Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Jan. 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-37649 | |
Entity Registrant Name | MINIM, INC. | |
Entity Central Index Key | 0001467761 | |
Entity Tax Identification Number | 04-2621506 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 848 Elm Street | |
Entity Address, City or Town | Manchester | |
Entity Address, State or Province | NH | |
Entity Address, Postal Zip Code | 03101 | |
City Area Code | (833) | |
Local Phone Number | 966-4646 | |
Title of 12(b) Security | Common Stock, $0.01 per share | |
Trading Symbol | MINM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,632,809 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 466,124 | $ 530,110 |
Restricted cash | 500,000 | |
Accounts receivable, net of allowance of doubtful accounts of $0 and $138,331 as of September 30, 2023 and December 31, 2022, respectively | 2,999,232 | 2,758,406 |
Inventories | 10,493,021 | 25,415,206 |
Prepaid expenses and other current assets | 129,765 | 360,735 |
Total current assets | 14,088,142 | 29,564,457 |
Equipment, net | 559,464 | 636,973 |
Operating lease right-of-use assets, net | 54,015 | 173,480 |
Intangible assets, net | 37,584 | 73,301 |
Other assets | 539,538 | 511,795 |
Total assets | 15,278,743 | 30,960,006 |
Current liabilities | ||
Bank credit line | 896,796 | 4,758,663 |
Accounts payable | 10,203,069 | 2,837,191 |
Bridge loan agreement | 1,000,000 | 1,000,000 |
Current maturities of operating lease liabilities | 54,015 | 150,968 |
Accrued expenses | 1,399,007 | 4,440,724 |
Deferred revenue, current | 845,019 | 633,542 |
Total current liabilities | 14,397,905 | 13,821,088 |
Operating lease liabilities, less current maturities | 22,512 | |
Deferred revenue, noncurrent | 745,201 | 771,738 |
Total liabilities | 15,143,106 | 14,615,338 |
Commitments and Contingencies (Note 6) | ||
Stockholders’ equity | ||
Preferred Stock, authorized: 2,000,000 shares at $0.01 par value; 0 shares issued and outstanding | ||
Common Stock, authorized: 60,000,000 shares at $0.01 par value; issued and outstanding: 1,898,466 shares at September 30, 2023 and 1,877,970 shares at December 31, 2022 respectively | 471,992 | 469,492 |
Additional paid-in capital | 90,986,924 | 90,710,030 |
Accumulated deficit | (91,323,279) | (74,834,854) |
Total stockholders’ equity | 135,637 | 16,344,668 |
Total liabilities and stockholders’ equity | $ 15,278,743 | $ 30,960,006 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 138,331 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 1,898,466 | 1,877,970 |
Common stock, shares outstanding | 1,898,466 | 1,877,970 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 6,696,187 | $ 13,832,780 | $ 24,642,728 | $ 39,995,803 |
Cost of goods sold | 9,694,096 | 10,749,970 | 24,545,534 | 30,182,996 |
Gross profit | (2,997,909) | 3,082,810 | 97,194 | 9,812,807 |
Operating expenses: | ||||
Selling and marketing | 2,073,636 | 3,802,735 | 9,386,157 | 11,286,370 |
General and administrative | 963,108 | 1,922,315 | 3,460,092 | 4,991,959 |
Research and development | 687,076 | 1,310,300 | 3,358,276 | 4,227,290 |
Total operating expenses | 3,723,820 | 7,035,350 | 16,204,525 | 20,505,619 |
Operating loss | (6,721,729) | (3,952,540) | (16,107,331) | (10,692,812) |
Other expense: | ||||
Interest expense, net | 99,084 | 93,733 | 356,644 | 261,802 |
Total other expense | 99,084 | 93,733 | 356,644 | 261,802 |
Loss before income taxes | (6,820,813) | (4,046,273) | (16,463,974) | (10,954,614) |
Income taxes (benefit) | (525) | 16,307 | 24,451 | 73,026 |
Net loss | $ (6,820,287) | $ (4,062,580) | $ (16,488,425) | $ (11,027,640) |
Net loss per share: | ||||
Net loss per share, Basic | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) |
Net loss per share, Diluted | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) |
Basic weighted average common and common equivalent shares | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 |
Diluted weighted average common and common equivalent shares | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 458,850 | $ 89,313,273 | $ (59,285,610) | $ 30,486,513 |
Beginning balance, shares at Dec. 31, 2021 | 1,835,402 | |||
Net loss | (2,538,500) | (2,538,500) | ||
Stock-based compensation | 562,875 | 562,875 | ||
Stock option exercises, net | $ 1,807 | 97,362 | 99,169 | |
Stock option exercises, shares | 7,231 | |||
Ending balance, value at Mar. 31, 2022 | $ 460,657 | 89,973,510 | (61,824,110) | 28,610,057 |
Ending balance, shares at Mar. 31, 2022 | 1,842,633 | |||
Beginning balance, value at Dec. 31, 2021 | $ 458,850 | 89,313,273 | (59,285,610) | 30,486,513 |
Beginning balance, shares at Dec. 31, 2021 | 1,835,402 | |||
Net loss | (11,027,640) | |||
Ending balance, value at Sep. 30, 2022 | $ 465,786 | 90,515,197 | (70,313,249) | 20,667,734 |
Ending balance, shares at Sep. 30, 2022 | 1,863,148 | |||
Beginning balance, value at Dec. 31, 2021 | $ 458,850 | 89,313,273 | (59,285,610) | 30,486,513 |
Beginning balance, shares at Dec. 31, 2021 | 1,835,402 | |||
Net loss | (15,549,244) | |||
Ending balance, value at Dec. 31, 2022 | $ 469,492 | 90,710,030 | (74,834,854) | 16,344,668 |
Ending balance, shares at Dec. 31, 2022 | 1,877,970 | |||
Beginning balance, value at Mar. 31, 2022 | $ 460,657 | 89,973,510 | (61,824,110) | 28,610,057 |
Beginning balance, shares at Mar. 31, 2022 | 1,842,633 | |||
Net loss | (4,426,559) | (4,426,559) | ||
Stock-based compensation | 272,480 | 272,480 | ||
Stock option exercises, net | $ 2,501 | 135,134 | 137,635 | |
Stock option exercises, shares | 10,005 | |||
Ending balance, value at Jun. 30, 2022 | $ 463,158 | 90,381,124 | (66,250,669) | 24,593,613 |
Ending balance, shares at Jun. 30, 2022 | 1,852,638 | |||
Net loss | (4,062,580) | (4,062,580) | ||
Common stock issued for vested restricted stock units | 2,628 | (2,628) | ||
Stock-based compensation | 136,701 | 136,701 | ||
Stock option exercises, shares | 10,510 | |||
Ending balance, value at Sep. 30, 2022 | $ 465,786 | 90,515,197 | (70,313,249) | 20,667,734 |
Ending balance, shares at Sep. 30, 2022 | 1,863,148 | |||
Beginning balance, value at Dec. 31, 2022 | $ 469,492 | 90,710,030 | (74,834,854) | 16,344,668 |
Beginning balance, shares at Dec. 31, 2022 | 1,877,970 | |||
Net loss | (4,070,457) | (4,070,457) | ||
Common stock issued for vested restricted stock units | $ 2,391 | (2,391) | ||
Common stock issued for vested restricted stock units, shares | 9,565 | |||
Stock-based compensation | 123,500 | 123,501 | ||
Ending balance, value at Mar. 31, 2023 | $ 471,883 | 90,831,139 | (78,905,311) | 12,397,711 |
Ending balance, shares at Mar. 31, 2023 | 1,887,535 | |||
Beginning balance, value at Dec. 31, 2022 | $ 469,492 | 90,710,030 | (74,834,854) | 16,344,668 |
Beginning balance, shares at Dec. 31, 2022 | 1,877,970 | |||
Net loss | (16,488,425) | |||
Ending balance, value at Sep. 30, 2023 | $ 471,992 | 90,986,924 | (91,323,279) | 135,637 |
