Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 20, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-38907 | ||
Entity Registrant Name | Sonim Technologies, Inc. | ||
Entity Central Index Key | 0001178697 | ||
Entity Tax Identification Number | 94-3336783 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 4445 Eastgate Mall | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92121 | ||
City Area Code | (650) | ||
Local Phone Number | 378-8100 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | SONM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,575,418 | ||
Entity Common Stock, Shares Outstanding | 40,995,430 | ||
Documents Incorporated by Reference [Text Block] | Certain information required by Part III, Items 10-14 of this Form 10-K will either be (i) included in an amendment to this Annual Report on Form 10-K, or (ii) incorporated by reference to the Registrant’s definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Moss Adams LLP | ||
Auditor Location | Campbell, California | ||
Auditor Firm ID | 659 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 13,213 | $ 11,233 |
Accounts receivable, net | 22,433 | 10,803 |
Non-trade receivable | 2,269 | 2,255 |
Inventory | 3,910 | 5,544 |
Prepaid expenses and other current assets | 1,807 | 5,852 |
Total current assets | 43,632 | 35,687 |
Property and equipment, net | 168 | 534 |
Right-of-use-assets | 66 | |
Contract fulfillment assets | 6,848 | 2,345 |
Other assets | 2,972 | 2,524 |
Total assets | 53,686 | 41,090 |
Liabilities and stockholders’ equity | ||
Current portion of long-term debt | 147 | 148 |
Accounts payable | 21,126 | 9,473 |
Accrued liabilities | 10,692 | 11,353 |
Current portion of lease liability | 66 | |
Deferred revenue | 31 | 11 |
Total current liabilities | 32,062 | 20,985 |
Income tax payable | 1,429 | 1,409 |
Accrued severance | 150 | |
Long-term debt, less current portion | 66 | |
Total liabilities | 33,641 | 22,460 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized: and 40,774,687 and 18,808,885 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively. | 41 | 19 |
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized | ||
Additional paid-in capital | 269,874 | 253,416 |
Accumulated deficit | (249,870) | (234,805) |
Total stockholders’ equity | 20,045 | 18,630 |
Total liabilities and stockholders’ equity | $ 53,686 | $ 41,090 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 40,774,687 | 18,808,885 |
Common stock, shares outstanding | 40,774,687 | 18,808,885 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Income Statement [Abstract] | |||
Net revenues | $ 69,828 | $ 54,570 | |
Cost of revenues | 58,205 | 48,156 | |
Gross profit | 11,623 | 6,414 | |
Operating expenses: | |||
Research and development | 7,973 | 17,696 | |
Sales and marketing | 7,274 | 9,566 | |
General and administrative | 9,612 | 10,284 | |
Legal expenses | 1,054 | 6,869 | |
Total operating expenses | 25,913 | 44,415 | |
Loss from operations | (14,290) | (38,001) | |
Interest expense | (97) | ||
Other income (expense), net | 484 | (459) | |
Loss before income taxes | (13,903) | (38,460) | |
Income tax (expense) benefit | (184) | (167) | |
Net loss | $ (14,087) | $ (38,627) | |
Net loss per share, basic and diluted | [1] | $ (0.49) | $ (4.08) |
Weighted–average shares used in computing net loss per share, basic and diluted | [1] | 28,889,111 | 9,464,560 |
[1]Reflects the 1-for-10 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) | Sep. 15, 2021 |
Income Statement [Abstract] | |
Reverse stock split | 1-for-10 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | [1] | Retained Earnings [Member] | Total | ||
Balance at Dec. 31, 2020 | $ 7 | [1] | $ 224,581 | $ (196,178) | $ 28,410 | ||
Balance, shares at Dec. 31, 2020 | [1] | 6,631,039 | |||||
Issuance of common stock, net of issuance costs | $ 12 | [1] | 27,690 | 27,702 | |||
Issuance of common stock, net of issuance costs, shares | [1] | 12,101,691 | |||||
Issuance of common stock, settlement of long-term debt | [1] | ||||||
Issuance of common stock, settlement of long-term debt, shares | [1] | 29 | |||||
Issuance of common stock upon exercise of stock options | [1] | 5 | $ 5 | ||||
Issuance of common stock upon exercise of stock options, shares | 707 | [1] | 707 | ||||
Issuance of common stock upon purchase of ESPP | [1] | ||||||
Issuance of common stock upon exercise of ESPP, shares | [1] | 55,683 | |||||
Net settlement of common stock upon release of RSU | [1] | 55 | 55 | ||||
Net settlement of common stock upon release of RSU, shares | [1] | 19,736 | |||||
Employee and nonemployee stock-based compensation | [1] | 1,085 | 1,085 | ||||
Net loss | [1] | (38,627) | (38,627) | ||||
Balance at Dec. 31, 2021 | $ 19 | [1] | 253,416 | (234,805) | 18,630 | ||
Balance, shares at Dec. 31, 2021 | [1] | 18,808,885 | |||||
Issuance of common stock, net of issuance costs | $ 21 | [1] | 14,394 | $ 14,415 | |||
Issuance of common stock, net of issuance costs, shares | [1] | 20,878,638 | |||||
Issuance of common stock upon exercise of stock options, shares | 0 | ||||||
Net settlement of common stock upon release of RSU | [1] | ||||||
Net settlement of common stock upon release of RSU, shares | [1] | 286,542 | |||||
Employee and nonemployee stock-based compensation | [1] | 1,551 | 1,551 | ||||
Net loss | [1] | (14,087) | (14,087) | ||||
Issuance of common stock, compensation | $ 1 | [1] | 513 | 514 | |||
Issuance of common stock, compensation, shares | [1] | 800,622 | |||||
Adoption of ASC 842 – leases (See Note 6) | [1] | (978) | (978) | ||||
Balance at Dec. 31, 2022 | $ 41 | [1] | $ 269,874 | $ (249,870) | $ 20,045 | ||
Balance, shares at Dec. 31, 2022 | [1] | 40,774,687 | |||||
[1]Reflects the 1-for-10 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) | Sep. 15, 2021 |
Statement of Stockholders' Equity [Abstract] | |
Reverse stock split | 1-for-10 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (14,087) | $ (38,627) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,375 | 2,129 |
Stock-based compensation | 1,551 | 1,085 |
Loss on disposal of assets | 130 | 54 |
Inventory write-downs | 1,594 | |
Stock issued for services | 514 | |
Amortization of lease liability | (788) | |
Deferred income taxes | (35) | |
Gain on termination of lease | (730) | |
Bad debt expense | 5 | 867 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11,635) | (7,518) |
Non-trade receivable | (14) | (1,802) |
Inventory | 1,634 | 4,181 |
Prepaid expenses and other current assets | 4,045 | 1,617 |
Contract fulfillment assets | (6,236) | 544 |
Other assets | (448) | (3,271) |
Accounts payable | 11,653 | 617 |
Accrued expenses | (369) | (83) |
Deferred revenue | 20 | 6 |
Income tax payable | 20 | 166 |
Net cash used in operating activities | (12,360) | (38,476) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (8) | (46) |
Net cash used in investing activities | (8) | (46) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of costs | 14,415 | 27,702 |
Proceeds from exercise of stock options | 5 | |
Proceeds from ESPP | 55 | |
Repayment of long-term debt | (67) | (148) |
Net cash provided by financing activities | 14,348 | 27,614 |
Net increase (decrease) in cash and cash equivalents | 1,980 | (10,908) |
Cash and cash equivalents at beginning of the year | 11,233 | 22,141 |
Cash and cash equivalents at end of the year | 13,213 | 11,233 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 97 | |
Cash paid for income taxes | $ 151 | $ 87 |
The Company and its significant
The Company and its significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
The Company and its significant accounting policies | NOTE 1 — The Company and its significant accounting policies Description of Business August 5, 1999 On September 15, 2021, the Company effected a 1-for-10 Liquidity and Ability to Continue as a Going Concern 13,213 14,087 12,360 To alleviate a potential lack of liquidity, management is currently evaluating various funding alternatives and may seek to raise additional funds through other issuances of equity, mezzanine or debt securities, through arrangements with strategic or investment partners with greater sources of financing or through obtaining credit from government or financial institutions. The Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry. Financial Statement Presentation Principles of Consolidation Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. Estimates —The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates include, but are not limited to, estimates related to revenue recognition; valuation assumptions regarding the determination of the fair value of common stock, as well as stock options; the useful lives of our long-lived assets; product warranties; loss contingencies; the recognition and measurement of income tax assets and liabilities, including uncertain tax positions; the net realizable value of inventory; and allowances for bad debt. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with high-quality, federally insured commercial banks in the United States and cash balances are in excess of federal insurance limits at December 31, 2022 and 2021. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling approximately $ 113 932 5 936 Segment Information Cash and Cash Equivalents 1,061 432 Accounts Receivable and Allowance for Doubtful Accounts Inventory The Company periodically reviews its inventory for potential slow-moving or obsolete items and writes down specific items to net realizable value, as appropriate. The Company writes down inventory based on forecasted demand and technological obsolescence. These factors are impacted by market and economic conditions, technology changes, new product introductions, and changes in strategic direction, and require estimates that may include uncertain elements. Actual demand may differ from forecasted demand and such differences may have a material effect on recorded inventory values. Any write-down of inventory to the lower of cost or net realizable value creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. Property and Equipment Leases — Non-recurring Engineering (“NRE”) Tooling and Purchased Software Licenses —Third-party design services relating to the design of tooling materials and purchased software licenses used in the manufacturing process are capitalized and included in other assets within the consolidated balance sheets. During the years ended December 31, 2022 and 2021, amortization of NRE tooling and NRE software costs approximating $ 13 and $ 72 were charged to cost of revenues. The related net book value is $ 13 and $ 26 , respectively, as of December 31, 2022 and 2021. Long-lived Assets Revenue Recognition Revenue from Contracts with Customers The Company recognizes revenue primarily from the sale of products, including our mobile phones, tablets, and accessories. The Company also recognizes revenue from other contractual arrangements that may include a combination of products and NRE services or from the provision of solely NRE services. Revenue recognition incorporates discounts, price protection and customer incentives. In addition to cooperative marketing and other incentive programs, the Company has arrangements with some distributors, which allow for price protection and limited rights of return, generally through stock rotation programs. Under the price protection programs, the Company gives distributors credits for the difference between the original price paid and the Company’s then current price. Under the stock rotation programs, certain distributors are able to exchange certain products based on the number of qualified purchases made during the period. The Company’s handsets typically require a technical approval process. This process entails design and configuration activities required to conform the Company’s devices to a wireless carrier customer’s specific their network requirements. Each wireless carrier defines its own specific functional requirements and certification process in order for the product to be ready for manufacture. While the technical approval process does involve some level of customization, in addition to design and configuration, the Company does not charge separately and is not reimbursed for these activities to the extent that they do not involve significant customization and does not incur these costs in advance of entering into binding agreements with its wireless carrier customers. Such technical approval is obtained prior to shipment. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Cost of Revenues Advertising no Shipping and Handling Costs Deferred Revenues Research and Development Stock-Based Compensation Warranty Utilizing actual service records, the Company calculates the average service hours and parts expense per system to determine the estimated warranty charge. The Company updates these estimated charges periodically. The actual product performance and/or field expense profiles may differ, and in those cases the Company adjusts warranty accruals accordingly. From time to time, the Company ships mobile devices to its customers as seed stock. The seed stock represents extra units of mobile devices beyond the original mobile devices ordered by the customer and are primarily used to facilitate warranty coverage of mobile devices received by our customers from their direct customers. The warranty liability account balance is based on management’s estimates of the lifetime return rate for each model and the cost to repair each returned model. These assumptions are based on historical rates for similar products and on actual return rates. If the estimated cost to repair each unit increased by 10 68 10 68 10 Comprehensive Income or Loss Foreign currency translation 102 378 Sales taxes Income taxes Compliance with income tax regulations requires the Company to make decisions relating to the transfer pricing of revenue and expenses between each of its legal entities that are located in several countries. The Company’s determinations include many decisions based on management’s knowledge of the underlying assets of the business, the legal ownership of these assets, and the ultimate transactions conducted with customers and other third parties. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple tax jurisdictions. The Company may be periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when it is more likely than not that an uncertain tax position will not be sustained upon examination by a taxing authority. Such estimates are subject to change. See Note 11, “Income Taxes”. Net Loss per Share New accounting pronouncements The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. Pronouncements adopted in 2022: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), |
Revenue recognition
Revenue recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | NOTE 2 Revenue recognition The Company recognizes revenue primarily from the sale of products, including mobile phones, scanners, and accessories, and the majority of the Company’s contracts include only one performance obligation, namely the delivery of product. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition under ASC 606. The Company also recognizes revenue from other contracts that may include a combination of products and NRE services or from the provision of solely NRE services. Where there is a combination of products and NRE services, the Company accounts for the promises as individual performance obligations if they are concluded as distinct. Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. During the years ended December 31, 2022 and 2021, the Company did not have any contracts in which the products and NRE services were concluded to be a single performance obligation. In certain cases, the Company may offer tiered pricing based on volumes purchased for specific model phones. To date, all tiered pricing provisions have fallen into observable ranges of pricing to existing customers, thus, not resulting in any material right which could be concluded as its own performance obligation. In addition, the Company does not offer material post-contract support services to its customers. Net revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the goods and/or services. The transaction price for product sales is calculated as the product selling price net of variable consideration which may include estimates for marketing development funds, sales incentives, and price protection and stock rotation rights. The Company generally does not offer a right of return to its customers, except for certain distributors where the company estimates future returns and reduces revenue on sales subject to return and maintains a reserve for returns allowance. Typically, variable consideration does not need to be constrained as estimates are based on specific contract terms. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. Standalone selling price of the professional services are mostly based on time and materials. We determine our estimates of variable consideration based on historical collection experience with similar payor classes, aged accounts receivable by payor class, terms of payment agreements, correspondence from payors related to revenue audits or reviews, our historical settlement activity of audited and reviewed claims and current economic conditions using the portfolio approach. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods. Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware is recognized at the time control of the product transfers to the customer. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company’s revenue attributable to hardware, control transfers when products are shipped. Revenue attributable to professional services is recognized as the Company performs the professional services for the customer. Disaggregation of revenue The following table presents our net revenue disaggregate by product category for the years ended: Schedule of Net Revenue Disaggregate by Product Category 2022 2021 Year Ended December 31, 2022 2021 (in thousands) Smartphones $ 17,763 $ 14,794 Feature Phones 21,252 37,723 Tablets 29,475 — Accessories/Other 1,338 2,053 Total Revenue $ 69,828 $ 54,570 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 and general and administrative 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 4 The total capitalized costs to fulfill a contract is primarily associated with Company’s introduction of the XP10, XP5plus, and XP3plus model phones. As of December 31, 2022, and 2021, the total costs to fulfill a contract included in other assets were $ 6,848 2,345 Contract balances The Company records accounts receivable when it has an unconditional right to consideration. As of December 31, 2022, and 2021, the Company does not have a contract receivable balance. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are presented as a component of deferred revenue on the consolidated balance sheets. As of December 31, 2022 and December 31, 2021, the contract liabilities were $ 31 11 The following table is a rollforward of contract balances as of December 31, 2022: Schedule of Contract Balances Contractual Liability 2022 2021 Balance at January 1, 2022 $ 11 $ 5 Recognition of revenue (1,001 ) (880 ) Addition of revenue 1,021 886 Balance at December 31, 2022 $ 31 $ 11 |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | NOTE 3 Fair value measurement The fair value measurements standard establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the standard are described below: Level 1—Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2—Inputs to the valuation methodology include: ● Quoted market prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used for the years ended December 31, 2022 and 2021. Money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value: Summary of Fair Value Assets and Liabilities Level 1 Level 2 Level 3 Total December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 1,501 $ — $ — $ 1,501 Level 1 Level 2 Level 3 Total December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 1,500 $ — $ — $ 1,500 * Included in cash and cash equivalents on the consolidated balance sheets. |
Significant Balance Sheet Compo
Significant Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Balance Sheet Components | NOTE 4 — Significant Balance Sheet Components Inventory consisted of the following: Schedule of Inventory 2022 2021 December 31 2022 2021 Devices - for resale $ 3,473 $ 2,952 Raw materials 14 1,986 Accessories 423 606 Inventory, Net $ 3,910 $ 5,544 In August 2022, the Company stopped purchasing raw materials used by third-party manufacturers in the manufacturing of Sonim’s legacy devices. Excess raw materials were sold to ODM partners. During the year ended December 31, 2021, the Company recorded a $ 1,594 300 Distributor returns allowance The Company records reductions to revenue related to future distributor product returns based on the Company’s expectation. The Company had inventory related to distributor product returns totaling approximately $ 4 229 Prepaid expenses and other current assets consisted of the following: Schedule of Prepaid Expenses and Other Current Assets 2022 2021 December 31 2022 2021 Deposits for manufacturing inventory $ — $ 1,041 Prepaid taxes 433 544 Refundable value added taxes 45 1,693 Prepaid – NRE — 350 Prepaid licenses and royalties 366 552 Director and officer insurance 250 770 Prepaid parts (direct buy) 193 185 Other 520 717 Prepaid expenses and other current assets, net $ 1,807 $ 5,852 Property and equipment consisted of the following: Schedule of Property and Equipment 2022 2021 December 31 2022 2021 Computer equipment $ 412 $ 3,994 Software — 981 Furniture, fixtures, and office equipment 175 175 Leasehold Improvements — 179 Property and equipment, gross 587 5,329 Less: accumulated depreciation and amortization (419 ) (4,795 ) Property and equipment, net $ 168 $ 534 Depreciation and amortization expense of property and equipment for the years ended December 31, 2022 and 2021, was $ 244 301 4,751 4,621 130 910 856 Contract fulfillment assets are capitalized costs to test and obtain certification for cell phones with specific carriers. These costs are amortized over the estimated life of a phone model, which is four years. Contract fulfillment assets for the years ended December 31, 2022 and 2021 are $ 6,848 2,345 Other assets consisted of the following: Schedule of Other Assets 2022 2021 December 31 2022 2021 Advances to third party manufacturer $ 2,000 $ 2,000 Deposits 311 431 Director and officer insurance 525 — Other 136 93 Total Other Assets $ 2,972 $ 2,524 Accrued liabilities consisted of the following: Schedule of Accrued Expenses 2022 2021 December 31 2022 2021 Customer allowances $ 4,130 $ 3,148 Employee-related liabilities 1,365 1,893 Warranties 636 836 Accrual for goods received not invoiced 301 668 Contractual obligations 1,107 1,035 Royalties 256 1,210 Research and development and fulfillment costs 1,469 1,158 Credits due to customers 961 — Shipping — 157 Returns allowance 6 390 Legal 296 517 Other 165 341 Accrued liabilities, current $ 10,692 $ 11,353 The table below sets forth the activity in the warranty liability account, which is included in accrued expenses on the Consolidated Balance Sheets for the years ended December 31, 2022 and 2021: Schedule of Warrant Liability Included in Accrued Expenses on Consolidated Balance Sheet Balance, January 1, 2022 $ 836 Additions 1,493 Cost of warranty claims (1,693 ) Balance, December 31, 2022 $ 636 Balance, January 1, 2021 $ 1,530 Additions 1,086 Cost of warranty claims (1,780 ) Balance, December 31, 2021 $ 836 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
