Company: SONM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001493152-25-020310
Chunk: 45

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 45
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 for the three months ended September 30, 2025, increased by $1.2 million compared to 2024. This increase reflects $2.4 million
in sales of the H500 hotspot that launched in the fourth quarter of 2024 and $1.6 million in sales of the MegaConnect hotspot that was
launched in 2025. These increases were partially offset by a net decrease of $3.0 million in sales of our feature phones, due to declining
demand for our legacy feature phones.

Total net revenues for the fourth quarter of 2025 are expected to decline
sequentially from the third quarter due to holiday-related seasonality. We do not expect to generate revenue from the current business
following the closing of the Asset Purchase Agreement, which we anticipate occurring in late 2025 or early 2026. If the Asset Purchase
Agreement does not close in 2025, we expect a further decline in operating revenue from the current business in 2026, because we anticipate
permitting the Buyer to manufacture and sell our products pending the consummation of the Asset Purchase Agreement as one of the contemplated
approaches to our transition plan.

Total
net revenues for the nine months ended September 30, 2025, increased by $0.8 million compared to 2024. Hotspot revenue increased $6.5
million with the launch of the H500 and the MegaConnect hotspots. Smartphone revenue also increased by $4.1 million due to the expiration
of customer allowance in 2025. The nine months ended September 30, 2024, include $7.7 million in revenue from white label products sold
to a related party, and we had no white label revenue in 2025.

Cost
of Revenues

Cost
of revenues for the three months ended September 30, 2025, increased by $3.6 million as compared to 2024. This increase reflects the
lower margins on the H500 as compared to phones and the lower margins on the XP Pro as compared to the XP10.

Cost
of revenues for the nine months ended September 30, 2025, decreased by $0.1 million as compared to 2024. The nine months ended September
30, 2025, include $5.4 million in revenue related to the expiration of customer allowance agreements, which had no related cost of revenues.
The nine months ended September 30, 2024, had higher cost