UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission File Number: 001-38907

Sonim Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware

94-3336783

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

4445 Eastgate Mall, Suite 200

San Diego, CA 92121

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (650) 378-8100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock par value $0.001 per share		SONM		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On August 1, 2025, there were 17,738,905 shares of the registrant’s common stock, par value $0.001, outstanding.

Table of Contents

		Page
	Cautionary Note about Forward-Looking Statements	ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		38

Cautionary Note about Forward-Looking Statements

This Quarterly Report contains statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act as well as protections afforded by other federal securities laws. Generally, words such as “achieve,” “aim,” “ambitions,” “anticipate,” “believe,” “committed,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “future,” “goals,” “grow,” “guidance,” “intend,” “likely,” “may,” “milestone,” “objective,” “on track,” “opportunity,” “outlook,” “pending,” “plan,” “position,” “possible,” “potential,” “predict,” “progress,” “roadmap,” “seek,” “should,” “strive,” “targets,” “to be,” “upcoming,” “will,” “would,” and variations of such words and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements may appear throughout this Quarterly Report and other documents we file with the Securities and Exchange Commission (the “SEC”), including without limitation, the following sections:

	(i)	Note 8 “Commitments and Contingencies” to our Condensed Consolidated Financial Statements regarding the possible outcome of, and future effect on our financial condition and results of operations of, certain litigations and other proceedings to which we are a party;

	(ii)	Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including the statements with regard to the future changes to our business and our expectations regarding our strategy, our strategic alternatives search process and vision of the future of the company, future cash requirements, assessment of our liquidity, the availability, uses, sufficiency, and cost of capital resources, and sources of funding, and future products, services, and technologies; and

	(iii)	Part I, Item 4. “Controls and Procedures,” including the description of limitations on effectiveness of controls and procedures.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

	●	our ability to meet expectations regarding the timing and completion of the declared strategic initiatives to return value to stockholders;

	●	our ability to complete the asset purchase agreement and the consequences if we fail to do so;

	●	our ability to identify a suitable reverse merger target and successfully negotiate and consummate a transaction;

	●	the availability of cash on hand and other sources of liquidity to fund our operations and grow our business;

	●	our ability to compete effectively depends on multiple factors and we may not be able to continue to develop solutions to address user needs effectively;

	●	risks associated with potential hostile takeover attempts or shareholder activism, which may divert management’s attention, jeopardize strategic initiatives, and require significant resources;

	●	we may be negatively impacted by changes in U.S. trade policy, including the imposition of tariffs;

	●	we may not be able to continue to develop solutions to address user needs effectively, including our next-generation products, which could materially adversely affect our liquidity and our ability to continue operations;

	●	a small number of customers account for a significant portion of our revenue;

	●	failure to meet the Nasdaq’s continued listing requirements and other Nasdaq rules could adversely affect the price of our common stock and make it more difficult for us to sell securities in a future financing or for you to sell our common stock;

	●	the financial and operational projections that we may provide from time to time are subject to inherent risks;

	●	our ability to incorporate emerging technologies into our new consumer products given the lengthy development cycle;

	●	our ability to adapt to shortened customer lead times and tightened inventory controls from our key customers;

	●	we are materially dependent on some customer relationships that are characterized by product award letters and the loss of such relationships could harm our business and operating results;

	●	our quarterly results may vary significantly from period to period;

	●	we rely primarily on third-party contract manufacturers and partners;

	●	if our products contain defects or errors, we could incur significant unexpected expenses, experience product returns and lost sales, experience product recalls, suffer damage to our brand and reputation, and be subject to product liability or other claims;

	●	we are required to undergo a lengthy customization and certification process for each wireless carrier customer;

	●	we are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel;

	●	we face risks related to the impact of various economic, political, environmental, social, and market events beyond our control that can impact our business and results of operations; and

	●	other risks and uncertainties described in this Quarterly Report, our most recent Annual Report on Form 10-K, and our other filings with the SEC.

We urge investors to consider all of the risks, uncertainties, and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results or developments anticipated by us and reflected or implied by any forward-looking statement contained in this Quarterly Report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized, or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report, and we undertake no obligation to update any such statements to reflect subsequent events or circumstances.

