Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
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 $0.001 per share | |
Trading Symbol | SONM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,067,433 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 9,797 | $ 13,213 |
Accounts receivable, net | 30,348 | 22,433 |
Non-trade receivable | 1,630 | 2,269 |
Inventory | 4,219 | 3,910 |
Prepaid expenses and other current assets | 1,543 | 1,807 |
Total current assets | 47,537 | 43,632 |
Property and equipment, net | 80 | 168 |
Right-of-use assets | 120 | 66 |
Contract fulfillment assets | 7,884 | 6,848 |
Other assets | 2,989 | 2,972 |
Total assets | 58,610 | 53,686 |
Liabilities and stockholders’ equity | ||
Current portion of long-term debt | 37 | 147 |
Accounts payable | 23,256 | 21,126 |
Accrued expenses | 10,614 | 10,692 |
Current portion of lease liability | 120 | 66 |
Deferred revenue | 11 | 31 |
Total current liabilities | 34,038 | 32,062 |
Income tax payable | 1,462 | 1,429 |
Accrued severance | 150 | |
Total liabilities | 35,500 | 33,641 |
Stockholders’ equity | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized: and 42,551,041 and 40,774,687 shares issued and outstanding at September 30, 2023, and December 31, 2022, respectively. | 43 | 41 |
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, and no shares issued and outstanding at September 30, 2023, and December 31, 2022, respectively. | ||
Additional paid-in capital | 271,674 | 269,874 |
Accumulated deficit | (248,607) | (249,870) |
Total stockholders’ equity | 23,110 | 20,045 |
Total liabilities and stockholders’ equity | $ 58,610 | $ 53,686 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |
Common Stock, Shares Authorized | 100,000,000 | |
Common Stock, Shares, Outstanding | 42,551,041 | 40,774,687 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 5,000,000 | |
Preferred Stock, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net revenues | $ 27,566 | $ 20,497 | $ 80,202 | $ 45,710 |
Cost of revenues | 21,963 | 17,181 | 65,998 | 38,019 |
Gross profit | 5,603 | 3,316 | 14,204 | 7,691 |
Operating expenses: | ||||
Research and development | 741 | (135) | 846 | 6,754 |
Sales and marketing | 2,133 | 1,511 | 5,717 | 5,754 |
General and administrative | 2,041 | 3,869 | 5,873 | 8,414 |
Total operating expenses | 4,915 | 5,245 | 12,436 | 20,922 |
Net income (loss) from operations | 688 | (1,929) | 1,768 | (13,231) |
Interest expense | (6) | (22) | (11) | (96) |
Gain on termination of lease | 730 | 730 | ||
Loss on sale of assets | (130) | (130) | ||
Other income (expense), net | (59) | (185) | (213) | (117) |
Net income (loss) before income taxes | 623 | (1,536) | 1,544 | (12,844) |
Income tax expense | (96) | (72) | (281) | (201) |
Net income (loss) | $ 527 | $ (1,608) | $ 1,263 | $ (13,045) |
Net income (loss) per share | ||||
Basic | $ 0.01 | $ (0.04) | $ 0.03 | $ (0.52) |
Diluted | $ 0.01 | $ (0.04) | $ 0.03 | $ (0.52) |
Weighted–average shares used in computing net income (loss) per share | ||||
Basic | 41,851,729 | 36,085,226 | 41,269,583 | 24,888,859 |
Diluted | 42,992,680 | 36,085,226 | 42,535,699 | 24,888,859 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 19 | $ 253,416 | $ (234,805) | $ 18,630 |
Beginning balance, shares at Dec. 31, 2021 | 18,808,885 | |||
Issuance of common stock, net of issuance costs | $ 21 | 14,394 | 14,415 | |
Issuance of common stock, net of issuance costs, shares | 20,878,638 | |||
Issuance of common stock, compensation | $ 1 | 513 | 514 | |
Issuance of common stock, compensation, shares | 800,622 | |||
Net settlement of common stock upon release of RSU | ||||
Net settlement of common stock upon release of RSU, shares | 169,683 | |||
Employee and nonemployee stock-based compensation | 1,136 | 1,136 | ||
Net income | (13,045) | (13,045) | ||
Adoption of ASC 842 – leases | (978) | (978) | ||
Ending balance, value at Sep. 30, 2022 | $ 41 | 269,459 | (248,829) | 20,671 |
Ending balance, shares at Sep. 30, 2022 | 40,657,828 | |||
Beginning balance, value at Jun. 30, 2022 | $ 19 | 254,213 | (247,220) | 7,012 |
Beginning balance, shares at Jun. 30, 2022 | 19,340,560 | |||
Issuance of common stock, net of issuance costs | $ 21 | 14,349 | 14,370 | |
Issuance of common stock, net of issuance costs, shares | 20,833,333 | |||
Issuance of common stock, compensation | $ 1 | 260 | 261 | |
Issuance of common stock, compensation, shares | 385,599 | |||
Net settlement of common stock upon release of RSU | ||||
Net settlement of common stock upon release of RSU, shares | 98,336 | |||
Employee and nonemployee stock-based compensation | 637 | 637 | ||
Net income | (1,608) | (1,608) | ||
Ending balance, value at Sep. 30, 2022 | $ 41 | 269,459 | (248,829) | 20,671 |
Ending balance, shares at Sep. 30, 2022 | 40,657,828 | |||
Beginning balance, value at Dec. 31, 2022 | $ 41 | 269,874 | (249,870) | 20,045 |
Beginning balance, shares at Dec. 31, 2022 | 40,774,687 | |||
Net settlement of common stock upon release of RSU | ||||
Net settlement of common stock upon release of RSU, shares | 319,000 | |||
Employee and nonemployee stock-based compensation | 1,038 | 1,038 | ||
Net income | 1,263 | 1,263 | ||
Issuance of common stock for payment of services | $ 1 | 344 | 345 | |
Issuance of common stock for payment of services, shares | 457,354 | |||
Issuance of common stock upon exercise of stock options | $ 1 | 418 | $ 419 | |
Issuance of common stock upon exercise of stock options, shares | 1,000,000 | 1,000,000 | ||
Ending balance, value at Sep. 30, 2023 | $ 43 | 271,674 | (248,607) | $ 23,110 |
Ending balance, shares at Sep. 30, 2023 | 42,551,041 | |||
Beginning balance, value at Jun. 30, 2023 | $ 41 | 270,742 | (249,134) | 21,649 |
Beginning balance, shares at Jun. 30, 2023 | 41,110,279 | |||
Net settlement of common stock upon release of RSU | ||||
Net settlement of common stock upon release of RSU, shares | 299,151 | |||
Employee and nonemployee stock-based compensation | 371 | 371 | ||
Net income | 527 | 527 | ||
