Minim(MINM) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides the unaudited financial statements and management's analysis of FIEE, Inc. for the three months ended March 31, 2025 ITEM 1. FINANCIAL STATEMENTS This section presents FIEE, Inc.'s unaudited condensed consolidated financial statements for Q1 2025 and 2024, including balance sheets, operations, equity, and cash flows Condensed Consolidated Balance Sheets (Unaudited) This section provides the unaudited condensed consolidated balance sheets as of March 31, 2025, and December 31, 2024 | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :--------------------------- | :------------------ | | Cash and cash equivalents | $9,104 | $30,162 | | Total current assets | $103,453 | $164,919 | | Total assets | $357,894 | $307,035 | | Total current liabilities | $846,703 | $437,027 | | Total liabilities | $861,796 | $437,027 | | Total stockholders' deficit | $(503,902) | $(129,992) | - The company's cash and cash equivalents decreased significantly from $30,162 at December 31, 2024, to $9,104 at March 31, 2025[12] - Total current liabilities more than doubled from $437,027 at December 31, 2024, to $846,703 at March 31, 2025, primarily due to new 'Due to related party' liabilities of $355,170 and 'Current maturities of operating lease liabilities' of $58,688[12] Condensed Consolidated Statements of Operations (Unaudited) This section presents the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $125 | $639,893 | | Cost of goods sold | $750 | $432,634 | | Gross (loss) margin | $(625) | $207,259 | | Total operating expenses | $370,496 | $3,476,938 | | Operating loss | $(371,121) | $(3,269,679) | | Net loss | $(373,910) | $(3,258,955) | | Basic and diluted net loss per share | $(0.10) | $(1.18) | - Net sales decreased by 100% from $639,893 in Q1 2024 to $125 in Q1 2025, reflecting a significant shift away from previous business operations[15] - The company reported a gross loss of $625 in Q1 2025, compared to a gross margin of $207,259 in Q1 2024[15] - Net loss significantly improved from $(3,258,955) in Q1 2024 to $(373,910) in Q1 2025, largely due to a substantial reduction in operating expenses, particularly the absence of 'Vendor liability forgiveness, net of asset transfers' which was $2,364,955 in Q1 2024[15] Condensed Consolidated Statements of Stockholders' Equity (Unaudited) This section presents the unaudited condensed consolidated statements of stockholders' equity for the three months ended March 31, 2025 and December 31, 2024 | Metric | December 31, 2024 | March 31, 2025 | | :------------------------ | :---------------- | :------------- | | Accumulated Deficit | $(96,693,056) | $(97,066,966) | | Total Stockholders' Deficit | $(129,992) | $(503,902) | - The accumulated deficit increased from $(96,693,056) at December 31, 2024, to $(97,066,966) at March 31, 2025, primarily due to the net loss incurred during the quarter[18] - Total stockholders' deficit worsened from $(129,992) at December 31, 2024, to $(503,902) at March 31, 2025[18] Condensed Consolidated Statements of Cash Flows (Unaudited) This section presents the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(371,058) | $(2,482,265) | | Net cash used in investing activities | $- | $- | | Net cash provided by financing activities | $350,000 | $2,800,000 | | Net increase (decrease) in cash and cash equivalents | $(21,058) | $317,735 | | Cash and cash equivalents - Ending | $9,104 | $1,027,057 | - Net cash used in operating activities decreased significantly from $(2,482,265) in Q1 2024 to $(371,058) in Q1 2025[21] - Cash provided by financing activities decreased from $2,800,000 in Q1 2024 (due to preferred stock issuance) to $350,000 in Q1 2025 (due to proceeds from debt)[21] - The company experienced a net decrease in cash and cash equivalents of $(21,058) in Q1 2025, resulting in an ending cash balance of $9,104[21] Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed notes accompanying the unaudited condensed consolidated financial statements (1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION This note describes FIEE, Inc.'s business transformation from a networking company to a digital service provider focused on AI and data analytics - FIEE, Inc. (formerly Minim, Inc.) pivoted from a networking company with an exclusive Motorola brand license (until 2023) to a digital service provider focused on AI and data analytics for content creation and brand management[23][25][26] - The company's new focus includes SaaS solutions for digital presence optimization, customized graphic/video content, and editorial calendars, delivered