As used herein, “Sonim,” the “Company,” “we,” “us,” “our,” and similar terms include Sonim Technologies, Inc. and its subsidiaries, unless the context indicates otherwise.

iii

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT SHARE AND

PER SHARE AMOUNTS)

	June 30, 2025			December 31, 2024
	(Unaudited)
Assets
Cash and cash equivalents	$	2,006		$	5,343
Accounts receivable, net		2,870			4,339
Non-trade receivable		6,967			7,119
Related party receivable		181			181
Inventory		9,889			10,621
Prepaid expenses and other current assets		5,210			4,562
Total current assets		27,123			32,165
Property and equipment, net		161			227
Contract fulfillment assets		8,014			6,399
Other assets		780			948
Total assets	$	36,078		$	39,739
Liabilities and stockholders’ equity (deficit)
Accounts payable	$	20,583		$	22,848
Accrued liabilities		12,163			20,892
Promissory note, net, current portion		2,916			—
Total current liabilities		35,662			43,740
Income tax payable		1,750			1,699
Total liabilities		37,412			45,439
Commitments and contingencies (Note 8)		-			-
Stockholders’ equity (deficit)
Common stock, $0.001 par value per share; 100,000,000 shares authorized; and 10,338,905 and 4,983,868 shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively		10			5
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, and no shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively		—			—
Additional paid-in capital		289,281			277,903
Accumulated deficit		(290,625	)		(283,608	)
Total stockholders’ equity (deficit)		(1,334	)		(5,700	)
Total liabilities and stockholders’ equity (deficit)	$	36,078		$	39,739

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

(UNAUDITED)

	2025			2024			2025			2024
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Net revenues	$	11,190		$	11,516		$	27,911		$	20,634
Related party net revenues		—			—			—			7,658
Total net revenues		11,190			11,516			27,911			28,292
Cost of revenues		10,345			8,547			18,710			22,421
Gross profit		845			2,969			9,201			5,871
Operating expenses
Research and development		909			557			2,542			1,013
Sales and marketing		3,445			3,219			6,684			5,711
General and administrative		3,223			2,446			6,062			5,089
Impairment of contract fulfillment assets		—			3,217			—			3,217
Total operating expenses		7,577			9,439			15,288			15,030
Income (loss) from operations		(6,732	)		(6,470	)		(6,087	)		(9,159	)
Interest expense, net		(389	)		(17	)		(480	)		(17	)
Other expense, net		(215	)		(92	)		(179	)		(184	)
Income (loss) before income taxes		(7,336	)		(6,579	)		(6,746	)		(9,360	)
Income tax expense		(139	)		(37	)		(271	)		(162	)
Net income (loss)	$	(7,475	)	$	(6,616	)	$	(7,017	)	$	(9,522	)
Net income (loss) per share:
Basic	$	(0.79	)	$	(1.41	)	$	(0.91	)	$	(2.09	)
Diluted	$	(0.79	)	$	(1.41	)	$	(0.91	)	$	(2.09	)
Weighted-average shares used in computing net income (loss) per share:
Basic		9,510,601			4,685,352			7,685,323			4,561,741
Diluted		9,510,601			4,685,352			7,685,323			4,561,741

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS EXCEPT SHARE AMOUNTS)

(UNAUDITED)

For the Three Months Ended June 30, 2024	Shares (*)		Amount			Capital			Deficit			Equity
	Common stock					Additional Paid-in			Accumulated			Stockholders’
For the Three Months Ended June 30, 2024	Shares (*)		Amount			Capital			Deficit			Equity
Balance at April 1, 2024		4,439,367	$	4		$	272,701		$	(252,866	)	$	19,839
Issuance of common stock upon exercise of stock options and settlement of restricted stock units, net of taxes withheld		37,725		1			(1	)		—			—
Taxes withheld on net settled vesting of restricted stock units		—		—			(5	)		—			(5	)
Issuance of common stock, net of issuance costs		350,000		4			3,780			—			3,784
Stock-based compensation		—		—			472			—			472
Impact of retroactively adjusted reverse stock split		—		(4	)		4			—			—
Net loss		—		—			—			(6,616	)		(6,616	)
Balance at June 30, 2024		4,827,092	$	5		$	276,951		$	(259,482	)	$	17,474