Accounts Receivable | NOTE 5 — Accounts Receivable The following table presents the components of the Company’s receivables as of December 31, 2022 and 2021: Schedule of Accounts Receivable December 31, 2022 December 31, 2021 Trade receivables $ 22,239 $ 11,735 Allowance for doubtful accounts (113 ) (932 ) Accounts receivable, net 22,126 10,803 Vendor non-trade receivables 2,269 2,255 Total accounts receivable $ 24,395 $ 13,058 The Company has non-trade receivables from manufacturing vendors resulting from the sale of components to the vendors who manufacture and assemble final products for the Company. The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling approximately $ 113 932 821 Trade receivables from the customer that purchases tablets from the Company accounts for 84 70 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | NOTE 6 — Leases The Company adopted ASU 2016-02 on January 1, 2022 At adoption of ASC 842, the Company determined the fair value of the lease liability for each of the four operating leases (excluding the short-term leases) as the net present value of future lease payments using the Company’s incremental borrowing rate of 8.5 8.5 142 One of the Company’s ROU assets is part of an asset group that had indicators of impairment (sublease income that is significantly less than the head lease obligation) as of December 31, 2021 and accordingly subject to an impairment analysis under ASC 360 at that time. At December 31, 2021 the amount of leasehold improvements and other recorded assets related to the asset group were not significant and as a result no impairment was required prior to adoption of ASC 842; however, had the recorded assets of the group at December 31, 2021 been significant an impairment charge would have been required. Upon adoption of ASC 842 and the recording of the ROU asset within this asset group, the Company reassessed impairment under ASC 360. As a result of this assessment, it was determined that as of the adoption date the fair value of the asset group was less than the recorded carrying value upon adoption and an impairment related to the ROU asset of $ 978 978 The Company entered into a sublease for the above property in September 2021 that had sublease income that was significantly less than the head lease payments. This sublease is for 13 months which, at the option of the subtenant, can be extended for 12 additional months. In determining the fair value of the ROU asset, the Company assumed that the subtenant will extend the lease because the sublease payments are less than market value. The Company determined that the fair value of the ROU asset as the sum of the sublease payments for the 25 months of the sublease 260 730 The Company elected the practical expedient for short-term leases for two leases that had terms of one year or less. ROU assets and lease liabilities were not established for these two short-term leases and rent payments are recorded as rent expense. On January 1, 2022 the Company began recording all lease payments as the payment of lease interest expense and a reduction of the lease liability for the four leases that are not short-term. ROU assets are amortized over the life of the Company’s lease. The following table shows the activity of the ROU assets and lease liability for the year ended on December 31, 2022: Summary of Activity of ROU Assets and Lease Liability Lease Liability Balance, December 31, 2021 $ — Adoption of ASC 842 1,805 Derecognition on cancelation of lease (1,211 ) Principal payments (528 ) Balance, December 31, 2022 66 Less short-term portion 66 Long term lease liability $ — ROU Assets Balance, December 31, 2021 $ — Adoption of ASC 842 1,805 Derecognition of deferred rent liability (142 ) Impairment of ROU asset (978 ) Derecognition on cancelation of lease (221 ) Amortization (398 ) Balance, December 31, 2022 $ 66 Future minimum lease payments under noncancelable operating lease commitments are as follows as of December 31, 2022: Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments Year Ending, December 31 st 2023 $ 66 2024 — 2025 — 2026 — Total undiscounted minimum lease commitments $ 66 Effect of discounting — Lease liabilities at December 31, 2022 $ 66 In connection with leases, for the year ended December 31, 2022, the Company recognized $ 398 97 143 11 80 no 0.2 8.5 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | NOTE 7 — Borrowings Long-Term Debt Promissory Notes Payable 736 two four years 8 147 214 The components of the long-term debt balance as of December 31, are as follows: Schedule of Components of Long-term Debt 2022 2021 Promissory note payable $ 147 $ 214 Less current portion (147 ) (148 ) Total long-term debt $ — $ 66 There is no long-term debt as of December 31, 2022. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Preferred Stock And Stockholders Equity | |
Convertible Preferred Stock and Stockholders’ Equity | NOTE 8 — Convertible Preferred Stock and Stockholders’ Equity On November 2, 2018, the Company amended and restated its previous certificate of incorporation and adjusted its authorized capital stock (par value of $ 0.001 100,000,000 5,000,000 no The following table shows shares of common stock reserved as of: Schedule of Common Stock Reserved 2022 2021 December 31 2022 2021 Shares subject to options to purchase common stock 4,476,215 95,413 Unvested restricted stock units 860,888 347,111 Shares subject to warrants to purchase common stock 2 2 Total 5,337,105 442,526 Common stock, shares reserved 5,337,105 442,526 |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders Equity | NOTE 9 — Stockholders Equity On April 13, 2022, the Company entered into a subscription agreement (the “Subscription Agreement”) with AJP Holding Company, LLC (“AJP”) whereby, subject to the terms thereof, AJP agreed to purchase from the Company an aggregate of 20,833,333 0.84 17.5 Pursuant to the terms and conditions set forth in the Subscription Agreement, the Purchased Shares were issued in two tranches: (i) 14,880,952 12.5 5,952,381 5.0 The first closing was completed on July 13, 2022 and the second closing was completed on August 8, 2022. In connection with the closings, the Company incurred approximately $ 3,130 Upon completion of the transaction, AJP controlled approximately 52 On July 13, 2022, Robert Tirva, the CFO and President of the Company, resigned and became eligible for $ 1 1.2 On July 13, 2022 two of the Company’s Board Members resigned and the remaining Board of Directors appointed three new Board Members, including a representative of AJP. On July 14, 2022 the Board of Directors appointed two additional Board Members including Peter Liu, the Company’s Chief Executive Officer. On September 15, 2021, the Company effected a 1-for-10 On June 30, 2021, we entered into a Sales Agreement with Sales Agents to sell shares of our common stock, $ 0.001 10,000 3.0 1,820,785 4.59 8,313 On September 23, 2021, we entered into a new Sales Agreement with the Sales Agent, to sell shares of our common stock, $ 0.001 41,637 3.0 10,280,906 1.89 19,389 45,305 0.99 45 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | NOTE 10— Stock-based Compensation On September 15, 2021, the Company effected a 1-for-10 As of December 31, 2022, the Company had the 2012 Equity Incentive Plan (the “2012 Option Plan”), 2019 Equity Incentive Plan (the “2019 Option Plan”) and the 2019 Employee Stock Purchase Plan in place. As of December 31, 2022, the number of shares available to be issued under the 2019 Option Plan were 496,915 The 2019 Option Plans provides for the grant of incentive and non-statutory stock options (“Options”), stock appreciation rights (“SAR”), restricted stock awards (“RSA”), and restricted stock unit awards (“RSU”) to employees, nonemployee directors, and consultants of the Company. Option awards granted under the 2019 Option Plan generally become exercisable ratably over a two-year four-year ten years no 100 110 five years The Board of Directors adopted, and its stockholders approved, the 2019 Employee Stock Purchase Plan and the 2019 Option Plan in March 2019 and April 2019, respectively, each of which became effective in connection with the IPO. There are 54,137 Additionally, the number of shares of common stock reserved for issuance under the 2019 Employee Stock Purchase Plan automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1 st 50,000 . The increase under the 2019 Employee Stock Purchase Plan for 2021 was 50,000 1,862,684 5 940,444 331,551 5,000,000 As of December 31, 2022 and 2021, zero 19,736 On July 17, 2022, and June 18, 2022, the Company granted an aggregate of 383,163 On August 5, 2022, the Company granted an aggregate of 171,428 On October 26, 2022, the Company granted an aggregate of 4,414,419 On November 18, 2022, the Company granted an aggregate of 286,392 On June 17, 2021, and June 18, 2021, the Company granted an aggregate of 46,747 On July 1, 2021, the Company granted an aggregate of 850 On October 8, 2021, the Company granted an aggregate of 75,000 On November 12, 2021, the Company granted an aggregate of 97,671 The stock-based compensation expense is as follows: Schedule of Stock Based Compensation Expense 2022 2021 For the Year Ended December 31 2022 2021 Research and development $ 18 $ 159 Sales and marketing 68 188 General and administrative 1,426 673 Cost of revenues 39 65 Total $ 1,551 $ 1,085 On January 27, 2022, 415,023 254 254 In the third quarter of 2022, 385,599 260 260 Stock Options: Stock option activity for the years ended December 31, 2022 and 2021 is as follows and reflects the 1-for-10 Reverse Stock Split that became effective on September 15, 2021: Schedule of Stock Option Activity Weighted average exercise price Weighted average remaining contractual life Aggregate Intrinsic Options per share (in years) Value* Outstanding at January 1, 2021 144,303 $ 36.37 7.82 $ 24 Options granted 0 $ Options exercised (707 ) $ 7.50 Options forfeited (23,171 ) $ 27.55 Options cancelled (25,012 ) $ 29.60 Outstanding at December 31, 2021 95,413 $ 40.00 6.73 $ 0 Options granted 4,414,419 $ 0.44 Options exercised 0 $ Options forfeited (15,303 ) $ 33.65 Options cancelled (18,314 ) $ 49.67 Outstanding at December 31, 2022 4,476,215 $ 0.95 9.76 $ 358 Vested and expected to vest at December 31, 2022 4,476,215 $ 0.95 9.76 $ 358 Exercisable at December 31, 2022 54,839 $ 39.45 5.27 $ 0 * The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the balance sheet date. As of December 31, 2022, there was approximately $ 3,228 3.27 The total pre-tax intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was zero The weighted average grant date fair value of options granted during the years ended December 31, 2022 was $ 0.40 The fair value of employee stock options is determined using the Black-Scholes option-pricing model using various inputs, including the Company’s estimates of the fair value of common stock on the date of grant, expected term, expected volatility, risk-free interest rate, and expectations regarding future dividends. Stock-based compensation also reflects the Company’s estimate regarding the portion of awards that may be forfeited. The following describes the key inputs used by the Company: Fair Value of Common Stock— The Company measures equity classified stock-based awards granted to employees and directors based on the estimated fair value on the date of grant and the expense is recognized on a straight-line basis, over the vesting period. We account for forfeitures as they occur. Expected Term—The expected term represents the period that the Company’s stock options are expected to be outstanding. The majority of stock option grants are considered to be “plain vanilla” and thus the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. Expected Volatility—The expected volatility was derived from the historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to the business over a period equivalent to the expected term of the stock option grants. The Company completed its IPO in May 2019, and therefore does not have sufficient history. Risk-Free Interest Rate—The risk-free interest rate is based on the interest yield in effect at the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Dividend Rate—The expected dividend rate was assumed to be zero Forfeiture Rate—Forfeitures are recognized when they occur. Historically, the Company estimated the forfeiture rate based on an analysis of actual forfeiture experience, analysis of employee turnover behavior, and other factors. The fair value of option grants made during the years ended December 31, 2022, was estimated using the following Black-Scholes option pricing model assumptions: Schedule of Fair Value Option grants 2022 Expected dividend yield 0 % Risk-free interest rate 4.04 % Expected volatility 116 % Expected life (in years) 6.8 Restricted Stock Awards: During 2022, 385,599 260 Restricted Stock Units: As of December 31, 2022, and 2021, the unvested restricted stock units totaled 860,888 347,108 We account for restricted stock units (RSUs) issued to employees and non-employees at fair value, based on the market price of our stock on the date of grant. The RSUs are expensed over the vesting period, and we account for forfeitures as they occur. RSUs, primarily issued as incentives, generally vest annually over one to four years. The following table summarized the outstanding