Issuance of common stock for payment of services | $ 1 | 143 | 144 | |
Issuance of common stock for payment of services, shares | 141,611 | |||
Issuance of common stock upon exercise of stock options | $ 1 | 418 | 419 | |
Issuance of common stock upon exercise of stock options, shares | 1,000,000 | |||
Ending balance, value at Sep. 30, 2023 | $ 43 | $ 271,674 | $ (248,607) | $ 23,110 |
Ending balance, shares at Sep. 30, 2023 | 42,551,041 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,263 | $ (13,045) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,250 | 555 |
Stock-based compensation | 1,038 | 1,136 |
Stock issued for services | 345 | 514 |
Amortization of lease liability and lease interest expense | (201) | (561) |
Loss on disposal of assets | 130 | |
Gain on termination fee | (730) | |
Lease termination fee | (260) | |
Bad debt expense (benefit) | 2 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,915) | (5,485) |
Non-trade receivable | 639 | 1,365 |
Inventory | (309) | 1,454 |
Prepaid expenses and other current assets | 352 | 3,415 |
Contract fulfillment costs | (1,973) | (1,604) |
Other assets | (105) | 139 |
Accounts payable | 2,130 | 2,962 |
Accrued expenses | (228) | (450) |
Deferred revenue | (20) | 255 |
Income tax payable | 33 | 71 |
Net cash provided by (used in) operating activities | (3,701) | (10,137) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (24) | (6) |
Net cash used in investing activities | (24) | (6) |
Cash flows from financing activities: | ||
Repayment of debt | (110) | (30) |
Proceeds from exercise of stock options | 419 | |
Proceeds from issuance of common stock, net of costs | 14,414 | |
Net cash provided by (used in) financing activities | 309 | 14,384 |
Net increase (decrease) in cash and cash equivalents | (3,416) | 4,241 |
Cash and cash equivalents at beginning of period | 13,213 | 11,233 |
Cash and cash equivalents at end of period | 9,797 | 15,474 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 11 | 96 |
Cash paid for income taxes | $ 69 | $ 103 |
The Company and its significant
The Company and its significant accounting policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
The Company and its significant accounting policies | NOTE 1 — The Company and its significant accounting policies Description of Business —Sonim Technologies, Inc. was incorporated in the state of Delaware on August 5, 1999 , and is headquartered in San Diego, California. We are a leading provider of rugged and consumer durable mobile devices designed to provide extra protection for users who demand more durability in their work and everyday lives. Historically, we were focused on handsets and accessories in the enterprise and government sectors. However, we believe there is a greater market need for additional devices in both the consumer and data device spaces that could benefit from a more durable feature set that is embedded in the Company’s DNA. In 2022, we introduced a tablet line that has generated a significant portion of our revenue since its introduction. The tablet was designed with a large screen that allows customers to easily access and process IoT data. This was the beginning of the diversification of our portfolio, and the process is ongoing. Liquidity and Ability to Continue as a Going Concern – The Company’s (as defined below) condensed consolidated financial statements account for the continuation of our business as a going concern. The Company is subject to the risks and uncertainties associated with the development and release of new products. The Company’s principal sources of liquidity as of September 30, 2023, consist of existing cash and cash equivalents totaling $ 9.8 million, and positive cash flow from the sale of products over the next year. The Company had net income for the three and nine months ended September 30, 2023 of $ 0.5 million and $ 1.3 million respectively. Based on these facts, the Company believes that it has the ability to continue as a going concern for a period of at least one year from the date of issuance of these condensed consolidated financial statements. Basis of presentation and preparation The condensed consolidated financial statements include the accounts of Sonim Technologies, Inc. and its wholly owned subsidiaries (collectively “Sonim” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). 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 2023: None. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) |
Revenue recognition
Revenue recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | NOTE 2 — Revenue recognition The Company recognizes revenue primarily from the sale of products, which are primarily mobile phones, tablets, and related 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 Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The Company also recognizes revenue from other contracts that may include a combination of products and non-recurring engineering (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 identified 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 three and nine months ended September 30, 2023, and 2022, 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 products. 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 records reductions to net revenues related to future product returns based on the Company’s expectations and historical experience. 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. The Company determines its 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, the Company’s 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 the Company’s net revenue disaggregated by product category: Schedule of Net Revenue Disaggregate by Product Category 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Smartphones $ 8,364 $ 1,506 $ 23,683 $ 10,956 Feature Phones 4,907 4,779 11,737 19,618 Tablets 13,870 13,870 43,864 13,870 Accessories / Other 425 342 918 1,266 Total revenue $ 27,566 $ 20,497 $ 80,202 $ 45,710 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. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) Contract costs Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing expenses. The non-recurring costs associated with design and development of new products for technical approval represent costs to fulfill a contract pursuant to ASC 340-40 Other Assets and Deferred Costs. 4 years, the estimated life of a particular model phone. As of September 30, 2023, and December 31, 2022, the total net contract fulfillment assets were $ 7,884 and $ 6,848 , respectively. Contract balances The Company records accounts receivable when it has an unconditional right to consideration. 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 condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022, the contract liabilities were $ 11 and $ 31 , respectively. |
