MINIM INC

Overview

Minim was founded in 1977 as a networking company and pivoted into delivering intelligent software to protect and improve the WiFi connections we depend on to work, learn, and live. Headquartered in Manchester, New Hampshire, Minim held the exclusive global license to design, manufacture, and sell consumer networking products under the Motorola brand until 2023. Our cable and WiFi products, with an intelligent operating system and bundled mobile app, were sold in leading retailers and e-commerce channels in the United States (“U.S.”). 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.

Minim, Inc. and its wholly owned subsidiaries, MME Sub 1 LLC, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “Minim” or the “Company”. The Company currently supports and services intelligent networking products that connect homes and offices around the world. We were the exclusive global license holder to the Motorola brand for home networking hardware until 2023. The Company designed and manufactured products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax adapters, and mesh home networking devices.

MME Sub 1 LLC, is a Florida corporation and a wholly-owned subsidiary of Minim (“Merger Sub”) that was recently incorporated solely for the purpose of entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”) on March 12, 2024, together with Minim and e2Companies LLC, a Florida limited liability company (“e2Companies”), and which provides for, among other things, the merger of Merger Sub with and into e2Companies, with e2Companies continuing as the surviving entity and a wholly owned subsidiary of Minim (following the consummation of the mergerand the name change described below, the “combined company”), and pursuant to which, holders of the outstanding Class A common units and Class B common units of e2Companies (collectively, the “common units”) will receive such number of shares of common stock, par value $0.01 per share, of Minim (“Minim common stock”) representing 97% of the issued and outstanding shares of Minim common stock, on the terms and conditions set forth in the Merger Agreement for consummating the merger and the other transactions contemplated by the Merger Agreement. Merger Sub is not engaged in any business and has no material assets. Its principal executive offices have the same address and telephone number as Minim. In the merger, Merger Sub will merge with and into e2Companies, with e2Companies surviving as Minim’s wholly owned subsidiary, and Merger Sub will cease to exist. In connection with the consummation of the merger, Minim will amend and restate its amended and restated certificate of incorporation to, among other things, cause its name to be changed to “e2Companies, Inc.”

e2companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility®, is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues.

e2Companies was founded in 2009 in Peoria, Illinois, and following its merger with and into e2Companies LLC, which was completed on January 27, 2022, became a Florida limited liability company. From its origins of helping companies comply with new EPA emissions regulations for diesel generators to solving today’s most pressing power reliability and sustainability challenges, it remains on the forefront of engineering new energy solutions. Over time, it has gradually expanded its range of solutions, services, and geographic footprint. Today, e2Companies provides power generation and state of the art monitoring systems, for customers in energy market programs and over 1,000 monitoring systems currently in place in the U.S. and Canada totaling over 113,880,000 monitoring hours. During this time, it has completed over 4,000 successful regulatory reviews for clients. e2Companies estimates that its products have generated over $2 billion in value to our customers.

e2Companies operates through a number of subsidiaries. During 2019, e2Companies created a wholly owned subsidiary, e2comply Canada, ULC for the purpose of providing products and services throughout Canada. During 2020, e2Companies created a number of additional, wholly owned subsidiaries, including: (i) e2c Holdings Inc., which holds the ownership interests in e2company Canada, ULC; (ii) e2c DGU, LLC, which holds other ownership interests in e2c ESA Assets 1 LLC and e2c ESA Bond 1 LLC (“ESA Bond 1”); (iii) e2c Assets 1 LLC, which holds e2Companies Equipment (as defined below); (iv) ESA Bond 1, which raises bond capital to fund capital expenditures necessary for the equipment necessary for energy service agreements (“ESAs”) with customers; (v) e2 Mission Critical LLC (“Mission Critical”), which provides onsite generation, resilient, reliable and ready for demand integration; (vi) e2Comply Service LLC, which services e2Companies Equipment; (vii) e2c SERA LLC, which provides Internet of Things (“IoT”) data for system monitoring; (viii) e2c EPC LLC, which is the engineering, procurement and construction business for e2Companies equipment; and (ix) e2c Insure LLC, which provides regulatory compliance services to subsidiaries under e2Companies’ umbrella.

Our Merger with e2Companies

Explanatory Note Regarding the Merger Agreement

The following summary of the Merger Agreement, and the copy of the Merger Agreement attached as an exhibit to this Annual Report on Form 10-K, are intended only to provide information regarding the terms of the Merger Agreement. The Merger Agreement and the related summary are not intended to be a source of factual, business or operational information about e2Companies, Minim, or Minim’s subsidiaries, and the following summary of the Merger Agreement, and the copy thereof included as an exhibit hereto, are not intended to modify or supplement any factual disclosure about Minim in any documents Minim has or will publicly file with the Securities Exchange Commission (“SEC”). The Merger Agreement contains representations and warranties by, and covenants of, e2Companies, Minim and certain subsidiaries of Minim that were made only for purposes of the Merger Agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Minim’s public disclosures.

The Merger Agreement

On March 12, 2024, Minim, Inc., a Delaware corporation (the “Company”), and its wholly owned subsidiary, MME Sub 1 LLC, a Florida limited liability company (“Merger Sub”), entered into an Agreement and Plan of Merger (“Merger Agreement”) with e2Companies LLC, a Florida limited liability company (“e2Companies”). Pursuant to the Merger Agreement, Merger Sub will merge with and into e2Companies, with e2Companies remaining as the surviving entity (the “Merger”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), holders of the outstanding common units of e2Companies (“e2 Shares”) will receive such number of shares of common stock, par value $0.01 per share, of the Company (“Company Shares”) representing approximately 97% of the issued and outstanding Company Shares (on a fully-diluted basis).