RSU’s as of December 31, 2022: Schedule of Outstanding Restricted Stock Units RSU’s Outstanding at January 1, 2021 347,108 Granted 840,983 Released (286,542 ) Forfeited (40,661 ) Outstanding at December 31, 2022 860,888 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 — Income Taxes The following table presents the income (loss) before income taxes for domestic and foreign operations, and the components of the provision (benefit) for income taxes for the years ended December 31: Schedule of Income Tax Expense Benefit 2022 2021 Domestic loss $ (13,885 ) $ (39,065 ) Foreign subsidiaries income (18 ) 605 Income (loss) before income taxes $ (13,903 ) $ (38,460 ) 2022 2021 Current income tax expense: Federal $ — $ — State 21 17 Foreign 306 169 Total Current 327 186 Deferred income tax expense: Federal — — State — — Foreign (143 ) (19 ) Total Deferred (143 ) (19 ) Total provision (benefit) for income taxes $ 184 $ 167 The Company’s effective tax rate differs from the federal statutory rate due to the following for the years ended December 31: Schedule of Effective Income Tax 2022 2021 Statutory federal income tax rate 21.00 % 21.00 % State income taxes, net of federal tax benefits 1.00 % 1.65 % Stock compensation -1.43 % -0.54 % ASC 842 Adoption 1.48 % 0.00 % Foreign rate differential -1.20 % -0.06 % Tax credits 0.00 % 0.26 % GILTI Inclusion -0.17 % -0.41 % Non-deductible expenses -0.00 % -0.01 % Valuation allowance -22.00 % -22.34 % Effective tax rate -1.32 % -0.44 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities at December 31: Schedule of Components of the Company’s Deferred Tax Assets and Liabilities 2022 2021 Gross deferred tax assets: Net operating loss carryforward $ 18,937 $ 20,770 Section 174 capitalized costs 1,697 — Tax credits 99 199 Accruals and reserves 2,314 2,446 Property and equipment 51 102 ASC 842 14 — Alternative minimum tax credits 21 21 Total gross deferred tax assets 23,133 23,538 Less: valuation allowance (22,996 ) (22,920 ) Total deferred tax assets net of valuation allowance 137 618 Deferred tax liabilities: Property and equipment — — Accruals and reserves — (550 ) ASC 842 right of use asset (14 ) — Net deferred tax assets (liabilities) $ 123 $ 68 Beginning January 1, 2022, the Tax Cuts and Jobs Act (the “Tax Act”) eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to Internal Revenue Code (“IRC”) Section 174. The capitalized expenses are amortized over a 5 15 8,032 A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and the accumulated deficit, the Company provided a full valuation allowance against the U.S. deferred tax assets resulting from the accruals and reserves along with the net operating loss and credits carried forward. At December 31, 2022 and 2021 the Company had net deferred income tax assets related primarily to net operating loss carry forwards, accruals and reserves and tax credit carryforward that are not currently being recognized of $ 23.0 22.9 We have not provided U.S. Federal and State income taxes, nor foreign withholding taxes on approximately $ 10.1 Estimate of cumulative foreign earnings is as follows as of December 31: Schedule of Cumulative Foreign Earnings 2022 2021 China $ 5,031 $ 4,741 India 5,098 5,061 Total $ 10,129 $ 9,802 The Company had net operating loss carryovers as follows as of December 31: Summary of Operating Loss Carryforwards 2022 2021 Federal NOL $ 88,375 $ 92,262 State NOL $ 7,429 $ 27,577 Net operating loss carryforwards are available to offset future federal and state taxable income. Federal and state net operating loss carryforwards begin to expire in 2037 and 2035, respectively. The Company had research and development (“R&D”) credit carryforwards as follows as of December 31: Summary of Tax Credit Carryforwards 2022 2021 Federal R&D credits $ — $ 99 California R&D credits $ 125 $ 126 Federal and state laws impose restrictions on the utilization of net operating loss carryforwards and R&D credit carryforwards in the event of a change in ownership of the Company, which constitutes an ‘ownership change’ as defined by Internal Revenue Code Section 382 and 383. The Company experienced an ownership change in the past that materially impacts the availability of its net operating losses and tax credits. The amounts indicated in the above tables reflect the reduction of net operating losses and credit carryforwards as a result of previous ownership changes that the Company experienced. Should there be additional ownership changes in the future, the Company’s ability to utilize existing carryforwards could be substantially restricted. The Company had excess interest expense carryforwards of $ 1,594 Uncertain Tax Positions The Company accounts for uncertainty in income taxes in accordance with ASC 740, Income Taxes. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The following table summarizes the activity related to unrecognized tax benefits as follows as of December 31: Schedule of Unrecognized Tax Benefits In thousands 2022 2021 Unrecognized benefit-beginning of period $ 1,306 $ 1,190 Gross increases-prior period tax positions — 34 Gross (decreases)-prior period tax positions (33 ) — Decrease prior period tax positions - settlements — — Gross increases -current period tax positions — 82 Unrecognized benefit-end of period $ 1,273 $ 1,306 $ 33 1,240 1,273 The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. The Company reported a tax expense of $ 40 176 The Company does not expect any significant change in its unrecognized tax benefits during the next twelve months. The Company’s material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2012 and forward for California purposes and for 2017 and forward for federal tax purposes. The China tax years are open under the statute of limitations from 2017 and forward. The India tax years are open under the statute of limitations from 2018 and forward. Accounting for GILTI requires companies to adopt tax accounting policies related to: Treating the book-tax differences as either period costs or to recognize GILTI related deferred tax assets/liabilities in accounting for the GILTI book-tax differences. The Company has elected to treat this difference as a period cost. In the Company’s valuation allowance analysis, the Company will elect the Increment Cash Tax Savings Approach in determining its U.S. valuation allowance. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 — Commitments and Contingencies The terms and conditions of applicable bylaws, certificates or articles of incorporation, agreements or applicable law may obligate Sonim under certain circumstances to indemnify its current and former directors, officers or employees, and underwriters, with respect to certain of the matters described below and Sonim has been advancing legal fees and costs to certain current and former directors, officers, employees and underwriters in connection with certain matters described below. Third Party Designer Commitments zero 6,460 Purchase Commitments 19,975 5,663 Royalty payments 5% 622 2,168 General litigation The results of any future litigation cannot be predicted with certainty and, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management time and resources and other factors. Indemnification Contingent severance obligations At the beginning of 2021, the Company outsourced substantially all of its software development to a third-party and transferred 105 employees to support the ongoing work to be performed. In connection with outsourcing its software development, the Company entered into an agreement of future business volume over the next three years. 1,154 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 13 — Net Loss Per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods ended and reflects the 1-for-10 Schedule of Computation of Basic and Diluted Net Loss Per Share 2022 2021 For the Years Ended December 31 2022 2021 Numerator: Net loss $ (14,087 ) $ (38,627 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 28,889,111 9,464,560 Net loss per share, basic and diluted $ (0.49 ) $ (4.08 ) The potentially dilutive common shares that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive for the periods ended: Summary of Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share 2022 2021 For the Years Ended December 31 2022 2021 Shares subject to options to purchase common stock 4,476,215 95,413 Unvested restricted stock units 860,888 347,111 Shares subject to warrants to purchase common stock 2 2 Total 5,337,105 442,526 |
Entity Level Information
Entity Level Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Entity Level Information | NOTE 14 — Entity Level Information Segment Information one Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the chief operating officer, in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. The following table summarizes the revenue by region based on ship-to destinations for the periods ended: Schedule of Revenue by Region 2022 2021 For the Years Ended December 31 2022 2021 U.S. $ 29,444 $ 42,356 Canada and Latin America 8,975 9,401 Europe and Middle East 1,202 1,142 Asia Pacific 30,207 1,671 Total revenues $ 69,828 $ 54,570 Long-lived assets located in the United States and Asia Pacific region were $ 6,861 2,370 168 534 The composition of revenues is as follows: Schedule of Composition of Revenues 2022 2021 For the Years Ended December 31 2022 2021 Product Sales $ 69,797 $ 54,476 Services 31 94 Total revenues $ 69,828 $ 54,570 Concentrations of Credit Risk 113 932 Receivables from our tablets customer accounted for 84 70 Revenue from certain customers in 2022 and 2021 accounted for approximately the following percentage of total revenues: Schedule of Percentage of Total Revenues For the Years Ended December 31, 2022 2021 Customer A 42 % 23 % Customer B 25 % 23 % Customer C 9 % 22 % Customer D 7 % 8 % Total 83 % 76 % The Company’s tablet customer accounted for 42 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15 — Subsequent Events On February 14, 2023, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below $ 1.00 On March 6, 2023, we received a letter from the SEC that states that the Commission has concluded the investigation of the Company and does not intend to recommend any enforcement action against the Company. As a result, the Company expects to reduce its legal expense in 2023. |
The Company and its significa_2
The Company and its significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business August 5, 1999 On September 15, 2021, the Company effected a 1-for-10 |
Liquidity and Ability to Continue as a Going Concern | Liquidity and Ability to Continue as a Going Concern 13,213 14,087 12,360 To alleviate a potential lack of liquidity, management is currently evaluating various funding alternatives and may seek to raise additional funds through other issuances of equity, mezzanine or debt securities, through arrangements with strategic or investment partners with greater sources of financing or through obtaining credit from government or financial institutions. The Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry. |
Financial Statement Presentation | Financial Statement Presentation |
Principles of Consolidation | Principles of Consolidation |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. |
Estimates | Estimates —The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates include, but are not limited to, estimates related to revenue recognition; valuation assumptions regarding the determination of the fair value of common stock, as well as stock options; the useful lives of our long-lived assets; product warranties; loss contingencies; the recognition and measurement of income tax assets and liabilities, including uncertain tax positions; the net realizable value of inventory; and allowances for bad debt. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with high-quality, federally insured commercial banks in the United States and cash balances are in excess of federal insurance limits at December 31, 2022 and 2021. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling approximately $ 113 932 5 936 |
Segment Information | Segment Information |