Ending balance, shares at Sep. 30, 2023 | 1,898,466 | |||
Beginning balance, value at Mar. 31, 2023 | $ 471,883 | 90,831,139 | (78,905,311) | 12,397,711 |
Beginning balance, shares at Mar. 31, 2023 | 1,887,535 | |||
Net loss | (5,597,681) | (5,597,681) | ||
Common stock issued for vested restricted stock units | $ 7 | (7) | ||
Common stock issued for vested restricted stock units, shares | 739 | |||
Stock-based compensation | 101,589 | 101,589 | ||
Ending balance, value at Jun. 30, 2023 | $ 471,890 | 90,932,721 | (84,502,992) | 6,901,619 |
Ending balance, shares at Jun. 30, 2023 | 1,888,274 | |||
Net loss | (6,820,287) | (6,820,287) | ||
Common stock issued for vested restricted stock units | $ 102 | (102) | ||
Common stock issued for vested restricted stock units, shares | 10,191 | |||
Stock-based compensation | 54,305 | 54,305 | ||
Ending balance, value at Sep. 30, 2023 | $ 471,992 | $ 90,986,924 | $ (91,323,279) | $ 135,637 |
Ending balance, shares at Sep. 30, 2023 | 1,898,466 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash flows used in operating activities: | |||||||
Net loss | $ (6,820,287) | $ (4,070,457) | $ (4,062,580) | $ (2,538,500) | $ (16,488,425) | $ (11,027,640) | $ (15,549,244) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 440,546 | 616,704 | |||||
Amortization of right-of-use assets | 119,465 | 133,057 | |||||
Amortization of debt issuance costs | 29,815 | 53,404 | |||||
Amortization of sales contract costs | 28,814 | ||||||
Stock based compensation | 279,394 | 972,056 | |||||
Provision (recovery) for accounts receivable allowances | (138,331) | 98,984 | |||||
Provision for inventory valuation adjustment | 839,012 | ||||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (102,495) | (1,428,785) | |||||
Inventories | 14,922,185 | 2,739,413 | |||||
Prepaid expenses and other current assets | 230,993 | 260,376 | |||||
Other assets | 26,803 | 48,846 | |||||
Accounts payable | 7,365,878 | (5,523,817) | |||||
Accrued expenses | (3,041,742) | 341,615 | |||||
Deferred revenue | 184,940 | 518,975 | |||||
Operating lease liabilities | (119,465) | (133,728) | |||||
Net cash provided by (used in) operating activities | 3,709,561 | (11,462,714) | |||||
Cash flows from investing activities: | |||||||
Purchases of equipment | (162,270) | (252,624) | |||||
Certification costs capitalized | (219,595) | (345,983) | |||||
Net cash used in investing activities | (381,865) | (598,607) | |||||
Cash flows from financing activities: | |||||||
Net proceeds from (payment on) the bank credit line | (3,891,682) | 726,081 | |||||
Repayment of government loan | (34,252) | ||||||
Proceeds from stock option exercises | 236,803 | ||||||
Net cash provided by (used in) financing activities | (3,891,682) | 928,632 | |||||
Net increase (decrease) in cash and cash equivalents | (563,986) | (11,132,689) | |||||
Cash, cash equivalents, and restricted cash - Beginning | $ 1,030,110 | $ 13,070,445 | 1,030,110 | 13,070,445 | 13,070,445 | ||
Cash, cash equivalents, and restricted cash - Ending | 466,124 | 1,937,756 | 466,124 | 1,937,756 | 1,030,110 | ||
Cash paid during the period for: | |||||||
Interest | 235,006 | 263,097 | |||||
Income taxes | 24,451 | 73,026 | |||||
Cash and cash equivalents | 466,124 | 1,437,756 | 466,124 | 1,437,756 | 530,110 | ||
Restricted cash | 500,000 | 500,000 | $ 500,000 | ||||
Total cash, cash equivalents and restricted cash | $ 466,124 | $ 1,937,756 | $ 466,124 | $ 1,937,756 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | (1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION Minim, Inc. and its wholly owned subsidiaries, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “Minim” or the “Company”. The Company delivers intelligent networking products that reliably and securely connect homes and offices around the world. We are the exclusive global license holder to the Motorola brand for home networking hardware. The Company designs and manufactures products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh home networking devices. Our AI-driven cloud software platform and applications make network management and security simple for home and business users, as well as the service providers that assist them— leading to higher customer satisfaction and decreased support burden. On January 21, 2022, Zoom Connectivity, Inc. filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to change its legal corporate name from “Zoom Connectivity, Inc.” to “Cadence Connectivity, Inc.”, effective as of January 21, 2022. Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed or omitted. In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. All intercompany balances and transactions have been eliminated in consolidation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The results of the Company’s operations can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods. Certain prior year amounts have been reclassified to conform to the current year presentation. None of the reclassifications impacted the condensed consolidated statements of operations for the three-months and nine months ended September 30, 2023. On April 17, 2023, the Company effected a 25:1 reverse stock split for each share of common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock split. Liquidity The Company’s operations have historically been financed through the issuance of common stock and borrowings. Since inception, the Company has incurred significant losses and negative cash flows from operations. During the nine months ended September 30, 2023, the Company incurred a net loss of $ 16.5 3.7 91.3 0.5 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022. The Company’s significant accounting policies did not change during the nine months ended September 30, 2023. Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments Credit Losses — Measurement of Credit Losses on Financial Instruments. There have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows . |
REVENUE AND OTHER CONTRACTS WIT