Pursuant to the terms of the Merger Agreement, the Company has agreed to appoint upon the Effective Time, two individuals selected by the Company to the Company’s board of directors.

The Merger Agreement contains representations and warranties, closing deliveries and indemnification provisions customary for a transaction of this nature. The closing of the Merger is conditioned upon, among other things, (i) the Company Shares to be issued in the Merger (“Merger Consideration”) being approved for listing on the Nasdaq Capital Market (“Nasdaq”), (ii) the effectiveness of a registration statement on Form S-4 registering the Merger Consideration; (iii) any waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated; and (iv) the consent or approval of the Company’s stockholders, as applicable, of (a) the Merger, (b) the issuance of the Merger Consideration, and (c) an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to among other things, change the Company’s name to e2Companies, Inc. following the Merger (the “Stockholder Approvals”).

The Merger Agreement may be terminated under certain customary and limited circumstances prior to the closing including by the mutual consent of the Company and e2Companies if the closing has not occurred by June 15, 2024, subject to the right of either party to gain a 30 day extension, and including, but not limited to, if the Stockholder Approvals have not been obtained, if the Company Shares are delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), upon uncured breaches of representations, warranties and covenants or if a court of competent jurisdiction permanently restrains the Merger from occurring.

The foregoing description of the Merger Agreement is not complete and is qualified in all respects to the Merger Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference.

Lock-up Agreement

Concurrently with the execution and delivery of the Merger Agreement, e2Companies and the Class A Unitholders of e2Companies (each a “Unitholder”) entered into lock-up agreements, pursuant to which each Unitholder and e2Companies agreed to a 180-day lockup on the sale or transfer of Company Shares, Series A Preferred Stock of the Company or any securities convertible into or exercisable or exchangeable for Company Shares received by each such holder in the Merger (the “Lock-up Agreement”).

The foregoing description of the Lock-up Agreement is not complete and is qualified in all respects to the form of Lock-up Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference.

Voting and Support Agreement

Concurrently with the execution and delivery of the Merger Agreement, the Company and e2Companies entered into support agreements (the “Support Agreements”) with certain stockholders of the Company that beneficially own a majority of the outstanding Company Shares. Pursuant to the Support Agreements, among other things, such stockholders have agreed to vote or deliver (or cause to be delivered) a written consent, as applicable, with respect to all of their shares of capital stock of the Company owned by such holders in favor of the Stockholder Approvals.

The foregoing description of the Support Agreements is not complete and is qualified in all respects to the form of Support Agreement, which is filed as an exhibit to this Annual Report and incorporated herein by reference.

Important Information about the Merger and Where to Find It

In connection with the Merger, we will file relevant materials with the Securities and Exchange Commission (“SEC”), including a registration statement on Form S-4 that will include a consent solicitation or proxy statement, as applicable, pertaining to the Company and e2Companies. This Annual Report on Form 10-K does not contain all the information that should be considered concerning the Merger and is not a substitute for any other documents that the Company may file with the SEC. It is not intended to form the basis of any investment decision or any other decision in respect to the Merger. Investors and stockholders will be able to obtain free copies of the consent solicitation statement or proxy statement, as applicable. and other documents filed by the Company with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders should note that the Company communicates with investors and the public using its website (https://www.minim.com), where anyone will be able to obtain free copies of the consent solicitation statement or proxy statement and other documents filed by the Company with the SEC and stockholders are urged to read the consent solicitation statement or proxy statement, as applicable, and the other relevant materials when they become available before making any voting or investment decision with respect to the Merger.

Minim*’s Reasons for the Merger*

In evaluating strategic alternatives, the Minim Board of Directors consulted with Minim’s management and legal and financial advisors, reviewed a significant amount of information, and considered a number of factors, including, among others, the following factors regarding the combined company that the Minim Board of Directors viewed as supportive of its decision to approve the merger with e2Companies, as being in the best interests of Minim’s stockholders:

The Minim Board of Directors also reviewed various factors impacting the financial condition, results of operations and prospects for Minim, including:

The Minim Board of Directors also reviewed the terms and conditions of the proposed Merger Agreement and associated transactions, as well as the safeguards and protective provisions included therein intended to mitigate risks, including:

In its deliberations relating to the merger, the Minim Board of Directors also considered a variety of risks and other countervailing factors related to the merger, including:

The Minim Board of Directors believes that, overall, the potential benefits to Minim stockholders of the Merger Agreement outweigh the risks and potential losses that Minim is expected to incur if it continues operating its current business without consummating the merger.

Although this discussion of the information and factors considered by the Minim Board of Directors is believed to include the material facts it considered, it is not intended to be exhaustive and may not include all of the factors considered by the Minim Board of Director. The Minim Board of Directors did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination that the Merger Agreement and the transactions contemplated thereby are fair to, advisable, and in the best interests of Minim and its stockholders. The Minim Board of Directors based its determination on the totality of the information presented to it and factors considered by it. In addition, individual members of the Minim Board of Directors may have given differing weights to different factors.