Fair value measurement
Fair value measurement | 9 Months Ended |
Sep. 30, 2023 | |
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 assets 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. The 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 at September 30, 2023, and December 31, 2022. Money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) 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 at fair value: Summary of Fair Value Assets and Liabilities Level 1 Level 2 Level 3 Total September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 382 $ — $ — $ 382 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 Money market funds $ 1,501 $ — $ — $ 1,501 * Included in cash and cash equivalents on the condensed consolidated balance sheets. |
Significant Balance Sheet Compo
Significant Balance Sheet Components | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Balance Sheet Components | NOTE 4 — Significant Balance Sheet Components Accounts Receivable consists of the following: Schedule of Accounts Receivable September 30, 2023 December 31, 2022 Trade receivables $ 30,461 $ 22,546 Allowance for doubtful accounts (113 ) (113 ) Accounts receivable trade, net 30,348 22,433 Vendor non-trade receivables 1,630 2,269 Total accounts receivable $ 31,978 $ 24,702 The Company has non-trade receivables from a manufacturing vendor resulting from the sale of components to this vendor who manufactures and assembles 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 $ 113 as of September 30, 2023 and December 31, 2022. Trade receivables from the customer that purchases tablets from the Company account for 68 % and 84 % of total accounts receivable at September 30, 2023 and December 31, 2022 respectively. The tablets business uses the Original Device Manufacturer (“ODM”) model where the customer imports the tablets to the U.S., the tablets are rebranded, and the tablets are sold to a U.S. retailer. Due to the delay in shipping the product to the end customer, the payment terms for accounts receivable are much longer than our traditional direct sales to carriers. The customer is making regular payments, and the Company believes that the entire accounts receivable balance as of September 30, 2023 is collectible, and that no reserve is required. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) Inventory consists of the following: Schedule of Inventory September 30, 2023 December 31, 2022 Devices – for resale $ 3,749 $ 3,473 Raw materials — 14 Accessories 470 423 Inventory, net $ 4,219 $ 3,910 The Company purchases raw materials in bulk to obtain a lower price. The raw materials are resold to third-party manufacturers at the Company’s cost. Distributor returns allowance The Company records reductions to cost of goods sold related to future distributor product returns based on the Company’s expectation. The Company had inventory related to distributor product returns totaling approximately $ 4 as of September 30, 2023 and December 31, 2022. Other assets consisted of the following: Schedule of Other Assets September 30, 2023 December 31, 2022 Advances to third-party manufacturers $ 2,000 $ 2,000 Director and officer insurance 437 525 Deposits 309 311 Other 243 136 Total other assets $ 2,989 $ 2,972 Accrued Expenses consisted of the following: Schedule of Accrued Expenses September 30, 2023 December 31, 2022 Customer allowances $ 7,300 $ 4,130 Employee-related liabilities 886 1,365 Warranties 518 636 Accrual for goods received not invoiced 13 301 Contractual obligations 286 1,107 Royalties 391 256 Contract fulfillment liabilities 356 1,469 Credits due to customers 318 961 Legal 286 296 Other 260 171 Accrued liabilities, current $ 10,614 $ 10,692 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | NOTE 5 — Leases The Company adopted ASU 2016-02 on January 1, 2022 . The Company elected to use “the effective date” method where the comparative reporting periods are unchanged from legacy US GAAP. The Company elected the package of practical expedients to not reassess the classifications of existing leases and to not reassess if initial direct costs qualify for capitalization. All of the Company’s leases are for office space. The Company has elected the practical expedient to not separate lease components from nonlease components for all leases. The Company elected the practical expedient for short-term leases for leases that have terms of one year or less. ROU assets and lease liabilities were not established for these short-term leases and rent payments are recorded as rent expense. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) On January 1, 2022 the Company began recording all lease payments as the payment of lease expense and a reduction of the lease liability for the 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 nine months ending on September 30, 2023 and 2022: Summary of Activity of ROU Assets and Liability Lease Liability Balance, December 31, 2022 $ 66 Adoption of ASC 842 - Additions 255 Principal payments (201 ) Balance, September 30, 2023 120 Less short-term portion (120 ) Long-term lease liability $ — ROU Assets Balance, December 31, 2022 $ 66 Adoption of ASC 842 - Derecognition of deferred rent liability - Impairment of ROU asset - Additions 255 Amortization (201 ) Balance, September 30, 2023 $ 120 Lease Liability Balance, December 31, 2021 $ — Adoption of ASC 842 1,976 Derecognition on cancelation of lease (1,211 ) Principal payments (561 ) Balance, September 30, 2022 204 Less short-term portion 204 Long-term lease liability $ — ROU Assets Balance, December 31, 2021 $ — Adoption of ASC 842 1,976 Derecognition of deferred rent liability (142 ) Impairment of ROU asset (978 ) Derecognition on cancelation of lease (221 ) Amortization (431 ) Balance, September 30, 2022 $ 204 Future minimum lease payments under noncancelable operating lease commitments are as follows as of September 30, 2023: Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments Year Ending, December 31 st 2023 $ 66 2024 56 Total undiscounted minimum lease commitments 122 Effect of discounting (2 ) Lease liabilities at September 30, 2023 $ 120 In connection with leases, for the nine months ended September 30, 2023 and 2022, the Company recognized $ 201 and $ 431 for the amortization of ROU assets, $ 7 and $ 74 for interest expense on lease liabilities, and $ 41 and $ 70 of rent expense was included in Cost of Revenues. Variable lease payments, including reimbursements to the landlord for property taxes and operating expenses, of approximately zero and $ 140 , and short-term rent payments of $ 3 and $ 7 were included in rent expense for the nine months ended September 30, 2023 and 2022. The Company does not have any lease extension or termination options on any lease that it expects to execute. There are no residual value guarantees in any lease. The weighted average remaining lease term of the operating leases is approximately 5 months. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | NOTE 6 — Borrowings Promissory Notes Payable 736 outstanding balance to be paid in twenty equal quarterly installments. The amounts due under these agreements are paid in quarterly installments over periods from two to four years , with interest ranging up to 8 %. Remaining balances are all current liabilities and are $ 37 and $ 147 at September 30, 2023, and December 31, 2022, respectively. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | NOTE 7 — Stock-based Compensation Stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 is as follows: Schedule of Stock based Compensation Expense 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of revenues $ 28 $ 9 $ 230 $ 89 Sales and marketing 90 3 222 53 General and administrative 231 622 564 1,230 Research and development 22 3 22 18 Stock-based compensation expenses $ 371 $ 637 $ 1,038 $ 1,136 Stock Options: Stock option activity for the nine months ended September 30, 2023, is set forth in the table below: Summary of Stock Option Activity Weighted Weighted average average remaining Aggregate exercise price contractual life Intrinsic Options per share (in years) Value * Outstanding at January 1, 2023 4,476,215 $ 0.95 9.76 $ 358 Options granted 1,483,000 $ 0.54 Options exercised (1,000,000 ) 0.42 Options forfeited — Options expired (7,833 ) 4.50 Outstanding at September 30, 2023 4,951,382 $ 0.93 9.12 $ 1,091 Exercisable at September 30, 2023 403,420 $ 5.75 8.62 $ 89 * 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 September 30, 2023, there was approximately $ 2,174 of unamortized stock-based compensation cost related to unvested stock options and Restricted Stock Units (“RSU’s”), which is expected to be recognized over a weighted average period of 1.88 years. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) Restricted Stock Units: RSU activity for the nine months ended September 30, 2023, is set forth in the table below: Schedule of Outstanding Restricted Stock Units RSUs Outstanding at January 1, 2023 860,888 Granted 87,100 Released (605,392 ) Forfeited (5,200 ) Outstanding at September 30, 2023 337,396 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 — Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date profit or loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate primarily as a result of state taxes, foreign taxes, and changes in the Company’s valuation allowance against its deferred tax assets. For the nine months ended September 30, 2023, and 2022, the Company recorded provisions for income taxes of $ 281 and $ 201 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 — Commitments and Contingencies Employee Retention Credit 1.2 Purchase Commitments 20,839 and $ 19,975 , respectively, and were related to the purchase of inventory and components of our devices. In 2021, the Company outsourced substantially all of its software development to a third party and the Company entered into an agreement of future business volume over the next three years. The agreement was renegotiated in 2022 and the remaining commitment as of September 30, 2023 and December 31, 2022 is $ 289 and $ 1,154 respectively. Royalty payments 5 % of net revenues associated with each unit and expire between 2024 and 2033. Royalty expense for the nine months ended September 30, 2023, and 2022 was $ 793 and $ 964 , respectively and is included in Cost of Revenues. The Company may be required to pay additional royalties to additional patent holder and technology providers on future products. SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) 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 1 million in severance payments over 20 months, plus certain health insurance benefits. The severance costs were charged to expense as of the severance date. |
Net Earnings (Loss) Per Share A