REVENUE AND OTHER CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND OTHER CONTRACTS WITH CUSTOMERS | (3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS Revenue is recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the customer. The transaction price allocated to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a three-year period that the Company has estimated based on the expected replacement of the hardware. Transaction Price Allocated to the Remaining Performance Obligations The remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced. Contract costs The Company recognizes the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. The Company has determined that certain sales commissions meet the requirements to be capitalized, and the Company amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our condensed consolidated balance sheets. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on SaaS contracts with a contract period of one year or less as sales commissions on contract renewals are commensurate with those paid on the initial contract. Contract Balances The Company records accounts receivable when it has an unconditional right to the consideration. Contract liabilities consist of deferred revenue, which represents payments received in advance of revenue recognition related to SaaS agreements and for prepayments for products or services yet to be delivered. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. The following table reflects the contract balances as of the periods ended: SCHEDULE OF CONTRACT BALANCES September 30, December 31, 2023 2022 Deferred revenue, current $ 845,019 $ 633,542 Deferred revenue, noncurrent $ 745,201 $ 771,738 During the nine months ended September 30, 2023, the change in contract balances was as follows: SCHEDULE OF CHANGE IN CONTRACT BALANCES Balance at December 31, 2022 $ 1,405,280 Billings 767,832 Revenue recognized (582,892 ) Balance at September 30, 2023 $ 1,590,220 Disaggregation of Revenue The following table sets forth our revenues by distribution channel: SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Retailers $ 6,274,558 $ 13,463,696 $ 23,122,589 $ 38,548,176 Distributors — 180,800 171,043 550,177 Other 421,629 188,284 1,349,096 897,450 Revenues $ 6,696,187 $ 13,832,780 $ 24,642,728 $ 39,995,803 The following table sets forth our revenues by product: 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cable modems & gateways $ 6,448,977 $ 13,363,315 $ 23,910,809 $ 38,460,865 Other networking products 243,528 233,962 568,304 1,009,469 SaaS 3,682 235,503 163,615 525,469 Revenues $ 6,696,187 $ 13,832,780 $ 24,642,728 $ 39,995,803 |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | (4) BALANCE SHEET COMPONENTS Inventories Inventories, net consists of the following: SCHEDULE OF INVENTORIES September 30, 2023 December 31, 2022 Materials $ 208,156 $ 397,133 Work in process 1,622,249 5,842,251 Finished goods 8,662,616 19,175,822 Total $ 10,493,021 $ 25,415,206 Finished goods includes consigned inventory held by our customers of $ 0 4.2 1.6 2.5 Accrued expenses Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES September 30, 2023 December 31, 2022 Inventory purchases $ — $ 24,901 Payroll & related benefits 37,152 430,358 Professional fees 233,232 290,588 Royalty costs — 1,650,000 Sales allowances 875,118 1,226,856 Sales and use tax 81,158 113,200 Other 172,347 704,821 Total accrued other expenses $ 1,399,007 $ 4,440,724 |
BANK CREDIT LINES AND GOVERNMEN
BANK CREDIT LINES AND GOVERNMENT LOANS | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
BANK CREDIT LINES AND GOVERNMENT LOANS | (5) BANK CREDIT LINES AND GOVERNMENT LOANS Bank Credit Line On March 12, 2021, the Company terminated its Financing Agreement and entered into a loan and security agreement with Silicon Valley Bank (the “SVB Loan Agreement”). On November 1, 2021, the Company entered into the first amendment to the SVB Loan Agreement (the “First Amendment”). The SVB Loan Agreement, as amended, provides for a revolving facility up to a principal amount of $ 25.0 The borrowing base equals the sum of (a) 85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent of the value of eligible inventory (valued at cost), (ii) 85% of the net orderly liquidation value of inventory, and (iii) $6.2 million in each, as determined by SVB from the Company’s most recent borrowing base statement; provided that SVB has the right to decrease the foregoing percentages in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the collateral or its value. The SVB Loan Agreement is secured by substantially all of the Company’s assets but excludes the Company’s intellectual property. Loans under the credit facility bear interest at a rate per annum equal to (i) at all times when a streamline period is in effect, the greater of (a) one-half of one percent (0.50%) above the Prime Rate or (b) three and three-quarters of one percent (3.75%) and (ii) at all times when a streamline period is not effect, the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter of one percent (4.25%). On December 12, 2022, the Company entered into its second Amendment to the SVB Loan Agreement (the “Second Amendment”). The Second Amendment (i) reduced the aggregate amount available under the revolving credit line from $ 25 10 The Company incurred $ 143 8 18 29 53 As of September 30, 2023, the Company had $ 0.9 0 0 The interest rate on the bank credit lines was 9.5 On March 10, 2023, Silicon Valley Bank went into receivership with the Federal Deposit Insurance Corporation (FDIC) and is now the Silicon Valley Bridge Bank. The SVB Loan Agreement has been transferred to Silicon Valley Bridge Bank, and the revolving facility remains accessible to the Company. On March 27, 2023, the SVB Loan Agreement was transferred to First-Citizens Bank & Trust Company (“First-Citizens”) upon which First-Citizens entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank. The Company has had no business service interruptions or funding issues due to the bank transfer. On October 18, 2023, the Company fully paid the $ 0.9 Covenants The SVB Loan Agreement includes a minimum interest expense per month of $ 20 In addition, pursuant to the SVB Loan Agreement, the Company cannot pay any dividends without the prior written consent of SVB. Bridge Loan On November 30, 2022 (the “Effective Date”), the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a bridge loan in the principal amount up of up to $ 1,500,000 1,000,000 500,000 Principal amounts borrowed under the Bridge Loan Agreement bear interest for the period from the Effective Date until February 28, 2023 of 8.00 14.00 18 In connection with the Bridge Loan Agreement, the Company, Slingshot Capital, and Silicon Valley Bank (the “Senior Lender”) executed a subordination agreement (the “Subordination Agreement”) on November 30, 2022. The Loan Agreement is subordinated to the outstanding indebtedness and obligations under the Company’s senior credit facility. Subject to the Senior Lender’s written consent, the Company shall grant Slingshot Capital a second-priority security interest in all of the Company’s collateral, which shall be subordinated to any and all security interests granted to the Senior Lender and at all times shall be limited to the same collateral granted to the Senior Lender under the senior credit facility. Principal and interest are not due and payable until the maturity date, which is January 15, 2024, unless the Company’s senior credit facility with the Senior Lender is paid in full in cash on an earlier date. As of September 30, 2023, the accrued interest is $ 104 The Company reimbursed Slingshot Capital $ 20,000 Slingshot Capital is owned by the Company’s Chairperson of the Board and a Board of Director, Jeremy Hitchcock and Elizabeth Hitchcock, respectively. On December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal and accrued but interest, which aggregated to $ 1,125,778 734,343 Government Loans During 2020, the Company participated in the Coronavirus Aid, Relief, and Economic Security Act and received an aggregate $ 1,128,000 1 1,068,000 34,000 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | (6) Leases The Company has entered into agreements to lease its warehouses and distribution centers and certain office space under operating leases. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less. The components of lease costs were as follows: SCHEDULE OF COMPONENTS OF LEASE COSTS 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease costs $ 40,576 $ 39,937 $ 82,369 $ 121,748 Short-term lease costs 8,900 5,400 26,700 5,400 Total lease costs $ 49,476 $ 45,337 $ 109,069 $ 127,148 The weighted-average remaining lease term and discount rate were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE Period Ended September 30, 2023 2022 Operating leases: Weighted average remaining lease term (years) 0.5 1.2 Weighted average discount rate 3.8 % 4.2 % Supplemental cash flow information and non-cash activity related to our operating leases are as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES 2023 2022 Nine Months ended September 30, 2023 2022 Operating cash flow information: Amounts included in measurement of lease liabilities $ 123,399 $ 140,899 Non-cash activities: ROU asset obtained in exchange for lease liability $ — $ 103,914 The maturity of the Company’s operating lease liabilities as of September 30, 2023 were as follows: SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES Years ended December 31, 2023 (remainder) $ 31,981 2024 22,794 Total lease payments $ 54,775 Less: imputed interest (760 ) Present value of operating lease liabilities $ 54,015 Operating lease liabilities, current $ 54,015 Operating lease liabilities, noncurrent $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | ( 7) COMMITMENTS AND CONTINGENCIES (a) Commitments The Company is party to a license agreement with Motorola Mobility LLC pursuant to which the Company has an exclusive license to use certain trademarks owned by Motorola Trademark Holdings, LLC for the manufacture, sale and marketing of consumer cable modem products, consumer routers, WiFi range extenders, MoCa adapters, cellular sensors, home powerline network adapters, and access points worldwide through a wide range of authorized sales channels. The license agreement has a term ending December 31, 2025. In connection with the License Agreement, the Company has committed to reserve a certain percentage of wholesale prices for use in advertising, merchandising and promotion of the related products. Additionally, the Company is required to make quarterly royalty payments equal to a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments as follows: SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS Years ended December 31, 2023 (remaining) $ 1,712,500 2024 7,100,000 2025 7,100,000 Total $ 15,912,500 Royalty expense under the License Agreement was $ 1.7 1.7 5.1 5.0 6.1 1.7 6.1 0 0.0 1.7 (b) Contingencies The Company is party to various lawsuits and administrative proceedings arising in the ordinary course of business. The Company evaluates such lawsuits and proceedings on a case-by-case basis, and its policy is to vigorously contest any such claims which it believes are without merit. The Company reviews the status of its legal proceedings and records a provision for a liability when it is considered probable that both a liability has been incurred and the amount of the loss can be reasonably estimated. This review is updated periodically as additional information becomes available. If both of the criteria are not met, the Company reassesses whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, the Company discloses the estimate of the amount of the loss or range of losses, that the amount is not material, or that an estimate of the loss cannot be made. At September 30, 2023, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole. The Company expenses its legal fees as incurred. In the ordinary course of its business, the Company is subject to lawsuits, arbitrations, claims, and other legal proceedings in connection with their business. Some of the legal actions include claims for substantial or unspecified compensatory and/or punitive damages. A substantial adverse judgment or other unfavorable resolution of these matters could have a material adverse effect on the Company’s financial condition, results of operations, and cash flows. Management believes that the Company has adequate legal defenses with respect to the legal proceedings to which it is a defendant or respondent and that the outcome of these pending proceedings is not likely to have a material adverse effect on the financial condition, results of operations, or cash flows of the Company. However, the Company is unable to predict the outcome of these matters. |
SIGNIFICANT CUSTOMER AND DEPEND
SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS | (8) SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS Relatively few companies account for a substantial portion of the Company’s revenues. In the three months ended September 30, 2023, two companies, including a marketplace facilitator, accounted for 10% or greater individually and 80 87 87 91 The Company’s customers generally do not enter into long-term agreements obligating them to purchase products. The Company may not continue to receive significant revenues from any of these or from other large customers. A reduction or delay in orders from any of the Company’s significant customers, or a delay or default in payment by any significant customer could materially harm the Company’s business and prospects. Because of the Company’s significant customer concentration, its net sales and operating income could fluctuate significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any of the Company’s significant customers. The Company participates in the PC peripherals industry, which is characterized by aggressive pricing practices, continually changing customer demand patterns and rapid technological developments. The Company’s operating results could be adversely affected should the Company be unable to successfully anticipate customer demand accurately; manage its product transitions, inventory levels and manufacturing process efficiently; distribute its products quickly in response to customer demand; differentiate its products from those of its competitors or compete successfully in the markets for its new products. The Company depends on many third-party suppliers for key components contained in its product offerings. For some of these components, the Company may only use a single source supplier, in part due to the lack of alternative sources of supply. During