Cash and Cash Equivalents | Cash and Cash Equivalents 1,061 432 |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Inventory | Inventory The Company periodically reviews its inventory for potential slow-moving or obsolete items and writes down specific items to net realizable value, as appropriate. The Company writes down inventory based on forecasted demand and technological obsolescence. These factors are impacted by market and economic conditions, technology changes, new product introductions, and changes in strategic direction, and require estimates that may include uncertain elements. Actual demand may differ from forecasted demand and such differences may have a material effect on recorded inventory values. Any write-down of inventory to the lower of cost or net realizable value creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. |
Property and Equipment | Property and Equipment |
Leases | Leases — |
Non-recurring Engineering (“NRE”) Tooling and Purchased Software Licenses | Non-recurring Engineering (“NRE”) Tooling and Purchased Software Licenses —Third-party design services relating to the design of tooling materials and purchased software licenses used in the manufacturing process are capitalized and included in other assets within the consolidated balance sheets. During the years ended December 31, 2022 and 2021, amortization of NRE tooling and NRE software costs approximating $ 13 and $ 72 were charged to cost of revenues. The related net book value is $ 13 and $ 26 , respectively, as of December 31, 2022 and 2021. |
Long-lived Assets | Long-lived Assets |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers The Company recognizes revenue primarily from the sale of products, including our mobile phones, tablets, and accessories. The Company also recognizes revenue from other contractual arrangements that may include a combination of products and NRE services or from the provision of solely NRE services. Revenue recognition incorporates discounts, price protection and customer incentives. In addition to cooperative marketing and other incentive programs, the Company has arrangements with some distributors, which allow for price protection and limited rights of return, generally through stock rotation programs. Under the price protection programs, the Company gives distributors credits for the difference between the original price paid and the Company’s then current price. Under the stock rotation programs, certain distributors are able to exchange certain products based on the number of qualified purchases made during the period. The Company’s handsets typically require a technical approval process. This process entails design and configuration activities required to conform the Company’s devices to a wireless carrier customer’s specific their network requirements. Each wireless carrier defines its own specific functional requirements and certification process in order for the product to be ready for manufacture. While the technical approval process does involve some level of customization, in addition to design and configuration, the Company does not charge separately and is not reimbursed for these activities to the extent that they do not involve significant customization and does not incur these costs in advance of entering into binding agreements with its wireless carrier customers. Such technical approval is obtained prior to shipment. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. |
Cost of Revenues | Cost of Revenues |
Advertising | Advertising no |
Shipping and Handling Costs | Shipping and Handling Costs |
Deferred Revenues | Deferred Revenues |
Research and Development | Research and Development |
Stock-Based Compensation | Stock-Based Compensation |
Warranty | Warranty Utilizing actual service records, the Company calculates the average service hours and parts expense per system to determine the estimated warranty charge. The Company updates these estimated charges periodically. The actual product performance and/or field expense profiles may differ, and in those cases the Company adjusts warranty accruals accordingly. From time to time, the Company ships mobile devices to its customers as seed stock. The seed stock represents extra units of mobile devices beyond the original mobile devices ordered by the customer and are primarily used to facilitate warranty coverage of mobile devices received by our customers from their direct customers. The warranty liability account balance is based on management’s estimates of the lifetime return rate for each model and the cost to repair each returned model. These assumptions are based on historical rates for similar products and on actual return rates. If the estimated cost to repair each unit increased by 10 68 10 68 10 |
Comprehensive Income or Loss | Comprehensive Income or Loss |
Foreign currency translation | Foreign currency translation 102 378 |
Sales taxes | Sales taxes |
Income taxes | Income taxes Compliance with income tax regulations requires the Company to make decisions relating to the transfer pricing of revenue and expenses between each of its legal entities that are located in several countries. The Company’s determinations include many decisions based on management’s knowledge of the underlying assets of the business, the legal ownership of these assets, and the ultimate transactions conducted with customers and other third parties. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple tax jurisdictions. The Company may be periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when it is more likely than not that an uncertain tax position will not be sustained upon examination by a taxing authority. Such estimates are subject to change. See Note 11, “Income Taxes”. |
Net Loss per Share | Net Loss per Share |
New accounting pronouncements | New accounting pronouncements The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. Pronouncements adopted in 2022: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), |
Revenue recognition (Tables)
Revenue recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Net Revenue Disaggregate by Product Category | The following table presents our net revenue disaggregate by product category for the years ended: Schedule of Net Revenue Disaggregate by Product Category 2022 2021 Year Ended December 31, 2022 2021 (in thousands) Smartphones $ 17,763 $ 14,794 Feature Phones 21,252 37,723 Tablets 29,475 — Accessories/Other 1,338 2,053 Total Revenue $ 69,828 $ 54,570 |
Schedule of Contract Balances | The following table is a rollforward of contract balances as of December 31, 2022: Schedule of Contract Balances Contractual Liability 2022 2021 Balance at January 1, 2022 $ 11 $ 5 Recognition of revenue (1,001 ) (880 ) Addition of revenue 1,021 886 Balance at December 31, 2022 $ 31 $ 11 |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Assets and Liabilities | The following tables sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value: Summary of Fair Value Assets and Liabilities Level 1 Level 2 Level 3 Total December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 1,501 $ — $ — $ 1,501 Level 1 Level 2 Level 3 Total December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 1,500 $ — $ — $ 1,500 * Included in cash and cash equivalents on the consolidated balance sheets. |
Significant Balance Sheet Com_2
Significant Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory 2022 2021 December 31 2022 2021 Devices - for resale $ 3,473 $ 2,952 Raw materials 14 1,986 Accessories 423 606 Inventory, Net $ 3,910 $ 5,544 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: Schedule of Prepaid Expenses and Other Current Assets 2022 2021 December 31 2022 2021 Deposits for manufacturing inventory $ — $ 1,041 Prepaid taxes 433 544 Refundable value added taxes 45 1,693 Prepaid – NRE — 350 Prepaid licenses and royalties 366 552 Director and officer insurance 250 770 Prepaid parts (direct buy) 193 185 Other 520 717 Prepaid expenses and other current assets, net $ 1,807 $ 5,852 |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment 2022 2021 December 31 2022 2021 Computer equipment $ 412 $ 3,994 Software — 981 Furniture, fixtures, and office equipment 175 175 Leasehold Improvements — 179 Property and equipment, gross 587 5,329 Less: accumulated depreciation and amortization (419 ) (4,795 ) Property and equipment, net $ 168 $ 534 |
Schedule of Other Assets | Other assets consisted of the following: Schedule of Other Assets 2022 2021 December 31 2022 2021 Advances to third party manufacturer $ 2,000 $ 2,000 Deposits 311 431 Director and officer insurance 525 — Other 136 93 Total Other Assets $ 2,972 $ 2,524 |
Schedule of Accrued Expenses | Accrued liabilities consisted of the following: Schedule of Accrued Expenses 2022 2021 December 31 2022 2021 Customer allowances $ 4,130 $ 3,148 Employee-related liabilities 1,365 1,893 Warranties 636 836 Accrual for goods received not invoiced 301 668 Contractual obligations 1,107 1,035 Royalties 256 1,210 Research and development and fulfillment costs 1,469 1,158 Credits due to customers 961 — Shipping — 157 Returns allowance 6 390 Legal 296 517 Other 165 341 Accrued liabilities, current $ 10,692 $ 11,353 |
Schedule of Warrant Liability Included in Accrued Expenses on Consolidated Balance Sheet | The table below sets forth the activity in the warranty liability account, which is included in accrued expenses on the Consolidated Balance Sheets for the years ended December 31, 2022 and 2021: Schedule of Warrant Liability Included in Accrued Expenses on Consolidated Balance Sheet Balance, January 1, 2022 $ 836 Additions 1,493 Cost of warranty claims (1,693 ) Balance, December 31, 2022 $ 636 Balance, January 1, 2021 $ 1,530 Additions 1,086 Cost of warranty claims (1,780 ) Balance, December 31, 2021 $ 836 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
Schedule of Accounts Receivable | The following table presents the components of the Company’s receivables as of December 31, 2022 and 2021: Schedule of Accounts Receivable December 31, 2022 December 31, 2021 Trade receivables $ 22,239 $ 11,735 Allowance for doubtful accounts (113 ) (932 ) Accounts receivable, net 22,126 10,803 Vendor non-trade receivables 2,269 2,255 Total accounts receivable $ 24,395 $ 13,058 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Summary of Activity of ROU Assets and Lease Liability | Summary of Activity of ROU Assets and Lease Liability Lease Liability Balance, December 31, 2021 $ — Adoption of ASC 842 1,805 Derecognition on cancelation of lease (1,211 ) Principal payments (528 ) Balance, December 31, 2022 66 Less short-term portion 66 Long term lease liability $ — ROU Assets Balance, December 31, 2021 $ — Adoption of ASC 842 1,805 Derecognition of deferred rent liability (142 ) Impairment of ROU asset (978 ) Derecognition on cancelation of lease (221 ) Amortization (398 ) Balance, December 31, 2022 $ 66 |
Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments | Future minimum lease payments under noncancelable operating lease commitments are as follows as of December 31, 2022: Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments Year Ending, December 31 st 2023 $ 66 2024 — 2025 — 2026 — Total undiscounted minimum lease commitments $ 66 Effect of discounting — Lease liabilities at December 31, 2022 $ 66 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-term Debt | The components of the long-term debt balance as of December 31, are as follows: Schedule of Components of Long-term Debt 2022 2021 Promissory note payable $ 147 $ 214 Less current portion (147 ) (148 ) Total long-term debt $ — $ 66 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Preferred Stock And Stockholders Equity | |
