Company: SONM
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001641172-25-022821
Chunk: 5

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 8
Chunk 5
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 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.

    7

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