On March 11, 2024, Minim’s stockholders, who beneficially held a majority of Minim’s common stock, each entered into voting agreements (“Minim Voting Agreements”) pursuant to which, among other things, each of such stockholders agreed, solely in their capacity as a stockholder, to vote or deliver (or cause to be delivered) a written consent, as applicable, in favor of the Minim Proposals with respect to: (i) all of their shares of Minim common stock and Minim Preferred Stock owned by such holder; and (ii) any subsequently acquired Minim common stock, including upon exercise of any options to purchase Minim common stock or settlement of warrants to purchase Minim common stock or otherwise, including, without limitation, by gift, succession, in the event of a stock split or as a dividend or distribution of any shares of Minim common stock owned by such holder. The Minim Voting Agreements also place certain restrictions on the transfer of the shares of Minim held by such stockholders. The merger requires the written consent of the holders of at least a majority of the outstanding shares of Minim common stock and Minim Preferred Stock on an as-converted basis, voting together as a single class.

Strategy Overview

In addition to supporting our legacy cable and WiFi products, we sought to consider other strategic alternatives for our Company. On March 12, 2024, we and e2Companies entered into the Merger Agreement which is expected to close before June 30, 2024. In the merger, Merger Sub will merge with and into e2Companies, with e2Companies surviving as Minim’s wholly owned subsidiary, and Merger Sub will cease to exist. In connection with the consummation of the merger, Minim will amend and restate its amended and restated certificate of incorporation to, among other things, cause its name to be changed to “e2Companies, Inc.”

e2companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility®, is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues. e2Companies provides power generation and state of the art monitoring systems, for customers in energy market programs.

e2Companies is dedicated to delivering energy resiliency, reliability and regulatory compliance for its customers to unlock savings and revenue opportunities. Currently, its target markets are the continental United States, Puerto Rico and Canada. Its growth strategy is to invest heavily in this market to capture greater market share.

e2Companies has recently refocused sales efforts from a 15-year ESA model to an original equipment manufacturer (“OEM”) model for direct cash sales. The recent tax incentives from the Inflation Reduction Act (the “IRA”) and Investment Tax Credit (the “ITC”) make the OEM sales model very attractive for customers and investors. e2Companies expects the adjustment in sales strategy, which has been driven by feedback from customers, will lead to a shortening of the sales cycle and a corresponding increase in current revenue. e2Companies is also currently seeking to have certain ESA customers convert to OEM purchasers, however, e2Companies will continue to offer the ESA model to customers desiring to avoid the initial upfront cost of purchasing generation systems outright. In connection with adjustment of e2Companies’ sales strategy, e2Companies has implemented cost saving measures to increase the efficiency of revenue production.

Products

General

We created innovative Internet access products that dependably connect people to the information they need and the people they love. Our hardware portfolio included: cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax Alliance (MoCA) adapters, and mesh home networking devices. Our SaaS platform included: mobile applications, a web application, API suites, and an open-source embedded agent for networking devices.

We sold home networking products under the globally recognized Motorola brand, as well as under our previously owned ZOOM trademark. Our hardware and SaaS products were purchased by consumers to support and protect their family’s connected devices; ISPs to reduce support costs and increase revenue with digitally transformed support and value-added services; and by businesses to affordably support and secure satellite and remote worker networks.

The 2020 License Agreement applied to a wide range of products, including consumer grade cellular modems and gateways, DSL modems and gateways, and MoCA adapters for networking and home security products and services. The Company had 5 systems of the Motorola Mesh Router Systems, including the latest generation of WiFi 6E technology.

Home Networking Hardware

Our networking hardware products connect homes and small offices to the Internet, create wireless networks, and extend the wireless signal. These products were primarily available through retail and e-commerce channels in the U.S.

SaaS

The Minim SaaS platform offers three core software components:

Products for Markets outside North America

The vast majority of our sales were in North America from 2015 through 2023 because the business predominantly sold cable modem and modem/router products, and the U.S. is by far the largest market for cable modems sold through retailers.

Networking hardware products for countries outside the U.S. typically differ from a similar product for the U.S. because of varied regulatory and certification requirements, country-specific phone jacks and AC power adapters, and language needs. As a result, the introduction of new products into markets outside North America can incur significant costs and time to market.

Support

We developed quality products that are user-friendly and are designed to require minimal support. We typically support our claims of quality with product warranties of one to two years, depending upon the product. To address the needs of end-users and resellers who require assistance, there is a staff of technical support specialists. They provide telephone support six days per week in English and Spanish and aim to continuously expand languages, availability, and support channels. Our technical support specialists also maintain a significant Internet support facility that includes email, firmware and software downloads, and a digital knowledgebase. In 2023, we transferred our support services to Motorola to address the needs of our customers.

Research and Development

Our research and development efforts were focused on developing new products, enhancing the capabilities of existing products, and reducing production costs. We developed close collaborative relationships with certain of our Original Design Manufacturer (“ODM”) suppliers and component suppliers. We worked with these partners and other sources to identify and respond to emerging technologies and market trends by developing products that address those trends. We also developed all the hardware and firmware for certain products in-house, including some cellular modems and some future cellular sensors.

The Company’s costs on research and development for the years ended December 31, 2023 and 2022 were $3.5 million and $5.8 million, respectively. As of December 31, 2023, we had no employees engaged in research and development. Our research and development team performed hardware design and layout, mechanical design, prototype construction and testing, component specification, firmware and software development, product testing, foreign and domestic regulatory certification efforts, end-user and internal documentation, and third-party software selection and testing.

