also include consumer routers, WiFi range extenders, ~~home powerline network~~MoCa adapters, ~~and access points.~~

In August 2017 Zoom entered into an amendment to the License Agreement with Motorola Mobility LLC (the “2017 Amendment”). The 2017 Amendment expands Zoom’s exclusive license to use the Motorola trademark to a wide range of authorized channels worldwide, and expands the license from cable modems, gateways, consumer routers, WiFi range extenders,cellular sensors, home powerline network adapters, and access points ~~to also include MoCa adapters, and cellular sensors.~~worldwide through a wide range of authorized sales channels. The ~~License Agreement, as amended,~~license agreement has a ~~five-year~~ term ~~beginning January 1, 2016 through~~ending December 31, ~~2020 and increased the minimum royalty payments as outlined below.~~

2025.

In connection with the License Agreement, the Company has committed to reserve a certain percentage of wholesale prices for use in advertising, merchandising and promotion of the related products. Additionally, the Company is required to make quarterly royalty payments equal to a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments as follows:

Year ending December 31,

2017
$3,000,000
2018
$3,500,000
2019
$4,500,000
2020
$5,100,000

SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS

Years ending December 31,
2022 (remaining)	$	4,950,000
2023		6,850,000
2024		7,100,000
2025		7,100,000
Total	$	26,000,000

Royalty expense under the License Agreement was ~~$583,333~~$1.6million for the ~~third quarter of 2016~~three months ended March 31, 2022 and ~~$750,000 for the third quarter of 2017,~~2021 and ~~royalty expense~~ is included in selling ~~expense~~and marketing expenses on the accompanying ~~condensed~~ consolidated statements of operations.

(c) Contingencies

The ~~balance~~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 ~~committed royalty expense for 2017 amounts~~loss can be reasonably estimated. This review is updated periodically as additional information becomes available. If both of the criteria are not met, the Company reassesses whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, the Company discloses the estimate of the amount of the loss or range of losses, that the amount is not material, or that an estimate of the loss cannot be made. At March 31, 2022, the Company is not currently a party to ~~$750,000 for~~any legal proceedings that, if determined adversely to the ~~remaining quarter of 2017.~~

~~In order~~Company, in management’s opinion, are currently expected to ~~facilitate~~individually or in the aggregate have a material adverse effect on the Company’s ~~current~~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 ~~planned increase~~other legal proceedings in ~~production demand, driven in part by~~connection with their business. Some of the ~~launch~~legal actions include claims for substantial or unspecified compensatory and/or punitive damages. A substantial adverse judgment or other unfavorable resolution of ~~Motorola branded products,~~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 ~~committed~~adequate legal defenses with ~~North American Production Sharing, Inc. (“NAPS”)~~respect to ~~extend its existing lease used in connection with~~ the ~~Production Sharing Agreement (“PSA”) entered into between~~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 ~~and NAPS. The extension term~~ is ~~December 1, 2015 through November 30, 2018 and allows~~unable to predict the ~~Company to contract additional Mexican personnel to work in the Tijuana facility.~~outcome of these matters.

The Company moved its headquarters on June 29, 2016 from its long time location at 207 South Street, Boston, MA. to a nearby location at 99 High Street, Boston, MA. The Company signed a lease for 11,480 square feet that terminates on June 29, 2019. Payments under the lease are zero for the first 2 months, an aggregate of $413,280 for the next 12 months, an aggregate of $424,760 for the next 12 months, and an aggregate of $363,533 for the remaining term of the lease ending June 29, 2019. Rent expense was $102,338 for the third quarter of 2017.

~~(5) Customer Concentrations~~

The Company sells its products primarily through high-volume retailers and distributors, Internet service providers, value-added resellers, Personal Computer (“PC”) system integrators, and original equipment manufacturers ("OEMs"). The Company supports its major accounts in their efforts to offer a well-chosen selection of attractive products and to maintain appropriate inventory levels.

(7) SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS

Relatively few ~~customers~~companies account for a substantial portion of the Company’s revenues. In the ~~third quarter of 2017,~~ three ~~customers~~months ended March 31, 2022, two companies accounted for 10% or greater ~~separately~~individually and ~~92% combined of~~90% in the ~~Company’s total net sales. In the first nine months of 2017, three customers accounted for 10% or greater separately and 90% combined~~aggregate of the Company’s total net sales. At ~~September 30, 2017, three customers~~March 31, 2022, two companies with an accounts receivable balance of 10% or greater individually accounted for a combined ~~83%~~88% of the Company’s accounts receivable. In the ~~third quarter of 2016,~~ three ~~customers~~months ended March 31, 2021, two companies accounted for 10% or greater ~~separately~~individually and ~~86% combined of~~88% in the ~~Company’s total net sales. In the first nine months of 2016, three customers accounted for 10% or greater separately and 81% combined~~aggregate of the Company’s total net sales. At ~~September 30, 2016~~March 31, 2021, three ~~customers~~companies with an accounts receivable balance of 10% or greater individually accounted for a combined ~~88%~~87% 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~~Company’s significant customers.

~~(6) Bank Credit Lines~~

~~On December 18, 2012,~~ 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 ~~entered into~~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 ~~Financing Agreement with Rosenthal & Rosenthal, Inc. (the “Financing Agreement”). The Financing Agreement originally~~single source supplier, in part due to the lack of alternative sources of supply. During the three months ended March 31, 2022 and 2021, the Company had two suppliers and one supplier, respectively, that provided for up to $1.75 million of revolving credit, subject to a borrowing base formula and other terms and conditions. The Financing Agreement continued until November 30, 2014 with automatic renewals from year to year thereafter, unless sooner terminated by either party. The lender has the right to terminate the Financing Agreement at any time on 60 days’ prior written notice.~~Borrowings are secured by all~~99% of the ~~Company~~Company’s purchased inventory.

(8) INCOME TAXES

During the three months ended March 31, 2022, we recorded 0income 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, ~~including intellectual property. The Financing Agreement contains several covenants, including~~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 ~~requirement that~~result, as of March 31, 2022 and December 31, 2021, we recorded a full valuation allowance against our net deferred tax assets.

As of March 31, 2022 and December 31, 2021, the Company ~~maintain tangible~~had federal net ~~worth~~operating loss carry forwards of ~~not less than $2.5~~ approximately $54.8 million and ~~working capital~~$62.7 million, respectively, which are available to offset future taxable income. They are due to expire in varying amounts from 2022 to 2040. Federal net operating losses occurring after December 31, 2017, of ~~not less than $2.5 million.~~

Onapproximated $16.3 million may be carried forward indefinitely. As of March ~~25, 2014,~~31, 2022 and December 31, 2021, the Company ~~entered into an amendment to the Financing Agreement (the “Amendment”) with an effective date~~had state net operating loss carry forwards of ~~January 1, 2013. The Amendment clarified the definition of current assets in the Financing Agreement, reduced the size of the revolving credit line to $1.25~~ approximately $21.6 million and ~~revised~~$19.9 million, respectively, which are available to offset future taxable income. They are due to expire in varying amounts from 2033 through 2040. We recorded minimum state income taxes and taxes related to our operations in Mexico. For the ~~financial covenants so that Zoom~~three months ended March 31, 2022 and 2021, income tax expense was $6 thousand and $2 thousand, respectively.

