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COMMON CONTROL MERGER OF ZOOM CONNECTIVITY, INC. | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
COMMON CONTROL MERGER OF ZOOM CONNECTIVITY, INC. | (4) COMMON CONTROL MERGER OF ZOOM CONNECTIVITY, INC. On November 12, 2020, Minim executed an Agreement and Plan of Merger (the “Merger Agreement”) with Zoom Connectivity, Inc. (“Zoom Connectivity”), a privately held company based in Manchester, New Hampshire that designs, develops, sells and supports an IoT security platform that enables and secures a better- connected home. Upon closing of the Merger Agreement on December 4, 2020, an acquisition subsidiary of the Company merged into Zoom Connectivity with Zoom Connectivity being the surviving entity of the merger. Upon completion of the merger, all property, assets, other legal rights, debts, obligations, and all other liabilities of Zoom Connectivity transferred. The Agreement was structured as a non-cash, stock transaction. The stockholders of Zoom Connectivity received 10,784,534 shares of the Company’s common stock in exchange for the cancellation of 100% of the issued and outstanding shares of common stock of Zoom Connectivity. In addition, the holders of Zoom Connectivity stock options received 1,657,909 of the Company’s stock options in exchange for 2,069,644 Zoom Connectivity stock options. The vesting terms of the Zoom Connectivity stock options agreements were transferred to stock option agreements under the Zoom stock options issued. Immediately prior to execution of the Merger Agreement, the majority stockholder of the Company was also the majority stockholder of Zoom Connectivity. As a result of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction and was outside the scope of the business combination guidance in ASC 805-50. The entities are deemed to be under common control as of October 9, 2020, which was the date that the majority stockholder acquired control of the Company and, therefore, held control over both companies. Pursuant to ASC 250-10 and ASC 805-50, the transaction did not result in a change in the reporting entity and was recognized retrospectively for all periods during which the entities were under common control. For common-control transactions where both receiving entity and the transferring entity were not under common control during the entire reporting period, it is necessary to determine which entity is the predecessor. The predecessor is the reporting entity deemed to be the receiving entity for accounting purposes in a common-control transaction. The predecessor is not always the entity that legally receives the net assets or equity interests transferred. Comparative financial information shall only be adjusted for periods during which the entities were under common control. Since common control between the Company and Zoom Connectivity occurred as of October 9, 2020, the consolidated financial statements incorporate Zoom Connectivity’s financial results and financial information for the period beginning October 9, 2020, and the comparative information of the prior period does not include the financial results of Zoom Connectivity prior to October 9, 2020. Accordingly, for periods in which the combining entities were not under common control, the comparative financial statements presented are those of the entity that is determined to be the predecessor up to the date at which the entities became under common control. Minim, Inc. was determined to be the predecessor entity and, therefore, was deemed to be the receiving entity for accounting purposes. Additionally, the consolidated financial statements and financial information presented for prior periods are not required to be restated to reflect the financial position and results of operations of Zoom Connectivity. The merger of the Company with Zoom Connectivity is referred to as the “Zoom Connectivity Merger” within these Notes to the Consolidated Financial Statements. Assets acquired and liabilities assumed are reported at their historical carrying amounts and any difference between the proceeds transferred is recognized in additional paid-in capital. These consolidated financial statements include the historical accounts of the Company since inception and the accounts of Zoom Connectivity since the date common control commenced. The following table summarizes the historical balances of the assets acquired and liabilities assumed as of October 9, 2020: ASSETS ACQUIRED AND LIABILITIES ASSUMED
Assets acquired |  |  |
Cash and cash equivalents |  | $ | 501,845 |
Accounts receivable, net |  |  | 60,301 |
Inventories |  |  | 192,688 |
Total current assets acquired |  |  | 754,834 |
Equipment, net |  |  | 4,550 |
Operating lease right-of-use asset, net |  |  | 24,437 |
Goodwill |  |  | 58,872 |
Intangible assets, net |  |  | 97,122 |
Other assets |  |  | 45,810 |
Total assets acquired |  | $ | 985,625 |
Liabilities assumed |  |  |  |
Accounts Payables |  | $ | 46,392 |
Current maturities of long-term debt |  |  | 554,500 |
Current maturities of operating lease liabilities |  |  | 24,437 |
Accrued other expenses |  |  | 97,679 |
Total current liabilities |  | $ | 723,008 |
Net Assets |  | $ | 262,617 |
Zoom Connectivity held $551 thousand an aggregate principal amount of promissory notes issued by employees during 2019 and 2018 in connection with the exercise of Zoom Connectivity stock options. In connection with the transactions contemplated by the Merger Agreement, the $551 thousand aggregate principal amount of the promissory notes was repaid in full. Of the $551 thousand, the Company received $320 thousand in cash. The remaining balance of $230 thousand was net settled with 103,842 shares of Zoom Connectivity common stock shares. These shares of common stock are incorporated in the issuance of 10,784,534 shares of the Company’s common stock that were issued to Zoom Connectivity stockholders. This repayment occurred before the merger effective date of December 4, 2020 but after the October 9, 2020 commencement of common control. The $320 thousand repayment is represented in the consolidated statement of stockholders’ equity and consolidated statement of cash flows for the year end December 31, 2020. Zoom Connectivity repurchased 33,809 shares of Zoom Connectivity common stock for $15 thousand from a stockholder who is an immediate family member to the Company’s Chairman of the Board. This repurchase remained unpaid as of December 31, 2020 and is recorded in accrued expenses in the consolidated balance sheet as of December 31, 2020. This repurchase occurred before the merger effective date of December 4, 2020 but after the October 9, 2020 commencement of common control. The $15 thousand repurchase is represented in the consolidated statement of stockholders’ equity and consolidated statement of cash flows under accrued expenses as the amount was not paid as of December 31, 2020. During 2021, the Company made the payment of the $15 thousand to the stockholder. The Company incurred transaction costs of $1.6 million related to this common control merger which were expensed as incurred and are included in general and administrative expenses in the Company’s consolidated statements of operations for the year ended December 31, 2020.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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