through digital account management, content operations/growth analytics, and community engagement[26][27] - The company changed its name from Minim, Inc. to FiEE, Inc. effective February 27, 2025[28] - As of March 31, 2025, the Company had an accumulated deficit of $97 million and cash and cash equivalents of $9 thousand, indicating significant losses and negative cash flows from operations[31] - On March 25, 2025, the Company entered into a non-binding LOI to acquire 100% equity interests in Suzhou Yixuntong Network Technology Co., Ltd. for up to $2,000,000, aiming to expand its Multi-Channel Network business[32][33] (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note confirms that the Company's significant accounting policies remained unchanged during the quarter - The Company's significant accounting policies remained unchanged during the three months ended March 31, 2025, as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[37] (3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS This note details the Company's revenue recognition policies and the significant shift in revenue composition from hardware to SaaS - Revenue from hardware products bundled with SaaS offerings is recognized when product control transfers, with the SaaS portion recognized ratably over an estimated one to three-year period[39] Revenue by Source | Revenue Source | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Retailers | $- | $638,904 | | Other online and offline channels | $125 | $989 | | Total Revenue | $125 | $639,893 | Revenue by Product | Product | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Cable modems & gateways | $- | $638,804 | | Other networking products | $- | $1,089 | | SaaS | $125 | $- | | Total Revenue | $125 | $639,893 | - The company's revenue composition shifted entirely to SaaS in Q1 2025, with $125 in SaaS revenue, compared to $639,893 from hardware products (cable modems & gateways, other networking products) in Q1 2024[44] (4) BALANCE SHEET COMPONENTS This note provides a breakdown of key balance sheet components, particularly other payables and accrued expenses Other Payables and Accrued Expenses | Other Payables and Accrued Expenses | March 31, 2025 | March 31, 2024 | | :---------------------------------- | :------------- | :------------- | | Payroll & related benefits | $64,344 | $141,559 | | Professional fees | $116,690 | $104,947 | | Board of director fees | $12,500 | $173,000 | | Sales and use tax | $81,708 | $150,009 | | Vendor contingent payments | $26,905 | $415,259 | | Total other payables and accrued expenses | $332,079 | $1,011,679 | - Total other payables and accrued expenses decreased from $1,011,679 at March 31, 2024, to $332,079 at March 31, 2025, driven by significant reductions in vendor contingent payments, board of director fees, and payroll & related benefits[45] (5) LEASES This note details changes in the Company's lease agreements and the resulting impact on lease liabilities - The Company's previous office and warehouse leases expired, and a newly established Hong Kong subsidiary executed new office lease agreements in February 2025[46] Lease Liability Components | Lease Liability Component | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Current operating lease liabilities | $58,688 | $9,061 | | Long-term operating lease liabilities | $15,093 | $- | | Total lease liabilities | $73,781 | $9,061 | - Total lease liabilities increased significantly from $9,061 in Q1 2024 to $73,781 in Q1 2025, reflecting the new lease agreements[47] (6) COMMITMENTS AND CONTINGENCIES This note outlines the Company's commitments, including the termination of the Motorola license, vendor liability reductions, and legal proceedings - The exclusive license agreement with Motorola Mobility LLC for consumer networking products was cancelled in 2023, and all related royalty payments and obligations were satisfied by January 22, 2024, through asset transfers and a debt settlement agreement[49][50][52] - The Company negotiated liability release agreements with vendors in Q4 2023, reducing outstanding accounts payable by $3.6 million from $5.0 million to $1.4 million, contingent on payment of negotiated amounts[53] - As of March 31, 2025, management believes no current legal proceedings are expected to have a material adverse effect on the Company's business, operating results, or financial condition[55] (7) SIGNIFICANT CUSTOMERS AND DEPENDENCY ON KEY SUPPLIERS This note discusses customer acquisition for the new SaaS business and the absence of significant supplier concentration - The Company acquired 1 new customer upon launching