(9) RELATED PARTY TRANSACTIONS

The Company leases office space located at the 848 Elm Street, Manchester, NH. The landlord is ~~required~~an affiliate entity owned by Mr. Hitchcock. The two-year facility lease agreement was effective from August 1, 2019, to ~~maintain tangible net worth~~July 31, 2021 and has been extended to July 31, 2022. The facility lease agreement provides for 2,656square feet at an aggregate annual rental price of ~~not less than $2.0 million and working capital of not less than $1.75 million.~~

On October 29, 2015, the Company entered into a second amendment to the Financing Agreement (the “Second Amendment”). Retroactive to October 1, 2015, the Second Amendment eliminated $2,500 in monthly charges$30 thousand. Rent expense was $8 thousand for the ~~Financing Agreement. Effective December 1, 2015, the Second Amendment reduces the effective rate of interest to 2.25% plus an amount equal to the higher of prime rate or 3.25%.~~

On July 19, 2016, the Company entered into a third amendment to the Financing Agreement. The Amendment increased the size of the revolving credit line to $2.5 million effective as of date of the amendment.

On September 1, 2016, the Company entered into a fourth amendment to the Financing Agreement. The Amendment increased the size of the revolving credit line to $3.0 million effective with the date of this amendment.

~~The Company is required to calculate its covenant compliance on a quarterly basis. As of September 30, 2017, the Company was in compliance with both its working capital~~three months ended March 31, 2022 and ~~tangible net worth covenants. At September 30, 2017, the Company’s tangible net worth was approximately $3.1 million, while the Company’s working capital was approximately $2.9 million.~~

~~(7) Earnings (Loss) Per Share~~

~~Basic earnings (loss)~~2021.

(10) EARNINGS (LOSS) PER SHARE

Net loss per share ~~is calculated by dividing net income (loss) attributable to common stockholders by~~for the ~~weighted-average number of common shares, except for periods with a~~three months ended March 31, 2022 and 2021, respectively, are as follows:

SCHEDULE OF NET INCOME (LOSS) PER SHARE

	2022			2021
	Three Months ended March 31,
	2022			2021
Numerator:
Net loss	$	(2,538,500	)	$	(545,520	)

Denominator:
Weighted average common shares – basic		46,003,232			35,254,243
Effect of dilutive common share equivalents		—			—
Weighted average common shares – dilutive		46,003,232			35,254,243

Basic and diluted net loss per share	$	(0.06	)	$	(0.02	)

Diluted loss from operations. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential shares of common stock had been issued. Potential shares of common stock that may be issued by the Company include shares of common stock that may be issued upon exercise of outstanding stock options. Under the treasury stock method, the unexercised options are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase shares of common stock at the average market price during the period.

~~Diluted earnings (loss)~~ per common share for the ~~three-month period~~three months ended ~~September 30, 2017 includes the effects of 1,466,089 common share equivalents. Diluted earnings (loss) per common share for the three-month period ended September 30, 2016~~March 31, 2022 and 2021 excludes the effects of ~~2,015,825 common share equivalents, since such inclusion would be anti-dilutive. Diluted earning (loss) per common share for the nine-month periods ended September 30, 2017~~ 249,524 and ~~2016 excludes the effects of 1,466,089 and 2,015,825~~ 1,679,375 common share equivalents, respectively, since such inclusion would be anti-dilutive. The common share equivalents consist of shares of common ~~shares~~stock issuable upon exercise of outstanding stock options.

(11) SUBSEQUENT EVENTS

On April 25, 2022, Minim, Inc. (Minim or “the “Company”), received a letter (the “Notification Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the minimum closing bid price per share for its ordinary shares was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). The Notification Letter has no immediate effect on the listing or trading of the Company’s ordinary shares on the Nasdaq Capital Market.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until October 24, 2022 (the “Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement. If at any time during the Compliance Period, the closing bid price per share of the Company’s ordinary shares is at least $1.00 for a minimum of 10 consecutive business days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed.

In the event the Company does not regain compliance by October 24, 2022, the Company may be eligible for an additional 180 calendar day period to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to October 24, 2022, or the expiration of the second compliance period if granted.

On April 28, 2022, the Company filed a Form 8-K announcing the receipt of the Notification Letter.

On July 18, 2022, the Company amended its Manchester facility lease to a month-to-month lease arrangement and may be terminated by either party with a 60-day notice.

The Company has evaluated subsequent events from March 31, 2022 through the date of this filing and has determined that there are no such events, other than those noted above, requiring recognition or disclosure in the financial statements.

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~"Safe Harbor" Statement under the Private Securities Litigation Reform Act~~

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of ~~1995.~~

~~Some~~Financial Condition and Results of ~~the statements~~Operations, as well as information contained in “Risk Factors” in Part II, Item 1A and elsewhere in this ~~report are forward-looking statements~~Quarterly Report on Form 10-Q/A, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of ~~1934. These~~1934, as amended. We intend that these forward-looking statements ~~involve known~~be subject to the safe harbor created by those provisions. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will,” “may,” “should,” “forecast,” “could,” “expect,” “suggest,” “believe,” “anticipate,” “intend,” “plan,” “future,” “potential,” “target,” “seek,” “continue,” “if” or other similar words. Forward-looking statements include statements regarding our strategies as well as (1) our ability to predict revenue and ~~unknown~~reduce costs related to our products or service offerings, (2) our ability to effectively manage our sales channel inventory and product mix to reduce excess inventory and lost sales, (3) our ability to forecast product sales volumes and accordingly manufacture and manage inventory, (4) our ability to generate sales of Motorola brand products sufficient to make that portion of our business profitable, and retain the Motorola brand license for the Motorola brand product we produce, (5) fluctuations in the level or quality of inventory, (6) the sufficiency of our capital resources and the availability of debt and equity financing, (7) the continuing impact of uncertain global economic conditions on the demand for our products, (8) our ability to maintain and scale adequate and secure software platform infrastructure, (9) the impact of competition on demand for our products and services and (10) our competitive position.

