Company.
Our Chairman and his family own a significant percentage of our shares, which will limit your ability to influence corporate matters.
Our Chairman, and his family owned approximately 50.24% percent of our outstanding shares of Common Stock as of March 26, 2021. Accordingly, he could have a significant influence over the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including the election of directors, mergers, consolidations and the sale of all or substantially all of our assets and also could prevent or cause a change in control. The interests of the Chairman and his family may differ from the interests of our other stockholders. Third parties may be discouraged from making a tender offer or bid to acquire us because of this concentration of ownership.
An investment in the shares is speculative and there can be no assurance of any return on any such investment.
An investment in the shares is speculative and there can be no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
Common Stock eligible for future sale may adversely affect the market.
From time to time, certain of the Company’s shareholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations, or pursuant to a shelf registration statement for the resale of their shares. Any substantial sale of the Company’s Common Stock pursuant to Rule 144 or pursuant to any resale prospectus (including sales by investors of shares purchased pursuant to this prospectus) may have a material adverse effect on the market price of the Common Stock.
If we sell shares of our Common Stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.
We may from time to time issue additional shares of Common Stock at a discount from the current market price of our Common Stock. As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our Common Stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or Common Stock. If we issue Common Stock or securities convertible or exercisable into Common Stock, our common stockholders would experience additional dilution and, as a result, our stock price may decline.
We will have broad discretion in how we use the net proceeds of this offering. We may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.
We will have considerable discretion in the application of the net proceeds of this offering, including for any of the purposes described in the section entitled “Use of Proceeds.” We intend to use the net proceeds from this offering, together with our existing cash, to fund our inventory optimization, our development and marketing of new product offerings, our expansion into global markets and other general corporate purposes. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
An active trading market for our Common Stock may not be sustained.
Although our Common Stock is currently traded on the OTC Markets Group, the market for our shares has demonstrated varying levels of trading activity. Furthermore, the current level of trading may not be sustained in the future. The lack of an active market for our Common Stock may impair our investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration.
Our stock price may be subject to substantial volatility, and stockholders may lose all or a substantial part of their investment.
Our Common Stock currently trades on the OTC Markets Group. We have been approved to list our Common Stock on The Nasdaq Capital Market, and we expect trading to begin on June 7, 2021. There is limited public float, and trading volume historically has been low and sporadic. As a result, the market price for our Common Stock may not necessarily be a reliable indicator of our fair market value. The price at which our Common Stock trades may fluctuate as a result of a number of factors, including the number of shares available for sale in the market, quarterly variations in our operating results, actual or anticipated announcements of new releases by us or competitors, the gain or loss of significant customers, changes in the estimates of our operating performance, market conditions in our industry and the economy as a whole.
CAUTIONARYCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Various statements contained in or incorporated by reference into this prospectus constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal and state securities laws. Forward-looking statements are all statements other than statements of historical fact. We attempt to identify these forward-looking statements by words such as "may," "will," "should," "could," "might," "expect," "plan," "anticipate," "believe," "estimate," "target," "goal," "predict," "intend," "potential," "continue," "seek"“may,” “will,” “should,” “could,” “might,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “target,” “goal,” “predict,” “intend,” “potential,” “continue,” “seek” and other comparable words. Similarly, statements that describe our business strategy, goals, prospects, opportunities, outlook, objectives, plans or intentions are also forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, macroeconomic trends that we expect may influence our business, plans for financing or capital expenditures, expectations regarding liquidity and compliance with financing covenants, expectations regarding the introduction of new products, effects of restructuring actions and changes in our management team, regulatory compliance and expected changes in the regulatory landscape affecting our business, internal control improvements, expected impact of litigation and regulatory proceedings, plans for growth and future operations, and effects of acquisitions, divestitures and partnerships, as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These statements are based on current expectations and assumptions regarding future events and business performance and involve known and unknown risks, uncertainties and other factors that may cause actual events or results to be materially different from any future events or results expressed or implied by these statements. These factors include those set forth in the following discussion and elsewhere within this prospectus or incorporated by reference herein, as well as factors that cannot be predicted or quantified.
We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should not place undue reliance on forward-looking statements, which apply only as of the date of this prospectus. You should carefully review the risk factors described under the heading "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K,“Risk Factors”, any subsequently filed Quarterly Reports on Form 10-Q and any subsequently filed Current Reports on Form 8-K (other than, in each case, information furnished rather than filed), all of which are incorporated by reference in this prospectus, and any risk factors included in any applicable prospectus supplement. Except as required by applicable law, including the rules and regulations of the SEC, we undertake no obligation, and expressly disclaim any duty, to publicly update or revise forward-looking statements, whether as a result of any new information, future events or otherwise. Although we believe the expectations reflected in the forward-looking statements are reasonable as of the date of this prospectus, our statements are not guarantees of future results, levels of activity, performance, or achievements, and actual outcomes and results may differ materially from those expressed in, or implied by, any of our statements.
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| The following summary provides an overview of certain information about Minim, Inc, formerly known as Zoom Telephonics, Inc., which we refer to, together with its consolidated subsidiaries, in this prospectus as the “Company” or “Minim,” which is the name under which we do business, and this offering and may not contain all the information that is important to you. This summary is qualified in its entirety by, and should be read together with, the information contained in other parts of this prospectus and the documents we incorporate by reference. You should carefully review this entire prospectus, including the matters discussed in “Risk Factors” beginning on page 4, and our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q before making a decision about whether to invest in our securities.
Our Company
Minim delivers innovative Internet access 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.
We sell our products through a direct sales force, independent sales agents, distributors, and reseller partners. Our growth strategy centers on four key pillars: distributing high-margin software on hardware products as a profit driver; employing customer-driven product design and planning; expanding our global sales reach with ISPs and retailers; and mitigating costs and risks through supply chain resiliency. We believe our competitive edge in the market is forged by our software-driven approach to hardware product delivery, radical customer centricity, and commitment to win-win relationships with our reseller and partner base.
We are experienced in electronics hardware, firmware, and software design and testing, 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 the Company’s products in accordance with our specifications is typically done in Asia.
We continually seek to improve our product designs and manufacturing approach to elevate product performance and reduce our costs. We pursue a strategy of outsourcing rather than internally developing our 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.
Generally, our gross margin for a given product depends on a number of factors, including the type of customer to whom we are selling. The gross margin 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. The Company’s sales to certain countries are currently handled by a single master distributor for each country 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.
Corporate Information
We are incorporated in Delaware under the name Minim, Inc., formerly known as Zoom Telephonics, Inc., while maintaining the ZOOM trademark for products. The Company was originally incorporated in New York in 1977 and changed its state of incorporation to Delaware in 1993. Our principal executive offices are located at 848 Elm Street, Manchester, NH 03101, and our telephone number is (833) 966-4646. Our main website ishttps://www.minim.co. Information contained on our website does not constitute part of this prospectus.
Our shares of common stock, par value $0.01 per share (the “Common Stock”), are traded on the OTCQB Venture Market under the symbol “MINM” (formerly traded under the symbol “ZMTP” until December 8, 2020).
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USE OF PROCEEDS
We estimate that we will receive net proceeds of approximately $ million (or approximately $ million if the underwriters’ option to purchase additional shares is exercised in full) from the sale of approximately million shares of Common Stock offered by us in this offering, based on an assumed public offering price of $ per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
We expect to use the net proceeds from this offering for general corporate and working capital purposes, which may include inventory optimization, development and marketing of new product offerings and expansion into global markets. We may also use a portion of the net proceeds to pay down the revolving facility pursuant to the SVB Loan Agreement. Pending such uses, we intend to use any remaining balance in short-term, investment grade, interest-bearing securities.
The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors. As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering. Proceeds held by us will be invested in short-term investments until needed for the uses described above.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock and do not plan to pay any cash dividends in the foreseeable future. We currently anticipate that we will retain all available funds for use in the operation and expansion of our business. In addition, pursuant to the SVB Loan Agreement, we cannot pay any dividends without Silicon Valley Bank’s prior written consent.
| | SUMMARY OF THE OFFERING30 | |
CAPITALIZATION
The following table presents our cash and cash equivalents and capitalization as of March 31, 2021:
| ● | on an actual basis; and |
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| | ● | on a pro forma as adjusted basis to reflect the sale and related use of proceeds by us of shares of Common Stock offeredin this offering at an offering price of $ per share, after deducting underwriting discounts and commissions and estimated offering expenses payable by selling stockholdersus, and the application of the net proceeds from this offering as described under “Use of Proceeds.” |
You should read this information together with our consolidated financial statements and related notes incorporated by reference into this prospectus and the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus and incorporated by reference in this prospectus.
| | | March 31, 2021 |
| | Actual (Unaudited) | | | Pro Forma
As Adjusted
(Unaudited) |
| ASSETS | | | | | | | |
| Cash and cash equivalents | | $ | 397,713 | | | $ | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| Current liabilities | | | | | | | |
| Bank credit line | | $ | 6,918,783 | | | $ | |
| Stockholders’ equity | | | | | | | |
| Common stock: Authorized: 40,000,000 shares at $0.01 par value; issued and outstanding: 35,362,854 shares at March 31, 2021 | | | 353,628 | | | | |
| Additional paid-in capital | | | 65,307,650 | | | | |
| Accumulated deficit | | | (57,632,463 | ) | | | |
| Total stockholders’ equity | | | 8,028,815 | | | | |
| TOTAL CAPITALIZATION | | $ | 30,338,702 | | | $ | |
BUSINESS
Our Company
Minim aims to improve the quality of living in every connected home. We have developed a “WiFi as a Service” platform and networking products that deliver experiences so simple, they’re automated. So secure, they’re trusted. So helpful, they’re loved.
Internet is more than a utility to homes around the world. It’s a gateway to culture, society, work, education, entertainment, connection, medicine, information, and more. Reliable and secure access is no longer a nice to have, but a necessity that links us to the people we love and the things we need. Never was this more apparent than during the COVID-19 pandemic.
Our mission is to make everyone’s connected home safe and easy to use for life and work.
Since residential WiFi entered the scene in the late 1990s, the wireless protocol (802.11) has evolved over ten generations. Key advancements such as more radio capabilities and wider use of the airwave spectrum led to better area coverage and faster speeds. In 1997, you would be lucky to get 2 megabits per second of data throughput. Today, the 802.11ax (“WiFi 6”) standard offers a theoretical 9.6 gigabits per second.
These advancements have enabled the smart home we know today. And we’re at an inflection point for the smart home of tomorrow: The US government and a handful of countries have opened the 6 GHz spectrum for WiFi use, which has the potential with WiFi 6E to unlock incredible Ultra-Wide Broadband (“UWB”) applications. We expect increasing demand in network equipment upgrades over the next five years.
Yet, for all its advancements, the home router is currently the number one target in a residential cyberattack. The standard router interface hasn’t changed much since the late 1990s. And “I’m having WiFi problems” is all too familiar a phrase in the home. It makes sense: today’s routers are simple, single-purpose devices that rarely receive firmware updates.
We believe the router must instead go the way of the mobile phone, offering frequent security updates, helpful apps, extensive personalization options, and a delightful interface. That is what Minim delivers— not just the router, but a smarter operating system that leverages cloud computing and AI to analyze and optimize the smart home, combined with intuitive applications to engage with it.
As a result of the Company’s strategic acquisition by merger of the software company Zoom Connectivity, Inc., formerly known as Minim Inc., which closed on December 4, 2020, we have become a software-driven smart home product company with a global license to the Motorola brand for home networking and security. Along with the vertical integration of great hardware and innovative software, the merger brought together multi-pronged go-to-market strategies and hardware and software talent under one umbrella.
Our products can now be found in leading retailers across the US and in over 100 Internet Service Providers (“ISPs”) broadband offerings. In the first quarter of 2021, our Motorola modem and modem/router devices led the category in US Amazon sales. Our software is integrated with third-party hardware and two of our Motorola products to date. For the past three quarters, the Company has posted record revenue growth and margin expansion.
Looking ahead, we see margin expansion and growth opportunities in subscription software, new markets, new channels, and new product categories, such as connected security cameras and thermostats.
The global smart home market is expected to reach $313.95 billion by 2026 at a 25.3% compound annual growth rate (“CAGR”), according to Mordor Intelligence. Looking ahead, we are aligned on a powerful imperative: to make the world’s smartest connectivity products accessible to everyone for personal and business use.
Our Solution
Minim delivers a comprehensive WiFi as a Service platform that is comprised of the following product components:
| ● | The Minim® Mobile App gives consumers total control over their connected home with intuitive settings to monitor secure, and optimize their home network from anywhere. This app addresses many home user needs, from helping parents monitor online activities, to ensuring remote worker productivity, to empowering gamers and streamers to reach faster performance, and much more. |
| | 23,544,284 shares |
| ● | The Minim® Care Portal offers a single pane of glass view, with privacy settings, to ISPs and other businesses to efficiently and remotely support and secure home broadband users. |
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| ● | The Minim® Cloud is an AI-driven platform that powers our interfaces with the home router. The platform has been architected to operate across multiple private and public clouds. This design allows us to effectively manage costs associated with hosting our cloud application; to segregate subscriber data to achieve compliance with local regulations; and to offer managed ‘on premise’ deployments for large ISP customers. |
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| ● | The Minim® Middleware Agent, “Unum”, has been open sourced to enable third-party hardware makers to integrate with Minim’s cloud platform. Now integrated with leading open-source router operating systems, “Unum” was designed with a minimal footprint— requiring an estimated 1/10th of resources versus a leading competitor— and has been integrated with top router brands, primarily for our ISP customer base to date. Unum also been deployed in the cloud to achieve agentless integrations with hardware that exposes sufficient functionality via API. |
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| ● | The Minim® API suite enables third parties to build our cloud-managed WiFi functionality and reporting into their own interfaces and systems. |
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| ● | Motorola, Zoom®, and third-party hardware. Minim creates innovative connectivity hardware under the Motorola brand and our long-held ZOOM trademark, offering a growing portfolio of products to meet the unique needs of every home. Our exclusive global Motorola brand licenses have expanded in geographic and product category scope through the years. We actively collaborate with the Motorola Strategic Brand Partnerships team to guide quality and innovative product design, manufacturing, and marketing practices. Our current hardware product portfolio includes: |
| ○ | Modems and Modem/Routers (“Gateways”) allow our customers to convert cable service into Internet connectivity for Ethernet-only connection (modems) or Ethernet and wireless connections (modem/routers). Gateways manufactured by Minim meet various technical specifications for capability and performance (e.g., DOCSIS 3.0, DOCSIS 3.1, WiFi 5, WiFi 6). Where appropriate, Gateways are certified by Cable Labs® and cable service providers, allowing the devices to be used on and marketed for ISP networks (e.g., Comcast Xfinity, Charter Spectrum, Cox). |
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| ○ | WiFi & mesh systems enable our customers to create wireless networks to connect all their smart home devices. WiFi devices and mesh systems built by Minim satisfy technical specifications for capability and performance (e.g., WiFi 5, WiFi 6). |
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| ○ | Multimedia-over-coax-alliance (MoCA) devices allow our customers to create faster, reliable connections using their home’s coax cable wiring. In addition to increasing wired device speeds, customers can use Minim’s MoCA network adapters to enhance WiFi bandwidth and capacity. |
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| ○ | Third Party Hardware - We sell WiFi systems that are manufactured by third parties (e.g., MkroTik®). We do this when our customers want to purchase our software but for feature, functionality, price or availability reasons would prefer to purchase hardware we do not manufacture. |
Our Customers
Key Customer Benefits
Minim serves both consumers and businesses with its WiFi as a Service platform:
| ● | Consumers – Home broadband users can find our networking products and mobile app under the Motorola brand on leading electronics retailers and e-commerce platforms in the US and under the ZOOM® trademark, and from our own e-commerce platform which is coming soon. With Motorola connectivity, our customers benefit from: |
| ○ | Savings on rental fees from their ISPs; |
| ○ | Improved connected device performance; |
| ○ | Fast internet speeds; |
| ○ | Free support from our team of U.S.-based technicians; and |
| ○ | Reliability with 2-year product warranties. |
| ● | ISPs – Over 100 ISP customers to date have selected Minim to enhance their broadband services with our mobile app and improve customer support via the Minim Care Portal. ISP customers benefit from increased revenue through service plan upgrades and better subscriber retention, as well as decreased operational expenses through truck roll avoidance and reduced support calls. |
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| ● | Hybrid & Small Businesses – Minim is an alternative to traditional enterprise security solutions, granting the business customer extensive cost savings, fast deployment times, and easy maintenance. |
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| ● | Original Equipment Manufacturers (“OEMs”) – OEMs can freely and independently integrate the Minim agent in their networking devices. OEM customers benefit from increased competitiveness of their product offering and a recurring revenue stream with our software services. Our system integrator and OEM customers sell our products under their brand or incorporate our products as a component of their systems. |
Our Business Model
The foundation of our business model is to deliver a better-connected home experience to home users and the organizations that support them.