Net Earnings (Loss) Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) Per Share Attributable to Common Stockholders | NOTE 10 Net Earnings (Loss) Per Share Attributable to Common Stockholders The following table sets forth the computation of the Company’s basic and diluted earnings (loss) per share attributable to common stockholders for the three and nine months shown below: Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net profit (loss) $ 527 $ (1,608 ) $ 1,263 $ (13,045 ) Denominator: Weighted-average shares used in 41,851,729 36,085,226 41,269,583 24,888,859 Net earnings (loss) per share, basic 0.01 (0.04 ) 0.03 (0.52 ) Weighted-average shares used in computing net earnings (loss) per share, diluted 42,992,680 36,085,226 42,535,699 24,888,859 Net earnings (loss) per share, diluted $ 0.01 $ (0.04 ) $ 0.03 $ (0.52 ) SONIM TECHNOLOGIES, INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed) The dilutive common shares that were used in the calculation of diluted earnings for 2023 are presented in the table below. The 2022 amounts were not used as they were antidilutive. Summary of Dilutive Common Shares were Excluded from Calculation of Diluted 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Shares subject to options to purchase common stock 4,951,382 62,548 4,951,382 62,548 Unvested restricted stock units 337,396 691,355 337,396 691,355 Shares subject to warrants to purchase common stock 2 2 2 2 Total 5,288,780 753,905 5,288,780 753,905 |
Entity Level Information
Entity Level Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Entity Level Information | NOTE 11 — Entity Level Information The Company operates in one reporting segment. 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 executive officer and the chief financial 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 three and nine months ended: Schedule of Revenue by Region 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 U.S. $ 11,798 $ 4,351 $ 25,184 $ 24,284 Canada and Latin America 1,706 1,855 7,477 6,132 Europe and Middle East 87 266 3,000 1,159 Asia Pacific 13,975 14,025 44,541 14,135 Total revenues $ 27,566 $ 20,497 $ 80,202 $ 45,710 The following table summarizes the composition of revenues for the three and nine months ended: Schedule of Composition of Revenue 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Product Sales $ 27,565 $ 20,497 $ 80,201 $ 45,684 Services 1 0 1 26 Total revenues $ 27,566 $ 20,497 $ 80,202 $ 45,710 Revenue from customers with concentration greater than 10% in three and nine months ended September 30, 2023 and 2022 accounted for approximately the following percentage of total revenues: Schedule of Percentage of Total Revenues Three Months Ended Nine Months Ended 2023 2022 2023 2022 Customer A 50 % 68 % 55 % 30 % Customer B 35 % 16 % 26 % 30 % Customer C * - * - * - 11 % Customer D * - * - * - 10 % * Customer revenue did not exceed 10% in the respective period. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 Subsequent Events None |
The Company and its significa_2
The Company and its significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business —Sonim Technologies, Inc. was incorporated in the state of Delaware on August 5, 1999 , and is headquartered in San Diego, California. We are a leading provider of rugged and consumer durable mobile devices designed to provide extra protection for users who demand more durability in their work and everyday lives. Historically, we were focused on handsets and accessories in the enterprise and government sectors. However, we believe there is a greater market need for additional devices in both the consumer and data device spaces that could benefit from a more durable feature set that is embedded in the Company’s DNA. In 2022, we introduced a tablet line that has generated a significant portion of our revenue since its introduction. The tablet was designed with a large screen that allows customers to easily access and process IoT data. This was the beginning of the diversification of our portfolio, and the process is ongoing. |
Liquidity and Ability to Continue as a Going Concern | Liquidity and Ability to Continue as a Going Concern – The Company’s (as defined below) condensed consolidated financial statements account for the continuation of our business as a going concern. The Company is subject to the risks and uncertainties associated with the development and release of new products. The Company’s principal sources of liquidity as of September 30, 2023, consist of existing cash and cash equivalents totaling $ 9.8 million, and positive cash flow from the sale of products over the next year. The Company had net income for the three and nine months ended September 30, 2023 of $ 0.5 million and $ 1.3 million respectively. Based on these facts, the Company believes that it has the ability to continue as a going concern for a period of at least one year from the date of issuance of these condensed consolidated financial statements. |
Basis of presentation and preparation | Basis of presentation and preparation The condensed consolidated financial statements include the accounts of Sonim Technologies, Inc. and its wholly owned subsidiaries (collectively “Sonim” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). |
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 2023: None. |
Revenue recognition (Tables)
Revenue recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Net Revenue Disaggregate by Product Category | The following table presents the Company’s net revenue disaggregated by product category: Schedule of Net Revenue Disaggregate by Product Category 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Smartphones $ 8,364 $ 1,506 $ 23,683 $ 10,956 Feature Phones 4,907 4,779 11,737 19,618 Tablets 13,870 13,870 43,864 13,870 Accessories / Other 425 342 918 1,266 Total revenue $ 27,566 $ 20,497 $ 80,202 $ 45,710 |
Fair value measurement (Tables)
Fair value measurement (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 at fair value: Summary of Fair Value Assets and Liabilities Level 1 Level 2 Level 3 Total September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 382 $ — $ — $ 382 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 Money market funds $ 1,501 $ — $ — $ 1,501 * Included in cash and cash equivalents on the condensed consolidated balance sheets. |
Significant Balance Sheet Com_2
