Minim(US:MINM)2024-01-08 12:30Financial Performance - For the three months ended September 30, 2023, net sales decreased by $7.1 million or 51.6% compared to the same period in 2022, and for the nine months, net sales decreased by $15.4 million or 38.4%[104]. - The company generated net sales of $6.7 million and $24.6 million for the three and nine months ended September 30, 2023, respectively, compared to $13.8 million and $40.0 million for the same periods in 2022[97]. - Sales of Motorola branded cable modems and gateways were the primary contributors to the decline in net sales[105]. - SaaS offerings saw a significant decrease, with sales dropping by $233 thousand or 98.4% in the three months ended September 30, 2023, and by $361 thousand or 68.9% during the nine months[105]. - The company's gross profit for the three months ended September 30, 2023, was a loss of $2.998 million, compared to a profit of $3.083 million in the same period in 2022[104]. - Operating loss for the three months ended September 30, 2023, was $6.722 million, an increase of 70.1% compared to the loss of $3.952 million in the same period in 2022[104]. - The company reported a net loss of $16.5 million for the nine months ended September 30, 2023[120]. Liquidity and Financial Stability - Cash and cash equivalents remained unchanged at $0.5 million from December 31, 2022, to September 30, 2023[96]. - The company reported $0.9 million of outstanding borrowings on its asset-based credit line as of September 30, 2023[96]. - The company has experienced material liquidity pressures and has conducted two reductions in force to lower operating expenses[98]. - Substantial doubt exists about the company's ability to continue as a going concern without additional liquidity[98]. - As of September 30, 2023, the company believes its current cash and cash equivalents, along with other working capital and borrowings, will not be sufficient to fund working capital requirements, capital expenditures, and operations for the next twelve months[125]. - The company has substantial doubt about its ability to continue as a going concern and will require additional liquidity to continue operations beyond the next 12 months[118]. Cost Management - Selling and marketing expenses decreased by 45.5% to $2.1 million for the three months ended September 30, 2023, compared to $3.8 million in the same period of 2022[110]. - General and administrative expenses decreased by 49.9% to $963 thousand for the three months ended September 30, 2023, compared to $1.9 million in the same period of 2022[112]. - Research and development expenses decreased by 47.6% to $687 thousand for the three months ended September 30, 2023, compared to $1.3 million in the same period of 2022[114]. - The company has implemented cost reduction plans to align its cost structure with sales and increase liquidity during 2023[125]. Future Outlook - The company expects gross margin to be subject to similar variabilities experienced in the first half of 2023 and in 2022, with ongoing risks related to supply chain disruptions[109]. - Future liquidity and capital requirements will be influenced by factors such as operating losses, sales timing, and ongoing research and product development[126]. - The company may require significant additional capital to pursue its growth strategy, and failure to raise capital could hinder execution of this strategy[127]. - The company plans to support commercialization efforts related to current and future products, including expansion of its direct sales force[130]. - Upgrades to information technology infrastructure are planned to enhance capabilities and improve overall productivity[130]. Tax and Operating Losses - The company has Federal and state net operating loss carry forwards of approximately $62.0 million and $37.3 million, respectively, available to reduce future taxable income[128]. - A full valuation allowance has been established for deferred income tax assets, indicating that it is more likely than not that the benefits from such assets will not be realized[128]. Capital Commitments - There were no material changes to capital commitments and contractual obligations during the nine months ended September 30, 2023, compared to the previous year[129]. - The company did not have any material off-balance sheet arrangements as of September 30, 2023[130].