its SaaS product on March 28, 2025, and had 39 customers by April 30, 2025, with prepaid subscription fees totaling $203 thousand[57] - In Q1 2024, two companies accounted for 100% of total net sales, and one company accounted for 100% of accounts receivable, indicating high customer concentration in the prior business model[58] - The Company did not have any concentration of suppliers during the three months ended March 31, 2025 and 2024[59] (8) RELATED PARTY TRANSACTIONS This note details transactions with related parties, including changes in rent expense and new promissory notes - Rent expense from a related party (former Chairman of the Board) decreased from $14 thousand in Q1 2024 to $0 in Q1 2025, as the lease was not renewed in September 2024[60] Due to Related Party | Due to Related Party | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------- | :-------------------------------- | :-------------------------------- | | Cao Yu | $53,000 | $- | | David Lazar | $302,170 | $- | | Total | $355,170 | $- | - A new unsecured promissory note with David Lazar (Noteholder) for a principal amount of $300,000 became effective February 18, 2025, due by December 31, 2025[63] (9) EARNINGS (LOSS) PER SHARE This note presents the calculation of basic and diluted net loss per share for the periods presented Earnings (Loss) Per Share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(373,910) | $(3,258,955) | | Weighted average common shares – basic | 3,713,792 | 2,770,382 | | Basic and diluted net loss per share | $(0.10) | $(1.18) | - Basic and diluted net loss per share improved from $(1.18) in Q1 2024 to $(0.10) in Q1 2025, reflecting a reduced net loss despite an increase in weighted average common shares[64] (10) EQUITY This note describes significant equity transactions, including preferred stock issuance, warrant sales, and subsequent agreements - On January 23, 2024, the Company sold 2,000,000 shares of Series A Preferred Stock and issued warrants to purchase 2,800,000 shares of Common Stock to David Lazar for an aggregate purchase price of $2,800,000[65] - On February 18, 2025, David Lazar sold his Series A Preferred Stock, warrants, and receivables to Cao Yu, Hu Bin, and Youxin Consulting Limited for $500,000, with $300,000 directed to the Company for 1,200,000 newly issued Common Stock shares to Lazar (later rescinded and replaced with a Convertible Note)[71] - On May 9, 2025, a Second Amended and Restated Securities Purchase Agreement was executed, removing references to Lazar Common Stock and Earnout Shares, and Purchasers agreed to surrender the Warrant and forgive Lazar Receivables[72] (11) SUBSEQUENT EVENTS This note discloses significant events occurring after the balance sheet date, including board appointments, Nasdaq compliance issues, and new financing agreements - Hu Bin, Cao Yu, David Natan, and Chan Oi Fat were appointed to the Company's board of directors and various committees in April 2025[73][74] - The Company received a second letter from Nasdaq on April 7, 2025, citing additional deficiencies including failure to comply with shareholder approval requirements and majority independent board/committee requirements, in addition to the previously noted stockholders' equity requirement[81] - On May 9, 2025, the Company sold 1,585,366 shares of common stock to Cao Yu for $2,600,000 and 853,659 shares to Hu Bin for $1,400,000[84][85] - On May 9, 2025, the Company entered into a Securities Purchase Agreement with Helena Global Investment Opportunities I Ltd. to potentially issue and sell up to $15,000,000 of Common Stock over 36 months to fund future liquidity needs[129][130] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses FIEE, Inc.'s financial condition and results, highlighting the strategic pivot to AI-driven SaaS, declining sales, and liquidity challenges Overview This overview summarizes the Company's strategic transition to a digital service provider and its current financial position - The Company is transitioning from a WiFi/Software as a Service platform for connected homes to a digital service provider integrating AI and data analytics into content creation and brand management[92] - Cash and cash equivalents decreased from $30 thousand on December 31, 2024, to $9 thousand on March 31, 2025, with a negative working capital of $743 thousand[94] - Net sales for the three months ended March 31, 2025, were $125, a significant decrease from $640 thousand in the prior year, reflecting declining revenues[96] Recent Accounting Standards This section confirms no new significant accounting pronouncements impacted the Company's