Company: SONM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001493152-25-020310
Chunk: 42

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 42
---
 30, 2025, and December 31, 2024, the net contract fulfillment assets were $9,053 and $6,399, 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 nine months ended September 30, 2024, the Company recorded an impairment of contract fulfillment
assets of $3.2 million due to a decrease in projected profit of one of its hotspots and the cancellation of a consumer durable product.
This product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product.
During the nine months ended September 30, 2025, the Company recorded an impairment of contract fulfillment assets of $1.1 million due
to the end of life of a legacy smartphone, which is included in cost of revenues in the Condensed Consolidated Statements of Operations.

Macroeconomic
Events

Worldwide
economic and political uncertainties and negative trends, including tariffs and increasing trade protectionism, inflation, tensions between
the U.S. and China, financial and credit market fluctuations, recession risks, labor shortages, supply chain disruptions, political election
cycles, changes in laws and interpretations of laws, changes in the volume and relative mix of U.S. government spending, cost-cutting
and efficiency initiatives and potential disruptions from international conflicts and acts of terrorism, have impacted and may continue
to impact our business and the business of our customers, while also disrupting sales channels and advertising and marketing activities.
See “Part II. Item 1A. Risk Factors” in this Form 10-Q for further discussion of the possible impact of these factors and
other risks on our business.

We
have implemented and continue to implement measures to address those challenges. We also continue to actively manage our inventory and
establish a relationship with third-party manufacturers in an effort to minimize supply chain disruptions. Nevertheless, the above-described
events had and will continue to impact the global macroeconomic and geopolitical environments, capital and commodity markets, and global
supply chains, which may have an adverse impact on our operations and hinder our ability to access capital, if needed. Our cost of revenue
may increase if the component prices increase.

26

Results
of Operations

The
results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results
to be expected for the full year or in any future period. Historically, we have