Company: SONM
Filing Date: 2025-12-05
Form Type: DEFM14A
Source: 0001493152-25-026277
Chunk: 362

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-12-05
Form: DEFM14A
Chunk 362
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                              |     | $    |      65 |   |     | $    |      55 |   |

A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and the accumulated deficit, the Company provided a full valuation allowance against the U.S. deferred tax assets resulting from the accruals and reserves along with the net operating loss and credits carried forward.

As of December 31, 2024 and 2023 the Company had net deferred income tax assets related primarily to net operating loss carry forwards, accruals and reserves and tax credit carryforward that are not currently being recognized of $30,271 and $22,841, respectively, which have been offset by a valuation allowance.

The Company has not provided U.S. Federal and State income taxes, nor foreign withholding taxes on approximately $12,003 of undistributed earnings for certain non-US subsidiaries, because such earnings are intended to be indefinitely reinvested. If these earnings were distributed to the U.S. in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, the Company would not be subject to U.S. income tax due to the transition tax of IRC Section 965 or via newly enacted Global Intangible Low-Taxed Income (“GILTI”) provision, enacted as part of the 2017 U.S. Tax Act. The Company would be subject to U.S. state tax and potential foreign withholding taxes on a repatriation of the foreign earnings. The amount of unrecognized deferred income tax liability related to these earnings is not material.

Estimate of cumulative foreign earnings is as follows as of December 31:

Schedule of Cumulative Foreign Earnings

|       |     |   |   2024 |     |   |   2023 |
|:------|:----|:--|-------:|:----|:--|-------:|
| China |     | $ |  6,694 |     | $ |  5,471 |
| India |     |   |  5,309 |     |   |  5,102 |
| Total |     | $ | 12,003 |     | $ |