Significant Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts Receivable consists of the following: Schedule of Accounts Receivable September 30, 2023 December 31, 2022 Trade receivables $ 30,461 $ 22,546 Allowance for doubtful accounts (113 ) (113 ) Accounts receivable trade, net 30,348 22,433 Vendor non-trade receivables 1,630 2,269 Total accounts receivable $ 31,978 $ 24,702 |
Schedule of Inventory | Inventory consists of the following: Schedule of Inventory September 30, 2023 December 31, 2022 Devices – for resale $ 3,749 $ 3,473 Raw materials — 14 Accessories 470 423 Inventory, net $ 4,219 $ 3,910 |
Schedule of Other Assets | Other assets consisted of the following: Schedule of Other Assets September 30, 2023 December 31, 2022 Advances to third-party manufacturers $ 2,000 $ 2,000 Director and officer insurance 437 525 Deposits 309 311 Other 243 136 Total other assets $ 2,989 $ 2,972 |
Schedule of Accrued Expenses | Accrued Expenses consisted of the following: Schedule of Accrued Expenses September 30, 2023 December 31, 2022 Customer allowances $ 7,300 $ 4,130 Employee-related liabilities 886 1,365 Warranties 518 636 Accrual for goods received not invoiced 13 301 Contractual obligations 286 1,107 Royalties 391 256 Contract fulfillment liabilities 356 1,469 Credits due to customers 318 961 Legal 286 296 Other 260 171 Accrued liabilities, current $ 10,614 $ 10,692 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Summary of Activity of ROU Assets and Liability | Summary of Activity of ROU Assets and Liability Lease Liability Balance, December 31, 2022 $ 66 Adoption of ASC 842 - Additions 255 Principal payments (201 ) Balance, September 30, 2023 120 Less short-term portion (120 ) Long-term lease liability $ — ROU Assets Balance, December 31, 2022 $ 66 Adoption of ASC 842 - Derecognition of deferred rent liability - Impairment of ROU asset - Additions 255 Amortization (201 ) Balance, September 30, 2023 $ 120 Lease Liability Balance, December 31, 2021 $ — Adoption of ASC 842 1,976 Derecognition on cancelation of lease (1,211 ) Principal payments (561 ) Balance, September 30, 2022 204 Less short-term portion 204 Long-term lease liability $ — ROU Assets Balance, December 31, 2021 $ — Adoption of ASC 842 1,976 Derecognition of deferred rent liability (142 ) Impairment of ROU asset (978 ) Derecognition on cancelation of lease (221 ) Amortization (431 ) Balance, September 30, 2022 $ 204 |
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 September 30, 2023: Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments Year Ending, December 31 st 2023 $ 66 2024 56 Total undiscounted minimum lease commitments 122 Effect of discounting (2 ) Lease liabilities at September 30, 2023 $ 120 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock based Compensation Expense | Stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 is as follows: Schedule of Stock based Compensation Expense 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of revenues $ 28 $ 9 $ 230 $ 89 Sales and marketing 90 3 222 53 General and administrative 231 622 564 1,230 Research and development 22 3 22 18 Stock-based compensation expenses $ 371 $ 637 $ 1,038 $ 1,136 |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2023, is set forth in the table below: Summary of Stock Option Activity Weighted Weighted average average remaining Aggregate exercise price contractual life Intrinsic Options per share (in years) Value * Outstanding at January 1, 2023 4,476,215 $ 0.95 9.76 $ 358 Options granted 1,483,000 $ 0.54 Options exercised (1,000,000 ) 0.42 Options forfeited — Options expired (7,833 ) 4.50 Outstanding at September 30, 2023 4,951,382 $ 0.93 9.12 $ 1,091 Exercisable at September 30, 2023 403,420 $ 5.75 8.62 $ 89 * 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 Outstanding Restricted Stock Units | RSU activity for the nine months ended September 30, 2023, is set forth in the table below: Schedule of Outstanding Restricted Stock Units RSUs Outstanding at January 1, 2023 860,888 Granted 87,100 Released (605,392 ) Forfeited (5,200 ) Outstanding at September 30, 2023 337,396 |
Net Earnings (Loss) Per Share_2
Net Earnings (Loss) Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of the Company’s basic and diluted earnings (loss) per share attributable to common stockholders for the three and nine months shown below: Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net profit (loss) $ 527 $ (1,608 ) $ 1,263 $ (13,045 ) Denominator: Weighted-average shares used in 41,851,729 36,085,226 41,269,583 24,888,859 Net earnings (loss) per share, basic 0.01 (0.04 ) 0.03 (0.52 ) Weighted-average shares used in computing net earnings (loss) per share, diluted 42,992,680 36,085,226 42,535,699 24,888,859 Net earnings (loss) per share, diluted $ 0.01 $ (0.04 ) $ 0.03 $ (0.52 ) |
Summary of Dilutive Common Shares were Excluded from Calculation of Diluted | The dilutive common shares that were used in the calculation of diluted earnings for 2023 are presented in the table below. The 2022 amounts were not used as they were antidilutive. Summary of Dilutive Common Shares were Excluded from Calculation of Diluted 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Shares subject to options to purchase common stock 4,951,382 62,548 4,951,382 62,548 Unvested restricted stock units 337,396 691,355 337,396 691,355 Shares subject to warrants to purchase common stock 2 2 2 2 Total 5,288,780 753,905 5,288,780 753,905 |
Entity Level Information (Table
Entity Level Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Region | The following table summarizes the revenue by region based on ship-to destinations for the three and nine months ended: Schedule of Revenue by Region 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 U.S. $ 11,798 $ 4,351 $ 25,184 $ 24,284 Canada and Latin America 1,706 1,855 7,477 6,132 Europe and Middle East 87 266 3,000 1,159 Asia Pacific 13,975 14,025 44,541 14,135 Total revenues $ 27,566 $ 20,497 $ 80,202 $ 45,710 |
Schedule of Composition of Revenue | The following table summarizes the composition of revenues for the three and nine months ended: Schedule of Composition of Revenue 2023 2022 2023 2022 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Product Sales $ 27,565 $ 20,497 $ 80,201 $ 45,684 Services 1 0 1 26 Total revenues $ 27,566 $ 20,497 $ 80,202 $ 45,710 |