For the Three Months Ended June 30, 2025	Shares		Amount		Capital		Deficit			(Deficit)
	Common stock				Additional Paid-in		Accumulated			Stockholders’ Equity
For the Three Months Ended June 30, 2025	Shares		Amount		Capital		Deficit			(Deficit)
Balance at April 1, 2025		6,333,657	$	6	$	282,065	$	(283,150	)	$	(1,079	)
Issuance of common stock upon settlement of restricted stock units		771,811		—		—		—			—
Issuance of common stock, net of issuance costs		3,233,437		4		5,411		—			5,415
Stock-based compensation related to 2024 bonus accrual		—		—		879		—			879
Stock-based compensation		—		—		926		—			926
Net loss		—		—		—		(7,475	)		(7,475	)
Balance at June 30, 2025		10,338,905	$	10	$	289,281	$	(290,625	)	$	(1,334	)

For the Six Months Ended June 30, 2024	Shares (*)		Amount			Capital			Deficit			Equity
	Common stock					Additional Paid-in			Accumulated			Stockholders’
For the Six Months Ended June 30, 2024	Shares (*)		Amount			Capital			Deficit			Equity
Balance at January 1, 2024		4,426,867	$	4		$	272,324		$	(249,960	)	$	22,368
Issuance of common stock upon exercise of stock options and settlement of restricted stock units, net of taxes withheld		50,225		1			52			—			53
Taxes withheld on net settled restricted stock units		—		—			(5	)		—			(5	)
Issuance of common stock, net of issuance costs		350,000		4			3,780			—			3,784
Stock-based compensation		—		—			796			—			796
Impact of retroactively adjusted reverse stock split		—		(4	)		4			—			—
Net loss		—		—			—			(9,522	)		(9,522	)
Balance at June 30, 2024		4,827,092	$	5		$	276,951		$	(259,482	)	$	17,474

For the Six Months Ended June 30, 2025	Shares		Amount		Capital		Deficit			(Deficit)
	Common stock				Additional Paid-in		Accumulated			Stockholders’ Equity
For the Six Months Ended June 30, 2025	Shares		Amount		Capital		Deficit			(Deficit)
Balance at January 1, 2025		4,983,868	$	5	$	277,903	$	(283,608	)	$	(5,700	)
Balance		4,983,868	$	5	$	277,903	$	(283,608	)	$	(5,700	)
Issuance of common stock upon settlement of restricted stock units		773,960		—		—		—			—
Issuance of common stock, net of issuance costs		4,581,077		5		8,947		—			8,952
Stock-based compensation related to 2024 bonus accrual		—		—		1,215		—			1,215
Stock-based compensation		—		—		1,216		—			1,216
Net loss		—		—		—		(7,017	)		(7,017	)
Balance at June 30, 2025		10,338,905	$	10	$	289,281	$	(290,625	)	$	(1,334	)
Balance		10,338,905	$	10	$	289,281	$	(290,625	)	$	(1,334	)

(*)	Adjusted retroactively to reflect the 1-for-10 reverse stock split that became effective on July 17, 2024, see Note 1.

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	2025			2024
	Six Months Ended
	June 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(7,017	)	$	(9,522	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		1,852			1,725
Stock-based compensation		1,216			796
Release of customer allowance liability		(5,490	)		—
Impairment of contract fulfillment assets		1,084			3,217
Other		36			132
Changes in operating assets and liabilities:
Accounts receivable		1,330			5,862
Non-trade receivable		152			(1,237	)
Related party receivable		—			(2,647	)
Inventory		986			1,695
Prepaid expenses and other current assets		(589	)		(1,397	)
Contract fulfillment assets		(4,383	)		(3,673	)
Other assets		(18	)		(177	)
Accounts payable		(2,265	)		625
Accrued liabilities		(1,433	)		1,062
Income tax payable		51			(21	)
Net cash used in operating activities		(14,488	)		(3,560	)
Cash flows from investing activities:
Purchase of property and equipment		—			(69	)
Net cash used in investing activities		—			(69	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		8,952			3,784
Proceeds from promissory note, net of issuance costs		2,790			—
Repayments of short-term borrowings		(591	)		—
Proceeds from stock option exercises, net of taxes paid on vested restricted stock units		—			48
Net cash provided by financing activities		11,151			3,832
Net decrease in cash and cash equivalents		(3,337	)		203
Cash and cash equivalents at beginning of period		5,343			9,397
Cash and cash equivalents at end of period	$	2,006		$	9,600
Supplemental disclosure of cash flow information:
Cash paid for interest	$	241		$	17
Cash paid for income taxes	$	28		$	12
Non-cash activities:
Receivables transferred to satisfy payables (Note 3)	$	—		$	11,308
Accrued bonus settled in equity	$	1,215		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In Thousands, except Share and Per Share Amounts)