Manufacturing & Suppliers

Our products were designed for high-volume automated assembly to help assure reduced costs, rapid market entry, short lead times, and reliability. High-volume assembly mostly occurred in Vietnam or China. Our contract manufacturers and original design manufacturers obtained some or all of the components required to assemble the products based upon a Minim approved vendor list and parts list. Our manufacturers inserted parts onto the printed circuit board, with most parts automatically inserted by machine, solder the circuit board, and test the completed assemblies. The contract manufacturer sometimes performed final packaging. For the U.S. and many other markets, packaging was often performed at our facilities in North America, allowing us to tailor the packaging and its contents for our customers immediately before shipping. This facility also performed warehousing, shipping, quality control, finishing and some software updates from time to time. We also performed circuit design, circuit board layout, and strategic component sourcing at our Boston area office.

Our North American facility was located in Tijuana, Mexico. From time to time, we experienced certain challenges associated with the Tijuana facility, specifically relating to bringing products across the border between the U.S. and Mexico. We believed that this facility assisted us in cost- effectively providing rapid response to the needs of our U.S. customers.

Historically, we have used one primary manufacturer for a given design. We had maintained back-up production tooling at a second manufacturer for our highest-volume products. Our manufacturers were normally adequate to meet reasonable and properly planned production needs; but a fire, natural calamity, strike, financial problem, the impacts from a pandemic or another significant event at an assembler’s facility could adversely affect our shipments and revenues. In 2023 and 2022, one and two suppliers, respectively, provided 86% and 93%, respectively, of our purchased inventory.

About e2Companies

Overview

e2Companies is a leading provider of vertically integrated solutions for power generation and distribution. They are committed to delivering energy resiliency, reliability and regulatory compliance for their customers to unlock savings and revenue opportunities. Their product, Virtual Utility®, is the first utility-grade network of distributed energy resources, designed to deliver full visibility and control with a turnkey solution. As severe weather, electric vehicles and renewable energy sources become more prevalent, e2Companies is on a mission to help companies transition on the path to zero, while solving grid reliability and power quality issues.

e2Companies’ products and regulatory services come with full power systems monitoring services on an open architecture that allow for smart building integration, microgrid integration, artificial intelligence and full asset optimization through a private network on our Grid Response Optimization of Virtual Energy (“Grove”) platform. It serves diverse industries, including commercial, manufacturing, retail, healthcare and data centers. e2Companies creates electricity micro-grids offered to hospitals, data centers, schools and mission critical businesses to provide reliable power without reliance on the grid or the large initial capital outlay associated with the purchase of traditional independent power systems.

e2Companies’ Products

Virtual Utility®

For decades, diesel generation has been the traditional back-up power sources for facilities to keep critical processes running during outages. Given increasing emissions restrictions and state and federal regulations shifting requirements for on-site generation, natural gas generation and energy storage systems are gaining favor. To maximize the total cost of ownership, while reducing emissions, improving utility power quality, providing an uninterruptible power supply (“UPS”) to all connected loads, generating revenue in market-based programs, all with the cleanest and lowest operating cost turnkey technology available, there are not many turn-key options in today’s market.

e2Companies is the creator of the industry’s first Virtual Utility®, the industry’s first utility-grade network located on the customer’s site. Virtual Utility® is an independent source of power that optimizes the existing grid and reduces utility dependence, driving energy choice and taking the guesswork out of electric utility for customers. It does so by enhancing the stability of the electric grid and providing behind-the-meter cost flexibility based on variable inputs and market pricing.

The heart of Virtual Utility® is e2Companies’ patented R3Di® System, a self-contained, lithium-iron phosphate battery energy storage system, providing up to one megawatt of power, or enough power for about 100 households, which is modular in design. Matched with a prime-rated, natural gas generator, or any possible electron producing source, it acts as an onsite utility grade system with a synthetic BUS. Its double conversion inverter system (“Double Conversion System”) provides continuous power conditioning and uninterruptible power transfer, while its lithium iron phosphate battery chemistry offers higher energy density, allowing delivery of power to a customer’s facility 24 hours a day, 7 days a week, 365 days a year.

The system is ETL certified to UL 9540 and operates in sync with the grid and independently of it simultaneously, giving facility managers the flexibility to generate power on-site whenever needed, during utility outages, storm avoidance, when utilities experience peak demand or when energy prices are high. At the same time, The R3Di®’s dual isolation transformers provide clean conditioned power to all connected loads, ensuring power sensitive equipment avoids voltage sags or spikes that can impact critical operation.

Figure 1: Stocked R3Di® Design

R3Di®System

By itself, a diesel generator will not provide a “noblip” experience at a facility when there is a loss of utility power. Traditionally, pairing a diesel generator with a UPS provides instantaneous, uninterruptible power to only the facility’s sensitive electronic loads. The purpose of the UPS is to bridge the time between loss of utility and the transfer to the generator. All other loads (HVAC, lighting, etc.) lose power while the generator comes up to rated voltage and frequency and connects to the bus.

