Company: SONM
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009749
Chunk: 6

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 6
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 these agreements are based on available customer-specific data or, when such data is not available, relevant historical
trends. These costs are recognized as a reduction to revenue. Based on the terms of these agreements, any unused accruals
are released and recognized as revenue. For the three months ended March 31, 2025, the Company finalized agreements which resulted in the reduction of accruals by approximately $5,271,
which was recognized as revenue.

Disaggregation
of revenue

The
following table presents total net revenues disaggregated by product category:

 Schedule of Net Revenue Disaggregate by Product Category

    2025  
    2024 

    Three Months Ended 

    March 31, 

    2025  
    2024 
  
    Smartphones 
    $11,032  
    $5,580 
  
    Feature Phones 
     4,810  
     3,348 
  
    Connected Solutions 
     689  
     — 
  
    White Label Products (ODM Model) (Related Party) 
     —  
     7,658 
  
    Accessories and Other 
     190  
     188 
  
    Total net revenues 
    $16,721  
    $16,776 

Shipping
and handling costs

The
Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise
to transfer the associated products.

    7

Contract
costs

Applying
the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization
period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing expenses.

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 they are expected to be recovered, which is typically three to four years,
the estimated life of a particular product model. As of March 31, 2025, and December 31, 2024, the net contract fulfillment assets were
$8,014 and $6,399, respectively.

NOTE
3 — Significant Balance Sheet Components

The
following table presents the components of