the three months ended September 30, 2023 and 2022, the Company had one supplier and two suppliers, respectively, that provided 100 91 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (9) INCOME TAXES During the three and nine months ended September 30, 2023, we recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated due to the uncertainty of realizing a benefit from those items. We have evaluated the positive and negative evidence bearing upon the Company’s ability to realize its deferred tax assets, which primarily consist of net operating loss carryforwards and research and development tax credits. We considered the history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and we have concluded that it is more likely than not that we will not realize the benefits of our deferred tax assets. As a result, as of September 30, 2023 and December 31, 2022, we recorded a full valuation allowance against our net deferred tax assets. As of September 30, 2023 and December 31, 2022, the Company had federal net operating loss carry forwards of approximately $ 62.0 60.6 They are due to expire in varying amounts from 2023 to 2041. 27.6 37.3 29.8 They are due to expire in varying amounts from 2033 through 2041. 1 16 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | (10) RELATED PARTY TRANSACTIONS The Company leases office space located at 848 Elm Street, Manchester, NH. The landlord is an affiliate entity owned by Mr. Hitchcock. The two-year facility lease agreement was effective from August 1, 2019, to July 31, 2021 and was extended to July 31, 2022. On July 18, 2022, the lease agreement was amended to a month-to-month lease arrangement and may be terminated by either party with a 60-day notice. The facility lease agreement provides for 2,656 9 8 27 24 On November 30, 2022, the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a bridge loan in the principal amount up of up to $ 1,500,000 1,000,000 500,000 Slingshot Capital is owned by the Company’s Executive Chairperson of the Board and a Board of Director, Jeremy Hitchcock and Elizabeth Hitchcock, respectively. On April 7, 2023, the previous principal executive officer Mehul Patel, resigned from Minim Inc. Jeremy Hitch, Executive Chairman of the Board became the acting principal executive officer of the Company. On December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal and accrued but interest, which aggregated to $ 1,125,778 734,343 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Net loss per share: | |
EARNINGS (LOSS) PER SHARE | (11) EARNINGS (LOSS) PER SHARE Net loss per share for the three months ended September 30, 2023 and 2022, respectively, are as follows: SCHEDULE OF NET INCOME (LOSS) PER SHARE September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Numerator: Net loss $ (6,820,287 ) $ (4,062,580 ) $ (16,488,425 ) $ (11,027,640 ) Denominator: Weighted average common shares - basic 1,890,933 1,861,090 1,886,465 1,851,916 Effect of dilutive common share equivalents — — — — Weighted average common shares - dilutive 1,890,933 1,861,090 1,886,465 1,851,916 Basic and diluted $ (3.61 ) $ (2.18 ) $ (8.74 ) $ (5.95 ) Diluted loss per common share for the three and nine months ended September 30, 2023 and 2022 excludes the effects of 2,080 1,257,581 |
REVERSE STOCK SPLIT
REVERSE STOCK SPLIT | 9 Months Ended |
Sep. 30, 2023 | |
Reverse Stock Split | |
REVERSE STOCK SPLIT | (12) REVERSE STOCK SPLIT Reverse Stock Split On March 30, 2023, the Board of Directors of Minim, Inc. approved a 1-for-25 The reverse stock split was subject to shareholder approval at a Special Shareholders Meeting (the “Special Meeting”), which took place on March 28, 2023. A majority of shareholders voted in favor of the reverse stock split. The Company’s definitive proxy statement relating to the Special Meeting filed on March 14, 2023, includes additional details regarding the Amendment. On April 17, 2023, Minim, Inc. completed a 1-for-25 25 All of the Company’s historical shares and per share information related to issued and outstanding common stock and outstanding equity awards exercisable into common stock in these consolidated financial statements have been adjusted, on a retroactive basis, to reflect the reverse stock split in quarter ending September 30, 2023. The following unaudited pro forma selected financial information reflects the impact of the reverse stock split had the effective date of the reverse stock been as of December 31, 2022. The pro forma results have been prepared for comparative purposes only and are not intended to be a projection of future operating results. SCHEDULE OF PRO FORMA FINANCIAL INFORMATION Selected financial information As Reported Pro forma Preferred Stock authorized 2,000,000 2,000,000 Preferred Stock issued 0 0 Common Stock authorized 60,000,000 60,000,000 Common Stock issued 46,949,240 1,887,969 Net Loss $ (15,549,244 ) $ (15,549,244 ) Basic and diluted net loss per share $ (0.34 ) $ (8.38 ) Weighted average common and common equivalent shares: Basic and diluted 46,399,137 1,855,965 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (13) SUBSEQUENT EVENTS Non-binding letter of intent that may result in the Company being acquired On September 29, 2023, the Company entered into a non-binding letter of intent with an investor whereby the investor would purchase $ 2.4 If the Transaction were to occur, the Letter of Intent contemplates the investor would be appointed as the Company’s chief executive officer and the investor and its nominees would be appointed to the Company’s board of directors to which they would constitute a majority of the then-board of directors. The Company and the investor are working on completing definitive transaction documents regarding the Transaction, but, as the Letter of Intent is non-binding, there can be no assurances that such definitive transaction documentation will be executed or that the Transaction will be completed. Repayment of SVB Loan Agreement On October 18, 2023, the Company fully paid the $ 0.9 The Company has evaluated subsequent events from September 30, 2023 through the date of this filing and has determined that there are no such events, other than those noted above, requiring recognition or disclosure in the financial statements. Conversion of Bridge Loan Agreement On December 6, 2023, the Company and Slingshot Capital executed a debt conversion agreement, whereby the total outstanding principal and accrued but interest, which aggregated to $ 1,125,778 734,343 Vendor Forgiveness In its efforts to manage its liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023. In aggregate, the executed release agreements resulted in a reduction of outstanding accounts payable obligations by $ 3.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments Credit Losses — Measurement of Credit Losses on Financial Instruments. There have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows . |
REVENUE AND OTHER CONTRACTS W_2
REVENUE AND OTHER CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF CONTRACT BALANCES | The following table reflects the contract balances as of the periods ended: SCHEDULE OF CONTRACT BALANCES September 30, December 31, 2023 2022 Deferred revenue, current $ 845,019 $ 633,542 Deferred revenue, noncurrent $ 745,201 $ 771,738 |
SCHEDULE OF CHANGE IN CONTRACT BALANCES | During the nine months ended September 30, 2023, the change in contract balances was as follows: SCHEDULE OF CHANGE IN CONTRACT BALANCES Balance at December 31, 2022 $ 1,405,280 Billings 767,832 Revenue recognized (582,892 ) Balance at September 30, 2023 $ 1,590,220 |
SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL | The following table sets forth our revenues by distribution channel: SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Retailers $ 6,274,558 $ 13,463,696 $ 23,122,589 $ 38,548,176 Distributors — 180,800 171,043 550,177 Other 421,629 188,284 1,349,096 897,450 Revenues $ 6,696,187 $ 13,832,780 $ 24,642,728 $ 39,995,803 The following table sets forth our revenues by product: 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cable modems & gateways $ 6,448,977 $ 13,363,315 $ 23,910,809 $ 38,460,865 Other networking products 243,528 233,962 568,304 1,009,469 SaaS 3,682 235,503 163,615 525,469 Revenues $ 6,696,187 $ 13,832,780 $ 24,642,728 $ 39,995,803 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories, net consists of the following: SCHEDULE OF INVENTORIES September 30, 2023 December 31, 2022 Materials $ 208,156 $ 397,133 Work in process 1,622,249 5,842,251 Finished goods 8,662,616 19,175,822 Total $ 10,493,021 $ 25,415,206 |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES September 30, 2023 December 31, 2022 Inventory purchases $ — $ 24,901 Payroll & related benefits 37,152 430,358 Professional fees 233,232 290,588 Royalty costs — 1,650,000 Sales allowances 875,118 1,226,856 Sales and use tax 81,158 113,200 Other 172,347 704,821 Total accrued other expenses $ 1,399,007 $ 4,440,724 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
SCHEDULE OF COMPONENTS OF LEASE COSTS | The components of lease costs were as follows: SCHEDULE OF COMPONENTS OF LEASE COSTS 2023 2022 2023 2022 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease costs $ 40,576 $ 39,937 $ 82,369 $ 121,748 Short-term lease costs 8,900 5,400 26,700 5,400 Total lease costs $ 49,476 $ 45,337 $ 109,069 $ 127,148 |
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE | The weighted-average remaining lease term and discount rate were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE Period Ended September 30, 2023 2022 Operating leases: Weighted average remaining lease term (years) 0.5 1.2 Weighted average discount rate 3.8 % 4.2 % |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES | Supplemental cash flow information and non-cash activity related to our operating leases are as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES 2023 2022 Nine Months ended September 30, 2023 2022 Operating cash flow information: Amounts included in measurement of lease liabilities $ 123,399 $ 140,899 Non-cash activities: ROU asset obtained in exchange for lease liability $ — $ 103,914 |
SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES | The maturity of the Company’s operating lease liabilities as of September 30, 2023 were as follows: SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES Years ended December 31, 2023 (remainder) $ 31,981 2024 22,794 Total lease payments $ 54,775 Less: imputed interest (760 ) Present value of operating lease liabilities $ 54,015 Operating lease liabilities, current $ 54,015 Operating lease liabilities, noncurrent $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS | In connection with the License Agreement, the Company has committed to reserve a certain percentage of wholesale prices for use in advertising, merchandising and promotion of the related products. Additionally, the Company is required to make quarterly royalty payments equal to a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments as follows: SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS Years ended December 31, 2023 (remaining) $ 1,712,500 2024 7,100,000 2025 7,100,000 Total $ 15,912,500 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net loss per share: | |
SCHEDULE OF NET INCOME (LOSS) PER SHARE | Net loss per share for the three months ended September 30, 2023 and 2022, respectively, are as follows: SCHEDULE OF NET INCOME (LOSS) PER SHARE September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Numerator: Net loss $ (6,820,287 ) $ (4,062,580 ) $ (16,488,425 ) $ (11,027,640 ) Denominator: Weighted average common shares - basic 1,890,933 1,861,090 1,886,465 1,851,916 Effect of dilutive common share equivalents — — — — Weighted average common shares - dilutive 1,890,933 1,861,090 1,886,465 1,851,916 Basic and diluted $ (3.61 ) $ (2.18 ) $ (8.74 ) $ (5.95 ) |
REVERSE STOCK SPLIT (Tables)
REVERSE STOCK SPLIT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Reverse Stock Split | |
SCHEDULE OF PRO FORMA FINANCIAL INFORMATION | SCHEDULE OF PRO FORMA FINANCIAL INFORMATION Selected financial information As Reported Pro forma Preferred Stock authorized 2,000,000 2,000,000 Preferred Stock issued 0 0 Common Stock authorized 60,000,000 60,000,000 Common Stock issued 46,949,240 1,887,969 Net Loss $ (15,549,244 ) $ (15,549,244 ) Basic and diluted net loss per share $ (0.34 ) $ (8.38 ) Weighted average common and common equivalent shares: Basic and diluted 46,399,137 1,855,965 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||||||||
Net income (loss) attributable to parent | $ 6,820,287 | $ 5,597,681 | $ 4,070,457 | $ 4,062,580 | $ 4,426,559 | $ 2,538,500 | $ 16,488,425 | $ 11,027,640 | $ 15,549,244 |
Net cash provided by (used in) operating activities | 3,709,561 | (11,462,714) | |||||||
Accumulated deficit | 91,323,279 | 91,323,279 | 74,834,854 | ||||||
Cash and cash equivalents, at carrying value | $ 466,124 | $ 1,437,756 | $ 466,124 | $ 1,437,756 | $ 530,110 |
SCHEDULE OF CONTRACT BALANCES (
SCHEDULE OF CONTRACT BALANCES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, current | $ 845,019 | $ 633,542 |
Deferred revenue, noncurrent | $ 745,201 | $ 771,738 |
SCHEDULE OF CHANGE IN CONTRACT
SCHEDULE OF CHANGE IN CONTRACT BALANCES (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Beginning balance | $ 1,405,280 |
Billings | 767,832 |
Revenue recognized | (582,892) |
Ending balance | $ 1,590,220 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY DISTRIBUTION CHANNEL (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 6,696,187 | $ 13,832,780 | $ 24,642,728 | $ 39,995,803 |
Cable Modems and Gateways [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,448,977 | 13,363,315 | 23,910,809 | 38,460,865 |
