FiEE, Inc. Q2 FY2022 earnings call

• Leadership changes: Gray Chynoweth transitioning to Navy Reserve, Mehul Patel as new CEO, Dustin Tacker as new CFO, and hiring VP of Operations. - Strategy focus: Emphasis on software transformation, top tier execution, cost management, supply chain reliability, capital allocation, and digital capabilities. - Q2 results: Revenue down due to Prime Day timing shift, maintained Amazon position, expanded retail footprint, deferred revenue increased to $1.1 million. - Restatement: Inventory accounting errors corrected, with margins expected to return to ~30% going forward.

Minim's GAAP revenue in Q2 2022 was $12.9 million, a 3% decrease compared to Q1 2022. Deferred revenue grew to $1.1 million. Gross margins were 19.7% in Q2, down from 31.5% in Q1. Net loss for Q2 2022 was $4.4 million. The restatement of inventory accounting reduced net loss for prior periods but impacted Q2 gross margin by 10.5%.

• Q3 revenue expected based on modeling but cautious due to market softness. - Goal to improve inventory turns to 3 by end of 2022 and 4 in first half of 2023. - Expect operating expenses to be flat or slightly better with cost controls in place.

• NASDAQ compliance issue due to bid price below $1, potential 180-day extension available. - Inventory and supply chain challenges impacting cash flow. - Market softness and retail inventory reductions affecting revenue projections.

Q: Please go ahead on the inventory accounting issue; when are the statements expected to be completed and impact on 3Q?

A: Statements expected to be released tomorrow. Errors corrected going forward, no impact on 3Q gross margins.

Q: How is 3Q looking from revenue perspective?

A: Cautious due to market softness and retail inventory trends.

Q: Measures to achieve positive cash flow?

A: Focus on improving inventory turns to 3 by end of year.

Q: Questions on revenue traction in new markets, COVID impact on supply chain, and NASDAQ compliance?

A: Trials in India, Indonesia, Africa take time, supply chain delays in new product launches but marching ahead; NASDAQ has 180-day extension option under review.