Company: SONM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001493152-25-020310
Chunk: 41

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 41
---
 refer to Note 3, Significant Balance Sheet Components,
to the condensed consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”

25

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.
During the three months ended September 30, 2025, the Company and the Lender entered into certain exchange agreements whereby the Company
issued 30,188 shares, as adjusted for the Reverse Stock Splits, in exchange for payment-in-full of $375 in principal balance of the February
Note. For additional information, refer to Note 4, Promissory Notes, to the condensed consolidated financial statements contained within
this report under the title “February Purchase Agreement.”

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,” and together with the February Note, the “Notes”).
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 4, Promissory Notes, to the condensed consolidated financial statements contained within this report under the title “July
Purchase Agreement.”

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 September