Software product revenue and gross profits are derived on a per user basis, and we target higher gross margins as a function of economies of scale in hosting fees and further platform enhancements.
Hardware product revenue and gross profits are driven by a number of factors, including: functionality, target market, and customer type. Today, we view hardware sales as a profit center. In the future, we may view the sale of hardware as both a profit center and, in the case of value-driven hardware, a cost of customer acquisition.
Our Industry
The market for advanced connectivity products is massive, expanding, and dynamic. There are several trends and factors that are driving market growth:
| ● | Over one billion homes are now connected to the Internet. The next billion homes are connecting by the tens of millions every year. |
| ● | Smart homes continue to amass connected devices, making network management and security more complex and more valuable. |
| ● | Covid-19 accelerated the home network’s essentiality as a gateway to online education, work, entertainment, telemedicine, and social connection. |
| ● | High-profile network security events have heightened the public’s cybersecurity awareness and attention; residential network vulnerabilities are now seen as risk to personal information, business operations, and public infrastructure. |
| ● | Emerging government bodies are designing regulations to preserve their constituents’ security and privacy across their Internet-connected devices and applications. |
| ● | Consumers have expanding access and choice in broadband services as a result of emerging technologies (e.g., 5G) that enable new market entrants: Wireless Internet Service Providers, Satellite Internet Service Providers, and Peer-to-Peer networks. |
| ● | Consumers are shortening their network upgrade cycles as higher performance products and service plans come available, driven by new spectrum accessibility opportunities (e.g., 6 Ghz) and advancing Internet technology standards (e.g., WiFi 6, WiFi 6E, 5G, DOCSIS 3.1, DOCSIS 4.0). |
| ● | Proliferation of AI technology is leading to software that can more effectively optimize network performance, device management, security assurance, and self-help tools. |
Our Opportunity
It’s an exciting time to be a part of the smart home ecosystem, particularly in WiFi. In 2020, the FCC opened the 6 GHz band to WiFi and other unlicensed users. This extensive 1,200 MHz of spectrum allocation unlocks a bright wireless future: faster data transfer, wider channels, and stronger signal.
Realizing the promise of wireless technology innovation UWB offers, the US is now in the company of open 6 GHz spectrum markets, including Argentina, Brazil, Canada, Mexico, Peru, the United Kingdom (partial), Saudi Arabia, and South Korea— and growing.
According to ABI Research, UWB is expected to become the de facto radio technology by 2025, with more than 1.6 billion WiFi chipsets delivered. At the same time, the global smart home market is expected to reach $313.95 billion by 2026 at a 25.3% CAGR, according to Mordor Intelligence.
While hardware development is plowing ahead, we believe residential networking software has not advanced with modern edge and cloud computing technologies, creating a great opportunity.
Our Unique Approach
We believe we have 5 key differentiating aspects to our business strategy to sustain long-term growth:
| 1. | Software-led. Minim is not fundamentally hardware focused as are most competitors, where the Software as a Service business model and investment face great friction. |
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| 2. | Ecosystem approach. Like Android to phones, our software integrates with all kinds of hardware. Our router middleware has an estimated 10 times less the footprint and hardware performance requirements as a leading competitor’s. This enables us to enter emerging markets where product price points are lower, effectively expanding our Total Addressable Market and allowing us to deliver on our accessibility vision. |
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| 3. | Customer-focused. We maintain direct relationships with consumers, retailers, ISPs, and businesses for product feedback that informs our hardware and software roadmap. |
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| 4. | Open to partner. Minim’s core business model delivers value to ISPs and retailers, unlike competitors who challenge them; this enables us to form more durable partnerships and strategic alliances. |
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| 5. | Sustainable. Minim’s core business model does not tie services— such as broadband services, browser services, search services, and advertising services— to our products. Such binding can create privacy and antitrust concerns amongst incumbent and new market entrants. |
Our Growth Strategy
We are pursuing our market opportunity with a multi-pronged growth strategy:
Growth Through Product Innovation
| ● | Increase software user acquisition through hardware distribution. In retail, we can secure a higher Average Sales Price for networking products that include a 3-year subscription license to our mobile app and automated security. These superior-value offerings bundle high-margin, deferred subscription revenue with a lower-margin hardware sale. In business sales channels, we can sell our cloud software independently of hardware, allowing the customer to integrate Minim with their preferred platform. |
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| ● | Broaden hardware product portfolio. Increased Motorola and Zoom® hardware sales in existing and new product categories represent an opportunity for revenue growth and wider software distribution. We retain the global, exclusive licenses to the Motorola brand for connected home networking, energy management, and security. To date, we have only made use of the home networking license and see great opportunities in connected security cameras and thermostats. In this category, we see opportunities to widen our product portfolio and increase sales to meet the demand for cutting-edge performance products as well as value-driven products for emerging global markets. |
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| ● | Increase our Average Revenue per User (“ARPU”). Minim’s hardware/software combination products represent an opportunity for ARPU growth through upsells and cross-sells. When an end user downloads our mobile app, we can maintain a direct, persistent relationship to establish brand loyalty for in-app feature upgrades and future product purchases. When a business or ISP uses Minim’s Care Portal, we can offer feature suite and service plan upgrades. Our software innovation is guided by our intent to increase customer engagement and retention, signs of sustainable value delivery. |
Growth Through Market Expansion
| ● | Expand Internationally. Expansion beyond the US market represents a large opportunity for revenue growth as North America constitutes less than 10 percent of the world’s Internet users. Here, we have several positive indicators, including: a high degree of Motorola brand recognition worldwide; public and private initiatives to increase broadband access to homes; earlier smart home adoption curve outside the US; and early WiFi as a Service adoption by ISPs in global markets. Having already served ISPs in Africa, Canada, and the UK, we see near-term opportunities in India, Europe, Latin America, Canada, and Africa. |
Growth Through Sales and Marketing
| ● | Increase sales in direct-to-consumer channels. Acquiring and nurturing retailer relationships for further product placement opportunities represent a key opportunity for growth. Retailers choose to work with Minim for our pricing integrity, extended product warranties, quality customer support, positive product reviews, powerful Motorola brand, distribution and sales partnerships, and effective marketing practices. |
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| ● | Increase sales in business-to-business channels. Globally, we sell to challenger and incumbent ISPs and businesses directly and via channel partners. We target increased sales directly through inbound marketing and sales development within several ecosystems, including: the Wireless ISP Association (“WISPA”), the Fiber Broadband Association (“FBA”), and the Microsoft Airband Initiative. We target increased sales indirectly through our relationships with channel partners Irdeto, the global leader in digital platform security for ISPs, and Telarus, the largest privately held technology products master agent in the US. |
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| ● | Increase sales conversions with a growing omnichannel marketing engine. We see expanding investments in marketing and brand awareness as a significant growth driver. This year, we have strategically invested in the marketing team talent responsible for achieving the #1 position in Amazon.com for modem products in Q1 2021, lending to our highest revenue-quarter yet. Within our Amazon strategy, we sell directly to consumers using the Seller Central model, affording us higher pricing control and margins than our competitors using Buyer Central. We believe there is great opportunity to expand our own e-commerce strategy on minim.com and MotoManage.com; on e-tail platforms; and on Amazon worldwide alongside strategic merchandising in stores. |
Our Culture and Values
Team diversity makes us stronger, bringing together varied perspectives to solve problems and empathize with our customers. But we cannot build this vibrancy without vigilant inclusivity. With this principle, we have formed the following cultural values:
| 1. | RESPECT. Respect is the bedrock on which diverse perspectives and great suggestions come together. |
| 2. | Circle of Transparency. With important information, we can make better decisions, together. |
| 3. | Connected Community. A community where everyone feels respected, equal, safe, valued, connected. |
| 4. | Empowered Accountability. We fearlessly take initiatives in pursuit of our goals and beyond. |
| 5. | Big Open Minds. We exercise mental agility and encouragement like muscles so big ideas can take off. |
| 6. | Mindful Collaboration. Team distribution is our superpower, and we regard work-life harmony. |
| 7. | Go for it! We’ll take experimentation over slideware any day of the week. |
We see our culture as a continuous effort, a living document. We have strides to make in team diversity, employee education, and global recruitment strategies. We have actions to take in supporting remote-work first approach, investing in bringing teams together at critical creative moments. We are actively working on these initiatives, and our work is never done to ensure Minim is a place of work where passionate and diverse talent feel at home.
Our Market and Operational Concentrations
Customer Concentration
At December 31, 2020, three companies with an accounts receivable balance of 10% or greater individually accounted for a combined 85% of the Company’s accounts receivable. At December 31, 2019, three companies with an accounts receivable balance of 10% or greater individually accounted for a combined 84% of the Company’s accounts receivable.
Market Concentration
Today, the US market accounts for the vast majority of the Company’s revenues. For the fiscal year ending December 31, 2020, sales outside North America were only 1.8% of our net sales. For the fiscal year ending December 31, 2019, sales outside North America were only 2.3% of our net sales.
Product, Manufacturer and Chipset Concentration
The majority of our sales were for Gateways containing Broadcom chipsets that were manufactured by T&W in Vietnam. The company continues to look for ways to diversify its product offerings, the chipsets that our products are made with and the manufacturers that produce them on our behalf.
Regulatory Environment Concentration
The majority of our sales were for products that were compliant with regulations and requirements relevant only to the US market. The regulatory and certification requirements and purchasing behaviors for Gateways differs materially between different global markets. The company continues to work toward bringing its products into compliance with the regulations and requirements necessary to sell them in different global markets (e.g, India, European Union, Mexico).
Intellectual Property Rights
License to the Motorola® Brand
We hold an exclusive license to use the Motorola® brand trademarks in a wide range of consumer products including cable modems, gateways, routers, WiFi range extenders, home powerline network adapters, access points, MoCA adapters, and cellular sensors. The exclusive license allows the Company to sell through authorized channels worldwide, including Direct to Consumer Channels and Service Provider Channels, through December 31, 2025.
Our middleware agent is maintained under an Apache-2.0 open-source license.
Sales, Marketing and Support
In North America we sell our Zoom®, Motorola®, and Minim® products through a direct sales force and commissioned independent sales representatives to retailers; through channel resellers; and through electronics distributors. Worldwide technical support is primarily handled from our Manchester headquarters.
We believe that Motorola® is a widely recognized brand name, and we build upon this brand equity in a variety of ways, including: Amazon advertising, Google AdWords advertising, social media marketing and advertising, retailer cooperative advertising, product packaging, trade shows, and public relations. We promote Zoom® and Minim® brand awareness through similar means, as well as engaging in industry associations, content marketing, outbound sales development, analyst briefings, and open-source project contribution.
We develop quality products that are user-friendly and are designed to require minimal support. We typically support our claims of quality with product warranties of one to two years, depending upon the product. To address the needs of end-users and resellers who require assistance, we have our own staff of technical support specialists. They provide telephone support six days per week in English and Spanish and aim to continuously expand of languages, availability, and support channels. Our technical support specialists also maintain a significant Internet support facility that includes email, firmware and software downloads, and a digital knowledgebase.
Our Research and Development
Our research and development efforts are focused on developing new products, enhancing the capabilities of existing products, and reducing production costs. We have developed close collaborative relationships with certain of our Original Design Manufacturer suppliers and component suppliers. We work with these partners and other sources to identify and respond to emerging technologies and market trends by developing products that address these trends. We also develop all the hardware and firmware for certain products in-house, including some cellular modems and some future cellular sensors.
The Company’s costs of research and development were $3.8 million for 2020 and $2.2 million for 2019. The primary reasons for the increase in research and development costs were salary and related costs, increased product testing, and certification and software development expenses. As of December 31, 2020, we had twenty-two employees engaged primarily in research and development. Our research and development team performs hardware design and layout, mechanical design, prototype construction and testing, component specification, firmware and software development, product testing, foreign and domestic regulatory certification efforts, end-user and internal documentation, and third-party software selection and testing.
Our Manufacturing and Suppliers
Our products are currently designed for high-volume automated assembly to help assure reduced costs, rapid market entry, short lead times, and reliability. High-volume assembly mostly occurs in Vietnam or China. Our contract manufacturers and original design manufacturers typically obtain some or all of the material required to assemble the products based upon a Minim Approved Vendor List and Parts List. Our manufacturers typically insert parts onto the printed circuit board, with most parts automatically inserted by machine, solder the circuit board, and test the completed assemblies. The contract manufacturer sometimes performs final packaging. For the US and many other markets, packaging is often performed at our facilities in North America, allowing us to tailor the packaging and its contents for our customers immediately before shipping. This facility also performs warehousing, shipping, quality control, finishing and some software updates from time to time. We also perform circuit design, circuit board layout, and strategic component sourcing at our Boston area office. Wherever the product is built, our quality systems are used to help assure that the product meets our specifications.
Our North American facility is currently located in Tijuana, Mexico. From time to time, we experience certain challenges associated with the Tijuana facility, specifically relating to bringing products across the border between the US and Mexico. We believe that this facility assists us in cost-effectively providing rapid response to the needs of our US customers.
Historically we have used one primary manufacturer for a given design. We sometimes maintain back-up production tooling at a second manufacturer for our highest-volume products. Our manufacturers are normally adequate to meet reasonable and properly planned production needs; but a fire, natural calamity, strike, financial problem, the impacts from the COVID-19 pandemic or another significant event at an assembler’s facility could adversely affect our shipments and revenues. In 2020, two suppliers provided 99% of our purchased inventory. The loss of a key supplier, or a material adverse change in a key supplier’s business or in our relationship with a key supplier, could materially and adversely harm our business.
Our products include a large number of parts, most of which are available from multiple sources with varying lead times. However, most of our products include a sole-sourced chipset as the most critical component of the product. The vast majority of our cable modem chipsets come exclusively from Broadcom. Most of our cellular products include a Gemalto module. Our dial-up modem chipsets come exclusively from Conexant. Serious problems at Broadcom, including long chipset lead-times, would significantly reduce our shipments. While many companies that use computer chips in their business experienced during 2020 supply chain issues in sourcing chips due to a chip shortage, we did not experience issues during 2020 resulting from material delays or unavailability of chips. There can be no assurance, however, that we will not experience such issues in the future.
We have experienced delays in receiving shipments of essential integrated circuits in the past, and we may experience such delays in the future. Moreover, we cannot assure that a chipset supplier will, in the future, sell chipsets to us in quantities sufficient to meet our needs or that we will purchase the specified dollar amount of products necessary to receive concessions and incentives from a chipset supplier. An interruption in a chipset supplier’s ability to deliver chipsets, a failure of our suppliers to produce chipset enhancements or new chipsets on a timely basis and at competitive prices, a material increase in the price of the chipsets, our failure to purchase a specified dollar amount of products or any other adverse change in our relationship with modem component suppliers could have a material adverse effect on our results of operations.
We are also subject to price fluctuations in our cost of goods. Our costs may increase if component shortages develop, lead-times stretch out, fuel costs rise, or significant delays develop due to labor-related issues.
We are also subject to the Restriction of Hazardous Substances Directive (“RoHS”) and Consumer Electronics Control (“CEC”) rules discussed above, which affect component sourcing, product manufacturing, sales, and marketing.
Since September 24, 2018 until after we transitioned a substantial portion of our manufacturing to Vietnam during the second quarter of 2020, substantially all of our products were subject to a tariff because they were produced in China and they were in product categories subject to the tariff on our cost of goods at the time of entry into the United States. The tariff started at 10% and increased to 25% in June 2019. These tariffs have a significant impact on our cost of inventory and profitability. Because these tariffs may not be reduced and may even be increased, we actively worked on finding production capability outside China. Our largest supplier established a major production capability in Vietnam, and we transitioned the majority of our production to Vietnam by the end of second quarter of 2020. In addition, we are working with other suppliers outside of China. With the transition of a majority of our manufacturing to Vietnam, we significantly reduced the tariff burden.