financial statements - There have been no new accounting pronouncements with significant or potential significance to the Company's financial position, results of operations, and cash flows during the period[38][97] Critical Accounting Policies and Estimates This section states that no significant changes occurred in the Company's critical accounting policies and estimates - No significant changes occurred in the Company's critical accounting policies and estimates, including revenue recognition, product returns, inventory valuation, costs of goods sold, warrants, and valuation of deferred tax assets, for the three months ended March 31, 2025[99] Results of Operations This section analyzes the Company's financial performance, detailing changes in net sales, cost of goods sold, gross margin, and operating expenses Results of Operations Summary | Metric | March 31, 2025 | March 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------- | :------------- | :--------- | :--------- | | Net sales | $125 | $639,893 | $(639,768) | (100.0)% | | Cost of goods sold | $750 | $432,634 | $(431,884) | (99.8)% | | Gross profit (loss) | $(625) | $207,259 | $(207,884) | (100.3)% | | Selling and marketing | $- | $21,037 | $(21,037) | (100.0)% | | General and administrative | $340,496 | $1,018,516 | $(678,020) | (66.6)% | | Research and development | $30,000 | $72,430 | $(42,430) | (58.6)% | | Vendor liability forgiveness, net of asset transfers | $- | $2,364,955 | $(2,364,955) | (100.0)% | | Total operating expenses | $370,496 | $3,476,938 | $(3,106,442) | (89.3)% | | Operating loss | $(371,121) | $(3,269,679) | $2,898,558 | (88.6)% | | Net loss | $(373,910) | $(3,258,955) | $2,885,045 | (88.5)% | Net Sales This section details the significant year-over-year decrease in net sales due to the strategic business transition - Total net sales decreased by $640 thousand (100%) year-over-year, reflecting the strategic transition from legacy hardware to SaaS solutions[102] - The new AI and big data-focused SaaS business secured its first customer orders and generated initial sales in March 2025, onboarding 39 customers by April 30, 2025, with $203 thousand in prepaid service fees[102] Cost of Goods Sold and Gross Margin This section explains the decrease in gross profit and the resulting gross loss due to lower sales and upfront costs - Gross profit decreased due to lower sales, primarily from the Motorola license termination, resulting in a gross loss of (500)% in Q1 2025 compared to a 32.4% gross margin in Q1 2024[104][105] - The Q1 2025 gross margin is not indicative of future trends, as the new business incurred elevated upfront costs during its initial launch phase[107] Selling and Marketing This section highlights the significant reduction in selling and marketing expenses - Selling and marketing expenses decreased by $21 thousand (100%) in Q1 2025 compared to Q1 2024, primarily due to reductions in sales support costs[108] General and Administrative This section details the decrease in general and administrative expenses due to business reallocation and cost reduction efforts - General and administrative expenses decreased by $678 thousand (66.6%) in Q1 2025, mainly due to the reallocation of business operations from hardware to software focus and cost reduction efforts[110] Research and Development This section outlines the decrease in research and development expenses and the Company's new SaaS platform development - Research and development expenses decreased by $42 thousand (58.6%) in Q1 2025, primarily due to reduced software subscriptions and support costs[112] - In Q1 2025, the Company collaborated with a new vendor to develop the 'FiEE All-in-One Media Operations SaaS Platform' for content creation, multi-platform publishing, data analytics, and collaboration[112] Liquidity and Capital Resources This section discusses the Company's cash position, working capital, going concern issues, and future funding strategies - As of March 31, 2025, cash and cash equivalents were $9 thousand, down from $30 thousand on December 31, 2024, with negative working capital of $743 thousand[114] - Substantial doubt exists about the Company's ability to continue as a going concern beyond the next 12 months, requiring additional liquidity[116] - Management anticipates needing approximately $10 million in total funding over the next 3 years to support the strategic transition to SaaS, with allocations for infrastructure development, AI technology, and system enhancements[128] - On May 9, 2025, the Company entered into a Purchase Agreement with Helena Global Investment Opportunities I Ltd., granting the right to issue and sell up to $15,000,000 of Common Stock over 36 months to address liquidity needs[129][130] Cash Flows This section analyzes the Company's cash flow activities from operations, investing, and financing Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cash (used in) operating activities | $(371,058) | $(2,482) | | Cash used in investing activities | $- | $- | | Cash provided by financing activities | $350,000 | $2,800 | | Net increase (decrease) in cash and cash equivalents | $(21,058) | $318 | - Net cash used in operating activities decreased significantly from $2.5 million in Q1 2024 to $371 thousand in Q1 2025, primarily due to reduced net loss and changes in working capital[118][119] - Financing activities provided $350 thousand in Q1 2025 from debt proceeds, a decrease from $2.8 million in Q1 2024 from preferred stock issuance[121] Future Liquidity Needs This section addresses the Company's anticipated capital requirements and strategies for securing additional funding - The Company's current cash and cash equivalents are believed to be insufficient to fund working capital, capital expenditures, and operations for the next twelve months, necessitating additional equity or debt financing[124] - Future capital requirements will be influenced by operating losses, sales levels, R&D programs, working capital needs, debt servicing, regulatory approvals, and market acceptance of products[125] - The Company has federal net operating loss carryforwards of approximately $69.3 million, but a full valuation allowance has been established against deferred income tax assets[127] Commitments and Contractual Obligations This section confirms no material changes to the Company's capital commitments and contractual obligations - No material changes to capital commitments and contractual obligations were reported during the three months ended March 31, 2025, beyond those disclosed in the Form 10-K for December 31, 2024[136] Off-Balance Sheet Arrangements This section states that the Company had no material off-balance sheet arrangements - The Company did not have any material off-balance sheet arrangements as of March 31, 2025[137] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, FIEE, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[138] ITEM 4. CONTROLS AND PROCEDURES Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2024, finding them effective with no material changes in internal control - The Company's disclosure controls and procedures were deemed effective as of March 31, 2024, following an evaluation by management, including the CEO and CFO[139][140] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2025, that have affected, or are reasonably likely to affect, internal control over financial reporting[141] PART II - OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits ITEM 1. LEGAL PROCEEDINGS The Company reported no legal proceedings for the period - There are no legal proceedings to report[143] ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K - No material changes to the risk factors set forth in the 2024 Annual Report on Form 10-K were identified[144] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company reported no unregistered sales of equity securities or use of proceeds for the period - There are no unregistered sales of equity securities and use of proceeds to report[145] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Company reported no defaults upon senior securities for the period - There are no defaults upon senior securities to report[146] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the Company - Mine safety disclosures are not applicable to the Company[147] ITEM 5. OTHER INFORMATION The Company reported no other information for the period - There is no other information to report[148] ITEM 6. EXHIBITS This section lists the exhibits filed with the Form 10-Q, including amendments to the Certificate of Incorporation and Bylaws, Securities Purchase Agreements, and certifications required by the Sarbanes-Oxley Act - Key exhibits include the Certificate of Amendment of Amended and Restated Certificate of Incorporation (effective Feb 27, 2025), Second Amended and Restated Bylaws, and Amended and Restated Securities Purchase Agreement (effective Feb 18, 2025)[150] - Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[150] SIGNATURES The report is duly signed on behalf of FIEE, INC. by Li Wai Chung, Chief Executive Officer and President, as the Principal Executive Officer - The report was signed by Li Wai Chung, Chief Executive Officer and President of FIEE, INC., on May 15, 2025[155]