Schedule of Common Stock Reserved | The following table shows shares of common stock reserved as of: Schedule of Common Stock Reserved 2022 2021 December 31 2022 2021 Shares subject to options to purchase common stock 4,476,215 95,413 Unvested restricted stock units 860,888 347,111 Shares subject to warrants to purchase common stock 2 2 Total 5,337,105 442,526 Common stock, shares reserved 5,337,105 442,526 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Expense | The stock-based compensation expense is as follows: Schedule of Stock Based Compensation Expense 2022 2021 For the Year Ended December 31 2022 2021 Research and development $ 18 $ 159 Sales and marketing 68 188 General and administrative 1,426 673 Cost of revenues 39 65 Total $ 1,551 $ 1,085 |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31, 2022 and 2021 is as follows and reflects the 1-for-10 Reverse Stock Split that became effective on September 15, 2021: Schedule of Stock Option Activity Weighted average exercise price Weighted average remaining contractual life Aggregate Intrinsic Options per share (in years) Value* Outstanding at January 1, 2021 144,303 $ 36.37 7.82 $ 24 Options granted 0 $ Options exercised (707 ) $ 7.50 Options forfeited (23,171 ) $ 27.55 Options cancelled (25,012 ) $ 29.60 Outstanding at December 31, 2021 95,413 $ 40.00 6.73 $ 0 Options granted 4,414,419 $ 0.44 Options exercised 0 $ Options forfeited (15,303 ) $ 33.65 Options cancelled (18,314 ) $ 49.67 Outstanding at December 31, 2022 4,476,215 $ 0.95 9.76 $ 358 Vested and expected to vest at December 31, 2022 4,476,215 $ 0.95 9.76 $ 358 Exercisable at December 31, 2022 54,839 $ 39.45 5.27 $ 0 * The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the balance sheet date. |
Schedule of Fair Value Option grants | The fair value of option grants made during the years ended December 31, 2022, was estimated using the following Black-Scholes option pricing model assumptions: Schedule of Fair Value Option grants 2022 Expected dividend yield 0 % Risk-free interest rate 4.04 % Expected volatility 116 % Expected life (in years) 6.8 |
Schedule of Outstanding Restricted Stock Units | The following table summarized the outstanding RSU’s as of December 31, 2022: Schedule of Outstanding Restricted Stock Units RSU’s Outstanding at January 1, 2021 347,108 Granted 840,983 Released (286,542 ) Forfeited (40,661 ) Outstanding at December 31, 2022 860,888 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense Benefit | The following table presents the income (loss) before income taxes for domestic and foreign operations, and the components of the provision (benefit) for income taxes for the years ended December 31: Schedule of Income Tax Expense Benefit 2022 2021 Domestic loss $ (13,885 ) $ (39,065 ) Foreign subsidiaries income (18 ) 605 Income (loss) before income taxes $ (13,903 ) $ (38,460 ) 2022 2021 Current income tax expense: Federal $ — $ — State 21 17 Foreign 306 169 Total Current 327 186 Deferred income tax expense: Federal — — State — — Foreign (143 ) (19 ) Total Deferred (143 ) (19 ) Total provision (benefit) for income taxes $ 184 $ 167 |
Schedule of Effective Income Tax | The Company’s effective tax rate differs from the federal statutory rate due to the following for the years ended December 31: Schedule of Effective Income Tax 2022 2021 Statutory federal income tax rate 21.00 % 21.00 % State income taxes, net of federal tax benefits 1.00 % 1.65 % Stock compensation -1.43 % -0.54 % ASC 842 Adoption 1.48 % 0.00 % Foreign rate differential -1.20 % -0.06 % Tax credits 0.00 % 0.26 % GILTI Inclusion -0.17 % -0.41 % Non-deductible expenses -0.00 % -0.01 % Valuation allowance -22.00 % -22.34 % Effective tax rate -1.32 % -0.44 % |
Schedule of Components of the Company’s Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities at December 31: Schedule of Components of the Company’s Deferred Tax Assets and Liabilities 2022 2021 Gross deferred tax assets: Net operating loss carryforward $ 18,937 $ 20,770 Section 174 capitalized costs 1,697 — Tax credits 99 199 Accruals and reserves 2,314 2,446 Property and equipment 51 102 ASC 842 14 — Alternative minimum tax credits 21 21 Total gross deferred tax assets 23,133 23,538 Less: valuation allowance (22,996 ) (22,920 ) Total deferred tax assets net of valuation allowance 137 618 Deferred tax liabilities: Property and equipment — — Accruals and reserves — (550 ) ASC 842 right of use asset (14 ) — Net deferred tax assets (liabilities) $ 123 $ 68 |
Schedule of Cumulative Foreign Earnings | Estimate of cumulative foreign earnings is as follows as of December 31: Schedule of Cumulative Foreign Earnings 2022 2021 China $ 5,031 $ 4,741 India 5,098 5,061 Total $ 10,129 $ 9,802 |
Summary of Operating Loss Carryforwards | Summary of Operating Loss Carryforwards 2022 2021 Federal NOL $ 88,375 $ 92,262 State NOL $ 7,429 $ 27,577 |
Summary of Tax Credit Carryforwards | The Company had research and development (“R&D”) credit carryforwards as follows as of December 31: Summary of Tax Credit Carryforwards 2022 2021 Federal R&D credits $ — $ 99 California R&D credits $ 125 $ 126 |
Schedule of Unrecognized Tax Benefits | The following table summarizes the activity related to unrecognized tax benefits as follows as of December 31: Schedule of Unrecognized Tax Benefits In thousands 2022 2021 Unrecognized benefit-beginning of period $ 1,306 $ 1,190 Gross increases-prior period tax positions — 34 Gross (decreases)-prior period tax positions (33 ) — Decrease prior period tax positions - settlements — — Gross increases -current period tax positions — 82 Unrecognized benefit-end of period $ 1,273 $ 1,306 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | Schedule of Computation of Basic and Diluted Net Loss Per Share 2022 2021 For the Years Ended December 31 2022 2021 Numerator: Net loss $ (14,087 ) $ (38,627 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 28,889,111 9,464,560 Net loss per share, basic and diluted $ (0.49 ) $ (4.08 ) |
Summary of Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share | Summary of Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share 2022 2021 For the Years Ended December 31 2022 2021 Shares subject to options to purchase common stock 4,476,215 95,413 Unvested restricted stock units 860,888 347,111 Shares subject to warrants to purchase common stock 2 2 Total 5,337,105 442,526 |
Entity Level Information (Table
Entity Level Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Region | The following table summarizes the revenue by region based on ship-to destinations for the periods ended: Schedule of Revenue by Region 2022 2021 For the Years Ended December 31 2022 2021 U.S. $ 29,444 $ 42,356 Canada and Latin America 8,975 9,401 Europe and Middle East 1,202 1,142 Asia Pacific 30,207 1,671 Total revenues $ 69,828 $ 54,570 |
Schedule of Composition of Revenues | The composition of revenues is as follows: Schedule of Composition of Revenues 2022 2021 For the Years Ended December 31 2022 2021 Product Sales $ 69,797 $ 54,476 Services 31 94 Total revenues $ 69,828 $ 54,570 |
Schedule of Percentage of Total Revenues | Revenue from certain customers in 2022 and 2021 accounted for approximately the following percentage of total revenues: Schedule of Percentage of Total Revenues For the Years Ended December 31, 2022 2021 Customer A 42 % 23 % Customer B 25 % 23 % Customer C 9 % 22 % Customer D 7 % 8 % Total 83 % 76 % |
The Company and its significa_3
The Company and its significant accounting policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Date of incorporation | Aug. 05, 1999 | ||
Stockholders equity reverse stock split | 1-for-10 | ||
Cash and cash equivalents at carrying value | $ 13,213 | $ 11,233 | |
Net income loss | 14,087 | 38,627 | |
Net cash provided by used in operating activities | 12,360 | ||
Financing receivable allowance for credit losses | 113 | 932 | |
Bad debt expense | 5 | 936 | |
Foreign cash and cash equivalents at carrying value | 1,061 | 432 | |
Advertising Expense | $ 0 | 0 | |
Warranty liability increase percentage | 10% | ||
Warranty liability | $ 68 | ||
Warranty liability decrease percentage | 10% | ||
Foreign currency transaction | $ 102 | 378 | |
Non Recurring Engineering Tooling and Purchased Software Licenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Capitalized Computer Software, Amortization | 13 | 72 | |
Capitalized Computer Software, Net | $ 13 | $ 26 |
Schedule of Net Revenue Disaggr
Schedule of Net Revenue Disaggregate by Product Category (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 69,828 | $ 54,570 |
Smartphones [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 17,763 | 14,794 |
Feature Phones [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 21,252 | 37,723 |
Tablets/Accessories/Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 29,475 | |
Accessories/Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 1,338 | $ 2,053 |
Schedule of Contract Balances (
Schedule of Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Balance at January 1, 2022 | $ 11 | |
Balance at December 31, 2022 | 31 | $ 11 |
Contractual Liability [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Balance at January 1, 2022 | 11 | 5 |
Recognition of revenue | (1,001) | (880) |
Addition of revenue | 1,021 | 886 |
Balance at December 31, 2022 | $ 31 | $ 11 |
Revenue recognition (Details Na
Revenue recognition (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Estimated life of a particular model phone | 4 years | |
Contract liabilities | $ 31 | $ 11 |
Other Assets [Member] | ||
Total capitalized costs | $ 6,848 | $ 2,345 |
Summary of Fair Value Assets an
Summary of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds * | [1] | $ 1,501 | $ 1,500 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds * | [1] | 1,501 | 1,500 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds * | [1] | ||
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds * | [1] | ||
[1]Included in cash and cash equivalents on the consolidated balance sheets. |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Devices - for resale | $ 3,473 | $ 2,952 |
Raw materials | 14 | 1,986 |
Accessories | 423 | 606 |
Inventory, Net | $ 3,910 | $ 5,544 |
Schedule of Prepaid Expenses an
Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deposits for manufacturing inventory | $ 1,041 | |
Prepaid taxes | 433 | 544 |
Refundable value added taxes | 45 | 1,693 |
Prepaid – NRE | 350 | |
Prepaid licenses and royalties | 366 | 552 |
Director and officer insurance | 250 | 770 |
Prepaid parts (direct buy) | 193 | 185 |
Other | 520 | 717 |
Prepaid expenses and other current assets, net | $ 1,807 | $ 5,852 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 587 | $ 5,329 |
Less: accumulated depreciation and amortization | (419) | (4,795) |
Property and equipment, net | 168 | 534 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 412 | 3,994 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 981 | |
Furniture Fixtures and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 175 | 175 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 179 |
Schedule of Other Assets (Detai
Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advances to third party manufacturer | $ 2,000 | $ 2,000 |
Deposits | 311 | 431 |
Director and officer insurance | 525 | |
Other | 136 | 93 |
Total Other Assets | $ 2,972 | $ 2,524 |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer allowances | $ 4,130 | $ 3,148 |
Employee-related liabilities | 1,365 | 1,893 |
Warranties | 636 | 836 |
Accrual for goods received not invoiced | 301 | 668 |
Contractual obligations | 1,107 | 1,035 |
Royalties | 256 | 1,210 |
Research and development and fulfillment costs | 1,469 | 1,158 |
Credits due to customers | 961 | |
Shipping | 157 | |
Returns allowance | 6 | 390 |
Legal | 296 | 517 |
Other | 165 | 341 |
Accrued liabilities, current | $ 10,692 | $ 11,353 |
Schedule of Warrant Liability I
Schedule of Warrant Liability Included in Accrued Expenses on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Beginning balance | $ 836 | $ 1,530 |
Additions | 1,493 | 1,086 |
Cost of warranty claims | (1,693) | (1,780) |
Ending balance | $ 636 | $ 836 |
Significant Balance Sheet Com_3
Significant Balance Sheet Components (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Inventory adjustments | $ 1,594 | |
Accrued loss | 300 | |
Retail related inventory | $ 4 | 229 |
Depreciation and amortization expense | 244 | 301 |
property and equipment cost | 4,751 | |
Accumulated depreciation | 4,621 | |
Loss on disposal of assets | 130 | 54 |
Other Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total capitalized costs | $ 6,848 | 2,345 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment disposals | 910 | |
Property and equipment accumulated depreciation | $ 856 |
Schedule of Accounts Receivable
Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Credit Loss [Abstract] | ||
Trade receivables | $ 22,239 | $ 11,735 |
Allowance for doubtful accounts | (113) | (932) |
Accounts receivable, net | 22,126 | 10,803 |
Vendor non-trade receivables | 2,269 | 2,255 |
Total accounts receivable | $ 24,395 | $ 13,058 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||