The following discussion should be read in conjunction with the attached Unaudited Condensed Consolidated Financial Statements and notes thereto, and with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2021, found in our Annual Report on Form 10-K/A filed with the Securities and Exchange Commission (“SEC”) on August 19, 2022. Although we believe that the assumptions underlying the forward-looking statements contained in this Quarterly Report are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements will be accurate. The risks, uncertainties and ~~other factors which may~~assumptions referred to above that could cause our ~~or our industry's actual~~ results ~~performance or achievements~~ to bediffer materially ~~different~~ from ~~any future~~the results ~~performance or achievements~~ expressed or implied by ~~the~~such forward-looking ~~statements. Forward-looking~~ statements include, but are not limited to, ~~statements regarding: Zoom's plans, expectations~~those discussed under the heading “Risk Factors” in Part II, Item 1A hereto and ~~intentions, including statements relating to Zoom's prospects and plans relating to sales of and markets for its products; and Zoom's financial condition or results of operations.~~

In some cases, you can identify forward-looking statements by terms such as "may," "will, " "should," "could," "would," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential" and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknownthe risks, uncertainties and assumptions discussed from time to time in our other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Given these uncertainties you should not place undue reliance on these forward-looking statements. Also, thesepublic filings and public announcements. All forward-looking statements ~~represent our estimates and assumptions only~~included in this document are based on information available to us as of the date hereof. In light of ~~this report.~~the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Furthermore, past performance in operations and share price is not necessarily indicative of future performance. We ~~expressly~~ disclaim any intention or obligation to update or ~~undertaking to release publicly any updates or revisions to~~revise any forward-looking ~~statement contained in this report to reflect any change in our expectations~~statements, whether as a result of new information, future events or ~~any change in events, conditions or circumstances on which any of our forward-looking statements are based. Factors~~otherwise that ~~could cause or contribute to differences in our future financial results include those discussed in~~may arise after the ~~risk factors set forth in Item 1A of Part II~~date of this Quarterly Report on Form ~~10-Q, in our Annual Report on Form 10-K~~10-Q/A.

Overview

We deliver a comprehensive WiFi as a Service platform to make everyone’s connected home safe and supportive for life and work. We believe the ~~year ended December 31, 2016, filed with~~home router must go the Securities and Exchange Commission on March 22, 2017 and in our other filings with the Securities and Exchange Commission. Readers should also be cautioned that results of any reported period are often not indicative of results for any future period.

~~Overview~~

We derive our net sales primarily from sales of Internet access and other communications-related products, including cable modems, cable modem / routers, Digital Subscriber Line (“DSL”) modems and dial-up modems to retailers, distributors, Internet Service Providers and original equipment manufacturers (“OEMs”). We sell our products through a direct sales force and through independent sales agents. All of our employees are located at our headquarters in Boston, Massachusetts. We are experienced in electronics hardware, firmware, and software design and test, regulatory certifications, product documentation, and packaging; and we use that experience in developing each product in-house or in partnership with suppliers who are typically based in Asia. Electronic assembly and testing of our products in accordance with our specifications is typically done in Asia.

Last year Zoom headquarters moved from our long time location at 207 South Street to 99 High Street in Boston. The lease for this new location terminates June 29, 2019. We also lease a test/warehouse/ship facility in Tijuana, Mexico. In November 2014 we signed a one-year lease with five one-year renewal options thereafter for an 11,390 square foot facility in Tijuana Mexico. In September 2015, Zoom extended the termway of the ~~lease from December 1, 2015 through November 30, 2018. In September 2015, Zoom also signed~~mobile phone. Today’s routers are simple, single-purpose devices that rarely receive firmware updates and have underdeveloped management applications, making them the #1 target in residential cybersecurity attacks. It can be so much more. The router must offer frequent security updates, helpful apps, extensive personalization options and a ~~new lease for additional space in~~delightful interface. That is what Minim delivers— not just the ~~adjacent building, which doubled~~router or just an app, but WiFi as a Service. Technically, it’s composed of an intelligent router managed by a smart operating system that leverages cloud computing and AI to analyze and optimize the ~~existing capacity. The term of the lease is from March 1, 2016 through November 30, 2018.~~

smart home, combined with intuitive applications to engage with it.

We continually seek to improve our product designs and manufacturing approach ~~in order~~ to ~~improve~~elevate product performance and reduce our costs. We pursue a strategy of outsourcing rather than internally developing our ~~modem~~hardware product chipsets, which are application-specific integrated circuits that form the technology base for our modems. By outsourcing the chipset technology, we are able to concentrate our research and development resources on modem system design, leverage the extensive research and development capabilities of our chipset suppliers, and reduce our development time and associated costs and risks. As a result of this approach, we are able to quickly develop new products while maintaining a relatively low level of research and development expense as a percentage of net sales. We also outsource aspects of our manufacturing to contract manufacturers as a means of reducing our costs of production, and to provide us with greater flexibility in our production capacity.

~~Our~~

Generally, our gross margin for a given product ~~generally~~ depends on a number of factors, including the type of customer to whom we are selling. The gross margin for products sold to retailers tends to be higher than for some of our other customers; but the sales, support, returns, and overhead costs associated with products sold to retailers also tend to be higher. ~~Our~~Minim’s sales to certain countries are currently handled by a single master distributor for each country ~~who~~that handles the support and marketing costs within the country. Gross margin for sales to these master distributors tends to be low, since lower pricing to these distributors helps them to cover the support and marketing costs for their country.

~~As of September 30, 2017~~

Our cash and cash equivalents balance on March 31, 2022 was $10.0 million compared to $12.6 million on December 31, 2021. On March 31, 2022, we had ~~32 employees,~~ 27$7.1 million of outstanding borrowings on our asset-based credit line with availability of $1.1 million and working ~~full-time~~capital of $27.2 million.

The Company’s ability to maintain adequate levels of liquidity depends in part on our ability to sell inventory on hand, increasing SaaS sales, and ~~5 working less than five days per week. Twelve employees~~collect related receivables.

Although the Company has recently experienced losses, it has continued to experience sales growth. We have experienced six consecutive years with double-digit sales growth. In the three months ended March 31, 2022 and 2021, we generated net sales of $13.3 million and $15.0 million, respectively.

There have been no material changes due to the impact of the COVID-19 pandemic on our business from that disclosed in our most recently filed Annual Report. Our most recent Annual Report on Form 10-K/A for the year ended December 31, 2021 as filed with the SEC on August 19, 2022 provides additional information about our business and operations.

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/A, for a full description of recent accounting standards, include 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, and 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, 2021. For the three months ended March 31, 2022, there have been no significant changes in our critical accounting policies and estimates.