NOTE 1 — The Company and Its Significant Accounting Policies

Description of Business

Sonim Technologies, Inc. was incorporated in the state of Delaware on August 5, 1999, and is headquartered in San Diego, California. The Company offers a robust portfolio that includes rugged handsets, smartphones, wireless internet devices, software, services, and accessories. These products are engineered to deliver reliable communication in challenging and unpredictable environments, serving sectors such as critical communications, first responders, government, industrial, construction, hospitality, and logistics. The Company distributes its products primarily through major wireless carriers. The Company currently has products available at all three U.S. Tier-one carriers – AT&T, T-Mobile and Verizon as well as the three primary carriers in Canada – Bell, Telus and Rogers, Telstra in Australia, and multiple carriers throughout Europe. These carriers resell the Company’s products, along with network services, to end customers focusing on two primary end markets: industrial enterprise and the public sector.

The Company is executing a strategic expansion initiative, focusing on broadening its market reach with new products, geographical footprint, and customer segments including enterprise, small and medium business, and prosumers. This strategy is underpinned by a strong emphasis on execution. The Company has introduced new product categories: Connected Solutions featuring wireless internet products, a next-generation rugged smartphone, and a new range of mid and low-tier professional rugged phones, all boasting IP ratings, MIL-STD-810H standards, and elements of Sonim’s Rugged Performance Standards (“RPS”), highlighting the Company’s value proposition to target markets.

During the second half of 2024 and through the filing date of this report, the Company launched the following products:

	●	Sonim H500-series of 5G mobile hotspots available at Verizon and Verizon Frontline Verified, UScellular, and Bell in North America, as well as at select carriers and through the Company’s distribution partners in Europe;

	●	Sonim MegaConnect, the world’s first 5G High Powered User Equipment (HPUE) rugged mobile hotspot, available at AT&T Business and FirstNet® in the United States, and is also FirstNet Trusted;

	●	Sonim H100 4G mobile hotspot available through Telia Finland and distribution partners in Europe;

	●	XP100 4G and XP400 5G professional rugged phones available through Deutsche Telekom in Germany and distribution partners in Europe and South Africa;

	●	XP Pro 5G rugged smartphone available through Verizon and Verizon Frontline Verified, AT&T and FirstNet Ready, and T-Mobile and certified for T-Priority in the United States, Bell, Telus, Rogers, and SaskTel in Canada, and through select distributors in Europe the Middle East, and Africa;

	●	XP Pro Thermal 5G rugged smartphone available in Europe, the Middle East, and Africa through select distributors; and

	●	XP3plus 5G rugged flip phone available through T-Mobile and certified for T-Priority.

Additionally, the XP10 is available through the Company’s distribution partners in EMEA and Australia. Most of these products are supported by the SonimWare™ platform and enterprise services. In the first half of 2025, all of the Company’s new products that launched with tier-one carriers in the United States included a certification associated with carrier first responder initiatives, including FirstNet Ready, FirstNet Trusted, Verizon Frontline Certified, and T-Mobile certified for T-Priority. In the first half of 2025 the Company also announced the upcoming launch and availability of the XP Pro Thermal 5G smartphone for Europe which includes an SDK-enabled Sonim IRIS software for custom application development and an integrated thermal camera by FLIR® that benefits a number of vertical trades such as electricians, plumbers, public safety, construction, agriculture, amongst others.

A significant revenue driver in the first quarter of 2024 was a range of low-priced products developed under Sonim’s original design manufacturer (“ODM”) model, emphasizing high-volume and low-margin production tailored to a specific customer’s needs. These sales concluded in the first quarter of 2024 due to its life cycle end. The ODM model does not represent the Company’s core business strategy.

