Minim sets CEO switch

Minim, the one-time maker of Motorola-branded cable modems and gateways, is swapping out CEOs amid a change-of-control stock deal that's set to face a shareholder vote next week.

Minim revealed in an SEC filing that, on February 20, the company inked an employment agreement with board member David Lazar to act as CEO and chief financial officer following the resignation of former CEO/CFO and company co-founder Jeremy Hitchcock "after a certain transition period."

Hitchcock was Minim's sole executive officer as of December 31, 2023, according to an SEC filing. Manchester, New Hampshire-based Minim laid off 78% of its staff last fall and has been reducing headcount ever since.

Per a three-year employment agreement, Lazar is to be paid a base salary of $406,000 per year (or $33,833.33 per month), effective January 1, 2024.

Lazar is also eligible for other annual and special bonuses, as determined by the compensation committee. Those include possible grants in stock options or restricted stock equivalent to 100% of Lazar's base salary, along with eligibility for an annual bonus with a target of 100% of Lazar's base salary. Seventy-five percent of that annual bonus is based on the achievement of certain performance goals, including market cap, transactions, reduced spending and fees or increased earnings and revenues. Twenty-five percent of Lazar's annual bonus "shall be at sole discretion of the Compensation Committee," according to the agreement.

The employment agreement comes on the heels of a change-of-control deal in which Lazar, a self-described activist investor, has agreed to purchase 2 million shares of Minim at $1.40 each, for an aggregate purchase price of $2.8 million. Minim has also issued Lazar warrants to purchase up to an additional 2.8 million shares of Minim common stock at $1 per share.

That deal will effectively make Lazar Minim's largest stockholder (holding 50.1% of Minim common stock) and make Minim a "controlled company" under the Nasdaq rules.

Minim's stock deal with Lazar is currently set to face a shareholder vote, to be held online, on the morning of February 27 (delayed from an original date of February 16), according to an SEC filing.

Minim shareholders are also being asked to approve a one-for-three reverse stock split of Minim common shares, an increase in authorized shares of preferred stock to 10 million shares and to remove from the company's certificate of incorporation and by-laws of limitations on adopting shareholder resolutions via majority without holding a shareholders meeting. In turn, Lazar has agreed not to engage in – directly or indirectly – any short sales of Minim's common stock.

Shares in Minim were down more than 8% in Wednesday morning trading.

It's still not clear what Lazar intends to do with Minim and its Nasdaq listing. Per his LinkedIn profile, Lazar currently serves as CEO of Activist Investing and Custodian Ventures, Dubai-based companies that specialize in "turnaround situations" and "distressed public companies." He is also CEO of Dubai-based Lazar Realty and is serving as interim CEO of Titan Pharmaceuticals, a San Francisco-based company focused on a "long-term, continuous drug delivery technology" for chronic conditions.

Lazar tells Light Reading he will be in better position to explain his plans for Minim early next month.

Minim's days as a DOCSIS player are done

Minim's days as a maker of cable modems and gateways and Wi-Fi management software are at an end – the company now has nearly zero employees and Minim has already struck a deal to jettison its product inventory.

Minim disclosed last month that the company forged a deal on January 22 to sell its inventory of modems, gateways and other devices back to Motorola Mobility (now part of Lenovo) as part of a debt settlement agreement. Minim also agreed to transfer ownership of customer support platforms as well as Minim's Motosync and MotoManage applications that were used with its cable modem/gateway hardware.

Minim's debts include unpaid fees to use the Motorola license. Minim had been paying $7.1 million annually in guaranteed minimum royalties to Motorola and had about $7.8 million outstanding in royalty payments as of September 30, 2023.

Minim and Motorola agreed that the license agreements were terminated effectively as of July 18, 2023, according to a Minim SEC filing. A Lenovo spokesperson said it is in "ongoing confidential discussion with a number of licensees to replace Minim." An industry source familiar with the situation told Light Reading recently that Lenovo has held talks with at least two suppliers of DOCSIS customer premises equipment (CPE) about licensing the Motorola brand.

Minim got into the cable modem game via a 2020 merger with Zoom Telephonics, a company that specialized in making and selling DOCSIS devices at retail. Looking to create a new, recurring revenue stream, Minim invested heavily in the development of Motosync, a home network management software platform.

Minim's software strategy never took off. Minim posted Q3 2023 sales of $6.69 million, but just $3,682 were generated from Minim's software-as-a-service business. And, according to reviews of Motosync on Google Play and the Apple app store, Minim's software also underperformed.