Results of Operations

The following table sets forth certain financial data derived from our consolidated statements of operations for the three months ended March 31, 2022 and 2021 presented in absolute dollars and as a percentage of net sales, with dollars and percentage change period over period:

	Three Months ended March 31,										Change
	2022					2021					$			%

Net sales	$	13,299		100.0	%	$	15,018		100.0	%	$	(1,719	)		(11.4	)%
Cost of goods sold		9,108		68.5			9,914		66.0			(806	)		(8.1	)
Gross profit		4,191		31.5			5,104		34.0			(913	)		(17.9	)
Operating expenses:
Selling and marketing		3,652		27.5			3,174		21.1			478			15.1
General and administrative		1,451		10.9			1,077		7.2			374			34.7
Research and development		1,543		11.6			1,389		9.2			154			11.1
Total operating expenses		6,646		50.0			5,640		37.6			1,006			17.8

Operating loss		(2,455	)	(18.5	)		(536	)	(3.6	)		(1,919	)		(358.0	)

Total other income (expense)		(78	)	(0.5	)		(8	)	(0.1	)		(70	)		(875.0	)

Loss before income taxes		(2,533	)	(19.0	)		(544	)	(3.6	)		(1,989	)		(365.6	)

Income tax provision		6		0.0			2		0.0			4			200.0

Net loss	$	(2,539	)	(19.1	)%	$	(546	)	(3.6	)%	$	(1,993	)		(365.0	)%

Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021

The following table sets forth our revenues by product and the changes in revenues for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021:

	Three Months Ended
	March 31, 2022		March 31, 2021		$ Change			% Change
	(In thousands, except percentage data)
Cable modems & gateways	$	12,883	$	14,587	$	(1,704	)		(11.7	)%
Other networking products		272		306		(34	)		(11.1	)%
SaaS		144		125		19			15.2	%
Total	$	13,299	$	15,018	$	(1,719	)		(11.4	)%

The majority of the Company’s revenues by geographic area are earned in North America for the three months ended March 31, 2022 and 2021.

Net Sales

Our total net sales decreased year-over-year by $1.7 million or 11.4%. The decrease in net sales is directly attributable to decreased sales of Motorola branded cable modems and gateways. In both 2022 and 2021, we primarily generated our sales by selling cable modems and gateways. Sales related to SaaS offerings were ~~engaged~~$144 thousand and $125 in the three months ended March 31, 2022 and 2021, respectively. The decrease in other category of $34 thousand in 2022 compared to 2021 is primarily due to a reduction in DSL products and a refocus on new products with growth potential outside North America as well as within new product introductions. Generally, our lower sales outside North America reflect the fact that cable modems are sold successfully through retailers in the U.S. but not in most countries outside the U.S., due primarily to variations in government regulations.

Cost of Goods Sold and Gross Margin

Cost of goods sold consists primarily of the following: 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 decrease in gross profit was attributable to sales growth of Motorola branded cable modems and gateways, including intelligent networking products that include the Minim software. We outsource our manufacturing, warehousing and distribution logistics. We believe this outsourcing strategy allows us to better manage our product costs and gross margin. Our gross margin can be affected by a number of factors, including fluctuation in 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 March 31,
	2022			2021			$ Change			% Change

Net sales	$	13,299		$	15,018		$	(1,719	)		(11.4	)%
Gross margin		31.5	%		34.0	%

Gross profit and gross margin decreased in the three months ended March 31, 2022, compared to the three months ended in the prior fiscal year period, primarily due to higher component material costs that were partially offset by increased sales prices of our products.

For the remainder of fiscal 2022, we expect gross margin to be subject to similar variabilities experienced in fiscal 2021. In 2021, we experienced meaningful increase in costs for sea freight transportation as well as costs of materials and components for our products. We expect these costs to remain elevated for the foreseeable future. We continue to experience disruptions from the pandemic, with manufacturing partners being affected by factory uptime, scarcity of materials and components and limited capacity to transport cargo via sea and air. These disruptions have increased the length of time taken between order to production and transportation of inventory. If such disruptions become more widespread, they could significantly affect our ability to fulfill the demand for our products. 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; import customs duties and imposed tariffs; changes in technology; changes in product mix; expenses associated with writing off excessive or obsolete inventory; fluctuations in freight costs; manufacturing and purchase price variances; and changes in prices on commodity 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 March 31,
	2022		2021		Change		% Change
Selling and marketing	$	3,652	$	3,174	$	478		15.1	%

Selling and marketing expenses increased in the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to an increase in marketing program campaigns of $244 thousand, Motorola royalty fees of $62 thousand, and software subscriptions of $58 thousand.

For the remainder of fiscal 2022, we expect our selling and marketing expenses as a percentage of net sales in fiscal 2022 to be similar to fiscal 2021 levels. Expenses may fluctuate depending on sales levels achieved as certain expenses, such as commissions, 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 March 31,
	2022		2021		$ Change		% Change
General and administrative	$	1,451	$	1,077	$	374		34.7	%

General and administrative expenses increased $374 thousand primarily due to an increase in personnel expenses of $276 thousand, director fees of $143 thousand, and software subscriptions of $83 thousand, partially offset by a decrease in professional fees of $174 thousand.

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 March 31,
	2022		2021		$ Change		% Change
Research and development	$	1,543	$	1,389	$	154		11.1	%

The increase of $154 thousand was primarily due to personnel expenses of $220 thousand and increased contract labor, partially offset by a decrease in certification costs of $66 thousand.

We believe that innovation and technological leadership is critical to our future success, and we are committed to continuing a significant level of research and development to develop new technologies, products and services. We continue to invest in research and development to expand our hardware product offerings focused on premium WiFi 6E, WiFi 6, and ~~quality control. Five employees were involved~~software solutions. For the remainder of fiscal 2022, we expect research and development expenses as a percentage of net sales in fiscal 2022 to be in line with or slightly above fiscal 2021 levels. 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.

Liquidity and Capital Resources

Our principal sources of liquidity are cash and cash equivalents and borrowings under our SVB line-of-credit. As of March 31, 2022, we had cash and cash equivalents of $10.0 million as compared to $12.6 million on December 31, 2021. On March 31, 2022, we had $7.1 million of borrowings outstanding and $1.1 million available on our $25.0 million SVB line-of-credit and working capital of $27.2 million. We have funded our operations ~~which manages production,~~and investing activities primarily through borrowings on our line of credit, the sale of assets and the sale of our common stock.

Our historical cash outflows have primarily been associated with: (1) cash used for operating activities such as the purchase and growth of inventory, ~~purchasing, warehousing, freight, invoicing, shipping, collections,~~expansion of our sales and ~~returns. Nine employees were engaged in sales,~~ marketing and ~~customer support. The remaining six employees performed executive, accounting, administrative,~~research and ~~management information systems functions. Our dedicated personnel~~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; and (4) cash used to repay our debt obligations and related interest expense. Fluctuations in ~~Tijuana, Mexico are employees~~our working capital due to timing differences of our ~~Mexican service provider~~cash receipts and ~~are not included in~~cash disbursements also impact our ~~headcount.~~

~~Critical Accounting Policies~~cash inflows and ~~Estimates~~

~~Following is a discussion of what we view as~~outflows.