Other Networking Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 243,528 | 233,962 | 568,304 | 1,009,469 |
Software As A Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,682 | 235,503 | 163,615 | 525,469 |
Retailers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,274,558 | 13,463,696 | 23,122,589 | 38,548,176 |
Distributors [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 180,800 | 171,043 | 550,177 | |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 421,629 | $ 188,284 | $ 1,349,096 | $ 897,450 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Materials | $ 208,156 | $ 397,133 |
Work in process | 1,622,249 | 5,842,251 |
Finished goods | 8,662,616 | 19,175,822 |
Total | $ 10,493,021 | $ 25,415,206 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory purchases | $ 24,901 | |
Payroll & related benefits | 37,152 | 430,358 |
Professional fees | 233,232 | 290,588 |
Royalty costs | 1,650,000 | |
Sales allowances | 875,118 | 1,226,856 |
Sales and use tax | 81,158 | 113,200 |
Other | 172,347 | 704,821 |
Total accrued other expenses | $ 1,399,007 | $ 4,440,724 |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details Narrative) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods held by customer | $ 0 | $ 4.2 |
Inventory reserves | $ 1.6 | $ 2.5 |
BANK CREDIT LINES AND GOVERNM_2
BANK CREDIT LINES AND GOVERNMENT LOANS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 06, 2023 | Oct. 18, 2023 | Nov. 30, 2022 | Mar. 12, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 12, 2022 | Dec. 30, 2020 | |
Line of Credit Facility [Line Items] | ||||||||||||
Amortization of debt issuance costs | $ 29,815 | $ 53,404 | ||||||||||
Lines of credit | $ 896,796 | 896,796 | $ 4,758,663 | |||||||||
Interest expense | 99,084 | $ 93,733 | 356,644 | 261,802 | ||||||||
Accured interest | 104,000 | 104,000 | ||||||||||
Paycheck Protection Program [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate, percentage | 1% | |||||||||||
Repayments of debt | 34,000 | |||||||||||
Unsecured debt | $ 1,128,000 | |||||||||||
Loan forgiveness | $ 1,068,000 | |||||||||||
SVB Loan Agreement [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, description | The borrowing base equals the sum of (a) 85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent of the value of eligible inventory (valued at cost), (ii) 85% of the net orderly liquidation value of inventory, and (iii) $6.2 million in each, as determined by SVB from the Company’s most recent borrowing base statement; provided that SVB has the right to decrease the foregoing percentages in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the collateral or its value. | |||||||||||
Total outstanding amount | $ 900,000 | |||||||||||
Interest expense | 20,000 | |||||||||||
SVB Loan Agreement [Member] | Slingshot Capital LLC [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate, percentage | 8% | |||||||||||
Bridge Loan Agreement [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Total outstanding amount | $ 1,125,778 | |||||||||||
Unpaid bear interest rate percentage | 14% | |||||||||||
Annual interest rate percentage | 18% | |||||||||||
Debt instrument, collateral | In connection with the Bridge Loan Agreement, the Company, Slingshot Capital, and Silicon Valley Bank (the “Senior Lender”) executed a subordination agreement (the “Subordination Agreement”) on November 30, 2022. The Loan Agreement is subordinated to the outstanding indebtedness and obligations under the Company’s senior credit facility. Subject to the Senior Lender’s written consent, the Company shall grant Slingshot Capital a second-priority security interest in all of the Company’s collateral, which shall be subordinated to any and all security interests granted to the Senior Lender and at all times shall be limited to the same collateral granted to the Senior Lender under the senior credit facility. | |||||||||||
Number of shares converted | 734,343 | |||||||||||
Bridge Loan Agreement [Member] | Slingshot Capital LLC [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Proceeds from short term debt | $ 1,000,000 | |||||||||||
Proceeds from other drawn | 500,000 | |||||||||||
Repayments of debt | 20,000 | |||||||||||
Bridge Loan Agreement [Member] | Maximum [Member] | Slingshot Capital LLC [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal amount | $ 1,500,000 | |||||||||||
Revolving Credit Facility [Member] | SVB Loan Agreement [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, principal amount | $ 25,000,000 | |||||||||||
Line of credit facility, description | Loans under the credit facility bear interest at a rate per annum equal to (i) at all times when a streamline period is in effect, the greater of (a) one-half of one percent (0.50%) above the Prime Rate or (b) three and three-quarters of one percent (3.75%) and (ii) at all times when a streamline period is not effect, the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter of one percent (4.25%). | |||||||||||
Unamortized discount | $ 143,000 | |||||||||||
Amortization of debt issuance costs | 8,000 | $ 18,000 | 29,000 | $ 53,000 | ||||||||
Lines of credit | 900,000 | 900,000 | ||||||||||
Deferred finance costs | 0 | 0 | ||||||||||
Line of credit facility remaining borrowing capacity | $ 0 | $ 0 | ||||||||||
Interest rate, percentage | 9.50% | 9.50% | ||||||||||
Revolving Credit Facility [Member] | SVB Loan Agreement [Member] | Maximum [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit, value | 25,000,000 | |||||||||||
Revolving Credit Facility [Member] | SVB Loan Agreement [Member] | Minimum [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit, value | $ 10,000,000 |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE COSTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||||
Operating lease costs | $ 40,576 | $ 39,937 | $ 82,369 | $ 121,748 |
Short-term lease costs | 8,900 | 5,400 | 26,700 | 5,400 |
Total lease costs | $ 49,476 | $ 45,337 | $ 109,069 | $ 127,148 |
SCHEDULE OF WEIGHTED AVERAGE RE
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases | ||
Weighted average remaining lease term | 6 months | 1 year 2 months 12 days |
Weighted average discount rate | 3.80% | 4.20% |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||
Amounts included in measurement of lease liabilities | $ 123,399 | $ 140,899 |
ROU asset obtained in exchange for lease liability | $ 103,914 |
SCHEDULE OF MATURITY OF OPERATI
SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
2023 (remainder) | $ 31,981 | |
2024 | 22,794 | |
Total lease payments | 54,775 | |
Less: imputed interest | (760) | |
Present value of operating lease liabilities | 54,015 | |
Operating lease liabilities, current | 54,015 | $ 150,968 |
Operating lease liabilities, noncurrent | $ 22,512 |
Leases (Details Narrative)
Leases (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Lease term | initial term of 12 months or less. |
SCHEDULE OF MINIMUM ANNUAL ROYA
SCHEDULE OF MINIMUM ANNUAL ROYALTY PAYMENTS (Details) | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 (remaining) | $ 1,712,500 |
2024 | 7,100,000 |
2025 | 7,100,000 |
Total | $ 15,912,500 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Royalty expense | $ 1.7 | $ 1.7 | $ 5.1 | $ 5 |
Royalty payments | 6.1 | 1.7 | ||
Accounts payable | 6.1 | 0 | 6.1 | 0 |
Accrued expenses | $ 0 | $ 1.7 | $ 0 | $ 1.7 |
SIGNIFICANT CUSTOMER AND DEPE_2
SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Companies [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 80% | 87% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Companies [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 91% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Companies [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 87% | |||
Inventories [Member] | Supplier Concentration Risk [Member] | Two Suppliers [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 100% | 91% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||||
Income Tax Expense (Benefit) | $ (525) | $ 16,307 | $ 24,451 | $ 73,026 | |
MEXICO | |||||
Operating Loss Carryforwards [Line Items] | |||||
Income Tax Expense (Benefit) | 1,000 | $ 16,000 | |||
Domestic Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforward | 62,000,000 | $ 62,000,000 | $ 60,600,000 | ||
Expiration term | They are due to expire in varying amounts from 2023 to 2041. | ||||
Net operating loss carry forwards expiration | 27,600,000 | $ 27,600,000 | |||
State and Local Jurisdiction [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforward | $ 37,300,000 | $ 37,300,000 | $ 29,800,000 | ||
Expiration term | They are due to expire in varying amounts from 2033 through 2041. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 3 Months Ended | 9 Months Ended | |||||
Dec. 06, 2023 USD ($) shares | Dec. 06, 2023 shares | Nov. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) ft² | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) ft² | Sep. 30, 2022 USD ($) | |
Related Party Transaction [Line Items] | |||||||
Area of land | ft² | 2,656 | 2,656 | |||||
Rent expense | $ 9,000 | $ 8,000 | $ 27,000 | $ 24,000 | |||
Bridge Loan Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Converted to common stock | shares | 734,343 | ||||||
Bridge Loan Agreement [Member] | Slingshot Capital LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from short term debt | $ 1,000,000 | ||||||
Proceeds from other drawn | 500,000 | ||||||
Bridge Loan Agreement [Member] | Slingshot Capital LLC [Member] | Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregated amount | $ 1,125,778 | ||||||
Converted to common stock | shares | 734,343 | ||||||
Bridge Loan Agreement [Member] | Slingshot Capital LLC [Member] | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Principal amount | $ 1,500,000 |
SCHEDULE OF NET INCOME (LOSS) P
SCHEDULE OF NET INCOME (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Net loss per share: | |||||||||
Net loss | $ (6,820,287) | $ (5,597,681) | $ (4,070,457) | $ (4,062,580) | $ (4,426,559) | $ (2,538,500) | $ (16,488,425) | $ (11,027,640) | $ (15,549,244) |
Weighted average common shares - basic | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 | |||||
Effect of dilutive common share equivalents | |||||||||
Weighted average common shares - dilutive | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 | |||||
Basic | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) | |||||
Diluted | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net loss per share: | ||||
Anti-dilutive securities | 2,080 | 2,080 | 1,257,581 | 1,257,581 |
SCHEDULE OF PRO FORMA FINANCIAL
SCHEDULE OF PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Preferred Stock authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||||||
Preferred Stock issued | 0 | 0 | 0 | ||||||
Common Stock authorized | 60,000,000 | 60,000,000 | 60,000,000 | ||||||
Common Stock issued | 1,898,466 | 1,898,466 | 1,877,970 | ||||||
Net Income (Loss) Attributable to Parent | $ (6,820,287) | $ (5,597,681) | $ (4,070,457) | $ (4,062,580) | $ (4,426,559) | $ (2,538,500) | $ (16,488,425) | $ (11,027,640) | $ (15,549,244) |
Basic net loss per share | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) | |||||
Diluted net loss per share | $ (3.61) | $ (2.18) | $ (8.74) | $ (5.95) | |||||
Weighted average common and common equivalent shares, basic | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 | |||||
Weighted average common and common equivalent shares, diluted | 1,890,933 | 1,861,090 | 1,886,465 | 1,851,916 | |||||
Reverse Stock Split [Member] | |||||||||
Preferred Stock authorized | 2,000,000 | ||||||||
Preferred Stock authorized, Pro forma | 2,000,000 | ||||||||
Preferred Stock issued | 0 | ||||||||
Preferred Stock issued, Pro forma | 0 | ||||||||
Common Stock authorized | 60,000,000 | ||||||||
Common Stock authorized, Pro forma | 60,000,000 | ||||||||
Common Stock issued | 46,949,240 | ||||||||
Common Stock issued, Pro forma | 1,887,969 | ||||||||
Net Loss, Pro forma | $ (15,549,244) | ||||||||
Basic net loss per share | $ (0.34) | ||||||||
Diluted net loss per share | (0.34) | ||||||||
Basic net loss per share, Pro forma | (8.38) | ||||||||
Diluted net loss per share, Pro forma | $ (8.38) | ||||||||
Weighted average common and common equivalent shares, basic | 46,399,137 | ||||||||
Weighted average common and common equivalent shares, diluted | 46,399,137 | ||||||||
Weighted average common and common equivalent shares, basic Pro forma | 1,855,965 | ||||||||
Weighted average common and common equivalent shares, diluted Pro forma | 1,855,965 |
REVERSE STOCK SPLIT (Details Na
REVERSE STOCK SPLIT (Details Narrative) - shares | Apr. 17, 2023 | Mar. 30, 2023 |
Reverse Stock Split | ||
Stockholders' equity, reverse stock split | 1-for-25 | 1-for-25 |
Common shares held | 25 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Dec. 06, 2023 | Dec. 06, 2023 | Oct. 18, 2023 | Oct. 18, 2023 | Sep. 29, 2023 | Dec. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 |
Subsequent Event [Line Items] | ||||||||
Accounts payable | $ 6,100,000 | $ 0 | ||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Accounts payable | $ 3,000,000 | |||||||
SVB Loan Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Revolving facility | $ 900,000 | |||||||
SVB Loan Agreement [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Revolving facility | $ 900,000 | |||||||
Bridge Loan Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Revolving facility | $ 1,125,778 | |||||||
Converted to common stock | 734,343 | |||||||
Bridge Loan Agreement [Member] | Subsequent Event [Member] | Slingshot Capital LLC [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Aggregated amount | $ 1,125,778 | |||||||
Converted to common stock | 734,343 | |||||||
Pro Forma [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Convertible preferred stock | $ 2,400,000 |