With the R3Di®, all facility loads, not just the sensitive electronic loads, can be connected to the R3Di®’s instantaneous, uninterruptible power system. This is possible due to the R3Di®’s High C-rate, or the rate at which a battery is discharged relative to its maximum capacity, fast discharging battery system. Most traditional UPS systems utilize battery systems that are designed for an instantaneous slow discharge maximizing their availability. This limits those batteries’ ability to deliver power to loads that require high inrush currents such as pump motors, elevators, and large transformers. Due to the lithium iron phosphate (“LiFePO4”) chemistry and cathode design of the R3Di®’s battery system, the high discharge capability allows highly inductive loads to connect to the battery instantly without voltage or frequency sags.

Traditional UPS composition consists of lead acid batteries, needing replacement after a five-year lifecycle due to power constantly flowing through the batteries, which leads to quicker degradation. The R3Di® battery energy storage system (“BESS System”) is designed to a twenty-year life, with an extended battery life due to the composition of LiFePO4 and High-C discharging capabilities. Electricity does not continuously flow through the batteries in the R3Di®, extending their life to twenty years or 10,000 cycles. Any generation source is paired to pick up load as the batteries begin to deplete, then recharges the batteries once they have dropped to a selectable depth of discharge.

Like a traditional UPS system, the R3Di®’s Double Conversion System helps smooth transient loading, providing power conditioning and quality, with a seamless (sub-cycle) transfer of power with no interruption to facility’s load. Unlike conventional UPS systems, the R3Di® utilizes bidirectional, full four-quadrant insulated-gate bipolar transistors inverters in both the ACDC rectification and DC-AC conversion stages. A stand-alone diesel would not be able to protect a company’s sensitive equipment from any transient voltage sags or surges. Beyond on-site power generation for reliability, the R3Di® System can play the role of grid assurance, by firming renewables without intermittent power loss with its power conditioning abilities.

The R3Di®’s LiFePO4 battery chemistry is safer than other systems that utilize lithium ion (Li+), valve regulated lead acid (“VRLA”) or lead acid. All batteries store and release electrical energy through electrochemical reactions. When a battery purposely discharges electrical energy, ions move from one electrode to the other through a liquid medium called electrolyte. If during this process the battery undergoes some stress, e.g., an internal short, abnormal heat, etc., the cobalt present in the cathode can release fire-sustaining oxygen. This can result in “thermal runaway”, which is a heat generating reaction that is greater than the ability of a battery cell to release.

In lithium cobalt oxide batteries, thermal runaway can result from the omission of the cobalt with its negative temperature coefficient. The LiFePO4 battery, as found in the R3Di® System does not use cobalt, greatly reducing the risk of fire ignition or propagation. LiFePO4 is thermally and chemically stable, making it less prone to explosions or fires due to misuse or structural damage.

The R3Di®’s BESS takes up considerably less space than that of a Half-C or 1-C battery system. Where space is restricted, the R3Di® System can be configured in a smaller footprint by moving the UPS outdoors and stacking it above the generator, as shown in Figure 2, meaning no interior building space is required.

Figure 2: Side and Front View of the R3Di® System Generator and BESS

The R3Di® System can be paralleled with additional units, in 1MW increments. It is intended to be modular and eliminates, or greatly reduces, balance of plant versus diesel or other systems.

Facilities that have experienced a prolonged outage are impacted by the loss of production, stored product, machinery, and sensitive equipment, as well as the man-hours to reset processes and restore the facility. Even so much as a voltage sag/surge can affect equipment. The seamless conditioning the R3Di® provides protects sensitive equipment and sustains operations during long-term outages. A diesel generator can support the facility, but due to the emissions profile of the diesel engine, it cannot run in prime applications.

Environmental Social Governance (ESG), Societal Return on Investment (SROI) & Tax

The R3Di® System operates as an on-site utility and can do so with drastically reduced emissions and lower operating costs as compared to a similar sized emergency backup diesel generator. The R3Di® System has the lowest emissions profile available amongst comparable reciprocating engines based on independent third-party review with a globally recognized ESG firm. The R3Di®System saves 19,322 tons of emissions cradle-to-gate, as compared to battery storage systems, a net present value of $645,695. For a 1MW solutions, emissions reductions as compared to diesel are as follows:

This is a prime-rated application with no additional after-treatment system, such as a catalytic reduction (SCR), needed.

New initiatives to reduce carbon emissions include tax benefits for those companies that proactively plan to reduce their footprint. The societal return on investment (“SROI”), a method for measuring values that are not traditionally reflected in financial statements, including social, economic and environmental factors, considers the present value of project costs, project revenues, and socioeconomic benefits and costs. This financial benefit is used to measure a company’s value creation and positive impact for its community. Reductions in emissions from cradle-to-gate increase companies’ SROI; benefitting the greater good and health of our society. The R3Di® System, as compared to diesel, has significantly higher SROI as calculated by a third party and detailed in the following table:

Total Present Value of SROI is approximately a $7MM benefit compared to a diesel generator.

e2Companies are also thinking about the future. Anticipating any future changes in emissions standards and stricter emissions restrictions, today the R3Di® System is hydrogen ready up to 20% and can run on multiple fuel sources like liquid natural gas and renewable natural gas. The R3Di® System is designed to be future proofed as alternate sources of power develop, such as fuel cells.

Grid Response Optimization of Virtual Energy (Grove)

The other part of Virtual Utility® is e2Companies’ GROVE platform, the operational hub for all distributed assets, including R3Di®. Grove provides a specialized team dedicated to developing personalized operational strategies for the R3Di®System, such as devising a customized playbook that outlines the optimal use of power from public utilities, employing historical data, energy market pricing, and other pertinent factors aligned with specific goals. Grove provides real-time grid information, asset health monitoring, and remote dispatching capabilities.