Cash Flows

The following table presents our ~~more significant accounting policies and estimates. As described below, management judgments and estimates must be made and~~cash flows for the periods presented:

	Three Months ended March 31,
	2022			2021
Cash used in operating activities	$	(4,312	)	$	(4,970	)
Cash used in investing activities		(271	)		(257	)
Cash provided by financing activities		2,061			4,853
Net decrease in cash and cash equivalents	$	(2,522	)	$	(374	)

Cash Flows from Operating Activities. Cash used in ~~connection with~~operating activities of $4.3 million for 2022 reflected our net loss of $2.5 million, adjusted for non-cash expenses, consisting primarily of $563 thousand of stock-based compensation expense. Uses of cash included a decrease in accounts payable of $4.2 million and a decrease in accrued expenses $600 thousand. Sources of cash included primarily a decrease of inventories of $2.5 million.

Cash used in operating activities of $5.0 million for 2021 reflected our net loss of $546 thousand, adjusted for non-cash expenses, consisting primarily of stock-based compensation expense of $405 thousand. Uses of cash include an increase in inventories of $1.5 million and decreases in accounts payable of $1.4 million and accrued expenses of $2.8 million.

Cash Flows from Investing Activities. In 2022, $115 thousand was used to purchase equipment and $156 thousand was used for certification costs.

In 2021, cash of $257 thousand was used to purchase equipment.

Cash Flows from Financing Activities. Cash provided by financing activities in 2022 consisted of a source of cash of $2.0 million from borrowings under our SVB line-of-credit, and $99 thousand in proceeds from the ~~preparation~~exercise of common stock options.

Cash provided by financing activities in 2021 consisted of a source of cash of $7.0 million from borrowings under our SVB line-of-credit, and $379 thousand in proceeds from the exercises of common stock options. Uses of cash include the repayment of the Rosenthal & Rosenthal, Inc. line-of-credit of $2.4 million.

Future Liquidity Needs

Our primary short-term needs for capital, which are subject to change, include expenditures related to:

	●	the acquisition of equipment and other fixed assets for use in our current and future manufacturing and research and development facilities;

	●	upgrades to our information technology infrastructure to enhance our capabilities and improve overall productivity;

	●	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 ~~financial statements.~~product development programs, will significantly impact our cash management decisions.

At March 31, 2022, we believe our current cash and cash equivalents, other working capital and borrowings under our SVB line-of-credit will be sufficient to fund working capital requirements, capital expenditures and operations during the next twelve months. We ~~have identified areas where material differences could result~~intend to retain any future earnings to support operations and to finance the growth and development of our business, and we do not anticipate paying any dividends in the ~~amount~~foreseeable future.

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 ~~net~~ sales ~~costs,~~growth, funds required to service our debt, the receipt of and ~~expenses for any period if we had made different judgments or used different estimates.~~

~~Revenue Recognition.We primarily sell hardware products~~time required to ~~our customers. The hardware products include dial-up modems, DSL modems, cable modems,~~obtain regulatory clearances and ~~local area networking equipment.~~

~~We derive~~approvals, our ~~net sales primarily from the sales of hardware products to four types of customers:~~

~~● Computer peripherals retailers;~~

~~● Computer product distributors;~~

~~● Internet service providers; and~~

~~● OEMs.~~

We recognize hardware net sales for our customers at the point when the customers take legal ownership of the delivered products. Legal ownership passes from Zoom to the customer based on the contractual Free on Board (“FOB”) point specified in signed contracts and purchase orders, which are both used extensively. Many of our customer contracts or purchase orders specify FOB destination, which means that title and risk remain with the seller until it has delivered the goods to the location specified in the contract. We verify the delivery date on all significant FOB destination shipments made during the last 10 business days of each quarter.

Our net sales of hardware include reductions resulting from certain events which are characteristic of the sales of hardware to retailers of computer peripherals. These events are product returns, certain sales and marketing ~~incentives, price protection refunds, and consumer mail-in and in-store rebates. Each of these is accounted~~programs, our need for ~~as a reduction of net~~infrastructure to support our sales ~~based on detailed management estimates, which are reconciled to actual customer or end-consumer credits on a monthly or quarterly basis.~~

~~Product Returns. Products are returned by retail stores and distributors for inventory balancing, contractual stock rotation privileges, and warranty repair or replacements. We estimate~~growth, the sales and cost value of expected future product returns of previously sold products. Our estimates for product returns are based on recent historical trends plus estimates for returns prompted by, among other things, announced stock rotations and announced customer store closings. Management reviews historical returns, current economic trends, and changes in customer demand andcontinuing acceptance of our products when estimating sales return allowances. The estimate for future returns is recorded as a reserve against accounts receivable, a reduction in our net sales, and the corresponding change to inventory reserves and cost of sales.

~~Price Protection Refunds.~~We have a policy of offering price protection to certain of our retailer and distributor customers for some or all their inventory. Under the price protection policies, when we reduce our prices for a product, the customer receives a credit for the difference between the original purchase price and our reduced price for their unsold inventory of that product. Our estimates for price protection refunds are based on a detailed understanding and tracking by customer and by sales program. Estimated price protection refunds are recorded in the same period as the announcement of a pricing change. Information from customer inventory-on-hand reports or from direct communications with the customers is used to estimate the refund, which is recorded as a reduction of net salesmarketplace, competing technologies and ~~a reserve against accounts receivable.~~

~~Sales and Marketing Incentives. Many of our retailer customers require sales and marketing support funding, usually set as a percentage of our sales in their stores. The incentives are reported as reductions in our net sales.~~

~~Consumer Mail-In and In-Store Rebates~~. Our estimates for consumer mail-in and in-store rebates are based on a detailed understanding and tracking by customer and sales program, supported by actual rebate claims processed by the rebate redemption centers plus an accrual for an estimated lag in processing at the redemption centers. The estimate for mail-in and in-store rebates is recorded as a reserve against accounts receivable and a reduction of net saleschanges in the ~~same period~~market and regulatory environment and cash that ~~the rebate obligation was triggered.~~

~~Accounts Receivable Valuation~~. We establish accounts receivable valuation allowances equal to the above-discussed net sales adjustments for estimates of product returns, price protection refunds, consumer rebates, and general bad debt reserves. These allowances are reduced as actual credits are issued to the customer's accounts.

~~Inventory Valuation and Cost of Goods Sold.~~Inventory is valued at the lower of cost, determined by the first-in, first-out method, or its net realizable value. We review inventories for obsolete slow moving products each quarter and make provisions based on our estimate of the probability that the material will not be consumed or that it will be sold below cost. Additionally, material product certification costs on new products are capitalized and amortized over the expected period of value of the respective products.

~~Valuation and Impairment of Deferred Tax Assets.~~As part of the process of preparing our financial statements we estimate our income tax expense and deferred income tax position. This process involves the estimation of our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our balance sheet. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income. To the extent we believe that recovery is not likely, we establish a valuation allowance. Changes in the valuation allowance are reflected in the statement of operations.

Significant management judgment is required in determining our provision for income taxes and any valuation allowances. We have recorded a 100% valuation allowance against our deferred income tax assets. It is management's estimate that, after considering all available objective evidence, historical and prospective, with greater weight given to historical evidence, it is more likely than not that these assets will not be realized. If we establish a record of continuing profitability, at some point we willmay be required to ~~reduce the valuation allowance and recognize an equal income tax benefit which will increase net income in that period(s).~~

Assettle our foreign currency hedges.