Allowance for doubtful accounts, premiums and other receivables | $ 113 | $ 932 |
Allowance for doubtful accounts | $ 821 | |
Customer [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Product Information [Line Items] | ||
Accounts receivable percentage | 84% | |
Customer One [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Product Information [Line Items] | ||
Accounts receivable percentage | 70% |
Summary of Activity of ROU Asse
Summary of Activity of ROU Assets and Lease Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Lease liability, opening balance | ||
Lease liability, Adoption of ASC 842 | 1,805 | |
Derecognition on cancelation of lease | (1,211) | |
Lease liability, Principal payments | (528) | |
Lease liability, ending balance | 66 | |
Lease liability, Less short-term portion | 66 | |
Lease liability, Long term lease liability | $ 66 | |
Right of use assets, beginning balance | ||
Right of use assets, Adoption of ASC 842 | 1,805 | |
Right of use assets, Derecognition of deferred rent liability | (142) | |
Right of use assets, Impairment of ROU asset | (978) | |
Right of use assets, Derecognition on cancelation of lease | (221) | |
Right of use assets, Amortization | (398) | |
Right of use assets, ending balance | $ 66 |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2023 | $ 66 | |
2024 | ||
2025 | ||
2026 | ||
Total undiscounted minimum lease commitments | 66 | |
Effect of discounting | ||
Lease liabilities at December 31, 2022 | $ 66 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Incremental borrowing rate | 8.50% | ||
Operating lease, right-of-use asset, reduced | $ 142,000 | ||
Operating lease, right-of-use asset, impairment | $ 978,000 | ||
Operating sublease, option to extend, description | This sublease is for 13 months which, at the option of the subtenant, can be extended for 12 additional months. In determining the fair value of the ROU asset, the Company assumed that the subtenant will extend the lease because the sublease payments are less than market value. The Company determined that the fair value of the ROU asset as the sum of the sublease payments for the 25 months of the sublease | ||
Payments to termination of lease | $ 260,000 | ||
Gain (loss) on termination of lease | $ 730,000 | ||
Amortization of ROU assets | $ 398,000 | ||
Interest expense on lease liabilities | 97,000 | ||
Property taxes and operating expenses | 143,000 | ||
Short term, rent payments | 11,000 | ||
Sublease income | 80,000 | ||
Residual value guarantees | $ 0 | ||
Weighted average remaining lease, term | 2 months 12 days | ||
Weighted average of the discount, rate | 8.50% | ||
Accounting Standards Update 2016-02 [Member] | |||
ASU, adoption date | Jan. 01, 2022 |
Schedule of Components of Long-
Schedule of Components of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Promissory note payable | $ 147 | $ 214 |
Less current portion | (147) | (148) |
Total long-term debt | $ 66 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2019 | |
Short-Term Debt [Line Items] | |||
Notes payable | $ 147 | $ 214 | |
Promissory Notes Payable [Member] | |||
Short-Term Debt [Line Items] | |||
Notes payable | $ 147 | $ 214 | $ 736 |
Promissory Notes Payable [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument term | 2 years | ||
Promissory Notes Payable [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument term | 4 years | ||
Debt instrument interest rate stated percentage | 8% |
Schedule of Common Stock Reserv
Schedule of Common Stock Reserved (Details) - shares shares in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 23, 2021 |
Common stock, shares reserved | 5,337,105 | 442,526 | 41,637 |
Shares Subject To Options To Purchase Common Stock [Member] | |||
Common stock, shares reserved | 4,476,215 | 95,413 | |
Unvested Restricted Stock Units [Member] | |||
Common stock, shares reserved | 860,888 | 347,111 | |
Shares Subject to Warrants to Purchase Common Stock [Member] | |||
Common stock, shares reserved | 2 | 2 |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Stockholders’ Equity (Details Narrative) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 02, 2018 |
Convertible Preferred Stock And Stockholders Equity | |||
Capital stock par value | $ 0.001 | ||
Common stock shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2022 | Aug. 08, 2022 | Jul. 13, 2022 | Apr. 13, 2022 | Sep. 23, 2021 | Sep. 15, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 04, 2022 | Jul. 14, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Purchased shares issued, Value | $ 14,415,000 | $ 27,702,000 | |||||||||||
Stockholders equity reverse stock split | 1-for-10 | ||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Common stock, number of shares available for sale | 41,637,000 | 442,526,000 | 5,337,105,000 | 442,526,000 | |||||||||
Percentage of gross proceeds from sale of common stock | 3% | ||||||||||||
Common stock, shares issued | 18,808,885 | 40,774,687 | 18,808,885 | ||||||||||
CFO and President [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Severance payments | $ 1,000,000 | ||||||||||||
Severance costs | $ 1,200,000 | ||||||||||||
June 2021 At The Market Offering Program [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Common stock, number of shares available for sale | 10,000,000 | ||||||||||||
Percentage of gross proceeds from sale of common stock | 3% | ||||||||||||
Sale of stock, weighted net average price per share | $ 4.59 | ||||||||||||
Net proceeds received from sale of common stock | $ 8,313,000 | ||||||||||||
At the Market Offering Program [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Common stock, shares issued | 10,280,906 | 10,280,906 | 45,305 | 1,820,785 | |||||||||
Sale of stock, weighted net average price per share | $ 1.89 | $ 1.89 | |||||||||||
Net proceeds received from sale of common stock | $ 19,389,000 | ||||||||||||
September 2021 At The Market Offering Program [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Sale of stock, weighted net average price per share | $ 0.99 | ||||||||||||
Net proceeds received from sale of common stock | $ 45 | ||||||||||||
AJP Holding Company LLC [Member] | Subscription Agreement [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Purchased shares issued | 20,833,333 | ||||||||||||
Shares issued price per share | $ 0.84 | ||||||||||||
Purchased shares issued, Value | $ 17,500,000 | ||||||||||||
Stock issuance costs | $ 3,130,000 | ||||||||||||
Percentage for capital outstanding stock | 52% | ||||||||||||
AJP Holding Company LLC [Member] | Subscription Agreement [Member] | First Closing [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Purchased shares issued | 14,880,952 | ||||||||||||
Purchased shares issued, Value | $ 12,500,000 | ||||||||||||
AJP Holding Company LLC [Member] | Subscription Agreement [Member] | Second Closing [Member] | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Purchased shares issued | 5,952,381 | ||||||||||||
Purchased shares issued, Value | $ 5,000,000 |
Schedule of Stock Based Compens
Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Cost of revenues | $ 1,551 | $ 1,085 |
Total | 1,551 | 1,085 |
Research and Development Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Cost of revenues | 18 | 159 |
Total | 18 | 159 |
Selling and Marketing Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Cost of revenues | 68 | 188 |
Total | 68 | 188 |
General and Administrative Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Cost of revenues | 1,426 | 673 |
Total | 1,426 | 673 |
Cost of Sales [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Cost of revenues | 39 | 65 |
Total | $ 39 | $ 65 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Share-Based Payment Arrangement [Abstract] | |||
Options Outstanding | 95,413 | 144,303,000 | |
Outstanding, Weighted average exercise price per share | $ 40 | $ 36.37 | |
Weighted average remaining contractual life (in years) | 9 years 9 months 3 days | 7 years 9 months 25 days | |
Outstanding, Aggregate Intrinsic Value | [1] | $ 24 | |
Options, granted | 4,414,419 | 0 | |
Number of shares exercised | 0 | (707) | |
Options exercised, Weighted average exercise price per share | $ 7.50 | ||
Options, forfeited | (15,303) | (23,171) | |
Weighted average exercise price per share, forfeited | $ 33.65 | $ 27.55 | |
Options cancelled | (18,314,000) | (25,012) | |
Options cancelled, Weighted average exercise price per share | $ 49.67 | $ 29.60 | |
Weighted average remaining contractual life (in years) | 6 years 8 months 23 days | ||
Outstanding, Aggregate Intrinsic Value | [1] | $ 0 | |
Weighted average exercise price per share, exercised | $ 0.44 | ||
Options exercised | 0 | 707 | |
Options, ending outstanding | 4,476,215 | 95,413 | |
Weighted average exercise price per share, ending balance | $ 0.95 | $ 40 | |
Aggregate intrinsic value, ending balance | [1] | $ 358 | |
Options Vested and expected to vest at December 31, 2022 | 4,476,215,000 | ||
Vested and expected to vest at December 31, 2022, Weighted average exercise price per share | $ 0.95 | ||
Vested and expected to vest at December 31, 2022, Weighted average remaining contractual life (in years) | 9 years 9 months 3 days | ||
Vested and expected to vest at December 31, 2022, Aggregate Intrinsic Value | [1] | $ 358 | |
Option, exercisable | 54,839 | ||
Weighted average exercise price per share, exercisable | $ 39.45 | ||
Weighted average remaining contractual life (in years), exercisable | 5 years 3 months 7 days | ||
Aggregate intrinsic value, exercisable | [1] | $ 0 | |
[1]The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the balance sheet date. |
Schedule of Fair Value Option g
Schedule of Fair Value Option grants (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Expected dividend yield | 0% |
Risk free interest rate | 4.04% |
Expected volatility | 116% |
Expected life (in years) | 6 years 9 months 18 days |
Schedule of Outstanding Restric
Schedule of Outstanding Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2022 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at January 1, 2021 | 347,108 |
Granted | 840,983 |
Released | (286,542) |
Forfeited | (40,661) |
Outstanding at December 31, 2022 | 860,888 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||||||||
Nov. 18, 2022 | Oct. 26, 2022 | Aug. 05, 2022 | Jul. 17, 2022 | Jun. 18, 2022 | Jan. 27, 2022 | Nov. 12, 2021 | Oct. 08, 2021 | Sep. 15, 2021 | Jul. 01, 2021 | Jun. 18, 2021 | Jul. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | Sep. 23, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Reverse stock split | 1-for-10 | ||||||||||||||||||
Number of shares exercised | 0 | 707 | |||||||||||||||||
Common stock, number of shares available for sale | 5,337,105,000 | 442,526,000 | 5,337,105,000 | 41,637,000 | |||||||||||||||
Dollar value of bonuses fixed amount | $ 254,000 | ||||||||||||||||||
Fully vested included in accrued expenses | 254,000 | ||||||||||||||||||
Common stock issued under stock purchase plan, shares | 385,599 | ||||||||||||||||||
Common stock issued under stock purchase plan | $ 260,000 | ||||||||||||||||||
Stock-based compensation, unamortized | $ 3,228,000 | $ 3,228,000 | |||||||||||||||||
Unamortized stock-based compensation cost, weighted average period of recognition | 3 years 3 months 7 days | ||||||||||||||||||
Pre-tax intrinsic value of options exercised | $ 0 | $ 0 | |||||||||||||||||
Weighted average options grant fair value | $ 0.40 | ||||||||||||||||||
Expected dividend yield | 0% | ||||||||||||||||||
Restriceted unit value | $ 260 | ||||||||||||||||||
Consulting Service [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Restricted unit shares | 385,599 | ||||||||||||||||||
General and Administrative Expense [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Allocated share based compensation expense | $ 260,000 | ||||||||||||||||||
Two Executives [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Stock issued during period | 4,414,419 | ||||||||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Stock issued during period | 286,392 | 171,428 | 383,163 | 383,163 | 97,671 | 75,000 | 850 | 46,747 | |||||||||||
Number of shares, Unvested | 860,888 | 347,108 | 860,888 | ||||||||||||||||
2019 Equity Incentive Plan [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Number of shares available to be issued | 496,915 | 496,915 | |||||||||||||||||