Grove includes a dedicated energy management team that can help a customer achieve energy goals by reducing energy consumption from utility during peak times, using a custom procurement strategy and analyzing utility bills to avoid hidden fees. Using historical data and advanced analytics, the Grove team predicts peak demand times so you can avoid increased charges. e2Companies also work with a vast network of suppliers to secure the most competitive rates and terms based on the customer’s needs. Our utility bill management services provide additional oversight and insight, resolving billing issues and investigating opportunities for savings. In addition, e2Companies’ centralized services department handles all preventative maintenance and quickly responds to any emergency maintenance request.

Other Products and Services

e2Companies have 15 years of experience developing products and services for regulatory compliance. From simple catalyst systems to Best Available Control Technology (“BACT”) for large stationary power systems including monitoring with remote start and diagnostics, we have the solutions to help the customers’ business. e2Companies’ products are made to order and all of e2Companies’ products are outsourced for production. In 2019, e2Companies started to assemble its monitoring equipment in its new building at 8901 Quality Dr, Bonita Springs, FL 34135.

In addition to R3Di® System, e2Companies current product offerings are listed below:

Compliance and Monitoring Services

e2Companies is a compliance products and services company innovating value through technology-driven risk management using compliance as a service (“CaaS”). e2Companies offers a complete turnkey business model for energy, utility, industrial, and commercial customers. e2Companies compliance products and services help its customer to:

In addition to providing a performance warranty that products will meet emissions standards over their useful life, e2Companies also include service offerings that guarantee compliance with state and federal regulatory requirements such as notification, reporting, testing, and monitoring. e2Companies Step2Comply management tool speeds up a customer’s ability to understand the complex federal, state, and local regulatory environment. Step2Comply includes a proprietary database for the ever-changing landscape of emissions regulations. Further, as an extension of environmental services, e2Companies completes all required reporting and actions required for many regulatory items, including the CAA and CWA.

e2Companies cloud monitoring solution, ICe2c, addresses the need for remote access to real-time information. This information is the keystone for proactive operations and maintenance. ICe2c makes managing any set of assets a possibility, including optimizing operations, managing risks, and leveraging artificial intelligence to detect data patterns and drive efficiency and preventive maintenance schedules.

e2Companies also offer full indemnification for all its products and services, including regulatory monitoring and reporting. These services are combined with remote monitoring, cloud reporting and proprietary software that checks for regulatory changes every second on over a hundred federal, state and local required posting sites. e2Companies supports its products and service offering with insurance that covers each customer from regulatory-based fines and penalties due to violations of environmental standards resulting from its performance.

e2Companies current services offering include the below:

e2Companies Brands

e2Companies is the creator of the industry’s first Virtual Utility® and a leading provider of integrated solutions for power generation, distribution, and energy economics.

e2 Mission Critical Ltd. is a global organization focused on providing essential energy for critical environments in EMEA such as data centers, hospitals, industrial facilities, and retail centers.

e2Companies’ energy management team provides industry-leading utility and energy market experience to drive real-time asset optimization and unmatched customer service.

Competition

The Internet access and networking industries are intensely competitive and characterized by aggressive pricing practices, continually changing customer demand patterns, rapid technological advances, and emerging industry standards. These characteristics result in frequent introductions of new products with added capabilities and features, and continuous improvements in the relative functionality and price of modems and other communications products.

Many of our competitors and potential competitors have more extensive financial, engineering, product development, manufacturing, and marketing resources than we do.

The principal competitive factors for the products include the following:

Prior to the Motorola License Agreement cancellation, we believed that we provided a competitive mix of the above factors for our products, particularly when they are sold through retailers, computer product distributors, small to medium sized Internet service providers, and system integrators. We have been less successful in selling directly to large telecommunication providers and other large providers of broadband access services.

Successfully penetrating the broadband modem market presents a number of challenges, including:

e2Companies Market Considerations and Competitive Conditions

Market Considerations

The push for electrification is rapidly driving implementation of smart technology to enhance customer experience in everything from electric vehicles (“EVs”) and home energy management systems to industrial automation. At the same time, consumers have less choice over both where their power comes from and when.

According to the U.S. Department of Energy recently published report on virtual power plans (“VPP”)1, the U.S. electric grid will need to add enough new capacity to serve over 200 gigawatts (“GW”) of peak demand by 2030. With this increased load on the grid, businesses are even more susceptible to power interruptions. Short-duration blackouts can cause large-scale damage to products and manufacturing lines. A single power blip can disrupt businesses that depend on automation like robotics, that then have to wait for their machines to reboot.

In addition to rising demand for electric grid capacity, energy prices continue to increase. The U.S. Bureau of Labor Statistics revealed that the average utility bill in the United States increased by 16% from August 2021 to August 2022, and many energy experts expect electricity prices to continue increasing.

As a result of these trends, commercial and industrial customers, who have historically used diesel, batteries, and solar, are looking to outside resources to overcome the limitations of these power sources. Furthermore, many commercial and industrial customers value cost savings, capital strategies, reliability, and sustainability. Until now, no single product has served those needs. Instead, companies have incorporated various projects, which have often been technically challenging, cost prohibitive, or limited in some other way.