Our ability to fund our longer-term cash needs is subject to various risks, many of ~~December 31, 2016 we had federal net operating loss carry forwards of approximately $54.0 million~~ 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 assure that such funding will be available in needed quantities or on terms favorable to ~~offset future taxable income. They are due to expire in varying amounts from 2018 to 2036. As of December~~us, if at all.

At March 31, ~~2016,~~2022, we ~~had Massachusetts~~have Federal and state net operating loss carry forwards of approximately ~~$7.3~~$54.8 million ~~which are~~and $21.6 million, respectively, available to ~~offset~~reduce future taxable income. ~~They are due to expire in varying amounts from 2031 through 2036.~~ 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 be realized.~~

~~Results of Operations~~

~~Comparison of~~

Commitments and Contractual Obligations

During the three months ended ~~September 30, 2017 to the three months ended September 30, 2016~~

~~Summary~~. Net sales were $8.58 million for the third quarter ended September 30, 2017 (“Q3 2017”), up 43.3% from $5.99 million for the third quarter ended September 30, 2016 (“Q3 2016”). We reported net income of $377 thousand for Q3 2017, compared to a net loss of $244 thousand for Q3 2016.

~~Net Sales. Our total net sales for Q3 2017 increased $2.59 million or 43.3% from Q3 2016, primarily due to sales increases on Motorola branded cable modems and cable modem routers.~~

~~Concentration.~~ In Q3 2017 three customers accounted for 10% or greater separately and 92% combined of the Company’s total net sales. At September 30, 2017 three customers with an accounts receivable balance of 10% or greater accounted for a combined 83% of the Company’s accounts receivable. In Q3 2016, three customers accounted for 10% or greater separately and 86% combined of the Company’s total net sales. At September 30, 2016 three customers with an accounts receivable balance of 10% or greater accounted for a combined 88% of the Company’s accounts receivable.

~~Gross Profit.~~ ~~Gross profit was $3.07 million or 35.7% of net sales~~March 31, 2022, except as otherwise disclosed in ~~Q3 2017, up from $1.93 million or 32.1% of net sales in Q3 2016. Improvement in gross profit was primarily due to increased sales.~~

~~Selling Expense.~~ Selling expense was $1.81 million or 21.1% of net sales in Q3 2017, up from $1.47 million or 24.6% of net sales in Q3 2016. The increase of $339 thousand was primarily due to Motorola brand royalty payments, and increased advertising costs and freight expenses.

~~General and Administrative Expense.~~General and administrative expense was $383 thousand or 4.5% of net sales in Q3 2017, up 8.3% from $354 thousand or 5.9% of net sales in Q3 2016. The increase of $29 thousand was primarily due to increases in stock option expenses, which were partially offset by reduced legal expenses.

~~Research and Development Expense.~~ Research and development expense was $457 thousand or 5.3% of net sales in Q3 2017, up from $353 thousand or 5.9% of net sales in Q3 2016. The increase of $104 thousand was primarily due to higher product certification costs.

~~Other Income (Expense).~~ Other expense was $31 thousand in Q3 2017 due to interest expense related to our bank credit line. Other income was $14 thousand in Q3 2016, driven by a one-time favorable settlement on a class action lawsuit for approximately $41 thousand, reduced by loan interest costs of approximately $27 thousand.

~~Net Income (Loss).~~ ~~Net income was $377 thousand for Q3 2017, compared to a net loss of $244 thousand for Q3 2016.~~

~~Comparison of the nine months ended September 30, 2017 to the nine months ended September 30, 2016~~

~~Summary~~. Net sales of $20.56 million for the first nine months of 2017 were up 62.0% from net sales of $12.69 million for the first nine months of 2016. Our net loss was $0.98 million for the first nine months of 2017, down from a net loss of $1.94 million for the first nine months of 2016. Loss per diluted share was $0.07 in the nine months ended September 30, 2017 compared to $0.14 for the nine months ended September 30, 2016.

~~Net Sales~~. Our total net sales for the first nine months of 2017 increased $7.87 million or 62.0% from the first nine months of 2016, primarily due to continued expansion of Motorola branded products and increased sales.

~~Concentration.~~ In the first nine months of 2017, three customers accounted for 10% or greater separately and 90% combined of the Company’s total net sales. In the first nine months of 2016, three customers accounted for 10% or greater separately and 81% combined of the Company’s total net sales.

~~Gross Profit.~~ Gross profit was $6.99 million for the first nine months of 2017, up $3.03 million or 76.6% from gross profit of $3.96 million for the first nine months of 2016. Improvement in gross profit was primarily due to increased sales. The improvement in gross margin was due to the increase in total sales, which reduced our fixed overhead as a percentage of sales.

~~Selling Expense.~~ Selling expense was $5.34 million or 26.0% of net sales in the first nine months of 2017, up from $3.52 million or 27.7% of net sales in the first nine months of 2016. The increase of $1.82 million was primarily due to increased advertising costs, Motorola royalty payments, and freight expenses.

~~General and Administrative Expense.~~General and administrative expense was $1.15 million or 5.6% of net sales for the first nine months of 2017, down 6.7% from $1.24 million or 9.7% of net sales for the first nine months of 2016. The decrease of $82 thousand was due primarily to lower personnel, legal, and audit costs, partially offset by increased consulting expenses.

~~Research and Development Expense.~~ Research and development expense was $1.37 million or 6.7% of net sales in the first nine months of 2017, up 18.4% from $1.15 million or 9.1% of net sales in the first nine months of 2016. The increase of $213 thousand was due primarily to increased certification and outside consultant costs.

~~Other Income (Expense).~~ Other expense was $98 thousand in the first nine months quarter of 2017, of which $87 thousand is interest expense on our bank credit line. Other income was $10 thousand in the first nine months of 2016, driven by a one-time favorable settlement on a class action lawsuit for approximately $41 thousand, reduced by loan interest costs of approximately $32 thousand.

~~Net Income (Loss).~~ ~~The net loss was $0.98 million for the first nine months of 2017, compared to the net loss of $1.94 million for the first nine months of 2016.~~

~~Liquidity and Capital Resources~~

Our cash and cash equivalents balance on September 30, 2017 was approximately $91 thousand, a decrease from a balance of $180 thousand on December 31, 2016. Major uses of cash were a $980 thousand loss for the nine months ended September 30, 2017, a decrease of approximately $712 thousand in bank debt, an increase of approximately $380 thousand in inventory, and an increase of approximately $284 thousand in prepaid expenses. These were offset by an increase of approximately $1.4 million in accounts payable and accrued expenses, a decrease of approximately $394 thousand in accounts receivable, and a decrease of approximately $190 thousand in other assets.

