Company: SONM
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009749
Chunk: 3

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 3
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 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 related party, in which a family member
of our 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.

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