Schedule of Percentage of Total Revenues | Revenue from customers with concentration greater than 10% in three and nine months ended September 30, 2023 and 2022 accounted for approximately the following percentage of total revenues: Schedule of Percentage of Total Revenues Three Months Ended Nine Months Ended 2023 2022 2023 2022 Customer A 50 % 68 % 55 % 30 % Customer B 35 % 16 % 26 % 30 % Customer C * - * - * - 11 % Customer D * - * - * - 10 % * Customer revenue did not exceed 10% in the respective period. |
The Company and its significa_3
The Company and its significant accounting policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||||
Entity Incorporation, Date of Incorporation | Aug. 05, 1999 | ||||
Cash and Cash Equivalents, at Carrying Value | $ 9,797 | $ 9,797 | $ 13,213 | ||
Net Income (Loss) Attributable to Parent | $ 527 | $ (1,608) | $ 1,263 | $ (13,045) |
Schedule of Net Revenue Disaggr
Schedule of Net Revenue Disaggregate by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 27,566 | $ 20,497 | $ 80,202 | $ 45,710 |
Smart Phones [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,364 | 1,506 | 23,683 | 10,956 |
Feature Phones [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,907 | 4,779 | 11,737 | 19,618 |
Tablets [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 13,870 | 13,870 | 43,864 | 13,870 |
Accessories And Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 425 | $ 342 | $ 918 | $ 1,266 |
Revenue recognition (Details Na
Revenue recognition (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
[custom:EstimatedLifeOfParticularModelPhone] | 4 years | |
Contract with Customer, Liability, Current | $ 11 | $ 31 |
Other Assets [Member] | ||
Capitalized Contract Cost, Net | $ 7,884 | $ 6,848 |
Summary of Fair Value Assets an
Summary of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds | [1] | $ 382 | $ 1,501 |
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] | 382 | 1,501 |
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 condensed consolidated balance sheets. |
Schedule of Accounts Receivable
Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade receivables | $ 30,461 | $ 22,546 |
Allowance for doubtful accounts | (113) | (113) |
Accounts receivable trade, net | 30,348 | 22,433 |
Vendor non-trade receivables | 1,630 | 2,269 |
Total accounts receivable | $ 31,978 | $ 24,702 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Devices – for resale | $ 3,749 | $ 3,473 |
Raw materials | 14 | |
Accessories | 470 | 423 |
Inventory, net | $ 4,219 | $ 3,910 |
Schedule of Other Assets (Detai
Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advances to third-party manufacturers | $ 2,000 | $ 2,000 |
Director and officer insurance | 437 | 525 |
Deposits | 309 | 311 |
Other | 243 | 136 |
Total other assets | $ 2,989 | $ 2,972 |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer allowances | $ 7,300 | $ 4,130 |
Employee-related liabilities | 886 | 1,365 |
Warranties | 518 | 636 |
Accrual for goods received not invoiced | 13 | 301 |
Contractual obligations | 286 | 1,107 |
Royalties | 391 | 256 |
Contract fulfillment liabilities | 356 | 1,469 |
Credits due to customers | 318 | 961 |
Legal | 286 | 296 |
Other | 260 | 171 |
Accrued liabilities, current | $ 10,614 | $ 10,692 |
Significant Balance Sheet Com_3
Significant Balance Sheet Components (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 113 | $ 113 |
Retail Related Inventory | $ 4 | |
Customer [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 68% | 84% |
Summary of Activity of ROU Asse
Summary of Activity of ROU Assets and Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Leases | |||
Lease liability, Opening balance | $ 66 | ||
Lease liability, Adoption of ASC 842 | 1,976 | ||
Additions | 255 | ||
Lease liability, Principal payments | (201) | (561) | |
Lease liability, Ending balance | 120 | 204 | |
Lease liability, Less short-term portion | (120) | (204) | $ (66) |
Lease liability, Long term lease liability | |||
Right of use assets, Beginning balance | 66 | ||
Right of use assets, Adoption of ASC 842 | 1,976 | ||
Right of use assets, Derecognition of deferred rent liability | 142 | ||
Right of use assets, Impairment of ROU asset | (978) | ||
Additions | 255 | ||
Right of use assets, Amortization | (201) | (431) | |
Right of use assets, Ending balance | 120 | 204 | |
Lease liability, Derecognition on cancelation of lease | (1,211) | 221 | |
Lease liability, Less short-term portion | 120 | 204 | $ 66 |
Right of use assets, Derecognition of deferred rent liability | (142) | ||
Right of use assets, Derecognition on cancelation of lease | $ 1,211 | $ (221) |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments under Noncancelable Operating Lease Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||||
2023 | $ 66 | |||
2024 | 56 | |||
Total undiscounted minimum lease commitments | 122 | |||
Effect of discounting | (2) | |||
Lease liabilities at September 30, 2023 | $ 120 | $ 66 | $ 204 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Lease, Right-of-Use Asset, Periodic Reduction | $ 201 | $ 431 |
Interest Expense | 7 | 74 |
Operating Lease, Expense | 41 | 70 |
[custom:PropertyTaxesAndOperatingExpenses] | 0 | 140 |
[custom:ShortTermLeaseRentPayments] | $ 3 | $ 7 |
Lessee, Operating Lease, Remaining Lease Term | 5 months | |
Accounting Standards Update 2016-02 [Member] | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - Promissory Notes Payable [Member] - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2019 | |
Short-Term Debt [Line Items] | |||
Notes Payable | $ 37 | $ 147 | $ 736 |
Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt Instrument, Term | 2 years | ||
Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt Instrument, Term | 4 years | ||
Debt Instrument, Interest Rate, Stated Percentage | 8% |
Schedule of Stock based Compens