On September 30, 2017 we had approximately $595 thousand in bank debt for a $3.0 million asset-based credit line and had working capital of approximately $2.9 million, including approximately $91 thousand in cash and cash equivalents. On December 31, 2016 we had working capital of approximately $3.4 million, including approximately $180 thousand in cash and cash equivalents. Our current ratio at September 30, 2017 was 1.5 compared to 1.7 at December 31, 2016.

~~On May 18, 2015, we announced licensing of the Motorola trademark for cable modems and gateways for the U.S. and Canada for five years starting January 2016.~~In order to support anticipated sales growth, we raised approximately $1.5 million in net proceeds from the private placement offering of 619,231 unregistered shares of our common stock that closed on October 24, 2016.

Although the Company has experienced losses in the past, the Company has experienced dramatic growth over the last year and one-half. Sales in 2016 were up 65% over sales in 2015 and sales in the first nine months of 2017 were up 62% over sales in the first nine months of 2016. The Company believes that year-over-year growth is likely to continue for the foreseeable future due to a number of factors including the strength of the Motorola brand, new product introductions, increased shelf space, growing online retailer sales, and international expansion. Because of projected sales increases, the associated improved net income, and its Financing Agreement (as defined below) with~~Rosenthal & Rosenthal, Inc., the Company expects to maintain acceptable levels of liquidity to meet its obligations as they become due for at least twelve months from the date of our quarterly filing of~~ this Form ~~10-Q with the Securities Exchange Commission.~~

~~Commitments~~

~~During the nine months ended September 30, 2017,~~10-Q/A, there were no material changes to our capital commitments and contractual obligations from those disclosed in our Form ~~10-K~~10-K/A for the year ended December 31, ~~2016.~~

2021.

Off-Balance Sheet Arrangements

~~During the nine months ended September 30, 2017, there were no~~

We did not have any material ~~changes to our~~ off-balance sheet arrangements ~~from those disclosed in our Form 10-K~~as of March 31, 2022. See Note 6 to the accompanying consolidated financial statements for ~~the year ended December 31, 2016.~~additional disclosure.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~Not Required.~~

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.

~~ITEM 4. CONTROLS AND PROCEDURES~~

ITEM 4.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”)~~ is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer ~~who is also~~and our ~~Acting~~ Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In connection with the preparation of this Quarterly Report on the Form ~~10-Q,~~10-Q/A, we carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and ~~Acting~~ Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of ~~September 30, 2017.~~March 31, 2022. Based upon that evaluation and other than as disclosed herein, our Chief Executive Officer and ~~Acting~~ Chief Financial Officer concluded that due to the existence of material weaknesses in our internal controls over financial reporting, described below, our disclosure controls and procedures were not effective as of the end of the period covered by this ~~report.~~

~~There have been~~report in enabling us to record, process, summarize and report information required to be included in our periodic SEC filings within the required time period..

During our preparation of our Annual Report on Form 10-K/A for the year ended December 31, 2021, we identified material weaknesses with financial reporting to account for inventory transactions. These material weaknesses resulted in the Company incorrectly reporting its inventory. To remediate the material weaknesses, the Company is instituting reporting enhancements within its accounting system, standardized and timely account reconciliations, and independent and regular reviews by the finance department to ensure the Company inventory records are complete and accurate. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of these material weaknesses will be completed before the end of 2022.

Other than as disclosed herein, there were no ~~significant~~ changes in our internal ~~controls~~control over financial reporting ~~that occurred~~ during the ~~period covered by this report~~three months ended March 31, 2022 that have ~~materially~~affected, or are reasonably likely to ~~materially~~ affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

~~ITEM 1. LEGAL PROCEEDINGS~~

For a description of our material pending legal proceedings, please refer to Note 4, “Contingencies – Legal Matters” of the Notes to Condensed Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1.

LEGAL PROCEEDINGS

None.

~~ITEM 1A. RISK FACTORS~~

This report contains forward-looking statements that involve risks and uncertainties, such as statements of our objectives, expectations and intentions. The cautionary statements made in this report are applicable

ITEM 1A.

RISK FACTORS

There have been no material changes to all forward-looking statements wherever they appear in this report. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include the risk factors ~~contained~~set forth in our 2021 Annual Report on Form 10-K/A for the year ended December 31, 2021, filed with the SEC on August 19, 2022, which includes a detailed discussion of our risk factors in Part I, “Item 1A. Risk Factors”, which discussion is hereby incorporated by reference into this Part II, Item 1A. Our Risk Factors could materially affect our business, financial position, or future results of operations. The risks described in our Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended December 31, ~~2016, filed with~~2021, are not the ~~SEC on March 22, 2017, as well as those discussed in this report~~only risks we face. Additional risks and inuncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our ~~other filings with the SEC.~~business, financial position, or future results of operations.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

~~There have not been any material changes from the risk factors previously disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016.~~

~~ITEM 6. EXHIBITS~~

ITEM 6.

EXHIBITS

Exhibit No.		Exhibit Description
~~10.1 (1)~~		~~Amendment to License Agreement, dated August 21, 2017, between Zoom Telephonics, Inc. and Motorola Mobility LLC.~~
~~31.1~~ 3.1		Amended and Restated By-Laws of Minim, Inc., adopted and effective April 13, 2022 (incorporated by reference to Exhibit 3.1 to Minim, Inc. Current Report on Form 8-K filed by the Company on April 15, 2022).
31.1		CEO Certification ~~of Chief Executive Officer and Acting Chief Financial Officer Pursuant~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
~~32.1~~ ~~(2)~~31.2		~~Certifications~~CFO Certification pursuant to Section 302 of ~~Chief Executive Officer and Acting Chief Financial Officer Pursuant~~the Sarbanes-Oxley Act of 2002.
32.1		CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
~~101.INS~~32.2		CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	In accordance with Rule 12b-32 under the Securities Exchange Act of 1934, as amended, reference is made to the documents previously filed with the Securities and Exchange Commission, which documents are hereby incorporated by reference.

