Minim(MINM) - 2023 Q1 - Quarterly Report

Financial Performance - Total net sales decreased by $2.5 million or 19% year-over-year, from $13.3 million in Q1 2022 to $10.8 million in Q1 2023[100] - Gross profit fell to $2.6 million, representing a gross margin of 24.3%, down from 31.5% in the previous year[100] - Operating loss increased to $3.9 million in Q1 2023, compared to a loss of $2.5 million in Q1 2022, marking a 56.9% increase in losses[100] - The company reported a net loss of $4.0 million for Q1 2023, compared to a net loss of $2.5 million in Q1 2022, reflecting a 57.5% increase in losses[100] Revenue Sources - Sales of cable modems and gateways, the primary revenue source, decreased by $2.3 million or 17.9% year-over-year[102] - SaaS sales dropped to $86,000 in Q1 2023 from $144,000 in Q1 2022, a decline of 40.3%[102] - The majority of revenues are generated in North America, with lower sales outside the U.S. attributed to regulatory variations[102] Expenses - Selling and marketing expenses for the three months ended March 31, 2023, were $3.7 million, flat compared to the same period in 2022, with a 2.0% increase attributed to various factors[108] - General and administrative expenses decreased by $125 thousand to $1.3 million for the three months ended March 31, 2023, reflecting an 8.6% decline primarily due to reduced professional fees[110] - Research and development expenses for the three months ended March 31, 2023, were $1.5 million, a decrease of $58 thousand or 3.8% compared to the same period in 2022, driven by lower personnel and contract labor costs[112] Liquidity and Cash Flow - Cash and cash equivalents rose to $0.8 million as of March 31, 2023, up from $0.5 million at the end of 2022[92] - Cash provided by operating activities was $1.3 million for the three months ended March 31, 2023, compared to cash used of $4.3 million in the same period of 2022[118] - As of March 31, 2023, the company had cash and cash equivalents of $0.8 million, an increase from $0.5 million on December 31, 2022[114] - The company reported $3.8 million in borrowings outstanding and $395 thousand available on its $10.0 million line-of-credit as of March 31, 2023[114] Future Outlook - The company expects gross margin to remain volatile due to increased costs of freight, materials, and components, with potential disruptions affecting production timelines[106] - Future liquidity needs will be influenced by operating losses, sales levels, and expenditures related to product development and marketing[124] - The company has implemented cost reduction plans to align its cost structure with sales and increase liquidity[123] - There is substantial doubt regarding the company's ability to continue as a going concern without obtaining additional financing[116] - The company continues to face liquidity pressures due to supply disruptions and has conducted two reductions in force to lower operating expenses[94] - The company has approximately $57.9 million in federal and $31.6 million in state net operating loss carryforwards available to reduce future taxable income[127]