DNA X, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
SONM$2.13-7.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-27.
0001493152-24-011530
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001720
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 114 current paragraphs.
47 unchanged; 24 reworded; 43 added; 29 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
In 2023, Sonim announced a strategic expansion initiative, focusing on broadening its market reach with new products, geographical markets, and customer segments including enterprise, small and medium business, and prosumers. This strategy is underpinned by a strong emphasis on execution. We have introduced new product categories: Connected Solutions featuring wireless internet products, a next-generation rugged smartphone, and a new range of mid and low-tier professional rugged phones, all boasting IP ratings, MIL-STD-810H standards, and elements of Sonim’s RPS, highlighting our value proposition to target markets.
Current report
During the second half of 2024 and through the filing date of this report, Sonim launched the following products:
Current report
Additionally, the XP10 is now available through our distribution partners in EMEA and Australia. Most of these products are supported by the SonimWare platform and enterprise services. In the first quarter of 2025, the XP Pro 5G and H500 5G each received Verizon Frontline certification. In the first quarter of 2025 we also announced the upcoming launch and availability of the XP Pro Thermal 5G smartphone for Europe which includes an SDK-enabled Sonim IRIS software for custom application development and an integrated thermal camera by FLIR® that benefits a number of vertical trades such as electricians, plumbers, public safety, construction, agriculture, amongst others.
Current report
Geographic market expansion continues with agreements and product availability through new distribution partners in Europe and South Africa, catering to carrier, reseller, and enterprise sales channels. New partners include TCCM, Brodos, Modino, Ingram Micro, and Cernotech, which bolster our presence in these regions. This strategic alignment supports our commitment to offering reliable solutions and expanding our customer base.
Current report
During the first half of 2024, the Company was in a transition period, phasing out low margin white label products and commencing selling new products through our carrier channels. Our strategy of moving away from the white label business was accelerated when our manufacturing partners had difficulty maintaining production of our white label products. Revenue in 2024 decreased compared to 2023 due to this transition away from white label products. However, with the launch of new products in the fourth quarter of 2024 and in the first half of 2025, we anticipate significant revenue growth and improved profitability in 2025.
Current report
With the primary sales channels in the U.S. and Canada consisting of large wireless carriers, the Company’s customer base is highly concentrated. For the year ended December 31, 2024, wireless carriers contributed 75% of our total net revenues, with our top three carrier customers accounting for 62% of our total net revenues. Our rugged smartphones represented 45% of our total net revenues, while feature phones were 35% of our total net revenues, white label products (related party revenue) were 13% of our total net revenues, and connected solutions were 6% of our total net revenues.
Current report
In alignment with Sonim Technologies’ commitment to quality, reliability, and regulatory compliance, we have prioritized our Trade Agreements Act (“TAA”) initiatives. TAA compliance is crucial in enhancing our market strategy, particularly in expanding opportunities within government and enterprise markets, which demand stringent adherence to regulatory standards. By ensuring our products meet TAA requirements, we reinforce our position as a trusted provider of enterprise 5G solutions.
Current report
This initiative underscores our dedication to delivering products that not only meet industry-leading standards but also comply with U.S. federal procurement regulations, thereby enhancing our competitiveness in securing government contracts.
Current report
Looking ahead, Sonim is focused on bringing our new products and solutions offering to our expanded portfolio throughout 2025.
Current report
As of the filing date of this report, Sonim is completing the development, testing and certification of new products that it expects to launch with various carriers in 2025.
Current report
Reverse Stock Split
Current report
On July 17, 2024, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). Our common stock began trading on the Nasdaq Capital Market on a post-split basis on July 18, 2024. As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to July 18, 2024, was automatically converted into one-tenth (1/10) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive one whole share in lieu of such fractional share.
Current report
The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.
Current report
All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.
Current report
Equity Financing
Current report
On April 29, 2024, we consummated a private placement with a single investor and sold 350,000 shares of our common stock (as adjusted for the Reverse Stock Split) and warrants to purchase up to 350,000 shares of our common stock for an exercise price of $11.00 per share (as adjusted for the Reverse Stock Split) for an aggregate purchase price of $3.85 million. We used the net proceeds from the private placement for working capital and general corporate purposes. The shares of our common stock sold in the private placement (including those underlying the warrants) are subject to registration rights and may not be transferred or sold until 180 days after the closing, or October 29, 2024, subject to customary limited exceptions.