Expiration period | 10 years | ||||||||||||||||||
Number of shares exercised | 0 | 0 | |||||||||||||||||
Increase In common stock reserved for issuance of number of shares of capital stock outstanding | 940,444 | 331,551 | 940,444 | ||||||||||||||||
Increase in common stock reserved for future issuance | 5,000,000 | ||||||||||||||||||
2019 Equity Incentive Plan [Member] | Minimum [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||
2019 Equity Incentive Plan [Member] | Minimum [Member] | Stock Appreciation Rights (SARs) [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Exercise price options granted from fair value common stock, percent | 100% | ||||||||||||||||||
2019 Equity Incentive Plan [Member] | Minimum [Member] | Granted To Ten Percent Stockholders [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Exercise price options granted from fair value common stock, percent | 110% | ||||||||||||||||||
2019 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Vesting period | 4 years | ||||||||||||||||||
2019 Equity Incentive Plan [Member] | Maximum [Member] | Granted To Ten Percent Stockholders [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Vesting period | 5 years | ||||||||||||||||||
2019 Employee Stock Purchase Plan [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Common stock, number of shares available for sale | 54,137 | ||||||||||||||||||
Common stock reserved for issuance description | Additionally, the number of shares of common stock reserved for issuance under the 2019 Employee Stock Purchase Plan automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1% of the total number of shares of capital stock outstanding on December 31st of the prior calendar year, and (ii) 50,000 shares, unless the Board of Directors or the compensation committee of the Board of Directors determines prior to such date that there will be a lesser increase, or no increase | ||||||||||||||||||
Increase in common stock reserved for issuance as a percentage of total number of shares of capital stock outstanding on the last day of the prior calendar year | 1% | ||||||||||||||||||
Increase In common stock reserved for issuance of number of shares of capital stock outstanding on last day of prior calendar year | 50,000 | 50,000 | |||||||||||||||||
Increase In common stock reserved for issuance of number of shares of capital stock outstanding | 50,000 | ||||||||||||||||||
Number of shares issued | 0 | 19,736 | |||||||||||||||||
Number of shares issued | 415,023 | ||||||||||||||||||
2019 Plan [Member] | |||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||
Common stock, number of shares available for sale | 1,862,684 | 1,862,684 | |||||||||||||||||
Common stock reserved for issuance description | The increase under the 2019 Employee Stock Purchase Plan for 2021 was 50,000 shares. During 2022, there was no activity for the 2019 Employee Stock Purchase Plan. As of December 31, 2022, 1,862,684 shares of common stock are reserved for issuance under the 2019 Option Plan, plus the number of shares subject to outstanding stock options or other stock awards that were granted under the 2012 Option Plan that are forfeited, terminated, expire or are otherwise not issued. Additionally, the number of shares of common stock reserved for issuance under the 2019 Option Plan automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020 and ending on and including January 1, 2029, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31 of the prior calendar year, unless the Board of Directors or compensation committee determines prior to the date of increase that there will be a lesser increase, or no increase | ||||||||||||||||||
Increase in common stock reserved for issuance as a percentage of total number of shares of capital stock outstanding on the last day of the prior calendar year | 5% | 5% |
Schedule of Income Tax Expense
Schedule of Income Tax Expense Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic loss | $ (13,885) | $ (39,065) |
Foreign subsidiaries income | (18) | 605 |
Income (loss) before income taxes | (13,903) | (38,460) |
Current income tax expense: | ||
Federal | ||
State | 21 | 17 |
Foreign | 306 | 169 |
Total Current | 327 | 186 |
Deferred income tax expense: | ||
Federal | ||
State | ||
Foreign | (143) | (19) |
Total Deferred | (143) | (19) |
Total provision (benefit) for income taxes | $ 184 | $ 167 |
Schedule of Effective Income Ta
Schedule of Effective Income Tax (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 21% | 21% |
State income taxes, net of federal tax benefits | 1% | 1.65% |
Stock compensation | (1.43%) | (0.54%) |
ASC 842 Adoption | 1.48% | 0% |
Foreign rate differential | (1.20%) | (0.06%) |
Tax credits | 0% | 0.26% |
GILTI Inclusion | (0.17%) | (0.41%) |
Non-deductible expenses | (0.00%) | (0.01%) |
Valuation allowance | (22.00%) | (22.34%) |
Effective tax rate | (1.32%) | (0.44%) |
Schedule of Components of the C
Schedule of Components of the Company’s Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Gross deferred tax assets: | ||
Net operating loss carryforward | $ 18,937 | $ 20,770 |
Section 174 capitalized costs | 1,697 | |
Tax credits | 99 | 199 |
Accruals and reserves | 2,314 | 2,446 |
Property and equipment | 51 | 102 |
ASC 842 | 14 | |
Alternative minimum tax credits | 21 | 21 |
Total gross deferred tax assets | 23,133 | 23,538 |
Less: valuation allowance | (22,996) | (22,920) |
Total deferred tax assets net of valuation allowance | 137 | 618 |
Deferred tax liabilities: | ||
Property and equipment | ||
Accruals and reserves | (550) | |
ASC 842 right of use asset | (14) | |
Net deferred tax assets (liabilities) | $ 123 | $ 68 |
Schedule of Cumulative Foreign
Schedule of Cumulative Foreign Earnings (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Total | $ 10,129 | $ 9,802 |
CHINA | ||
Total | 5,031 | 4,741 |
INDIA | ||
Total | $ 5,098 | $ 5,061 |
Summary of Operating Loss Carry
Summary of Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
State NOL | $ 88,375 | $ 92,262 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
State NOL | $ 7,429 | $ 27,577 |
Summary of Tax Credit Carryforw
Summary of Tax Credit Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Internal Revenue Service (IRS) [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
California R&D credits | $ 99 | |
California Franchise Tax Board [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
California R&D credits | $ 125 | $ 126 |
Schedule of Unrecognized Tax Be
Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized benefit-beginning of period | $ 1,306 | $ 1,190 |
Gross increases-prior period tax positions | 34 | |
Gross (decreases)-prior period tax positions | (33) | |
Decrease prior period tax positions - settlements | ||
Gross increases -current period tax positions | 82 | |
Unrecognized benefit-end of period | $ 1,273 | $ 1,306 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax Credit Carryforward [Line Items] | |||
Income tax capitalized expenses on domestic expenses term | 5 years | ||
Income tax capitalized expenses on foreign expenses term | 15 years | ||
Valuation allowance | $ 22,996,000 | $ 22,920,000 | |
Income tax undistributed earnings | $ 10,129,000 | 9,802,000 | |
Federal and state net operating loss carryforwards begin to expire | Federal and state net operating loss carryforwards begin to expire in 2037 and 2035, respectively. | ||
Interest expense carryforwards | $ 1,594,000 | ||
Income tax examination description | The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. | ||
Unrecognized tax benefits accounted for as a reduction in deferred tax assets | $ 33,000 | ||
Unrecognized tax benefits would affect the effective tax rate if recognized | 1,240,000 | ||
Unrecognized tax benefits | 1,273,000 | $ 1,306,000 | $ 1,190,000 |
Accrued interest and penalties related to unrecognized tax expense | 40 | ||
Accrued liability for Interest and penalties related to unrecognized tax benefits | 176,000 | ||
Research Tax Credit Carryforward [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Research expenses | $ 8,032 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||
Contractual obligation | $ 0 | $ 6,460,000 | |
Purchase obligation | 19,975,000 | 5,663,000 | |
Loss contingency, management's assessment and process | At the beginning of 2021, the Company outsourced substantially all of its software development to a third-party and transferred 105 employees to support the ongoing work to be performed. In connection with outsourcing its software development, the Company entered into an agreement of future business volume over the next three years. | ||
Litigation settlement expense | 1,154 | ||
Cost of Sales [Member] | |||
Loss Contingencies [Line Items] | |||
Royalty expense | $ 622,000 | $ 2,168,000 | |
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Royalty payment percent of net revenues | 5% |
Schedule of Computation of Basi
Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Numerator: | |||
Net loss | $ (14,087) | $ (38,627) | |
Denominator: | |||
Weighted-average shares used in computing net loss per share, basic and diluted | [1] | 28,889,111 | 9,464,560 |
Net loss per share, basic and diluted | [1] | $ (0.49) | $ (4.08) |
[1]Reflects the 1-for-10 |
Summary of Dilutive Common Shar
Summary of Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 5,337,105 | 442,526 |
Shares Subject To Options To Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 4,476,215 | 95,413 |
Unvested Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 860,888 | 347,111 |
Shares Subject to Warrants to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2 | 2 |
Net Loss Per Share (Details Nar
Net Loss Per Share (Details Narrative) | Sep. 15, 2021 |
Earnings Per Share [Abstract] | |
Stockholders equity reverse stock split | 1-for-10 |
Schedule of Revenue by Region (
Schedule of Revenue by Region (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | $ 69,828 | $ 54,570 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 29,444 | 42,356 |
Canada And Latin America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 8,975 | 9,401 |
Europe And Middle East [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | 1,202 | 1,142 |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenues | $ 30,207 | $ 1,671 |
Schedule of Composition of Reve
Schedule of Composition of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Total revenues | $ 69,828 | $ 54,570 |
Product [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 69,797 | 54,476 |
Service [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | $ 31 | $ 94 |
Schedule of Percentage of Total
Schedule of Percentage of Total Revenues (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage1 | 42% | 23% |
Customer B [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage1 | 25% | 23% |
Customer C [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage1 | 9% | 22% |
Customer D [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage1 | 7% | 8% |
Customers [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage1 | 83% | 76% |
Entity Level Information (Detai
Entity Level Information (Details Narrative) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Integer | Dec. 31, 2021 USD ($) | |
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | Integer | 1 | |
Allowance for credit losses | $ 113 | $ 932 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 84% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Carrier Customers [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 70% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customers [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 83% | 76% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 42% | 23% |
UNITED STATES | ||
Revenue, Major Customer [Line Items] | ||
Noncurrent assets | $ 6,861 | $ 2,370 |
Asia Pacific [Member] | ||
Revenue, Major Customer [Line Items] | ||
Noncurrent assets | $ 168 | $ 534 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Feb. 14, 2023 $ / shares |
Subsequent Event [Line Items] | |
Description of nasdaq compliance | On February 14, 2023, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Stock Market under Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Requirement”). |
Failure to maintain common stock minimum closing bid price | $ 1 |