Company: SONM
Filing Date: 2025-12-05
Form Type: DEFM14A
Source: 0001493152-25-026277
Chunk: 349

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-12-05
Form: DEFM14A
Chunk 349
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464 |     |      | 15,765 |
| White Label Products (ODM Model) (Related Party) |     |                         |  7,379 |     |      |      — |
| White Label Tablets (ODM Model)                  |     |                         |      — |     |      | 44,818 |
| Connected Solutions                              |     |                         |  3,427 |     |      |      — |
| Accessories and Other                            |     |                         |    729 |     |      |  1,639 |
| Total net revenues                               |     | $                       | 58,298 |     | $    | 93,632 |

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.

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 December 31, 2024 and 2023, the net contract fulfillment assets were $6,399 and $9,232, respectively. Amortization of contract fulfillment assets for the years ended December 31, 2024 and 2023 was $3,486 and $2,159, respectively.

If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the year ended December 31, 2024, the Company recorded an impairment of contract fulfillment assets of $6,484, of which $3,020 is included in cost of revenues, due to a decrease in projected profit of certain hotspots products, the cancellation of a consumer durable product, and the projected end of life of legacy products as newer products are scheduled to launch. The consumer durable product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product.

| F-35 |

NOTE 3