Current report
ATM Offering
Current report
On August 6, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”). Pursuant to the Sales Agreement, the Company may sell, at its option, up to an aggregate of $8.9 million in shares of common stock through Roth, as sales agent. Sales of shares of our common stock made pursuant to the Sales Agreement are being made under the effective Registration Statement on Form S-3. Roth is entitled to compensation at a commission rate of 3% of the gross sales price per share. For additional information, refer to Note 7—Stockholders’ Equity to the consolidated financial statements contained within this report under the title “ATM Offering.”
Current report
We have no obligation to sell shares under the Sales Agreement, but we may do so from time to time. During the year ended December 31, 2024, a total of 138,988 shares of common stock were sold under the Sales Agreement for net proceeds of $0.4 million after payment of commission fees and other related expenses of $18,000. As of December 31, 2024, the Company had approximately $8.4 million of common stock remaining available for sale under the ATM Sales Agreement.
Current report
Receivables Financing Agreement
Current report
To improve its liquidity during seasonally high working capital periods, on September 23, 2024, the Company entered into an invoice purchase agreement (the “Receivables Financing Agreement”) with LS DE LLC (“LS”), pursuant to which LS will provide receivables factoring to the Company, pursuant to which LS will advance 80% of the face value of the receivables being sold by the Company, up to a maximum of $2.5 million of eligible customer invoices from the Company. As of December 31, 2024, there was $0.6 million outstanding under the Receivables Financing Agreement, which is included in Accrued Liabilities in the Consolidated Balance Sheets. For additional information, refer to Note 1—The Company and Its Significant Accounting Policies to the consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”
Current report
Impairment of Contract Fulfillment Assets
Current report
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. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs over the estimated period of time that the product will be sold, which is typically three to four years. As of December 31, 2024 and 2023, the net contract fulfillment assets were $6.4 million and $9.2 million, respectively.
Current report
If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the year ended December 31, 2024, the Company recorded an impairment of contract fulfillment assets of $6.5 million, $3.0 million of which is included in cost of revenues in the Consolidated Statements of Operations, due to a decrease in projected profit of certain hotspots products, the cancellation of a consumer durable product, and the projected end of life of legacy products as newer products are scheduled to launch. The consumer durable product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product.
Current report
Compliance with Nasdaq Listing Rules
Current report
Worldwide economic and political uncertainties and negative trends, including tariffs and increasing trade protectionism, inflation, tensions between the U.S. and China, financial and credit market fluctuations, recession risks, labor shortages, supply chain disruptions, political election cycles, changes in laws and interpretations of laws, changes in the volume and relative mix of U.S. government spending, cost-cutting and efficiency initiatives and potential disruptions from international conflicts and acts of terrorism, have impacted and may continue to impact our business and the business of our customers, while also disrupting sales channels and advertising and marketing activities. See “Part I. Item 1A. Risk Factors” in this Form 10-K for further discussion of the possible impact of these factors and other risks on our business.
Current report
During the first half of 2024, the Company was in a transition period, phasing out low margin white label products and commencing selling new products through our carrier channels. Our strategy of moving away from the white label business was accelerated when our manufacturing partners had difficulty maintaining production of our white label products. Revenue in 2024 decreased compared to 2023 due to this transition away from white label products. However, with the launch of new products in the fourth quarter of 2024 and in the first half of 2025, we anticipate significant revenue growth and improved profitability.
Current report
Impairment of contract fulfillment assets. 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. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs to costs of revenues over the estimated period of time that the product will be sold, which is typically three to four years. If the Company determines that such contract fulfillment costs are not expected to be recovered prior to the launch of the product, it records an impairment to operating expenses in the period such determination is made. If the Company determines that such contract fulfillment costs are not expected to be recovered after the launch of the product, it records an impairment to cost of revenues in the period such determination is made.
Current report
Restructuring. We have undertaken certain restructuring activities and cost reduction initiatives in an effort to better align our organizational structure and costs with our strategy. Restructuring charges consist of severance costs incurred in connection with the reduction of our workforce.
Current report
*Total net revenues.*Total net revenues for the year ended December 31, 2024, decreased by $35.3 million compared to the same period in 2023 because 2023 included $44.8 million in revenue from the white label tablets and the tablet sales ended in the fourth quarter of 2023. The Company had planned to exit the white label business in 2024 but our strategy of moving away from the white label business was accelerated when our manufacturing partners had difficulty maintaining production of our white label products. The year ended December 31, 2024, has been a transition period, marked by the ending of our white label business and the start of the launches of our hotspots and new rugged smartphones. Revenue is expected to increase in 2025 as we launch new products.
