Company: SONM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001493152-25-020310
Chunk: 7

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 7
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 the opinion of the
Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in
nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and
accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make
estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior
period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current
period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with
the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the
year ended December 31, 2024.

As
discussed above, all per share amounts and common shares amounts have been adjusted on a retroactive basis to reflect the effect of the
Reverse Stock Split. Proportionate adjustments were made to the per share exercise price and number of shares of common stock issuable
under all outstanding stock options, restricted stock units, and warrants. In addition, proportionate adjustments have been made to the
number of shares of common stock reserved for the Company’s equity incentive awards.

Promissory
Notes

The
Company accounts for promissory notes in accordance with ASC 470, Debt. Promissory notes are initially recorded at the amount
of cash proceeds received, net of any original issue discount and direct issuance costs. Debt discounts and issuance costs are amortized
to interest expense over the term of the note using the straight-line method, which approximates the effective interest method. Interest
is accrued based on the stated interest rate.

Prior
period reclassifications

Certain
amounts in prior periods have been reclassified to conform with current period presentation. These reclassifications had no effect on
the reported results of operations.

Related
Party Transactions

Effective
December 15, 2023, in the ordinary course of business, the Company entered into an agreement pursuant to which the Company would execute
various statements of work and sell white label phones under the ODM model arrangement with a then-related party, in which a family member
of the Company’s then-director, Jeffrey Wang, holds indirect interest of approximately 40% (the “ODM Arrangement”).
Pursuant to the ODM Arrangement, the Company consummated various transactions during the first quarter of 2024.

On
April