Proposed Transaction with Social Mobile and Announced Strategic Initiatives

As further described in Note 11, Subsequent Events, below, on July 17, 2025, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) by and among the Company, as seller, Pace Car Acquisition LLC, as buyer, (the “Buyer”), the Seller Representative named in the Asset Purchase Agreement, and, Social Mobile Technology Holdings LLC (the “Parent”), solely for the purpose of guaranteeing complete payment and performance obligations of the Buyer contained in the Asset Purchase Agreement.

The Asset Purchase Agreement pertains to the sale of substantially all of the Company’s assets. The Company also announced a strategic initiative to pursue a potential reverse takeover transaction in addition to the consummation of the asset sale, with the objective of maximizing stockholder value. This transaction would allow the public vehicle to continue as a reporting entity under a new name and trading symbol, and with a new business focus.

Reverse Stock Split

On July 17, 2024, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). The Company’s common stock began trading on the Nasdaq Capital Market on a post-split basis on July 18, 2024. As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to July 17, 2024, was automatically converted into one-tenth (1/10) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive one whole share in lieu of such fractional share.

The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.

The Company’s stockholders’ equity, in the aggregate, remained unchanged following the Reverse Stock Split. Net income (loss) per share increased because there were fewer shares of common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the Reverse Stock Split.

All common share and per-share amounts in this Form 10-Q have been retroactively restated to reflect the effect of the Reverse Stock Split.

Liquidity and Ability to Continue as a Going Concern

The Company’s condensed consolidated financial statements account for the continuation of its business as a going concern. The Company is subject to the risks and uncertainties associated with the development and release of new products. The Company’s principal sources of liquidity as of June 30, 2025, consist of existing cash and cash equivalents of $2,006. Subsequent to June 30, 2025, the Company received net proceeds of approximately $4,800 from the sale of shares through its public offering and net proceeds of approximately $2,320 from the sale of a promissory note, as well as entered into an additional receivables financing agreement for international receivables, which gives the Company access to up to €3,000 (see Note 11, Subsequent Events, for additional details). The Company believes that it can meet its obligations over the next twelve months following the filing date of this report with cash at June 30, 2025 and with the cash that was raised subsequent to June 30, 2025.

Basis of presentation and preparation

The condensed consolidated financial statements include the accounts of Sonim Technologies, Inc. and its wholly owned subsidiaries (collectively “Sonim” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2024.

As discussed above, all per share amounts and common shares amounts have been adjusted on a retroactive basis to reflect the effect of the Reverse Stock Split. Proportionate adjustments were made to the per share exercise price and number of shares of common stock issuable under all outstanding stock options, restricted stock units, and warrants. In addition, proportionate adjustments have been made to the number of shares of common stock reserved for the Company’s equity incentive awards.

Promissory Notes

The Company accounts for promissory notes in accordance with ASC 470, Debt. Promissory notes are initially recorded at the amount of cash proceeds received, net of any original issue discount and direct issuance costs. Debt discounts and issuance costs are amortized to interest expense over the term of the note using the straight-line method, which approximates the effective interest method. Interest is accrued based on the stated interest rate.

Prior period reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation. These reclassifications had no effect on the reported results of operations.

Related Party Transactions

Effective December 15, 2023, in the ordinary course of business, the Company entered into an agreement pursuant to which the Company would execute various statements of work and sell white label phones under the ODM model arrangement with a then-related party, in which a family member of the Company’s then-director, Jeffrey Wang, holds indirect interest of approximately 40% (the “ODM Arrangement”). Pursuant to the ODM Arrangement, the Company consummated various transactions during the first quarter of 2024.

On April 1, 2025, the Company signed an agreement with a then-related party, in which a family member of the Company’s then-director, Jeffrey Wang, holds an indirect interest of approximately 40%, to purchase parts and components to be used in the manufacturing of the company’s products for the aggregate amount of approximately $1,000. The agreement was executed in the ordinary course of business. During the three months ended June 30, 2025, the Company purchased approximately $496 in raw materials under this agreement.

Subsequent to June 30, 2025, shareholders did not re-elect Jeffrey Wang as a director at the Company’s Annual Meeting.

New accounting pronouncements

Pronouncements adopted in 2025

None.

Pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures This guidance requires expanded annual income tax disclosures, including (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. This guidance is effective for public entities for annual periods beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 will be effective for the Company for the annual period ending December 31, 2025. The Company is currently evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. This guidance requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.

NOTE 2 — Revenue Recognition

The Company recognizes revenue primarily from the sale of products, including mobile phones, connected devices, and accessories, and the majority of the Company’s contracts include only one performance obligation, namely the delivery of product. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition under ASC 606. The Company also recognizes revenue from other contracts that may include a combination of products and NRE services or from the provision of solely NRE services. Where there is a combination of products and NRE services, the Company accounts for the promises as individual performance obligations if they are concluded as distinct. Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. During the three and six months ended June 30, 2025, and 2024, the Company did not have any contracts in which the products and NRE services were concluded to be a single performance obligation. In certain cases, the Company may offer tiered pricing based on volumes purchased for specific model phones. To date, all tiered pricing provisions have fallen into observable ranges of pricing to existing customers, thus, not resulting in any material right which could be concluded as its own performance obligation. In addition, the Company does not offer material post-contract support services to its customers.

Net revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the goods and/or services. The transaction price for product sales is calculated as the product selling price net of variable consideration which may include estimates for marketing development funds, sales incentives, and price protection and stock rotation rights. The Company generally does not offer a right of return to its customers, except for certain distributors where the company estimates future returns and reduces revenue on sales subject to return and maintains a reserve for returns allowance. Typically, variable consideration does not need to be constrained as estimates are based on specific contract terms. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. The standalone selling price of the professional services are mostly based on time and materials. The Company determines its estimates of variable consideration based on historical collection experience with similar payor classes, aged accounts receivable by payor class, terms of payment agreements, correspondence from payors related to revenue audits or reviews, its historical settlement activity of audited and reviewed claims and current economic conditions using the portfolio approach. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods.

Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware is recognized at the time control of the product transfers to the customer. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company’s revenue attributable to hardware, control transfers when products are shipped. Revenue attributable to professional services is recognized as the Company performs the professional services for the customer.

The Company maintains agreements with certain customers that include provisions for product allowances under specific conditions. Accruals for these agreements are based on available customer-specific data or, when such data is not available, relevant historical trends. These costs are recognized as a reduction to revenue. Based on the terms of these agreements, any unused accruals are released and recognized as revenue. For the three and six months ended June 30, 2025, the Company finalized agreements which resulted in the reduction of accruals by approximately $219 and $5,490, respectively, which was recognized as revenue.

Disaggregation of revenue

The following table presents total net revenues disaggregated by product category:

	2025		2024		2025		2024
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Smartphones	$	4,836	$	6,372	$	15,868	$	11,953
Feature Phones		3,836		4,711		8,646		8,059
Connected Solutions		2,248		—		2,937		—
White Label Products (ODM Model) (Related Party)		—		—		—		7,658
Accessories and Other		270		433		460		622
Total net revenues	$	11,190	$	11,516	$	27,911	$	28,292

Shipping and handling costs

The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.

Contract costs

Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing expenses.

The non-recurring costs associated with design and development of new products for technical approval represent costs to fulfill a contract pursuant to ASC 340-40, Other Assets and Deferred Costs. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs over the estimated period of time they are expected to be recovered, which is typically three to four years, the estimated life of a particular product model. As of June 30, 2025, and December 31, 2024, the net contract fulfillment assets were $8,014 and $6,399, respectively.

If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the three months ended June 30, 2024, the Company recorded an impairment of contract fulfillment assets of $3,217 due to a decrease in projected profit of one of its hotspots and the cancellation of a consumer durable product. During the three months ended June 30, 2025, the Company recorded an impairment of contract fulfillment assets of $1,084 due to the end of life of a legacy smartphone, which is included in cost of revenues in the Condensed Consolidated Statements of Operations.

NOTE 3 — Significant Balance Sheet Components

The following table presents the components of the Company’s accounts receivable, net:

Schedule of Accounts Receivable

June 30,

2025

December 31,

2024

Trade receivables

5,576

6,906

Allowance for credit losses

(

SEC Form 10-Q filed by Sonim Technologies Inc.