Our Competition
The Internet access and networking industries are intensely competitive and characterized by aggressive pricing practices, continually changing customer demand patterns, rapid technological advances, and emerging industry standards. These characteristics result in frequent introductions of new products with added capabilities and features, and continuous improvements in the relative functionality and price of modems and other communications products. Our operating results and our ability to compete could be adversely affected if we are unable to:
| ● | successfully and accurately anticipate customer demand; |
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| ● | manage our product transitions, inventory levels, and manufacturing processes efficiently; |
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| ● | distribute or introduce our products quickly in response to customer demand and technological advances; |
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| ● | differentiate our products from those of our competitors; or |
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| ● | otherwise compete successfully in the markets for our products. |
Some of our primary competitors by product group include the following:
| ● | Cable modem and modem/router competitors: Belkin/Linksys, Commscope/Arris, D-Link, Hon Hai Network Systems (formerly Ambit Microsystems), Netgear, Sagemcom, Technicolor, TP-Link and Ubee Interactive. |
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| ● | Router and mesh WiFi competitors: Amazon/Eero, Amped, Apple, Asus, Belkin/Linksys, D-Link, Google, Netgear, Securifi, Tenda, TP-Link, Trendnet, and Ubiquiti. |
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| ● | WiFi Management and Security: AirTies, Cujo AI, Plume Design, SAM Seamless Network. |
Many of our competitors and potential competitors have more extensive financial, engineering, product development, manufacturing, and marketing resources than we do. The principal competitive factors in our industry include the following:
| ● | product performance, features, reliability and quality of service; |
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| ● | price; |
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| ● | brand image; |
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| ● | product availability and lead times; |
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| ● | size and stability of operations; |
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| ● | breadth of product line; |
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| ● | sales and distribution capability, including retailer and distributor relationships; |
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| ● | technical support and service; |
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| ● | product documentation and product warranties; |
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| ● | relationships with providers of broadband access services; and |
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| ● | certifications evidencing compliance with various requirements. |
We believe we are able to provide a competitive mix of the above factors for our products, particularly when they are sold through retailers, computer product distributors, small to medium sized ISPs, and system integrators. We have been less successful in selling directly to large telecommunication providers and other large providers of broadband access services.
Successfully penetrating the broadband modem market presents a number of challenges, including:
| ● | the current limited retail market for broadband modems, as most consumer broadband users get their modem from their service provider; |
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| ● | the relatively small number of cable, telecommunications and ISPs that make up the majority of the market for broadband modems in the USA, our largest market; |
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| ● | the significant bargaining power and market dominance of these large service providers; |
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| ● | the time-consuming, expensive and uncertain certification processes of the various cable, mobile broadband service providers; and |
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| ● | the strong relationships with service providers enjoyed by some incumbent equipment providers, including ARRIS for cable modems and Huawei for DSL and mobile broadband modems. |
Properties
Our principal executive offices are located at 848 Elm Street, Manchester, New Hampshire, where we sublease approximately 2,656 square feet of office space pursuant to a lease that expires in 2021, with an automatic renewal clause unless terminated under the lease agreement.
The Company signed a twelve-month lease agreement for offices at 225 Franklin Street, Boston, MA and completed the move to this location on June 28, 2019. The lease has an automatic renewal option provision and renews unless cancelled under the terms of the agreement. This lease originally expired on June 30, 2020, after which the Company reduced its footprint of leased space and continued on a short-term basis until October 31, 2020. Beginning November 1, 2020, while reviewing options for long-term lease for headquarters in Boston, the Company signed a month-to-month lease agreement for a single office at 101 Arch Street, Boston, MA.
In May 2020, the Company signed a two-year lease agreement for 3,218 square feet at 275 Turnpike Executive Park, Canton MA. The agreement includes a one-time option to cancel the second year of lease with three-month advance notice. The location is currently being occupied by the research and development group of the Company.
We also have two leases in Tijuana, Mexico. We signed a lease for a 11,390 square foot facility in November 2014. In September 2015, we leased space in the adjacent building to double our capacity. These leases have been renewed and will expire in November 2021.
We believe that our existing facilities are adequate for our near-term needs, though additional space could be required based upon business activities. When our existing leases expire, we may look for alternate space for our operations. We believe that suitable alternative space would be available on commercially reasonable terms if required in the future.
Backlog
Our backlog on March 31, 2021 was $1.0 million, and on March 31, 2020 was $440 thousand. Orders included in backlog may be canceled or rescheduled by customers without significant penalty. Backlog as of any particular date should not be relied upon as indicative of our net sales for any future period.
Human Capital
We are committed to attracting and retaining the brightest and best talent. Therefore, investing, developing, and maintaining human capital is critical to our success. Our effectiveness in attracting, developing, engaging and retaining talented team members demonstrates our commitment to providing a welcoming and safe workplace, with equitable compensation, benefits and opportunities for our team members to continually grow and develop their careers within Minim.
As of March 31, 2021, we had 73 employees. Twenty-eight of these employees were engaged in research and development and quality control. Ten were involved in operations, which manages productions, inventory, purchasing, warehousing, freight, invoicing, shipping, collections, and returns. Twenty-six employees were engaged in sales, marketing, and customer technical support. Nine employees performed executive, accounting, administrative, and management information systems functions. Our dedicated personnel in Tijuana, Mexico are employees of our Mexican service provider and not included in our headcount. As of March 31, 2021, we had four consultants, two in research and development and two in operations, who are not included in our headcount.
As part of our efforts to keep our employees safe and support efforts to slow the spread of COVID-19, we instituted a mandatory work-from-home policy for all but a small number of onsite essential personnel, and we implemented work and safety protocols at our office facilities that put the health and safety of our team first. With the support and commitment of our employees, we have pivoted to a work-from-home model and continue protecting our customers. We believe open and on-going communications have been critical to maintaining our culture and productivity during the pandemic, and we hosted bi-weekly update calls and weekly virtual social gatherings. Management continues to monitor the conditions and government mandates to ensure safe practices as the pandemic evolves.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project,” and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements and/or the aforementioned identifying words. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Overview
Minim aims to improve the quality of living in every connected home. We have developed a “WiFi as a Service” platform and networking products that deliver experiences so simple, they’re automated. So secure, they’re trusted. So helpful, they’re loved.
Internet is more than a utility to homes around the world. It’s a gateway to culture, society, work, education, entertainment, connection, medicine, information, and more. Reliable and secure access is no longer a nice to have, but a necessity that links us to the people we love and the things we need. Never was this more apparent than during the COVID-19 pandemic.
Our mission is to make everyone’s connected home safe and easy to use for life and work.
Since residential WiFi entered the scene in the late 1990s, the wireless protocol (802.11) has evolved over ten generations. Key advancements such as more radio capabilities and wider use of the airwave spectrum led to better area coverage and faster speeds. In 1997, you would be lucky to get 2 megabits per second of data throughput. Today, the 802.11ax (“WiFi 6”) standard offers a theoretical 9.6 gigabits per second.
These advancements have enabled the smart home we know today. And we’re at an inflection point for the smart home of tomorrow: The US government and a handful of countries have opened the 6 GHz spectrum for WiFi use, which has the potential with WiFi 6E to unlock incredible Ultra-Wide Broadband (“UWB”) applications. We expect increasing demand in network equipment upgrades over the next five years.
Yet, for all its advancements, the home router is currently the number one target in a residential cyberattack. The standard router interface hasn’t changed much since the late 1990s. And “I’m having WiFi problems” is all too familiar a phrase in the home. It makes sense: today’s routers are simple, single-purpose devices that rarely receive firmware updates.
We believe the router must instead go the way of the mobile phone, offering frequent security updates, helpful apps, extensive personalization options, and a delightful interface. That is what Minim delivers— not just the router, but a smarter operating system that leverages cloud computing and AI to analyze and optimize the smart home, combined with intuitive applications to engage with it.
As a result of the Company’s strategic acquisition by merger of the software company Zoom Connectivity, Inc., formerly known as Minim Inc., which closed on December 4, 2020, we have become a software-driven smart home product company with a global license to the Motorola brand for home networking and security. Along with the vertical integration of great hardware and innovative software, the merger brought together multi-pronged go-to-market strategies and hardware and software talent under one umbrella.
Our products can now be found in leading retailers across the US and in over 100 Internet Service Providers (“ISPs”) broadband offerings. In the first quarter of 2021, our Motorola modem and modem/router devices led the category in US Amazon sales. Our software is integrated with third-party hardware and two of our Motorola products to date. For the past three quarters, the Company has posted record revenue growth and margin expansion.
Looking ahead, we see margin expansion and growth opportunities in subscription software, new markets, new channels, and new product categories, such as connected security cameras and thermostats.
The global smart home market is expected to reach $313.95 billion by 2026 at a 25.3% CAGR, according to Mordor Intelligence. Looking ahead, we are aligned on a powerful imperative: to make the world’s smartest connectivity products accessible to everyone for personal and business use.
The Company’s cash and cash equivalents balance on December 31, 2020 was $772 thousand compared to $1.2 million on December 31, 2019. On December 31, 2020, the Company had $2.4 million outstanding bank debt on an available asset-based credit line of $4.0 million, and working capital of $5.9 million.
The Company closed on a $3.4 million private placement and issued an aggregate of 2,237,103 shares on May 26, 2020 at a purchase price of $1.52 per share, and in connection with the closing of the offering two designees of an investor in the private placement joined Zoom’s Board of Directors. Other major changes of cash and cash equivalents during 2020 were decreases of approximately $5.0 million in accounts receivables, $8.8 million in inventories, and $0.3 million in prepaid expenses and other current assets; and increases of approximately $6.7 million in accounts payable and $4.7 million in accrued expenses. The Company had drawn $2.4 million, net, of its credit line. In 2020, the Company also had a net loss of $3.9 million, which contributed to the decrease in cash and cash equivalents.
The Company’s ability to maintain adequate levels of liquidity depends in part on our ability to sell inventory on hand and collect related receivables. Effective September 24, 2018, almost all of our products were subject to a 10% tariff because they were produced in China and they were in product categories subject to a 10% tariff on our cost of goods at the time of entry into the United States. Effective June 15, 2019 almost all of our products were subject to the tariff increase from 10% to 25%. This has a significant impact on our cost of inventory and profitability. Because these tariffs may not be reduced and may even be increased, we moved a substantial portion of our production capability outside China to Vietnam. Although the Company has recently experienced losses, it has continued to experience sales growth. Zoom experienced five consecutive years with double-digit sales growth.
COVID-19 Pandemic
We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict as coronavirus continues to spread around the world. The availability of vaccines has been limited, and there can be no assurance as to when the pandemic will be contained. Since March 2020, we have instituted office closures, travel restrictions and a mandatory work-from-home policy for substantially all of our employees. The spread of COVID-19 has had a prolonged impact on our supply chain operations due to restrictions, reduced capacity and limited availability from suppliers whom we rely on for sourcing components and materials and from third-party partners whom we rely on for manufacturing, warehousing and logistics services. Although demand for our products has been strong in the short-term as consumers seek more bandwidth and better Wi-Fi, customers’ purchasing decisions over the long-term may be impacted by the pandemic and its impact on the economy, which could in turn impact our revenue and results of operations. Furthermore, our supply chain continues to face constraints primarily due to challenges in sourcing components and materials for our products. The prolonged impact of COVID-19 could exacerbate these constraints or cause further supply chain disruptions.
In the second quarter of 2020, the Company temporarily shifted from the use of primarily ocean freight during prior quarters to the use of primarily air freight during the second quarter of 2020 and into the third quarter of 2020 to keep up with demand and replenish supply. By the fourth quarter of 2020, the Company had returned to primarily ocean freight. These changes in freight transportation resulted in an additional $1.5 million in freight expense incurred during the year ended December 31, 2020. The Company also implemented cost cutting measures to conserve cash, delaying the planned start dates of all new hiring during 2020, and not renewing the same footprint of its headquarters office lease when it expired in June 2020. The Company retained a small executive office within the City of Boston on a short-term, month-to-month basis at a cost of $682 per month starting November 1, 2020. The Company negotiated extended and improved payment terms with its primary outsourced manufacturing partner. The Company applied for and received approval for a Small Business Administration (“SBA”) Paycheck Protection Plan Loan with Primary Bank under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The loan in the amount of $583.3 thousand was approved and funded in April 2020. The Company used the proceeds from the loan for qualifying expenses as defined in the CARES Act.
Critical Accounting Policies and Estimates
Following is a discussion of what we view as our more significant accounting policies and estimates. As described below, management judgments and estimates must be made and used in connection with the preparation of our consolidated financial statements. We have identified areas where material differences could result in the amount and timing of our net sales, costs, and expenses for any period if we had made different judgments or used different estimates.
Revenue Recognition. The Company primarily sells hardware products to its customers. The hardware products include cable modems and gateways, mobile broadband modems, wireless routers, MoCA adapters and mesh home networking devices. The Company also sells software, including the Minim subscription service that enables and secures a better connected home.
The Company derives its net sales primarily from the sales of hardware products to computer peripherals retailers, computer product distributors, OEMs, and direct to consumers and other channel partners via the Internet. The Company accounts for point-of-sale taxes on a net basis. In addition, the Company earns revenues from its software subscription services of the Minim AI-driven smart home WiFi management and security platform.
The Company applies Accounting Standards Codification (“ASC”) Topic 606, which requires that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services.
Product Returns. Products are returned by retail stores and distributors for inventory balancing, contractual stock rotation privileges, and warranty repair or replacements. Analyses of actual returned product are compared to analyses of the product return estimates and historically have resulted in no material difference between the two. The Company has concluded that the current process of estimating the return reserve represents a fair measure with which to adjust revenue. Returned goods are variable and under Topic 606, are estimated and recognized as a reduction of revenue as performance obligations are satisfied (e.g. upon shipment of goods). The Company monitors pending authorized returns of goods and, if deemed appropriate, record the right of return asset accordingly.
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. Price protection provides that if the Company reduces the price on any products sold to the customer, the Company will guarantee an account credit for the price difference for all quantities of that product that the customer still holds. Price protection is variable and under Topic 606, are estimated and recognized as a reduction of revenue as performance obligations are satisfied (e.g. upon shipment of goods). The estimates are due to price protection are historically not material.
Volume Rebates and Promotion Programs. Many of our retailer customers require sales and marketing support funding, usually set as a percentage of our sales in their stores. Volume rebates are variable dependent upon the volume of goods sold-through the Company’s customers to end users variable and under Topic 606, are estimated and recognized as a reduction of revenue as performance obligations are satisfied (e.g. upon shipment of goods). The estimates due to rebates and promotions are historically not material.
Warranties. The Company does not offer customers to purchase a warranty separately. Therefore, there is not a separate performance obligation. The Company does account for warranties as a cost accrual and the warranties do not include any additional distinct services other than the assurance that the goods comply with agreed-upon specifications. The estimates due to warranties are historically not material.
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 and 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 will be required to reduce the valuation allowance and recognize an equal income tax benefit which will increase net income in that period(s).
In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revised the U.S. tax code effective January 1, 2018 by, among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%.
As of December 31, 2020, the Company had federal net operating loss carry forwards of approximately $61.8 million which are available to offset future taxable income. They are due to expire in varying amounts from 2021 to 2039. Federal net operating losses occurring after December 31, 2017, of approximately $13.6 million may be carried forward indefinitely. As of December 31, 2020, the Company had state net operating loss carry forwards of approximately $19.2 million which are available to offset future taxable income. They are due to expire in varying amounts from 2032 through 2039. The Company believes that its merger with Zoom Connectivity, Inc., formerly known as Minim Inc., in 2020 triggered a change of ownership that may limit the use of our net operating losses. The Company is in the process of determining the impact of any such limitation. 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.
Sales Tax. As of December 31, 2020, approximately $86 thousand of the original state sales tax liability remains and $133 thousand relates to sales tax that has been collected and not yet remitted to the respective states. As of December 31, 2019, approximately $51 thousand of the original state sales tax liability remains and $98 thousand relates to sales tax that has been collected and not yet remitted to the respective states. As of December 31, 2020, approximately $50 thousand of the original state sales tax liability remains and $46 thousand relates to sales tax that has been collected and not yet remitted to the respective states.