According to the U.S. Department of Energy, VPPs will play an important role in the race to find energy solutions that meet the grid needs of tomorrow without compromising on environmental impact. VPPs are a distributed energy resource (“DER”), a smaller-scale power source relative to the public utility and is usually located on-site or closer to the end user. DERs can include anything as small as a solar panel or battery, or as large as a VPP. According to U.S. Department of Energy, tripling the current scale of VPPs could address 10-20% of the projected peak demand. This could avoid approximately $10 billion in annual grid costs, and much of the money that is spent on VPPs would flow back to participating consumers.

e2Companies believes that the Virtual Utility® product will benefit from the projected rising demand for VPPs and, further, offers several competitive advantages. Both Virtual Utility® and VPPs are considered DERs and place an emphasis on lowering costs and providing reliable and resilient power. But there are some important differences, one of the main ones being that while VPPs are owned and operated by a utility, Virtual Utility® gives the customer complete energy choice. In addition, Virtual Utility® provides other advantages addressing specific challenges and requirements associated with implementing a VPP. A more detailed comparison of VPP and Virtual Utility® features is detailed in the following chart:

In addition to rising energy prices and capacity demands, e2Companies are also benefiting from positive trends in the specific industries they are serving.

Retail - Additional Value with Electric Vehicle Adoption

As electrification of vehicles becomes standard, there will be a need for 1.2 million public chargers.2 By 2030, it is estimated that EV charging demand will surge from 11 billion kWh to 230 billion kWh.3 With thousands of gigawatts of demand from those chargers, there will be a need for additional power capacity to support the grid. Our R3Di® System allows for on-site DC Fast Charging (“DCFC”) for EV cars, trucks, fleets, etc. which is something that diesel generation cannot do.

DCFC provides a quick recharge for EVs but has substantial power requirements as shown in the below table. The R3Di® System provides excess generation to power EV chargers directly or support the facility and the EV chargers during power outages or when experiencing power quality issues.

Figure 3: EV Charging Levels

The R3Di® system integrates with current EV and fleet chargers. There’s no impact to the provider facility as the system only uses excess capacity for charging.

Commercial

Commercial buildings are responsible for as much as 40% of US energy consumption, and a significant percentage of it is wasted by unused or underutilized buildings. Owners and operators face increasing pressure to reduce their carbon footprint. Our R3Di® System offers an attractive solution, saving an average of 19,322 tons of emissions over its lifetime compared to traditional battery storage systems.

Data Centers

According to Frost & Sullivan research, global data center energy consumption is projected to grow 27% by 2030 to 353 terawatt hours (“TWh”) and is soon expected to hit 8% of global energy consumption. As the volume of data increases exponentially and AI-powered applications require vastly more computing power, supplying reliable power to keep data centers running and keep servers cool has become a compounding challenge. This added demand, combined with unpredictable weather patterns, means that resolving critical power issues while adhering to environmental regulations is increasingly difficult. e2Companies believe that Virtual Utility® can help increase resiliency through reliable, uninterruptible power, while also enabling the data centers to operate independently of the grid and facilitating compliance with applicable laws and regulations.

Manufacturing

Manufacturers face increasing pressure to reduce their carbon footprint. The U.S. Energy Information Administration predicts the industrial sector will see a 26% increase in emissions by 2050. In addition to monitoring and facilitating reduction in emissions and providing data verified by a third party, e2Companies offer manufacturing customers personalized assistance with developing ESG strategies that meet environmental compliance regulations and expectations from stakeholders.

Healthcare

Worldwide, the health care sector is responsible for as much as 4.6 percent of total greenhouse gas emissions, which include carbon dioxide, methane, and ozone, among others.4 In the United States, where the share is 8.5%, the health care system is becoming more, not less, polluting: emissions increased 6% from 2010 to 2018.5 Most hospitals and healthcare facilities rely on a combination of traditional backup diesel generators and battery storage systems, which only provide power to the most critical equipment and aren’t designed for long-duration outages. Virtual Utility® offers a competitive solution by providing on-site power generation and energy storage systems combined with continuous monitoring of energy market pricing, weather and grid conditions. e2Companies integrated solution can also help reduce the emissions of existing diesel generators by at least 70% to meet EPA standards.

e2Companies Competition

e2Companies encounter stiff competition in all aspects of their business and compete head on with many other companies who provide compliance products and services to the energy industry.

e2Companies competition primarily consists of manufacturers and distributors of power generation and heavy electrical equipment including switchgear companies, electrical contractors, electrical engineering firms and companies involved in providing utilities with demand response and load curtailment products and services. Electric utilities could also offer their own DER solutions, which would decrease e2Companies’ base of potential customers. Additionally, several well-established companies have developed microturbines used in DER, and a number of companies are also developing alternative generation technology such as wind, fuel cells and solar energy systems. Several large companies are also becoming leaders in uninterruptible power supply system technology, and companies developing and marketing their proprietary smart grid technologies are also potential competitors. Many of these technologies are eligible for and supported by governmental financial incentives. Additionally, technologies that make commercial, institutional and industrial operations more efficient result in lower electricity use, reducing the benefits of using the Virtual Utility® product.

e2Companies also compete with numerous providers of transmission and distribution construction and maintenance firms. Many of these firms have broader customer bases, strong track records of performance and larger resources of personnel and equipment. Competitors in this area are diverse, consisting of both large and small firms on regional and national levels.

The markets for e2Companies’ products, services and technology are competitive and are characterized by rapidly changing technology, new and emerging products and services, frequent performance improvements and evolving industry and regulatory standards. e2Companies expect the intensity of competition to increase in the future because the growth potential of the energy market has attracted and is anticipated to continue to attract many new competitors, including new businesses as well as established businesses from different industries. As a result of increased competition, e2Companies may have to reduce the price of products and services, and may experience reduced gross margins, loss of market share or inability to penetrate or develop new markets, or increases in operating expenses or capital investment required to develop and maintain competitive product offerings, any one of which could adversely affect operating results.

e2Companies competitors may have far greater capital, human resources, technology, and name recognition. e2Companies primary competitors include engine OEMs and uninterruptible power source OEMS as well as PowerSecure, Inc. and Enchanted Rock Ltd. e2Companies believe that its primary competitive advantages include the following:

In order to be successful in the future, e2Companies must continue to respond promptly and effectively to the challenges of technological change and to e2Companies competitors’ innovations. While e2Companies believes that it competes favorably with respect to the above factors, no assurance can be provided that e2Companies products and services will continue to compete favorably in the future against current and future competitors or that e2Companies will be successful in responding to changes in other markets including new products and services and enhancements to existing products and services introduced by our existing competitors or new competitors entering the market.

Intellectual Property Rights

We have trademarks and copyrights for our firmware (software on a chip), printed circuit board artwork, instructions, packaging, and literature, and intelligent software. We also have three active patents that expire in 2031. There cannot be any assurance that the validity of a patent will not be challenged. Moreover, our means of protecting our proprietary rights may not be adequate and our competitors may independently develop comparable or superior technologies.

Intellectual Property rights of e2Companies

e2Companies’ success depends in part on its ability to obtain intellectual property protection for its proprietary technology, information, algorithms, processes and know-how to prevent others from infringing, misappropriating, or otherwise violating our intellectual property rights, to defend and enforce our intellectual property rights, and to operate without infringing, misappropriating, or otherwise violating valid and enforceable intellectual property rights of others. e2Companies currently uses and owns a number of patents, trademarks, copyrights and similar intellectual property in connection with its businesses and owns registrations and applications to register them both domestically [and internationally]. e2Companies relies on a strategy that combines the use of copyright, patents, trademarks, trade secret laws, know-how, and license agreements, as well as other intellectual property laws, employment, confidentiality and contractual protections, to establish and protect its intellectual property rights.

Patents

In February 2022, e2Companies’ flagship technology, the R3Di system, was patent approved. The U.S. Patent and Trademark Office accepted e2Companies’ claims and approved all 19 claims in e2Companies’ patent request. This makes e2Companies the sole supplier of a high-capacity discharge open transition system, which is now protected by a full patent for 20 years. This system is a full replacement for the more expensive uninterruptible power supply systems with shorter life spans and increased toxic landfill waste. It also gives a customer fully conditioned power to their entire property and enables renewable equipment or electric vehicle charging stations to be easily added.

Trademarks

e2Companies’ trademark portfolio is designed to protect intellectual property, technology applications, and any future products. As of April 10, 2024, e2Companies owns three trademarks across three countries, with two additional trademarks pending.

Trade Secrets

e2Companies’ also relies on trade secrets relating to its proprietary information, including its algorithms, and it maintains the confidentiality of such proprietary information to protect aspects of its business that are not amenable to, or that it does not consider appropriate for, patent protection. e2Companies seeks to protect its trade secrets and know-how by relying on trade secret laws, client license agreements, employee and third-party nondisclosure agreements and other methods with parties who have access to such information. Such agreements generally provide that all confidential information concerning e2Companies’ business or financial affairs developed or made known to the individual during the course of the individual’s relationship with e2Companies are to be kept confidential and not disclosed to third parties except in specific circumstances.

Human Capital

As of December 31, 2023, Minim had 1 employee, who served in an administrative function, and five consultants, who support administrative, operations, and management information management systems.

Our Board of Directors, through our Compensation Committee, provides oversight on employee matters. The Compensation Committee receives updates on activities, strategies and initiatives related to our employees.

As of the date hereof, e2Companies has 43 full-time employees. None of its employees are covered by a collective bargaining agreement and they have not experienced any work stoppage and consider relations with employees to be good.

Corporate Information

We are incorporated in Delaware under the name Minim, Inc. Minim, Inc. was originally incorporated in New York in 1977 and changed its state of incorporation to Delaware in 1993. Cadence Connectivity, Inc., a wholly owned subsidiary of Minim, Inc., is a corporation organized in Delaware. MTRLC LLC, a wholly owned subsidiary of Minim, Inc., is a limited liability company organized in Delaware that focuses on the sale of our Motorola brand products. Our common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol MINM. Our principal executive offices are located at 848 Elm Street, Manchester, NH 03101, and our telephone number is (617) 423-1072. Our main website iswww.Minim.com. Information contained on our website does not constitute part of this report. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on our website home page as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (“SEC”). Copies of the materials filed by the Company with the SEC are also available on the SEC’s website atwww.sec.gov. A copy of our Code of Conduct and Ethics is posted on our website atir.Minim.com. Any changes to or waiver from, this Code of Conduct and Ethics will be posted on that website.

e2Companies’ principal executive offices are located at 8901 Quality Rd, Bonita Springs, Florida 34135, its telephone number is (833) 682-7273, and its website is located at www.e2companies.com. Information on or accessed through e2Companies’ website is not incorporated into this Annual Report.