**	Compensation Plan or Arrangement.

†	In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Form 10-Q/A and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

~~______________~~

~~(1)~~

~~Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.~~

~~(2)~~

In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibit 32.1 hereto is deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

~~ZOOM TELEPHONICS, INC.~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities ~~and~~ Exchange Act of 1934, the ~~Company~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MINIM, INC.
	~~ZOOM TELEPHONICS, INC.~~ (Registrant)

Date: August 19, 2022	By:	/s/ DUSTIN TACKER
		Dustin Tacker

~~Date: November 9, 2017~~	~~By:~~	~~/s/~~F~~rank~~ ~~B. Manning~~	Chief Financial Officer
		~~Frank B. Manning, President, Chief Executive Officer~~(on behalf of Registrant and ~~Acting Chief Financial Officer~~ ~~(Principal Executive Officer and~~as Principal Financial ~~and Accounting~~ Officer)

~~EXHIBIT INDEX~~

~~Exhibit No.~~		~~Exhibit Description~~
~~10.1~~ ~~(1)~~		~~Amendment to License Agreement, dated August 21, 2017, between Zoom Telephonics, Inc. and Motorola Mobility LLC.~~
~~31.1~~		~~Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
~~32.1~~ ~~(2)~~		~~Certifications of Chief Executive Officer and Acting Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~101.INS~~		~~XBRL Instance Document~~
~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~		~~XBRL Taxonomy Calculation Linkbase Document~~
~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~		~~XBRL Taxonomy Label Linkbase Document~~
~~101.PRE~~		~~XBRL Taxonomy Presentation Linkbase Document~~

~~______________~~

~~(1)~~

~~Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.~~

~~(2)~~

Delaware		04-2621506
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

~~99 High~~848 Elm Street ~~Boston, Massachusetts~~, Manchester, NH	~~02110~~	03101
(Address of Principal Executive Offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 per share		MINM		The Nasdaq Capital Market

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐ ☒		Smaller Reporting Company ☑☒
~~(do not check if a smaller reporting company)~~		Emerging growth company ☐

ASSETS	September 30, 2017 (Unaudited)	December 31, 2016
Current assets
Cash and cash equivalents	$90,853	$179,846
Accounts receivable, net of allowances of $661,892 at September 30, 2017 and $507,296 at December 31, 2016	2,104,555	2,498,259
Inventories, net	5,306,662	4,926,612
Prepaid expenses and other current assets	935,984	652,402
Total current assets	8,438,054	8,257,119

Other assets	398,824	588,907
Equipment, net	187,374	175,743
Total assets	$9,024,252	$9,021,769

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank debt	$594,778	$1,306,620
Accounts payable	3,761,662	2,502,323
Accrued expenses	1,214,240	1,051,616
Total liabilities	5,570,680	4,860,559

Commitments and contingencies (Note 4)

Stockholders' equity
Common stock: Authorized: 25,000,000 shares at $0.01 par value
Issued and outstanding: 15,037,790 shares at September 30, 2017 and 14,685,290 shares at December 31, 2016	150,378	146,853
Additional paid-in capital	40,163,143	39,893,919
Accumulated deficit	(36,859,949)	(35,879,562)
Total stockholders' equity	3,453,572	4,161,210
Total liabilities and stockholders' equity	$9,024,252	$9,021,769

		Page

Part I.I - Financial Information
~~Item 1. Financial Statements~~	2
~~Condensed~~ ITEM 1.	FINANCIAL STATEMENTS	5

	Consolidated Balance Sheets ~~as of September 30, 2017~~ (Unaudited) ~~and December 31, 2016~~	25
~~Condensed~~
	Consolidated Statements of Operations ~~for the three and nine months ended September 30, 2017 and 2016~~ (Unaudited)	36
~~Condensed~~
	Consolidated Statements of Stockholders’ Equity (Unaudited)	7

	Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2017 and 2016~~ (Unaudited)	48

	Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited)	59
~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations~~	10
~~Item 3. Quantitative And Qualitative Disclosures About Market Risk~~ITEM 2.	15MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
~~Item 4. Controls and Procedures~~	15
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	25

ITEM 4.	CONTROLS AND PROCEDURES	25

Part ~~II.~~II - Other Information
~~Item 1. Legal Proceedings~~		16
~~Item 1A. Risk Factors~~ITEM 1.	16LEGAL PROCEEDINGS	26
~~Item 6. Exhibits~~	16
~~Signatures~~ITEM 1A.	17RISK FACTORS	26
~~Exhibit Index~~	18
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	26

ITEM 4.	MINE SAFETY DISCLOSURES	26

ITEM 5.	OTHER INFORMATION	26

ITEM 6.	EXHIBITS	27

SIGNATURES		28

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016

Net sales	$8,582,076	$5,990,432	$20,556,157	$12,688,142
Cost of goods sold	5,515,753	4,064,834	13,561,520	8,727,755
Gross profit	3,066,323	1,925,598	6,994,637	3,960,387

Operating expenses:
Selling	1,812,921	1,473,787	5,341,239	3,520,030
General and administrative	383,475	354,237	1,153,753	1,236,239
Research and development	457,309	352,849	1,367,718	1,154,789
	2,653,705	2,180,873	7,862,710	5,911,058

Operating income (loss)	412,618	(255,275)	(868,073)	(1,950,671)

Other income (expense):
Interest income	22	21	59	238
Interest expense	(30,636)	(27,778)	(87,178)	(32,115)
Other, net	65	41,482	(11,072)	42,232
Total other income (expense)	(30,549)	13,725	(98,191)	10,355

Income (loss) before income taxes	382,069	(241,550)	(966,264)	(1,940,316)

Income taxes	4,984	2,034	14,123	3,312

Net income (loss)	$377,085	$(243,584)	$(980,387)	$(1,943,628)

Net income (loss) per share:
Basic	$0.03	$(0.02)	$(0.07)	$(0.14)
Diluted	$0.02	$(0.02)	$(0.07)	$(0.14)


Basic weighted average common and common equivalent shares	14,953,285	13,877,407	14,851,229	13,722,680
Diluted weighted average common and common equivalent shares	16,419,374	13,877,407	14,851,229	13,722,680

	Nine Months Ended September 30,
	2017	2016
Cash flows from operating activities:
Net income (loss)	$(980,387)	$(1,943,628)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	391,181	389,487
Stock based compensation	170,074	164,795
Provision for accounts receivable allowances	540	8,988
Provision for inventory reserves	186,440	10,450
Changes in operating assets and liabilities:
Accounts receivable	393,164	(1,801,446)
Inventories	(566,490)	(1,454,910)
Prepaid expenses and other assets	(327,462)	(193,245)
Accounts payable and accrued expenses	1,421,963	1,084,228
Net cash provided by (used in) operating activities	689,023	(3,735,281)

Cash flows from investing activities:

Cost of other assets	(75,000)	(295,000)
Additions to plant and equipment	(93,849)	(32,303)
Net cash provided by (used in) investing activities	(168,849)	(327,303)

Cash flows from financing activities:
Net funds received from (to) bank credit lines	(711,842)	2,141,799
Proceeds from stock option exercises	102,675	249,389
Net cash provided by (used in) financing activities	(609,167)	2,391,188

Net change in cash	(88,993)	(1,671,396)

Cash and cash equivalents at beginning of period	179,846	1,846,704

Cash and cash equivalents at end of period	$90,853	$175,308

Supplemental disclosures of cash flow information:

Cash paid during the period for:
Interest	$87,178	$32,115
Income taxes	$14,123	$3,312

Inventories consist of :	September 30, 2017	December 31, 2016
Materials	$1,287,621	$888,830
Work in process	209,694	27,708
Finished goods	3,809,347	4,010,074
Total	$5,306,662	$4,926,612

Year ending December 31,
2017	$3,000,000
2018	$3,500,000
2019	$4,500,000
2020	$5,100,000