Schedule of Stock based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expenses | $ 371 | $ 637 | $ 1,038 | $ 1,136 |
Cost of Sales [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expenses | 28 | 9 | 230 | 89 |
Selling and Marketing Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expenses | 90 | 3 | 222 | 53 |
General and Administrative Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expenses | 231 | 622 | 564 | 1,230 |
Research and Development Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expenses | $ 22 | $ 3 | $ 22 | $ 18 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | ||
Share-Based Payment Arrangement [Abstract] | |||
Options outstanding, Beginning balance | 4,476,215 | ||
Weighted average exercise price per share, Beginning balance | $ 0.95 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 9 years 1 month 13 days | 9 years 9 months 3 days | |
Aggregate intrinsic value, Beginning balance | [1] | $ 358 | |
Options outstanding, Granted | 1,483,000 | ||
Weighted average exercise price per share, Granted | $ 0.54 | ||
Options outstanding, Exercised | (1,000,000) | ||
Weighted average exercise price per share, Exercised | $ 0.42 | ||
Options outstanding, Forfeited | |||
Options outstanding, Expired | (7,833) | ||
Weighted average exercise price per share, Expired | $ 4.50 | ||
Options outstanding, Ending balance | 4,951,382 | 4,476,215 | |
Weighted average exercise price per share, Ending balance | $ 0.93 | $ 0.95 | |
Aggregate intrinsic value, Ending balance | [1] | $ 1,091 | $ 358 |
Options outstanding, Exercisable | 403,420 | ||
Weighted average exercise price per share, Exercisable | $ 5.75 | ||
Weighted average remaining contractual life (in years), Exercisable | 8 years 7 months 13 days | ||
Aggregate intrinsic value, Exercisable | [1] | $ 89 | |
[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 Outstanding Restric
Schedule of Outstanding Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at January 1, 2023 | 860,888 |
Granted | 87,100 |
Released | (605,392) |
Forfeited | (5,200) |
Outstanding at September 30, 2023 | 337,396 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 2,174 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 10 months 17 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income Tax Expense (Benefit) | $ 96 | $ 72 | $ 281 | $ 201 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Jul. 13, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Sep. 14, 2023 | |
Loss Contingencies [Line Items] | |||||
Loss contingency receivable | $ 1,200 | ||||
Purchase Obligation | $ 20,839 | $ 19,975 | |||
Long-Term Purchase Commitment, Amount | 289 | $ 1,154 | |||
CFO and President [Member] | |||||
Loss Contingencies [Line Items] | |||||
Payments for Postemployment Benefits | $ 1,000 | ||||
Cost of Sales [Member] | |||||
Loss Contingencies [Line Items] | |||||
Royalty Expense | $ 793 | $ 964 | |||
Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
[custom:RoyaltyPaymentPercentOfNetRevenues] | 5% |
Schedule of Computation of Basi
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income | $ 527 | $ (1,608) | $ 1,263 | $ (13,045) |
Denominator: | ||||
Weighted-average shares used in computing net earnings (loss) per share, basic | 41,851,729 | 36,085,226 | 41,269,583 | 24,888,859 |
Net earnings (loss) per share, basic | $ 0.01 | $ (0.04) | $ 0.03 | $ (0.52) |
Weighted-average shares used in computing net earnings (loss) per share, diluted | 42,992,680 | 36,085,226 | 42,535,699 | 24,888,859 |
Net earnings (loss) per share, diluted | $ 0.01 | $ (0.04) | $ 0.03 | $ (0.52) |
Summary of Dilutive Common Shar
Summary of Dilutive Common Shares were Excluded from Calculation of Diluted (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 5,288,780 | 753,905 | 5,288,780 | 753,905 |
Share-Based Payment Arrangement, Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 4,951,382 | 62,548 | 4,951,382 | 62,548 |
Unvested Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 337,396 | 691,355 | 337,396 | 691,355 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 2 | 2 | 2 | 2 |
Schedule of Revenue by Region (
Schedule of Revenue by Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 27,566 | $ 20,497 | $ 80,202 | $ 45,710 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 11,798 | 4,351 | 25,184 | 24,284 |
Canada and Latin America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 1,706 | 1,855 | 7,477 | 6,132 |
Europe and Middle East [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 87 | 266 | 3,000 | 1,159 |
Asia Pacific [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 13,975 | $ 14,025 | $ 44,541 | $ 14,135 |
Schedule of Composition of Reve
Schedule of Composition of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from External Customer [Line Items] | ||||
Total revenues | $ 27,566 | $ 20,497 | $ 80,202 | $ 45,710 |
Product [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 27,565 | 20,497 | 80,201 | 45,684 |
Service [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | $ 1 | $ 0 | $ 1 | $ 26 |
Schedule of Percentage of Total
Schedule of Percentage of Total Revenues (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||||
Customer A [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
Concentration Risk, Percentage | 50% | 68% | 55% | 30% | |||
Customer B [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
Concentration Risk, Percentage | 35% | 16% | 26% | 30% | |||
Consumer C [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
Concentration Risk, Percentage | [1] | [1] | [1] | 11% | |||
Consumer D [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
Concentration Risk, Percentage | [1] | [1] | [1] | 10% | |||
Customers [Member] | Maximum [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
Concentration Risk, Percentage | 10% | ||||||
[1]Customer revenue did not exceed |
Entity Level Information (Detai
Entity Level Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 Integer | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |