Company: SONM
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001641172-25-022821
Chunk: 69

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 2
Chunk 69
---
 report under the title “Additional Receivables Financing Agreement.”

24

Promissory
Notes

On
February 21, 2025, the Company entered into the Purchase Agreement with the Lender pursuant to which the Company issued and sold to the
Lender the Note. Starting on August 21, 2025, the Lender may exercise its right to redeem up to $330,000 of the Note per calendar month.
For additional information, refer to Note 4, Promissory
Note, to the condensed consolidated financial statements contained within this report.

On
July 11, 2025, the Company entered into an additional note purchase agreement with the Lender pursuant to which the Company issued and
sold to the Lender an additional promissory note (the “July Note”). Starting on January 11, 2026, the Lender may exercise
its right to redeem up to $275,000 of the July Note per calendar month. Additionally, the July Note was secured by a first-priority interest
in all of the Company’s assets. The July Note requires the Company to prepay an amount equal to not less than 33% of the net proceeds
received from any equity or debt financing. For additional information, refer to Note 11, Subsequent Events, to the condensed consolidated
financial statements contained within this report.

The exercise of the Lender’s redemption
rights under either note or the Company’s obligation to make prepayments under the July Note may reduce the Company’s liquidity.

Impairment
of Contract Fulfillment Assets

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 that the product will be sold, which is typically three to four years. 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 $3.2 million due to a decrease in projected profit of one of its hotspots and the cancellation