Results of Operations
The following table sets forth the unaudited consolidated statements of operations for the three months ended March 31, 2021, with the comparable reporting period in the preceding year.
| | | Three Months Ended | | | | | | | |
| | | March 31, 2021 (Unaudited) | | | March 31, 2020 (Unaudited) | | | $ Change | | | % Change | |
| | | (In thousands, except percentage data) | |
| | | | |
| Net sales | | $ | 15,018 | | | | 100 | % | | $ | 11,955 | | | | 100 | % | | $ | 3,062 | | | | 25.6 | % |
| Cost of goods sold | | | 9,914 | | | | 66.0 | % | | | 8,860 | | | | 74.1 | % | | | 1,054 | | | | 11.9 | % |
| Gross profit | | | 5,104 | | | | 34.0 | % | | | 3,095 | | | | 25.9 | % | | | 2,008 | | | | 64.9 | % |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Selling and marketing expenses | | | 3,174 | | | | 21.1 | % | | | 2,354 | | | | 19.7 | % | | | 820 | | | | 34.8 | % |
| General and administrative expenses | | | 1,077 | | | | 7.2 | % | | | 828 | | | | 6.9 | % | | | 249 | | | | 30.1 | % |
| Research and development expenses | | | 1,389 | | | | 9.2 | % | | | 653 | | | | 5.5 | % | | | 735 | | | | 112.6 | % |
| Total operating expenses | | | 5,640 | | | | 37.6 | % | | | 3,835 | | | | 32.1 | % | | | 1,805 | | | | 47.0 | % |
| Operating loss | | | (536 | ) | | | (3.6 | )% | | | (740 | ) | | | (6.2 | %) | | | 204 | | | | (27.6 | )% |
| Operating income (expense); | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | | 0 | | | | 0.0 | % | | | 0 | | | | 0.0 | % | | | 0 | | | | | |
| Interest expense | | | (28 | ) | | | (0.2 | )% | | | (6 | ) | | | 0.0 | % | | | (22 | ) | | | | |
| Other, net | | | 20 | | | | 0.1 | % | | | 0 | | | | 0.0 | % | | | 20 | | | | | |
| Total other income (expense) | | | (8 | ) | | | (0.1 | )% | | | (6 | ) | | | 0.0 | % | | | (2 | ) | | | 33.30 | % |
| Loss before income taxes | | | (544 | ) | | | (3.6 | )% | | | (746 | ) | | | (6.2 | )% | | | 202 | | | | 27.1 | % |
| Income taxes | | | 2 | | | | 0.0 | % | | | 6 | | | | 0.1 | % | | | (4 | ) | | | (66.7 | )% |
| Net loss | | $ | (546 | ) | | | (3.6 | )% | | $ | (752 | ) | | | (6.3 | %) | | $ | 206 | | | | 27.4 | % |
Net Sales. Our total net sales increased by $3.1 million or 25.6% from Q1 2020 to Q1 2021. The growth in net sales is directly attributable to increased sales of Motorola branded cable modems and gateways. In both Q1 2021 and Q1 2020, we primarily generated our sales by selling cable modems and gateways. Software sales related to Minim SaaS offerings were $0.1 thousand in Q1 2021. The Company had no SaaS related sales in Q1 2020. The decrease in other category of $0.5 million compared to Q1 2020 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.
| | | Three Months Ended | |
| | | March 31, 2021 | | | March 31, 2020 | | | $ Change | | | % Change | |
| | | (In thousands, except percentage data) | |
| Cable modems & gateways | | $ | 14,587 | | | $ | 11,170 | | | $ | 3,417 | | | | 30.5 | % |
| Software | | | 125 | | | | –– | | | | 125 | | | | 100 | % |
| Other | | | 306 | | | | 785 | | | | (479 | ) | | | (61.0 | )% |
| Total | | $ | 15,018 | | | $ | 11,955 | | | $ | 3,063 | | | | 25.6 | % |
As shown in the table below, our net sales in North America increased $3.1 million to $14.8 million in Q1 2021 from $11.7 million in Q1 2020. Net sales outside North America decreased $30 thousand to $192 thousand in Q1 2021 from $222 thousand in Q1 2020. Generally, the Company’s lower sales outside North America reflect the fact that cable modems are sold successfully through retailers in the United States but not in most countries outside the United States, due primarily to variations in government regulations.
| | | Three Months Ended | |
| | | March 31, 2021 | | | March 31, 2020 | | | $ Change | | | % Change | |
| | | (In thousands, except percentage data) | |
| North America | | $ | 14,826 | | | $ | 11,734 | | | $ | 3,092 | | | | 26.4 | % |
| Outside North America | | | 192 | | | | 221 | | | | (29 | ) | | | (13.5 | )% |
| Total | | $ | 15,018 | | | $ | 11,955 | | | $ | 3,063 | | | | 25.6 | % |
Relatively few companies account for a substantial portion of the Company’s revenues. In Q1 2021, two companies accounted for 10% or greater individually, and 88% in the aggregate of the Company’s total net sales. In Q1 2020, two companies accounted for 10% or greater individually, and 86% in the aggregate of the Company’s total net sales.
Our customers generally do not enter into long-term agreements obligating them to purchase our products. Because of our significant customer concentration, our net sales and operating income could fluctuate significantly due to changes in political or economic conditions or the loss of, reduction of business with, or less favorable terms for any of our significant customers. A reduction or delay in orders from any of our significant customers, or a delay or default in payment by any significant customer could materially harm our business, results of operation and liquidity.
Gross Profit. Gross profit was $5.1 million for Q1 2021, an increase of $2.0 million from $3.1 million for Q1 2020. Gross margin increased to 34.0% in Q1 2021 from 25.9% in Q1 2020. The increase in gross profit was attributable to sales growth of Motorola branded cable modems and gateways. The increase in profit margin was primarily due to reduction in tariff costs of $1.4 million from $1.5 million in Q1 2020 to $35 thousand in Q1 2021.
Operating Expense. Total operating expense was $5.6 million for Q1 2021, an increase of $1.8 million from $3.8 million in Q1 2020. Total operating expense as a percentage of net sales increased from 32.1% in Q1 2020 to 37.6% in Q1 2021. The table below illustrates the change in operating expense.
| | | Three Months Ended | |
| Operating Expense | | March 31, 2021 | | | % Net Sales | | | March 31, 2020 | | | % Net Sales | | | $ Change | | | % Change | |
| | | (In thousands, except percentage data) | |
| Selling and marketing expense | | $ | 3,174 | | | | 21.1 | % | | $ | 2,354 | | | | 19.7 | % | | $ | 820 | | | | 34.8 | % |
| General and administrative expense | | | 1,077 | | | | 7.2 | % | | | 828 | | | | 6.9 | % | | | 249 | | | | 30.1 | % |
| Research and development expense | | | 1,389 | | | | 9.2 | % | | | 653 | | | | 5.5 | % | | | 736 | | | | 112.6 | % |
| Total operating expense | | $ | 5,640 | | | | 37.6 | % | | $ | 3,835 | | | | 32.1 | % | | $ | 1,805 | | | | 47.0 | % |
Selling and Marketing Expense. Selling and marketing expense increased $0.8 million to $3.2 million in Q1 2021 from $2.4 million in Q1 2020. Selling and marketing expense as a percentage of net sales was 21.1% in Q1 2021 and 19.7% in Q1 2020. The increase of $0.8 million was primarily due to an increase in Motorola royalty fees of $0.3 million and employee compensation of $0.4 million, and marketing programs of $0.1 million.
General and Administrative Expense. General and administrative expense increased to $1.1 million in Q1 2021 from $0.8 million in Q1 2020. General and administrative expense as a percentage of net sales was 7.2% in Q1 2021 and 6.9% in Q1 2020. General and administrative expenses increased approximately $0.2 million primarily due to $0.4 million in legal and accounting services, offset by $0.1 million in employee compensation, and $0.1 million in facility rent costs.
Research and Development Expense. Research and development expense increased to $1.4 million in Q1 2021 from $0.7 million in Q1 2020. Research and development expense as a percentage of net sales increased to 9.2% in Q1 2021 from 5.5% in Q1 2020. The increase of approximately $0.7 million was primarily due to an increase in employee compensation of $0.5 million and $0.2 million in contractor and consulting costs.
Other Income (Expense). Other income (expense), net was $(8) thousand in Q1 2021 and $(6) thousand in Q1 2020.
Income Tax Expense (Benefit). We recorded minimum state income taxes and tax related to our operations in Mexico, which was $2 thousand and $6 thousand in Q1 2021 and Q1 2020, respectively.
Unaudited Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for the Company and Zoom Connectivity, Inc., formerly known as Minim Inc., as if the merger had been completed on January 1, 2020. The pro forma results have been prepared for comparative purposes only, and do not necessarily represent what the net sales or results of operations would have been had the merger been completed on January 1, 2020. In addition, these results are not intended to be a projection of future operating results. The unaudited pro forma information includes adjustments to eliminate intercompany transactions and align accounting policies.
| | | Three Months Ended | |
| | | March 31, 2020 | |
| Pro forma revenue | | $ | 12,063,107 | |
| Pro forma net loss | | $ | (1,825,671 | ) |
| Pro forma net loss per share, basic and diluted | | $ | (0.06 | ) |
Liquidity and Capital Resources
The Company’s cash balance on March 31, 2021 was $1.2 million of which $800 thousand was restricted. This compares to $1.5 million on December 31, 2020 on which $800 thousand was restricted. As of March 31, 2021, the Company had $7.0 million outstanding and $449 thousand available on its asset-based credit line with Silicon Valley Bank and working capital of $6.5 million.
On April 13, 2020, the Company amended its Financing Agreement with Rosenthal & Rosenthal, Inc. The amendment increased the size of the revolving credit line from $3.0 million to $4.0 million effective the date of the amendment. On February 4, 2021, the Company amended the Financing Agreement to increase the revolving credit line from $4.0 million to $5.0 million effective the date of the amendment. The Company is required to calculate its covenant compliance on a quarterly basis under the Financing Agreement. As of December 31, 2020, the Company was in compliance with both the minimum working capital covenant of $1.75 million and minimum tangible net worth covenant of $2.0 million. At December 31, 2020, the Company’s tangible net worth, as calculated pursuant to the Financing Agreement, was approximately $6.3 million, while the Company’s working capital, as calculated pursuant to the Financing Agreement, was approximately $5.9 million.
On April 15, 2020, the Company received approval for a SBA Paycheck Protection Plan Loan with Primary Bank under the CARES Act. The loan in the amount of $583.3 thousand was used for qualifying expenses as defined in the CARES Act. The loan and related interest was subsequently partially forgiven in November 2020.
On May 26, 2020, the Company closed on a $3.4 million private placement and issued an aggregate of 2,237,103 shares at a purchase price of $1.52 per share, and in connection with the closing of the offering two designees of an investor in the private placement joined Zoom’s Board of Directors.
On February 4, 2021, the Company amended its Financing Agreement with Rosenthal & Rosenthal, Inc. The amendment increased the size of the revolving credit line from $4.0 million to $5.0 million effective the date of the amendment.
On March 12, 2021, the Company terminated its Financing Agreement with Rosenthal & Rosenthal, Inc. and entered into the Silicon Valley Bank (“SVB Loan Agreement”). The SVB Loan Agreement provides for a revolving facility up to a principal amount of $12.0 million. The SVB Loan Agreement matures, and all outstanding amounts become due and payable on March 12, 2023. The SVB Loan Agreement is secured by substantially all the Company’s assets and the assets of our subsidiary Zoom Connectivity, Inc. (“Zoom Connectivity”), but excludes the Company’s and Zoom Connectivity’s intellectual property. The availability of borrowings under the SVB Loan Agreement is subject to certain conditions and requirements, and the borrowing base amount is up to (a) 85% of eligible accounts receivable balances plus (b) the least of (i) 60% of eligible inventory, (ii) 85% of net orderly liquidation value, and (iii) $4.8 million. In conjunction with the SVB Loan Agreement, the Company secured a $1.0 million commercial credit card line.
Based on the Company’s present business plan, funding available under the SVB Loan Agreement and additional financing that the Company believes is obtainable under acceptable terms if needed, the Company expects to maintain acceptable levels of liquidity to meet its obligations as they become due during the next 12 months.
MANAGEMENT
Executive Officers and Directors
The following table provides information regarding our executive officers and directors as of the filing of this prospectus:
| Name | | Age | | Position(s) |
| Executive Officers: | | | | |
| Jeremy Hitchcock | | 39 | | Chairman, Director |
| Graham Chynoweth | | 43 | | Chief Executive Officer, Director |
| Nicole Zheng | | 36 | | President and Chief Marketing Officer |
| Sean Doherty | | 40 | | Chief Financial Officer |
| John Lauten | | 54 | | Chief Operating Officer |
| | | | | |
| Terms of the offering | | The selling stockholders will determine when and how they will sell the Common Stock offered in this prospectus. | |
| Non-Employee Directors: | | | | |
| Common Stock outstanding*David Aronoff | | 35,498,514 shares57 | | Director |
| Dan Artusi | | 66 | | Director |
| Philip Frank | | 50 | | Director |
| Elizabeth Hitchcock | | 42 | | Director |
| Joshua Horowitz | | 43 | | Director |
| Sandra Howe | | 48 | | Director |
Executive Officers
Jeremy Hitchcock is a technology entrepreneur and executive who joined the Company’s Board of Directors in May 2019. On January 16, 2020, the Board appointed Mr. Hitchcock as Chairman of the Board, to be effective as of February 1, 2020. On April 14, 2020, the Board appointed Mr. Hitchcock as Executive Chairman of the Board. Effective as of June 25, 2021, Mr. Hitchcock position as Executive Chairman of the Board was redesignated as Chairman of the Board in recognition of the Company’s senior management comprised of Mr. Graham Chynoweth, Ms. Nicole Zheng, Mr. Sean Doherty and Mr. John Lauten. Mr. Hitchcock founded our subsidiary Zoom Connectivity, an Internet of Things (“IoT”) networking and security company, which the Company acquired by merger on December 4, 2020. Mr. Hitchcock previously served as President and Chief Executive Officer of Zoom Connectivity from its founding until 2019, and served as director, from its founding until its acquisition by the Company. Mr. Hitchcock is a Principal at Orbit Group LLC. Previously, Mr. Hitchcock founded Dyn when he was a student at Worcester Polytechnic Institute in 2001. Dyn is an Internet infrastructure company connecting people, content, and commerce. The company grew to 500 employees and raised $100 million of growth capital, and was acquired by Oracle Corporation in 2017. Mr. Hitchcock is the spouse of Elizabeth Hitchcock, a Director of the Board. Mr. Hitchcock holds a B.S. degree from Worcester Polytechnic Institute.
Graham Chynoweth joined the Company in December 2020 as Chief Executive Officer. He was the Chief Executive Officer of Zoom Connectivity from June 2019 until the merger of Zoom Connectivity with the Company. Prior to Zoom Connectivity, he served as Chief Membership Officer for Advanced Regenerative Manufacturing Institute from January 2017 to June 2019, and Executive Vice President and Chief Operating Officer of SilverTech, Inc. from January 2015 to December 2016. Mr. Chynoweth was also the Chief Operating Officer of Dyn from November 2005 to December 2014. He is a Founding Board Member, and has been a member of the compensation, governance, and audit committees of Primary Bank (OTCPK: PRMY) from November 2014 to October 2020. He has also served as a director for PT United, LLC since August 2016. Mr. Chynoweth holds a JD degree from Duke University School of Law, an MA degree in Public Policy from Duke University, and a BA degree in political science from the University of California, Berkeley.
Sean Doherty joined the Company in December 2020 as Chief Financial Officer. Mr. Doherty was the Senior Vice President, Finance of Zoom Connectivity from May 2020 until the merger of Zoom Connectivity with the Company. Prior to joining Zoom Connectivity, he was the Managing Member at Pulpit Rock Consulting from August 2019 to October 2020. From October 2018 to July 2019, Mr. Doherty was a Director, Financial Planning and Analysis at Bottomline Technologies, Inc. (Nasdaq: EPAY). Prior to his time at Bottomline, Mr. Doherty was the Senior Manager of Finance at Dyn and then at Oracle Corporation (NYSE: ORCL) from March 2012 to October 2018. He has also served on the Board of Directors and Finance Committee of The Visiting Nurse Association of Southern New Hampshire since April 2017. Mr. Doherty holds a B.S. degree in Economics and Finance from Southern New Hampshire University as well as an MBA degree in Finance and International Business from Northeastern University.
Nicole Zheng joined the Company in December 2020 following the merger of Zoom Connectivity with the Company as Chief Marketing Officer. Effective as of June 25, 2021, Ms. Zheng was appointed President of the Company, in addition to her role as Chief Marketing Officer. Ms. Zheng was a co-founder of Zoom Connectivity and had been the Chief Marketing Officer and Chief Product Officer of Zoom Connectivity, since April 2018 until the merger of Zoom Connectivity with the Company. Ms. Zheng was recognized in Entrepreneur as a Top Female Founder in the United States in July 2020. Prior to Zoom Connectivity, she was the Chief Marketing Officer at Antidote Technologies from April 2017 to April 2018, and at OnSIP from February 2010 to April 2017. She has served as Advising CMO to quantum networking company Aliro Technologies since October 2020 and previously as a board member of Alliance of Channel Women, a nonprofit on a mission to advance careers for women in the telecom and broadband services sector, from January 2013 to November 2016. Ms. Zheng holds a B.S. in Materials Science Engineering and B.S. in Engineering and Public Policy from Carnegie Mellon University, as well as business certifications from The Wharton School Online.
John Lauten, our Chief Operating Officer, joined the Company in 2019 as Senior Vice President of Operations. Mr. Lauten has extensive experience in consumer electronic and technology manufacturing companies. Prior to joining Minim, he served as Chief Operating Officer for Skully Technologies from May 2017, where he led a wearable augmented reality technology company turn-around for new investors. He provided operations and strategy consulting to technology companies as a Partner at TechCXO from March 2016 to June 2017 and from June 2019 to November 2019, Mr. Lauten served as Vice President of Business Development and Strategy at Fox Factory, a leading automotive suspension manufacturer from October 2013, where he worked on five international acquisitions as part of a CEO and Board led expansion initiative. He previously served as the Director of North American Supply Chain Management at Cisco System, Inc. from 2009, and as Head of Global Customer Operations at Scientific-Atlanta from 2003 through 2009. Prior to that he held various finance and operations positions at Scientific-Atlanta and financial roles at Northern Telecom. Mr. Lauten earned a BA degree in Business Administration/Marketing from Texas Christian University and an MBA degree from the University of Texas at Austin, McCombs School of Business with a concentration in Finance.
Non-Employee Directors
David Aronoff has been a director of Minim since December 2020. Since June 2005, Mr. Aronoff has been a General Partner of Flybridge Capital Partners which he joined in 1995. Prior thereto, he was with Greylock Partners, a Silicon Valley venture capital firm and during his tenure he invested in 17 companies, actively guiding sales, business development and product marking activities. Mr. Aronoff is a member of the Board of Directors of Draper Laboratories, a defense, aerospace and commercial research contractor, and of BetterCloud, an SaaS management platform. He is a member of the Board of Trustees of the University of Vermont and a member of the Global Cyber Institute Advisory Board. Mr. Aronoff earned an MBA degree from the Harvard Business School, an MS degree in Computer Science from the University of Southern California, and a BS degree in Computer Science from the University of Vermont.
Dan Artusi has been a director of Minim since December 2020. Mr. Artusi is a board member of MaxLinear, Inc. (NYSE: MXL), VisIC-Tech, and GenXComm. From 2015 to 2018, Mr. Artusi served as Vice President in the Client Computing Group and General Manager for the connected home division at Intel Corporation, a technology company. Prior to Intel, Mr. Artusi served as Chief Executive Officer of Lantiq Deutschland GmbH, a fabless semiconductor company, from 2012 until its acquisition by Intel in 2015. From 2009 to 2015, Mr. Artusi served as an operating executive with Golden Gate Capital, a private equity firm. From 2007 to 2008, Mr. Artusi served as President and Chief Executive Officer and as a board member of Conexant Systems, Inc., a provider of semiconductors, and from 2005 to 2007, Mr. Artusi served as chairman and Chief Executive Officer of Coldwatt, Inc., a provider of high efficiency power supplies for the communications and computer industry. From April 2005 to June 2005, Mr. Artusi was an individual investor. From January 2003 to April 2005, he served as the President of Silicon Laboratories Inc., a developer of mixed signal integrated circuits, and from January 2004 to April 2005, he also served as the Chief Executive Officer and as a board member of Silicon Laboratories. From 2001 to 2004, he served as Chief Operating Officer of Silicon Laboratories. From 1977 until joining Silicon Laboratories, Mr. Artusi held various management and executive positions in the semiconductor business at Motorola Inc. Currently, Mr. Artusi also serves on the Engineering Advisory Board of the Cockrell School of Engineering at the University of Texas at Austin. Mr. Artusi studied electrical engineering at the Instituto Tecnologico de Buenos Aires (ITBA) in Argentina.
Philip Frank is a technology executive with over 25 years of experience. He has been a director of Minim since September 2015. He has served as President, Chief Executive Officer and director of VUI, Inc. since September 2018. Prior to that, he was the President, Chief Executive Officer and a director of AirSense Wireless from August of 2016 until its sale to Charter Communications, Inc. in January 2018, and was Minim’s Chief Financial Officer from September 2015 to July 2016. From February 2005 to December 2014 he worked for the Nokia Corporation including Nokia Siemens Networks, based in London, England. At Nokia, Mr. Frank was most recently the Global Head of Corporate Development and Mergers and Acquisitions. Earlier in his career, Mr. Frank was an executive with AT&T Wireless Services as well as having worked with global advisory firms Diamond-Cluster International, Inc. and Accenture PLC. He received a Master’s Degree in Business Administration from the University of Michigan Ross School of Business.
Elizabeth Hitchcock joined the Board of the Company in December 2020. She is a co-founder on Zoom Connectivity. Ms. Hitchcock is the spouse of Jeremy Hitchcock, the Chairman of the Board. Ms. Hitchcock is an entrepreneur, investor, small business owner and champion for her community and the arts. Her family office, Orbit Group LLC, is located in Manchester, New Hampshire, and focuses on technology and real estate projects with the mission to provide support through guidance, relationships and capital in order to build a better community. Since 2017, Ms. Hitchcock has been a General Partner of Millworks Fund, a venture fund focused on investing in technology startups. From September 2016 to September 2018, Ms. Hitchcock was a Managing Director of 10x Venture Partners, a seed stage (and beyond) investment firm. From July 2006 to November 2009, she served as the Leader of Sales and Marketing of Dyn. Ms. Hitchcock is the spouse of Jeremy Hitchcock, the Chairman of the Company. Ms. Hitchcock holds a B.S. degree in computer Science from Worcester Polytechnic Institute. She is a director of St. Mary’s Bank and a former Trustee of the Institute of Art and Design at New England College.
Joshua Horowitz has been a director of Minim since May 2020. Mr. Horowitz is a professional investor with over 17 years of investing experience. Since January 2012, Mr. Horowitz has served as a portfolio manager and Managing Director at various Palm entities, first with Palm Ventures LLC and currently with Palm Management (US) LLC where he manages the Palm Global Small Cap Master Fund. He was formerly Director of Research at Berggruen Holdings, a multi-billion dollar family office and a research analyst at Crossway Partners LP, a value strategy investment partnership. Mr. Horowitz has served as a director of three separate Nasdaq traded companies over the past six years. Mr. Horowitz served as a Director of The Lincoln General Insurance Company from October 2001 to November 2014, 1347 Capital Corp (Nasdaq: TFSC) from July 2014 to July 2016, and 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH) from April 2015 to April 2018. He was most recently the Interim Chairman of the Board of Directors at Birner Dental Management Services, Inc. (OTC: BDMS) from June 2018 until the Company’s sale to Mid Atlantic Dental Partners in January 2019. Birner was the only publicly traded dental service organization (“DSO”) in the country with 67 offices and over 500 employees. He is currently a Director of Limbach, Inc. (Nasdaq: LMB), a $500 million mechanical systems solutions concern. He is also a Board Observer at Biomerica, Inc. (Nasdaq: BMRA) and a Director of Insurance Income Strategies, Ltd. Mr. Horowitz holds a Bachelor of Science degree in Management magna cum laude from Binghamton University and also studied at the Bath School of Management in the United Kingdom.
| | Use of proceeds | | We are not selling any of the shares of Common Stock covered by this prospectus, and as a result will not receive any proceeds from the sale of shares of Common Stock pursuant to this prospectus.51 | |
Sandra Howe joined the Board of Directors of Minim in December 2020. She is a technology executive, previously with ARRIS, Cisco, and Technetix. Ms. Howe is a technology leader with over 25 years’ experience in the global telecommunications, consumer and media industries and has proven experience in business development and operations as well as leading marketing, sales and business unit teams to exceed company sales and profitability targets. From 2018 to 2020, Ms. Howe served as Senior Vice President and President, Americas for Technetix, Ltd., a technology company focused on next-generation broadband equipment engineering. From 2010 to 2018, she was a Senior Vice President of ARRIS Group, Inc., a telecommunications equipment company engaged in data, video and telephony systems for homes and businesses, most recently as General Manager of the Consumer Products Group. Ms. Howe graduated from Pennsylvania State University.
Compensation of Executive Officers
2020 Summary Compensation Table
The following Summary Compensation Table sets forth the total compensation paid or accrued for the fiscal years ended December 31, 2020 and December 31, 2019 for our principal executive officer and the two other most highly compensated executive officers who were serving as executive officers as of December 31, 2020. The table also includes Jeremy Hitchcock, Frank B. Manning and Joseph L. Wytanis who each served as principal executive officers during portions of fiscal year 2020 in addition to our current Chief Executive Officer, Graham Chynoweth, and Jacqueline Barry Hamilton who served as Acting Chief Financial Officer and Chief Financial Officer, during fiscal year 2020 and would otherwise have been included in the table but for the fact that she was not acting as an executive officer on December 31, 2020. We refer to these officers as our named executive officers.
| Name and Principal Position | | Year | | Salary ($) | | | Bonus(1) ($) | | | Option Awards(2) ($) | | | All Other Compensation(3) ($) | | | Total ($) | |
Graham Chynoweth,
| | 2020 | | $ | 15,385 | | | | — | | | | — | | | | — | | | $ | 15,385 | |
| Chief Executive Officer | | 2019 | | | — | | | | — | | | | — | | | | — | | | | — | |
Nicole Zheng,
| | 2020 | | $ | 12,308 | | | | — | | | | — | | | | — | | | $ | 12,308 | |
| President and Chief Marketing Officer | | 2019 | | | — | | | | — | | | | — | | | | — | | | | — | |
John Lauten,
| | 2020 | | $ | 195,000 | | | $ | 54,125 | | | | — | | | $ | 15,192 | | | $ | 264,317 | |
| Chief Operating Officer | | 2019 | | | — | | | | — | | | | — | | | | — | | | | — | |
Jeremy Hitchcock,
| | 2020 | | | — | | | | — | | | $ | 14,425 | | | | — | | | $ | 14,425 | |
| Chairman of the Board of Directors; former Executive Chairman of the Board of Directors; principal executive officer | | 2019 | | | — | | | | — | | | $ | 18,257 | | | | — | | | $ | 18,257 | |
Frank B. Manning,(4) | | 2020 | | $ | 12,430 | | | | — | | | | — | | | $ | 79,833 | | | $ | 92,263 | |
| Retired Chairman of the Board of Directors, Chief Executive Officer and Acting Chief Financial Officer | | 2019 | | $ | 134,244 | | | | — | | | $ | 67,463 | | | $ | 350 | | | $ | 202,057 | |
Joseph L. Wytanis,(5) | | 2020 | | $ | 78,254 | | | $ | 77,011 | | | | — | | | $ | 137,643 | | | $ | 292,908 | |
| former President and Chief Executive Officer | | 2019 | | $ | 207,708 | | | $ | 60,000 | | | | — | | | $ | 107,538 | | | $ | 375,246 | |
Jacqueline Barry Hamilton,
| | 2020 | | $ | 159,627 | | | $ | 32,375 | | | $ | 38,617 | | | $ | 104,178 | | | $ | 334,797 | |
| former Chief Financial Officer | | 2019 | | | — | | | | — | | | | — | | | | — | | | | — | |
| (1) | | | | The amounts in this column represent bonus payments granted in the applicable fiscal year. |
| (2) | OTCQB Symbol | | MINM | |
| | | | |
| Risk Factors | | See “Risk Factors” beginning on page 4The amounts included in the “Option Awards” column reflect the aggregate grant date fair value of option awards in accordance with FASB ASC Topic 718, pursuant to the 2009 Stock Option Plan and 2019 Stock Option Plan. Assumptions used in the other informationcalculations of these amounts are included in this prospectus, together with the information contained under the heading “Risk Factors”Note 11 to our Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. These options are incentive stock options issued under the 2009 Stock Option Plan or 2019 Stock Option Plan and represent the right to purchase shares of Common Stock at a fixed price per share (the grant date fair market value of the shares of Common Stock underlying the options). |
| (3) | The amounts included in the “All Other Compensation” column consists of: (a) for Mr. Lauten in 2020, filed witha taxable housing allowance of $15,192; (b) for Mr. Manning in 2020, severance compensation of $52,206 and vacation pay of $27,627, and in 2019, the SEC on April 13, 2021, any subsequently filed Quarterly Reports on Form 10-QCompany’s contribution to a 401(k) plan of $350; (c) for Mr. Wytanis in 2020, severance compensation of $105,000, vacation pay of $16,735, and any subsequently filed Current Reports on Form 8-K (other than,a taxable housing allowance of $15,908, and in each case, information furnished rather than filed), all2019, a taxable housing allowance of which are incorporated by reference$107,538; and (d) for Ms. Barry Hamilton in this prospectus,2020, severance compensation of $92,500 and vacation pay of $11,678. |
| (4) | Mr. Manning retired from his role as wellChairman of the Board of Directors, Chief Executive Officer of the Company and Acting Chief Financial Officer effective as other cautionary statements throughoutof February 1, 2020. |
| (5) | Mr. Wytanis resigned from the Company effective as of May 8, 2020. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company’s Common Stock immediately prior to and immediately after the completion of this offering by (i) each person who is known by the Company to own beneficially more than five percent of the Company’s outstanding Common Stock, (ii) each of the Company’s directors and named executive officers, as listed below in the Summary Compensation Table under the heading “Executive Compensation,” and (iii) all of the Company’s current directors and executive officers as a group.
On July , 2021, there were 35,498,514 issued and outstanding shares of Company Common Stock. Unless otherwise noted, each person identified below possesses sole voting and investment power with respect to the shares listed. The information contained in this table is based upon information received from or on behalf of the named individuals or from publicly available information and filings by or on behalf of those persons with the SEC.
| | | | | % of Common Stock Outstanding | |
| Name and Address of Beneficial Owner(1) | | Amount of Shares of Common Stock Beneficially Owned | | | Before Offering | | | After Offering | |
5% or incorporated by reference in this prospectus.Greater Stockholders: | | | | | | | | | | | | |
| | | |
| | * Does not include shares of Common Stock reserved for issuance pursuant to the Company’s equity incentive plans. | | | | | | | | |
Zulu Holdings LLC(2) 848 Elm Street, 2nd Floor Manchester, NH 03101 | | | 15,696,184 | | | | | | | | | |
| | | | | | | | | | | | | |
| Directors and Named Executive Officers: | | | | | | | | | | | | |
| David Aronoff(3) | | | 1,590,989 | | | | | | | | | |
| Daniel Artusi | | | 19,225 | | | | | | | | | |
| Graham Chynoweth | | | 990,726 | | | | | | | | | |
| Philip Frank | | | 90,000 | | | | | | | | | |
| Elizabeth Hitchcock(4) | | | 17,819,529 | | | | | | | | | |
| Jeremy Hitchcock(4) | | | 17,819,529 | | | | | | | | | |
| Sandra Howe | | | — | | | | | | | | | |
| Joshua Horowitz(5) | | | 1,236,426 | | | | | | | | | |
| Nicole Zheng | | | 275,858 | | | | | | | | | |
| John Lauten(6) | | | 60,000 | | | | | | | | | |
| Name of Selling Stockholder(1) | Total Shares Beneficially Owned Before Offering | Maximum Number of Shares Being Offered | Total Shares Beneficially Owned After Offering(2) | Percent of Total Shares Outstanding After Offering(2) |
| Jeremy Hitchcock(3)(4) | 17,819,534 | 17,081,521 | 738,013 | 2.1% |
| Elizabeth Hitchcock(3)(4) | 17,819,534 | 17,081,521 | 738,013 | 2.1% |
| Hitchcock Capital Partners, LLC(3) | 15,696,184 | 15,696,184 | — | — |
| Zulu Holdings LLC(3) | 12,379,252 | 12,379,252 | — | — |
| Flybridge Capital Partners IV LP | 1,537,118 | 1,537,118 | — | — |
| Flybridge Network Fund IV LP | 53,871 | 53,871 | — | — |
| Founder Collective III LP | 1,049,253 | 1,049,253 | — | — |
| Founder Collective Partners III LP | 170,807 | 170,807 | — | — |
| Palm Global Small Cap Master Fund LP(5) | 1,206,640 | 958,732 | 247,908 | * |
| Graham Chynoweth(6) | 990,726 | 967,795 | 22,931 | * |
| Alec Rooney(7) | 368,526 | 303,843 | 64,683 | * |
| Nicole Zheng(8) | 275,858 | 215,187 | 60,671 | * |
| Klingenstein Fields Venture Fund LP | 229,188 | 229,188 | — | — |
| Joseph L. Wytanis | 150,910 | 90,910 | 60,000 | * |
| Phil Stanhope | 150,000 | 50,000 | 100,000 | * |
| Universal Telecommunications Inc. | 114,594 | 114,594 | — | — |
| Bryan Ollila | 124,164 | 124,164 | — | — |
| Brian Kline | 96,308 | 96,308 | — | — |
| Jason Calacanis | 94,849 | 94,849 | — | — |
| Company Venture Capital Fund I LP | 45,837 | 45,837 | — | — |
| The Janower Irrevocable Trust Of 2009 Dated October 19, 2009 | 45,837 | 45,837 | — | — |
| Sarah Haines | 45,837 | 45,837 | — | — |
| Zach Mattor | 45,438 | 45,438 | — | — |
| Denis Bakin | 36,350 | 36,350 | — | — |
| Paul Blumenfeld | 33,070 | 33,070 | — | — |
| Deogratis Mwano | 32,042 | 32,042 | — | — |
| Ulysses Diversified Holdings LLC | 23,712 | 23,712 | — | — |
| Peter Fry | 24,233 | 24,233 | — | — |
| Sean M. Dalton | 22,918 | 22,918 | — | — |
| Naveen Selvadurai | 17,414 | 17,414 | — | — |
| Jason Syversen | 17,414 | 17,414 | — | — |
| Vast Ventures III LLC | 11,459 | 11,459 | — | — |
| Edward A. Julian | 4,583 | 4,583 | — | — |
| TOTAL | 24,838,490 | 23,544,284 | 1,294,206 | 3.6% |
(1)
In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of Company Common Stock over which such person has voting or investment power and of which such person has the right to acquire beneficial ownership within 60 days of the date hereof. The table includes shares owned by spouses, other immediate family members, in trust, shares held in retirement accounts or funds for the benefit of the named individuals, shares held as restricted stock and other forms of ownership, over which shares the persons named in the table may possess voting and/or investment power.
(2)
Assumes that all shares of Common Stock registered for resale by this prospectus are sold.
(3)
Information is based on a Schedule 13D/A filed as of December 8, 2020, by Jeremy Hitchcock, Elizabeth Cash Hitchcock, Orbit Group LLC (“Orbit”), Hitchcock Capital Partners, LLC (“HCP”) and Zulu Holdings LLC (“Zulu”). The 15,696,184 shares includes 3,316,932 shares held directly by HCP and 12,379,252 shares held directly by Zulu. HCP may be deemed the beneficial owner of the shares as a beneficial owner of the Common Stock held by Zulu through its ownership of Zulu. As the manager of Zulu, Orbit may be deemed the beneficial owner of the Common Stock held by Zulu. As the co-managers of Orbit and HCP, each of Mr. and Ms. Hitchcock may be deemed the beneficial owner of the Common Stock held by Zulu.
(4)
Mr. and Ms. Hitchcock are spouses of each other. Mr. and Ms. Hitchcock may be deemed to share beneficial ownership of all shares of the Company owned by either of them or investment vehicles, including Zulu and HCP, owned by either of them. Includes 52,500 shares that Mr. Hitchcock has the right to acquire upon exercise of outstanding stock options exercisable within 60 days after June 4, 2021.
(5)
The 1,206,640 shares are directly held by Palm Global. Palm Management (US) LLC, as the investment manager of Palm Global, may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Due to his position with Palm Management (US) LLC, Mr. Palmer may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Due to his positions with Palm Global and Palm Management (US) LLC, Mr. Horowitz may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Palm Management (US) LLC, Mr. Palmer and Mr. Horowitz expressly disclaim such beneficial ownership except to the extent of their pecuniary interest therein.
(6)
Includes 22,931 shares that Mr. Chynoweth has the right to acquire upon exercise of outstanding stock options exercisable within 60 days after June 4, 2021
(7)
Includes 64,683 shares that Mr. Rooney has the right to acquire upon exercise of outstanding stock options exercisable within 60 days after June 4, 2021.
(8)
Includes 60,671 shares that Ms. Zheng has the right to acquire upon exercise of outstanding stock options exercisable within 60 days after June 4, 2021.
*Less than one percent of shares outstanding.
Participation of Directors and Officers
Certain of the selling stockholders currently serve as executive officers and/or members of the Board, including Jeremy P. Hitchcock, Executive Chairman of the Board; Graham Chynoweth, Chief Executive Officer of the Company and member of the Board; and Nicole Zheng, Chief Marketing Officer; Elizabeth Hitchcock, member of the Board. Mr. Hitchcock and Ms. Hitchcock may be deemed to beneficially own shares held by Zulu and HCP. Joshua S. Horowitz, a director of the Company, due to his positions with Palm Management (US) LLC and as the director of the general partner of Palm Global, may be deemed to beneficially own shares held by Palm Global. In addition, Joseph L. Wytanis, the former President and Chief Executive Officer of the Company, and Phil Stanhope, the former Chief Technology Officer of the Company are also selling stockholders.
PLANDESCRIPTION OF DISTRIBUTIONEach selling stockholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the OTC Markets Group’s OTCQB or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A selling stockholder may use any one or more of the following methods when selling securities:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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settlement of short sales entered into after the effective date of the Registration Statement of which this prospectus is a part;
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in transactions through broker dealers that agree with the selling stockholders to sell a specified number of such securities at a stipulated price per security;
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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a combination of any such methods of sale; or
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any other method permitted pursuant to applicable law.
The selling stockholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker dealers engaged by the selling stockholders may arrange for other broker dealers to participate in sales. Broker dealers may receive commissions or discounts from the selling stockholders (or, if any broker dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction, not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction, a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The selling stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because selling stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the selling stockholders.
We agreed to keep this registration effective until the earliest of (i) the date on which the securities have been sold pursuant to this prospectus or pursuant to Rule 144 under the Securities Act or any other rule of similar effect; or (ii) the eighteen (18) month anniversary of the effectiveness of the Registration Statement of which this prospectus is a part. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Stock by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
DESCRIPTION OFOUR CAPITAL STOCKThe following information describes our Common Stock and preferred stock, as well as certain provisions of our Amended and Restated Certificate of Incorporation, as amended (the “Charter”), and our Amended and Restated Bylaws, as amended (the “Bylaws”). This description is only a summary. You should also refer to our Charter and Bylaws, which have been filed with the SEC as exhibits to our Registration Statement, of which this prospectus forms a part.
We are authorized under Delaware law to issue up to 60,000,00040,000,000 shares of Common Stock, $0.01 par value per share, and 2,000,000 shares of preferred stock, $0.001 par value per share. We are seeking approval of our stockholders to increase the number of authorized shares of capital stock and Common Stock to 62,000,000 and 60,000,000 shares, respectively. As of
June 4 July , 2021, there were 35,498,514 shares of Common Stock issued and outstanding and no shares of preferred stock issued and outstanding.Each share of Common Stock has the same relative rights and is identical in all respects with every other share of Common Stock. Each holder of Common Stock is entitled to one vote for each share held of record on all matters submitted to a vote of holders of Common Stock and is not permitted to cumulate votes in the election of our directors. Holders of our Common Stock have no redemption, conversion or preemptive rights to purchase or subscribe for our securities. Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of our outstanding shares of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. We have never declared or paid cash dividends on our capital stock and do not plan to pay any cash dividends in the foreseeable future. We currently anticipate that we will retain all available funds for use in the operation and expansion of our business. In addition, pursuant to the Silicon Valley Bank Loan and Security Agreement, we cannot pay any dividends without Silicon Valley Bank’s prior written consent.
Shares ofOur Common Stock is currently traded on the OTC Markets Group under the symbol “MINM”. We have been approved to list our Common Stock are traded over-the-counter and sales are reported on the OTCQBThe Nasdaq Capital Market under the symbol “MINM.”
“MINM”, and we expect trading to begin on July 7, 2021.Preferred Stock
Our Charter authorizes
the issuance of 2,000,000 shares of preferred stock, $0.001 par value per share. No shares of preferred stock are outstanding. The Board of Directors is empowered, without stockholder approval, to designate and issue additional series of preferred stock with dividend, liquidation, conversion, voting or other rights, including the right to issue convertible securities with no limitations on conversion, which could adversely affect the voting power or other rights of the holders of our Common Stock, substantially dilute a Common Stockholder’s interest and depress the price of our Common Stock.Certain Governance Arrangements
Pursuant to the terms of the Stock Purchase Agreement, dated as of May 3, 2019 (the “2019 Purchase Agreement”), by and between the Company and the Investors named therein, until November 6, 2021, if the Company proposes to issue Common Stock or any common stock equivalents for cash consideration of $500,000 or greater, in one or more transactions, with the primary purpose of raising capital (each, a “Subsequent Financing”), Zulu Holdings LLC (“Zulu”) shall have the right to participate in each such Subsequent Financing in an amount necessary to maintain Zulu’s pro-rata ownership of the Issuer (calculated on a fully-diluted basis) on the same terms, conditions and price provided for in such Subsequent Financing.
As of October 9, 2020, the Company entered into a Standstill and Voting Agreement (the “Standstill Agreement”) with Zulu Holdings LLC (“Zulu”) and Mr. Jeremy Hitchcock. Pursuant to the terms of the Standstill Agreement, each of Zulu, Mr. Hitchcock and their controlled affiliates (the “Restricted Parties”) have agreed not to effect any (a) transaction involving the Company and any Restricted Party, in which any Restricted Party would have a material interest different from stockholders of the Company generally, (b) purchase of more than 10% of the then total number of shares of outstanding Common Stock, and (c) sale, transfer or other disposition of Common Stock to a third party that would result in such third party beneficially owning more than 20.0% of the Company’s outstanding common stock immediately after giving effect to such transaction. The duration of the “Standstill Period” lasts through the earlier of: (i) such time as the Restricted Parties beneficially own less than 45.0% of the outstanding Common Stock of the Company, and (ii) the third anniversary of the date of the Standstill Agreement.
Registration Rights
Pursuant to the Agreement and Plan of Merger, dated as of November 12, 2020 (the “Merger Agreement”), relating to the Company’s acquisition of Zoom Connectivity, the Company is required to use commercially reasonable efforts to keep the 10,784,534 shares of Common Stock issued under the Merger Agreement continuously effective under the Securities Act until, among other things, the earlier of such time as all such shares covered by a registration statement covering the resale of such shares issued under the Merger Agreement have been sold thereunder or pursuant to Rule 144.
Pursuant to the terms of the 2019 Purchase Agreement, the Company is required to use commercially reasonable efforts to keep the 4,545,455 shares of Common Stock sold under the 2019 Purchase Agreement continuously effective under the Securities Act until, among other things, the earlier of such time as all such shares covered by a registration statement covering the resale of such shares sold under the 2019 Purchase Agreement have been sold thereunder or pursuant to Rule 144.
Liens on Company Assets
Pursuant to the Silicon Valley Bank Loan and Security Agreement, Silicon Valley Bank has a lien on all of the Company’s and Zoom Connectivity’s assets, including shares of capital stock of the Company’s subsidiaries, but specifically excludes the Company’s and Zoom Connectivity’s intellectual property.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax consequences relating to the acquisition, ownership, and disposition of common stock acquired pursuant to this offering by non-U.S. holders (as defined below). This summary deals only with common stock held as a capital asset (within the meaning of Section 1221 of the Code) and does not discuss the U.S. federal income tax consequences applicable to a non-U.S. holder that is subject to special treatment under U.S. federal income tax laws, including, but not limited to: a dealer in securities or currencies; a broker-dealer; a financial institution; a qualified retirement plan, individual retirement plan, or other tax-deferred account; a regulated investment company; a real estate investment trust; a tax-exempt organization; an insurance company; a person holding common stock as part of a hedging, integrated, conversion, or straddle transaction or a person deemed to sell common stock under the constructive sale provisions of the Code; a trader in securities that has elected the mark-to-market method of tax accounting; an accrual method taxpayer subject to special tax accounting rules under Section 451(b) of the Code; an entity that is treated as a partnership for U.S. federal income tax purposes; a person that received such common stock in connection with services provided; a corporation that accumulates earnings to avoid U.S. federal income tax; a corporation organized outside the United States, any state thereof or the District of Columbia that is nonetheless treated as a U.S. taxpayer for U.S. federal income tax purposes; a person that is not a non-U.S. holder; a “controlled foreign corporation;” a “passive foreign investment company;” or a U.S. expatriate.
This summary is based upon provisions of the Code, its legislative history, applicable U.S. Treasury regulations promulgated thereunder, published rulings, and judicial decisions, all as in effect as of the date hereof. We have not sought, and will not seek, any ruling from the Internal Revenue Service, or IRS, with respect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained. Those authorities may be repealed, revoked, or modified, perhaps retroactively, or may be subject to differing interpretations, which could result in U.S. federal income tax consequences different from those discussed below. This summary does not address all aspects of U.S. federal income tax, does not deal with all tax considerations that may be relevant to stockholders in light of their personal circumstances, and does not address any state, local, foreign, gift, estate (except to the limited extent set forth herein), or alternative minimum tax considerations.
For purposes of this discussion, a “U.S. holder” is a beneficial holder of common stock that is for U.S. federal income tax purposes: an individual citizen or resident of the United States; a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) was in existence on August 20, 1996 and has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of common stock that is neither a U.S. holder nor a partnership (or any other entity or arrangement that is treated as a partnership) for U.S. federal income tax purposes regardless of its place of organization or formation. If a partnership (or an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes) holds common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding common stock is urged to consult its own tax advisors.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME, ESTATE, AND OTHER TAX CONSEQUENCES OF ACQUIRING, OWNING, AND DISPOSING OF OUR COMMON STOCK IN LIGHT OF THEIR SPECIFIC SITUATIONS, AS WELL AS THE TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR NON-U.S. TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS (INCLUDING THE U.S. FEDERAL ESTATE AND GIFT TAX LAWS).
Distributions on Our Common Stock
Distributions with respect to Common Stock, if any, generally will constitute dividends for U.S. federal income tax purposes to the extent paid out of current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Any portion of a distribution in excess of current or accumulated earnings and profits will be treated as a return of capital and will first be applied to reduce the holder’s tax basis in its Common Stock, but not below zero. Any remaining amount will then be treated as gain from the sale or exchange of the Common Stock and will be treated as described under “—Disposition of Our Common Stock” below.
Distributions treated as dividends that are paid to a non-U.S. holder, if any, with respect to shares of our Common Stock will be subject to U.S. federal withholding tax at a rate of 30% (or such lower rate as may be specified in an applicable income tax treaty) of the gross amount of the dividends unless the dividends are effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States subject to the discussion below regarding foreign accounts. If a non-U.S. holder is engaged in a trade or business in the United States and dividends with respect to the Common Stock are effectively connected with the conduct of that trade or business and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment, then although the non-U.S. holder will generally be exempt from the 30% U.S. federal withholding tax, provided certain certification requirements are satisfied, the non-U.S. holder will be subject to U.S. federal income tax on those dividends on a net income basis at regular graduated U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. Any such effectively connected income received by a foreign corporation may, under certain circumstances, be subject to an additional branch profits tax equal to 30% (or lower applicable income tax treaty rate) of its effectively connected earnings and profits for the taxable year, as adjusted under the Code. To claim the exemption from withholding with respect to any such effectively connected income, the non-U.S. holder must generally furnish to us or our paying agent a properly executed IRS Form W-8ECI (or applicable successor form). In the case of a non-U.S. holder that is an entity, Treasury regulations and the relevant tax treaty provide rules to determine whether, for purposes of determining the applicability of a tax treaty, dividends will be treated as paid to the entity or to those holding an interest in that entity. If a non-U.S. holder holds stock through a financial institution or other agent acting on the holder’s behalf, the holder will be required to provide appropriate documentation to such agent. Such holder’s agent will then be required to provide certification to us or our paying agent.
A non-U.S. holder of shares of Common Stock who wishes to claim the benefit of a reduced rate of withholding tax under an applicable treaty must furnish to us or our paying agent a valid IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form) certifying such holder’s qualification for the exemption or reduced rate. If a non-U.S. holder is eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty and does not timely file the required certification, it may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders are urged to consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.
Disposition of Our Common Stock
Subject to the discussion below regarding backup withholding, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain from a sale, exchange or other disposition of our stock unless: (a) that gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment maintained by the non-U.S. holder); (b) the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or (c) we are or have been a “United States real property holding corporation” within the meaning of Code Section 897(c)(2) for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the date of disposition or the holder’s holding period for our Common Stock, and certain other requirements are met. Although there can be no assurance, we believe that we are not, and we do not anticipate becoming, a United States real property holding corporation for U.S. federal income tax purposes. Even if we are treated as a United States real property holding corporation, gain realized by a non-U.S. holder on a disposition of our Common Stock will not be subject to U.S. federal income tax so long as (1) the non-U.S. holder owned, directly, indirectly and constructively, no more than 5% of our Common Stock at all times within the shorter of (x) the five-year period preceding the disposition, or (y) the holder’s holding period, and (2) our Common Stock is regularly traded on an established securities market. There can be no assurance that our Common Stock will continue to qualify as regularly traded on an established securities market. If any gain on your disposition is taxable because we are a United States real property holding corporation and your ownership of our Common Stock exceeds 5%, you will be taxed on such disposition generally in the manner applicable to U.S. persons and in addition, a purchaser of your Common Stock may be required to withhold tax with respect to that obligation.
If a non-U.S. holder is described in clause (a) of the preceding paragraph, the non-U.S. holder will generally be subject to tax on the net gain derived from the disposition at the regular graduated U.S. federal income tax rates in the same manner as if such non-U.S. holder were a U.S. person, unless an applicable income tax treaty provides otherwise. In addition, a non-U.S. holder that is a corporation may be subject to the branch profits tax at a rate equal to 30% (or lower applicable income tax treaty rate) of its effectively connected earnings and profits. If the non-U.S. holder is an individual described in clause (b) of the preceding paragraph, the non-U.S. holder will generally be subject to a flat 30% tax on the gain derived from the disposition, which may be offset by U.S.-source capital losses even though the non-U.S. holder is not considered a resident of the United States, provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.
U.S. Federal Estate Tax
The estate of a nonresident alien individual is generally subject to U.S. federal estate tax on property it is treated as the owner of, or has made certain life transfers of, having a U.S. situs. Because we are a U.S. corporation, our Common Stock will be U.S. situs property and therefore will be included in the taxable estate of a nonresident alien decedent for U.S. federal estate tax purposes, unless an applicable estate tax treaty between the United States and the decedent’s country of residence provides otherwise.
Information Reporting and Backup Withholding Tax
We report to our non-U.S. holders and the IRS certain information with respect to any dividends we pay on our Common Stock, including the amount of dividends paid during each fiscal year, the name and address of the recipient, and the amount, if any, of tax withheld. All distributions to holders of Common Stock are subject to any applicable withholding. Information reporting requirements apply even if no withholding was required because the distributions were effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business or withholding was reduced by an applicable income tax treaty. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Under U.S. federal income tax law, interest, dividends, and other reportable payments may, under certain circumstances, be subject to “backup withholding” at the then applicable rate (currently, 24%). Backup withholding, however, generally will not apply to distributions on our Common Stock to a non-U.S. holder, provided the non-U.S. holder furnishes to us or our paying agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient. Backup withholding is not an additional tax but merely an advance payment, which may be credited against the tax liability of persons subject to backup withholding or refunded to the extent it results in an overpayment of tax and the appropriate information is timely supplied to the IRS.
Information reporting and backup withholding will generally apply to the proceeds of a disposition of our Common Stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, information reporting but not backup withholding will apply in a manner similar to dispositions effected through a U.S. office of a broker, if a non-U.S. holder sells our Common Stock through a non-U.S. office of a broker that has certain connections with the United States.
Foreign Accounts
Certain withholding taxes may apply to certain types of payments made to “foreign financial institutions” (as specially defined under these rules) and certain other non-U.S. entities if certification, information reporting and other specified requirements are not met. A 30% withholding tax may apply to “withholdable payments” if they are paid to a foreign financial institution or to a non-financial foreign entity, unless (a) the foreign financial institution undertakes certain diligence and reporting obligations and other specified requirements are satisfied, or (b) the non-financial foreign entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner and other specified requirements are satisfied. “Withholdable payment” generally means any payment of interest, dividends, rents, and certain other types of generally passive income if such payment is from sources within the United States. U.S. Treasury Regulations proposed in December 2018 (and upon which taxpayers and withholding agents are entitled to rely) eliminate possible withholding under these rules on the gross proceeds from any sale or other disposition of our Common Stock, previously scheduled to apply beginning January 1, 2019. If the payee is a foreign financial institution, it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements, or comply with comparable requirements under an applicable inter-governmental agreement between the United States and the foreign financial institution’s home jurisdiction. If an investor does not provide us with the information necessary to comply with these rules, it is possible that distributions to such investor that are attributable to withholdable payments, such as dividends, will be subject to the 30% withholding tax. Holders should consult their own tax advisers regarding the implications of these rules for their investment in our Common Stock.
UNDERWRITING
We have entered into an underwriting agreement with B. Riley Securities, Inc., as representative of the underwriters named below, with respect to the shares subject to this offering. Subject to the terms and conditions in the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has, severally and not jointly, agreed to purchase from us on a firm commitment basis, the respective number of shares of our Common Stock set forth opposite its name in the table below:
| Underwriters | | Number of Shares | |
| B. Riley Securities, Inc. | | | | |
| | | | |
| Total | | | | |
The underwriting agreement provides that the obligation of the underwriters to purchase all of the shares being offered to the public is subject to approval of legal matters by counsel and the satisfaction of other conditions. These conditions include, among others, the continued accuracy of representations and warranties made by us in the underwriting agreement, delivery of legal opinions and the absence of any material changes in our assets, business or prospects after the date of this prospectus. The underwriters are obligated to purchase all of our shares in this offering, other than those covered by the option described below, if they purchase any of our shares.
The representative of the underwriters has advised us that the underwriters propose to offer the Common Stock directly to the public at the public offering prices listed on the cover page of this prospectus and to selected dealers, who may include the underwriters, at the public offering price less a selling concession not in excess of $ per share for the Common Stock. After the completion of this offering, the underwriters may change the offering price and other selling terms.
Pursuant to the underwriting agreement, we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments which the underwriters or other indemnified parties may be required to make in respect of any such liabilities.
Listing
Our Common Stock is currently listed on the OTC Markets Group under the symbol “MINM”. We have been approved to list our Common Stock on The Nasdaq Capital Market under the symbol “MINM”, and we expect trading to begin on July 7, 2021.
Option
We have granted the underwriters an option, exercisable for up to 30 days after the date of this prospectus, to purchase a maximum of additional shares from us. If the underwriters exercise all or part of this option, each underwriter will be obligated to purchase its proportionate number of shares covered by the option at the public offering price that appears on the cover page of this prospectus, less the underwriting discounts and commissions.
Commissions and Expenses
The following table provides information regarding the amount of the underwriting discounts and commissions to be paid to the underwriters by us. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.
| | Per Share | | | Total
Without
Option | | | With
Option | |
| Underwriting discounts and commissions paid by us | | $ | | | | $ | | | | $ | | |
| Proceeds, before expenses, to us | | $ | | | | $ | | | | $ | | |
The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately $ million, which includes Company legal, accounting and printing costs and various other fees associated with registration and listing of our Common Stock. We have agreed to reimburse the representative for its reasonable out-of-pocket expenses actually incurred in the offering, including fees and disbursements of legal counsel to the representative, in an amount up to $100,000.
Lock-Up Agreements
We and each of our officers, directors and certain affiliates have agreed, subject to certain exceptions, including, without limitation, not to sell, offer, agree to sell, contract to sell, hypothecate, pledge, grant any option to purchase, make any short sale of, or otherwise dispose of or hedge, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of capital stock, for a period of 90 days in the case of our executive officers, certain of our directors and certain affiliates and 120 days in the case of our Chairman and Director and his affiliated entities after the date of this prospectus, without the prior written consent of B. Riley Securities, Inc.
The representative may, in its sole discretion and at any time or from time to time, release all or any portion of the Common Stock or other securities subject to the lock-up agreement. Any determination to release any Common Stock would be based upon a number of factors at the time of determination, which may include the market price of the Common Stock, the liquidity of the trading market of the Common Stock, general market conditions, the number of shares of Common Stock or other securities proposed to be sold or otherwise transferred and the timing, purposes and terms of the proposed sale or other transfer. The representative does not have any present intention, agreement or understanding, implicit or explicit, to release any of the shares of Common Stock or other securities subject to the lock-up agreements prior to the expiration of the lock-up period described above.
In addition, the underwriting agreement provides that, subject to certain exceptions, we will not, for a period of 180 days following the date of this prospectus, offer, sell or distribute any of our securities, without the prior written consent of the underwriters.
Stabilization
Until the distribution of shares of Common Stock is complete, SEC rules may limit the ability of the underwriters to bid for and purchase shares of our Common Stock. As an exception to these rules, underwriters are permitted to engage in certain transactions which stabilize the price of the shares of Common Stock, which may include short sales, covering transactions and stabilizing transactions. Short sales involve sales of shares of Common Stock in excess of the number of shares to be purchased by the underwriter in the offering, which creates a short position. “Covered” short sales are sales made in an amount not greater than the underwriter’s option to purchase additional shares of Common Stock from us in the offering. The underwriter may close out any covered short position by either exercising their option to purchase additional shares of Common Stock or purchasing shares of Common Stock in the open market. In determining the source of shares of Common Stock to close out the covered short position, the underwriter will consider, among other things, the price of shares of Common Stock available for purchase in the open market as compared to the share price at which they may purchase through their option to purchase additional shares. “Naked” short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares of Common Stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares of Common Stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of the shares of Common Stock made by the underwriter in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the other underwriter a portion of the underwriting discount received by it because the representative has repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might have on our shares of Common Stock. Any of these activities may have the effect of preventing or retarding a decline in the market price of our shares of Common Stock. They may also cause the price of the shares of Common Stock to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the Nasdaq or in the over-the-counter market, or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time without notice.
We have agreed that, for a period of 180 days from the date of this prospectus supplement, we will not, without the prior written consent of the underwriters and subject to certain exceptions, offer, sell, contract to sell, pledge, or otherwise dispose of any securities issued or guaranteed by us or shares of any class of our capital stock.
We expect that delivery of the shares will be made to investors on or about , 2021 (such settlement being referred to as “T+2 “).
In the ordinary course of their various business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Electronic Prospectus
This prospectus may be made available in electronic format on Internet sites or through other online services maintained by the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. Other than this prospectus in electronic format, any information on the underwriters’ or their affiliates’ websites and any information contained in any other website maintained by the underwriters or any affiliate of the underwriters is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.
Other
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. The underwriters and their respective affiliates may provide from time to time in the future in the ordinary course of their business certain commercial banking, financial advisory, investment banking and other services to us for which they will be entitled to receive customary fees and expenses. The underwriters have in the past and may in the future borrow money from or obtain other financial and non-financial services from us for which we will be entitled to receive customary fees and expenses.
Selling Restrictions
Notice to Prospective Investors in Canada (Alberta, British Columbia, Manitoba, Ontario and Québec Only)
This document constitutes an “exempt offering document” as defined in and for the purposes of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with the offer and sale of shares of Common Stock described herein (the “Securities”). No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this document or on the merits of the Securities and any representation to the contrary is an offence.
Canadian investors are advised that this document has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting Conflicts (“NI 33-105”). Pursuant to section 3A.3 of NI 33-105, this document is exempt from the requirement that the issuer and the underwriters in the offering provide Canadian investors with certain conflicts of interest disclosure pertaining to “connected issuer” and/or “related issuer” relationships as may otherwise be required pursuant to subsection 2.1(1) of NI 33-105.
Resale Restrictions
The offer and sale of the Securities in Canada are being made on a private placement basis only and are exempt from the requirement that the issuer prepare and file a prospectus under applicable Canadian securities laws. Any resale of Securities acquired by a Canadian investor in this offering must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the Securities outside of Canada.
Representations of Purchasers
Each Canadian investor who purchases the Securities will be deemed to have represented to the issuer, the underwriters and each dealer from whom a purchase confirmation is received, as applicable, that the investor (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or redistribution; (ii) is an “accredited investor” as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a “permitted client” as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Taxation and Eligibility for Investment
Any discussion of taxation and related matters contained in this document does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a Canadian investor when deciding to purchase the Securities and, in particular, does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a resident, or deemed resident, of Canada of an investment in the Securities or with respect to the eligibility of the Securities for investment by such investor under relevant Canadian federal and provincial legislation and regulations.
Rights of Action for Damages or Rescission
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Personal Information
We and the representative hereby notify prospective Canadian purchasers that: (a) we may be required to provide personal information pertaining to the purchaser as required to be disclosed in Schedule I of Form 45-106F1 under NI 45-106 (including its name, address, telephone number, email address, if provided, and the number and type of securities purchased, the total purchase price paid for such securities, the date of the purchase and specific details of the prospectus exemption relied upon under applicable securities laws to complete such purchase) (“personal information”), which Form 45-106F1 may be required to be filed by us under NI 45-106, (b) such personal information may be delivered to the securities regulatory authority or regulator in accordance with NI 45-106, (c) such personal information is being collected indirectly by the securities regulatory authority or regulator under the authority granted to it under the securities legislation of the applicable legislation, (d) such personal information is collected for the purposes of the administration and enforcement of the securities legislation of the applicable jurisdiction, and (e) the purchaser may contact the applicable securities regulatory authority or regulator by way of the contact information provided in Schedule 2 to Form 45-106F1. Prospective Canadian purchasers that purchase securities in this offering will be deemed to have authorized the indirect collection of the personal information by each applicable securities regulatory authority or regulator, and to have acknowledged and consented to such information being disclosed to the Canadian securities regulatory authority or regulator, and to have acknowledged that such information may become available to the public in accordance with requirements of applicable Canadian laws.
Language of Documents
Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the Securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.
Notice to Prospective Investors in the European Economic Area and the United Kingdom
In relation to the Member States of the European Economic Area and the United Kingdom (each, a “Relevant State”), no offer of shares of our Common Stock which are the subject of the offering contemplated by this prospectus to the public may be made in that Relevant State other than:
| ● | to any legal entity that is a qualified investor as defined in the Prospectus Regulation; |
| ● | to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the relevant representative or representatives nominated by us for any such offer; or |
| ● | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
provided that no such offer of shares of our Common Stock described in this prospectus shall result in a requirement for the publication of a prospectus, by us or any of the underwriters, pursuant to Article 3 of the Prospectus Regulation.
Each purchaser of shares of our Common Stock described in this prospectus located within a Relevant State will be deemed to have represented, acknowledged and agreed that (1) it is a “qualified investor” within the meaning of the Prospectus Regulation; and (2) in the case of any shares of Common Stock acquired by it as a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares of Common Stock acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in a Relevant State to qualified investors, as that term is defined in the Prospectus Regulation, or in circumstances in which the prior consent of the underwriters has been given to the offer or resale; or where shares of Common Stock have been acquired by it on behalf of persons in any Relevant State other than qualified investors, the offer of those shares of Common Stock to it is not treated under the Prospectus Regulation as having been made to such persons. For purposes of this provision, the expression an “offer to the public” in relation to the shares of our Common Stock in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares of our Common Stock to be offered so as to enable an investor to decide to purchase or subscribe to the shares and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
We and the underwriters have not authorized and do not authorize the making of any offer of shares of our Common Stock through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares of our Common Stock, other than the underwriters, is authorized to make any further offer of the shares on behalf of us or the underwriters.
References to the Prospectus Regulation includes, in relation to the UK, the Prospectus Regulation as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
The above selling restriction is in addition to any other selling restrictions set out below.
Additional Notice to Prospective Investors in the United Kingdom
The communication of this prospectus and any other document or materials relating to the issue of the shares of our Common Stock offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of Section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as amended, or the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Financial Promotion Order), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, the shares of our Common Stock offered hereby are only available to, and any investment or investment activity to which this prospectus relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents.
Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the shares of our Common Stock may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to us.
All applicable provisions of the FSMA must be complied with in respect to anything done by any person in relation to the shares of our Common Stock in, from or otherwise involving the United Kingdom.
Notice to Prospective Investors in Germany
This prospectus has not been prepared in accordance with the requirements for a securities or sales prospectus under the German Securities Prospectus Act (Wertpapierprospektgesetz), the German Sales Prospectus Act (Verkaufsprospektgesetz), or the German Investment Act (Investmentgesetz). Neither the German Federal Financial Services Supervisory Authority (Bundesanstalt für finanzdienstleistungsaufsicht—BaFin) nor any other German authority has been notified of the intention to distribute our Common Stock in Germany. Consequently, the Common Stock may not be distributed in Germany by way of public offering, public advertisement or in any similar manner and this prospectus and any other document relating to this offering, as well as information or statements contained therein, may not be supplied to the public in Germany or used in connection with any offer for subscription of the Common Stock to the public in Germany or any other means of public marketing. The Common Stock is being offered and sold in Germany only to qualified investors which are referred to in Section 3 paragraph 2 no. 1, in connection with Section 2 no. 6, of the German Securities Prospectus Act, Section 8f paragraph 2 no. 4 of the German Sales Prospectus Act, and in Section 2 paragraph 11 sentence 2 no. 1 of the German Investment Act. This prospectus is strictly for use of the person who has received it. It may not be forwarded to other persons or published in Germany.
Notice to Prospective Investors in Switzerland
This document is not intended to constitute an offer or solicitation to purchase or invest in the securities. The securities may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (“FinSA”) and no application has or will be made to admit the securities to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this document nor any other offering or marketing material relating to the securities constitutes a prospectus pursuant to the FinSA, and neither this document nor any other offering or marketing material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the Company or the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (“FINMA”), and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of the securities.
LEGAL MATTERS
The validity of the securities offered by this prospectus has been passed upon for us by Nixon Peabody LLP.
The NBD Group, Inc. has acted as counsel for the underwriters.EXPERTS
The consolidated balance sheets as of December 31, 2020 and December 31, 2019, and for each of the two years in the two-year period ended December 31, 2020 incorporated by reference into this Registration Statement, have been audited by Marcum LLP, an independent registered public accounting firm, as set forth in their report thereon and included inincorporated by reference into this Registration Statement in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The financial statements of Minim Inc. as of December 31, 2019 and 2018 and for each of the years in the two-year period ended December 31, 2019 incorporated in this Registration Statement by reference from the Zoom Telephonics, Inc. Current Report on Form 8-K/A filed on February 17, 2021, have been audited by Baker Newman & Noyes LLC, an independent auditor, as stated in their report thereon , incorporated herein by reference and have been incorporated in this Registration Statement in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
INCORPORATION OF INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference the information and reports we file with it under File No. 001-37649, which means that we can disclose important information to you by referring you to those publicly available documents. The information incorporated by reference is an important part of this prospectus, and information disclosed in documents that we file later with the SEC will automatically add to, update and change information previously disclosed. If there is additional information in a later filed document or a conflict or inconsistency between information in this prospectus or a prospectus supplement and information incorporated by reference from a later filed document, you should rely on the information in the later dated document.
We are incorporating herein by reference the documents listed below, which we have already filed with the SEC, and all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all such documents we may file with the SEC after the date of this prospectus and before the termination of this offering (other than, in each case, information furnished rather than filed):
| ● | Our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on April 13, 2021, as amended by Amendment No. 1 to Form 10-K filed with the SEC on April 30, 2021; |
| ● | Our Definitive Proxy Statement on Schedule 14A filed with the SEC on May 4, 2021; |
| ● | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC on May 17, 2021; |
| ● | Our Current Reports on Form 8-K filed with the SEC on February 8, 2021, March 15, 2021, April 15, 2021, April 27, 2021, June 4, 2021 and June 30, 2021, and our amended Current Reports on Form 8-K/A filed with the SEC on February 17, 2021, May 3, 2021 and June 30, 2021 (in each case, except for information contained therein which is furnished rather than filed); |
| ● | Our Registration Statement on Form S-1 filed on June 10, 2021; and |
| ● | The unaudited pro forma financial information filed as Exhibit 99.3 to our Current Report on Form 8-K/A filed with the SEC on February 17, 2021. |
All documents subsequently filed by the Company with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering contemplated by this prospectus, shall be deemed to be incorporated by reference into this prospectus.
Upon request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered a copy of the documents incorporated by reference into this prospectus. You may request a copy of these filings, and any exhibits we have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at the following address:
Minim, Inc.
848 Elm Street
Manchester, New Hampshire, 03101
Telephone: (833) 966-4646
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of Common Stock being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement.
We are subject to the information and periodic requirements of the Exchange Act and, in accordance therewith, file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address is www.sec.gov.
Our website address is www.minim.co and such reports are available under “SEC Filings” on our Investor Relations website located at https://ir.minim.co. You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Except for the specific incorporated reports and documents listed above, no information available on or through our website shall be deemed to be incorporated into this prospectus or the Registration Statement of which it forms a part, and you should not consider the contents of our website in making an investment decision with respect to our Common Stock.
MINIM, INC.
Shares
Common Stock
Prospectus
B. Riley Securities
, 2021
6
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
| Item 13. | Other Expenses of Issuance and Distribution |
The following table lists the costs and expenses payable by Minim, Inc., formerly known as Zoom Telephonics, Inc. (the “Company” or the “Registrant”), in connection with the offering of securities covered by this prospectus, other than any sales commissions or discounts. All amounts shown are estimates except for the Securities and Exchange Commission (“SEC”) registration fee, and all of the fees and expenses will be borne by the Company.
| SEC Registration Fee | $ | 3,481 |
| Legal Fees and Expenses | $ | 35,000 |
| Accounting Fees and Expenses | $ | 25,000 |
| Miscellaneous Costs | $ | 1,000 |
| Total | $ | 64,481 |
Item 14. Indemnification of Directors and Officers
| | | Amount to be Paid | |
| SEC registration fee | | $ | 3,137 | |
| FINRA filing fee | | | 4,250 | |
| Nasdaq listing fee | | | 75,000 | |
| Printing expenses | | | 5,000 | |
| Legal fees and expenses | | | 200,000 | |
| Accounting fees and expenses | | | 60,500 | |
| Transfer agent and registrar expenses | | | 1,000 | |
| Underwriters’ fees and expenses | | | 100,000 | |
| Miscellaneous expenses | | | 1,500 | |
| Total | | $ | 450,387 | |
| Item 14. | Indemnification of Directors and Officers |
The Company’s Amended and Restated Certificate of Incorporation, as amended (the “Charter”) and the Amended and Restated Bylaws, as amended (the “Bylaws”) authorize it to indemnify directors, officers, employees and agents of the Company against expenses (including attorneys'attorneys’ fees), liabilities and other matters incurred in connection with any action, suit or proceeding, to the fullest extent permitted by Section 145 of Delaware General Corporation Law. In addition, the Company’s Charter provides that its directors shall not be personally liable to the Company or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing, a director shall be liable to the extent provided by applicable law (i) for breach of the director'sdirector’s duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit.
The Company may also advance all reasonable expenses which were incurred by or on behalf of a present director or officer in connection with any proceeding to the fullest extent permitted by applicable law.
The Bylaws also permit the Company to enter into indemnity agreements with individual directors, officers, employees, and other agents. Any such agreements, together with the Charter and the Bylaws, may require the Company, among other things, to indemnify directors or officers against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities resulting from willful misconduct of a culpable nature), to advance expenses to them as they are incurred, and to obtain and maintain directors'directors’ and officers'officers’ insurance if available on reasonable terms.
The Company maintains director and officer liability insurance policies providing for the insurance on behalf of any person who is or was a director or officer of the Company or a subsidiary for any claim made during the policy period against the person in any such capacity or arising out of the person’s status as such.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors and officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.Item 15. Recent Sales of Unregistered Securities
Item 15. | Recent Sales of Unregistered Securities |
During the past three years, the Company has issued the following securities without registration under the Securities Act pursuant to the exemptions from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder, in each case in reliance upon the representations received from the purchasers of those securities.
On November 12, 2020, the Company entered into an Agreement and Plan of Merger, pursuant to which the Company exchanged 0.80106 newly-issued shares of Common Stock for each issued and outstanding share of common stockCommon Stock and preferred stock of Zoom Connectivity, Inc., formerly known as Minim Inc. The merger closed on December 4, 2020, and the Company issued an aggregate of 10,784,534 shares of Common Stock, at a price of $2.3498 per share, an implied valuation of approximately $30 million.
On May 26, 2020, the Company entered into a Stock Purchase Agreement with certain accredited investors, including certain members of management and the Board of Directors, in a private placement, pursuant to which the Company sold an aggregate of 2,237,103 shares of Common Stock at a purchase price of $1.52 per share. The private placement closed on May 27, 2020, and the gross proceeds to the Company at the closing were approximately $3.4 million.
On May 3, 2019, the Company entered into a Stock Purchase Agreement with certain accredited investors, including members of management and the Board of Directors, in a private placement, pursuant to which the Company sold an aggregate of 4,545,455 shares of Common Stock at a purchase price of $1.10 per share. The gross proceeds to the Company at the closing of the private placement were approximately $5.0 million.
Item 16. | Exhibits and Financial Statement Schedules |
7
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
| Exhibit No. | | Exhibit Description |
| 1.1*** | | Form of Underwriting Agreement. |
| 2.1 | | Separation and Distribution Agreement by and between Zoom Technologies, Inc. and Minim, Inc., formerly known as Zoom Telephonics, Inc. (the “Company”) (incorporated by reference to Annex B of the Preliminary Proxy Statement filed by Zoom Technologies, Inc. on May 13, 2009).* |
| | Agreement and Plan of Merger, dated as of November 12, 2020, by and among the Company, Elm Acquisition Sub, Inc., Zoom Connectivity, Inc., formerly known as Minim Inc. (“Zoom Connectivity”) and the Representative named therein (incorporated by the reference to Exhibit 10.1 to the Form 8-K filed by the Company on November 13, 2020).* |
| | Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10, filed on September 4, 2009).* |
| | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated by the reference to Exhibit 3.1 to the Form 8-K filed by the Company on November 18, 2015).* |
| | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated by the reference to Exhibit 3.1 to the Form 8-K filed by the Company on July 30, 2019).* |
| | Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.2 to the Form 8-K filed by the Company on November 18, 2015).* |
| | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated by the reference to Exhibit 3.1 to the Form 8-K filed by the Company on June 4, 2021).* |
| 3.6 | | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated by the reference to Exhibit 3.2 to the Form 8-K filed by the Company on June 4, 2021).* |
| | Certificate of Correction of Certificate of Amendment of Minim, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K/A filed by the Company on June 30, 2021).* |
| 3.8 | | Amended and Restated Bylaws of the Company.
Company (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by the Company on June 30, 2021).* |
| | Description of Securities.Securities (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed on June 10, 2021).* |
| | Opinion of Nixon Peabody LLP. |
| | Minim, Inc. 2009 Stock Option Plan (incorporated by reference to Appendix B to the Definitive Proxy Statement filed by the Company on April 30, 2013).* |
| | Minim, Inc. 2009 Directors Stock Option Plan (incorporated by reference to Appendix C to the Definitive Proxy Statement filed by the Company on April 30, 2013).* |
| | Minim, Inc. 2019 Stock Option Plan (incorporated by reference to Appendix D to the Definitive Proxy Statement filed by the Company on May 28, 2019).* |
| | Minim, Inc. 2019 Directors Stock Option Plan (incorporated by reference to Appendix C to the Definitive Proxy Statement filed by the Company on May 28, 2019).* |
| | Financing Agreement, dated as of December 18, 2012, by and between the Company and Rosenthal & Rosenthal, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company on December 21, 2012).* |
| | Intellectual Property Security Agreement, as of dated December 18, 2012, by and between the Company and Rosenthal & Rosenthal, Inc. (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by the Company on December 21, 2012).* |
| | Amendment dated March 25, 2014, effective January 1, 2013 to Financing Agreement, dated December 18, 2012,as of March 25, 2014, by and between the Company and Rosenthal & Rosenthal, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company on November 3, 2015).* |
| | Amendment dated October 29, 2015, effective January 1, 2013, to Financing Agreement, dated December 18, 2012,as of October 29, 2015, by and between the Company and Rosenthal & Rosenthal, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company on November 3, 2015).* |
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| 10.18+ | | |
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| 10.27+ | | |
| 10.28+ | | Employment Agreement, dated as of May 22, 2019, by and between Zoom Connectivity and Graham Chynoweth (incorporated by reference to Exhibit 10.28 to the Form 10-K/A filed by the Company on April 30, 2021).* |
| 10.29+ | | Employment Agreement, dated as of December 4, 2020, by and between the Company and Sean Doherty (incorporated by reference to Exhibit 10.29 to the Form 10-K/A filed by the Company on April 30, 2021).* |
| 10.30+ | | Employment Agreement, dated as of December 4, 2020, by and between the Company and Nicole Zheng (incorporated by reference to Exhibit 10.30 to the Form 10-K/A filed by the Company on April 30, 2021).* |
| 10.31+ | | Employment Agreement, dated as of November 1, 2019, by and between the Company and John Lauten (incorporated by reference to Exhibit 10.30 to the Form 10-K/A filed by the Company on April 30, 2021).* |
| | Subsidiaries.Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Registration Statement on Form S-1 filed on June 10, 2021).* |
| | Consent of Marcum LLP. |
23.2** | | 23.2Consent of Baker Newman & Noyes LLC. |
| 23.3*** | | Consent of Nixon Peabody LLP (included in Exhibit 5.1). |
| | Powers of Attorney (included on the signature pages of this Registration Statement). |
| | * | 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. |
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| | ** | Filed herewith. |
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| | +*** | Compensation Plan or Arrangement.To be filed by amendment. |
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| | † | Confidential portions of this exhibit have been redacted and filed separately with the SEC pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. |
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| | †† | Certain confidential portions of this exhibit were omitted because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. |
(b) Financial Statement Schedule
| (b) | Financial Statement Schedule |
No financial statement schedules are provided because the information either is not required or is shown in the financial statements or notes thereto incorporated by reference herein.
Item 17. Undertakings
The undersigned
Registrant
hereby undertakes:(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| | |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; |
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| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; |
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness.Provided, however,that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.
(5)
That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(6)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| | �� |
| (4) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use. |
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| (5) | That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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| (6) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
9
Pursuant to the requirements of the Securities Act of 1933, the
Registrant
has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Manchester, State of New Hampshire, on June 9, July 2, 2021.| | |
| (Registrant) |
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| |
By: | By: | /s/ Sean Doherty
| |
| | Name: | Sean Doherty
| |
| | Title: | Chief Financial Officer | |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Graham Chynoweth and Sean Doherty and each of them, as true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including any post-effective amendments and supplements, to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that such attorney-in-fact and agent, or his or her substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| | | | | |
| /s/ Graham Chynoweth | | Chief Executive Officer and Director
| | June 9, 2021 |
| Graham Chynoweth | | (Principal(Principal Executive Officer) | | July 2, 2021 |
| | | | | |
| | | | |
| /s/ Sean Doherty | | Chief Financial Officer | | June 9, 2021 |
| Sean Doherty | | (Principal(Principal Financial Officer and Principal Accounting Officer) | | July 2, 2021 |
| | | | | |
| /s/ Jeremy Hitchcock | | Executive Chairman of the Board | | |
| Jeremy Hitchcock | |
Chairman of the Board | | June 9, July 2, 2021 |
| | | | | |
| /s/ David Aronoff | | Director | | |
| David Aronoff | |
Director | | June 9, July 2, 2021 |
| | | | |
| /s/ Dan Artusi | | Director | | |
| Dan Artusi | |
Director | | June 9, July 2, 2021 |
| |
| | |
/s/ Philip Frank
| | Director | | |
| Philip Frank | |
| | June 9, 2021 |
| |
| | |
/s/ Elizabeth Hitchcock
| | Director | | June 9, July 2, 2021 |
Elizabeth Hitchcock | | | | |
/s/ Josh Horowitz | | Director | | June 9, 2021 |
Josh Horowitz | | | | |
/s/ Elizabeth Hitchcock | | | | |
/s/ Sandra Howe
Elizabeth Hitchcock | | Director | | July 2, 2021 |
| | | | |
| /s/ Joshua Horowitz | | | | |
| Joshua Horowitz | | Director | | July 2, 2021 |
| | | | |
| /s/ Sandra Howe | | | | |
| Sandra Howe | |
Director | | June 9, July 2, 2021 |