Current report
Cost of revenues. Total cost of revenues for the year ended December 31, 2024, decreased $25.9 million compared to the same period in 2023 primarily due to the decrease in net revenues, partially offset by a $3.0 million impairment of contract fulfillment assets included in cost of revenues in 2024. Cost of revenues as a percentage of net revenue increased due to the $3.0 million impairment charge.
Current report
Gross profit and margin. Gross profit for the year ended December 31, 2024, decreased $9.4 million compared to the same period in 2023 primarily due to a decrease in net revenues and the $3.0 million impairment of contract fulfillment assets included in cost of revenues in 2024. Gross profit margin was negatively impacted by this impairment charge.
Current report
Research and development. Research and development (“R&D”) expenses for the year ended December 31, 2024, increased by $12.5 million compared to the same period in 2023 primarily due to increased spending on the new mobile hotspots and smartphones to prepare them for launch, as well as costs to upgrade the operating system of our products. In 2024 R&D expenses were for many products including the XP Pro phone, H500 mobile hotspot, H700 premium mobile hotspot, the X100 phone, the X400 phone, a 5G upgrade for the XP3plus, and a 5G upgrade for the XP5plus. In 2025 we expect to spend less on R&D since we have or will complete upgrades of our legacy phones, and new products for the European market.
Current report
Sales and marketing. Sales and marketing expenses for the year ended December 31, 2024, increased by $4.2 million compared to the same period in 2023 primarily due to an increase in marketing spend to support new products in 2024 and the expansion of our sales team in Europe as we launch new products.
Current report
General and administrative. General and administrative expenses for the year ended December 31, 2024, increased by $4.1 million compared to the same period in 2023 primarily due to a $2.1 million increase in the reserve for credit losses related to the trade receivable from a customer we sold tablets to in 2023, a $0.8 million increase in personnel and consulting expenses, and a $0.8 million increase in legal, audit, and tax professional fees associated with an increase in public company filing activity.
Current report
Impairment of contract fulfillment assets. Impairment of contract fulfillment assets for the year ended December 31, 2024, was $3.5 million, primarily resulting from the Company’s determination that it would not recover the contract fulfillment costs capitalized due to a decrease in projected profit for one of its hotspots and the cancellation of the consumer durable phone product.
Current report
Restructuring charges. Restructuring charges for the year ended December 31, 2024, was $0.5 million, and consisted of severance costs incurred in connection with the reduction of our workforce.
Current report
Other income (expense), net. Other income (expense), net, increased by $0.5 million primarily because the Company recorded $0.7 million in other income related to an employee retention credit payment received in 2024.
Current report
Currently, our principal source of liquidity consists of cash and cash equivalents totaling $5.3 million as of December 31, 2024. Subsequent to December 31, 2024, we have received $3.7 million in proceeds from the sale of equity through our at-the-market (“ATM”) program, as well as $3.0 million in proceeds from the sale of a new note (see below). We may elect to sell up to $4.6 million in additional shares of common stock that are available for sale under our ATM offering program, as described in detail under the title “ATM Offering.” We also have access to up to $2.5 million under our Receivables Financing Agreement. We plan to continue to leverage multiple sources of liquidity to maintain flexibility in regard to meeting our capital needs.
Current report
On February 21, 2025, the Company entered into a note purchase agreement (the “Purchase Agreement”) with Streeterville Capital, LLC (the “Lender”) pursuant to which the Company issued and sold to the Lender a promissory note in the original principal amount of $3.3 million (the “Note”). The Company received $3.0 million, net of the debt discount and transaction costs paid to the Lender.
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Removed paragraphs (29)
Previous report
Sonim Technologies is a leading U.S.-based provider of rugged mobile devices and accessories designed for workers physically engaged in their work environments, often in mission-critical roles. As part of our expansion efforts, the Company has introduced our Connected Solutions division which will begin launching products in 2024 in the U.S., Canada and Asia/Pacific. Connected Solutions will primarily consist of devices that connect to the internet including mobile hotspots, fixed wireless devices and USB dongle devices. In addition to this, the Company has expanded its rugged phone portfolio by developing a semi-rugged smartphone that is designed for small businesses through three U.S. carriers beginning in the second half of 2024. The Company is also launching a consumer durable product in late 2024 to address consumers who need more protection in their devices without sacrificing key design elements and maintaining an attractive price point. In 2023, the Company sold tablets that connect to the internet to a customer who rebranded them for sale in the U.S., but such sales have been discontinued in the fourth quarter of 2023.
Previous report
Since June 2023, the Company has received thirteen product awards from U.S., Canadian, and an Australian carrier for products that will launch in 2024. This includes seven product awards for rugged phones, five product awards for mobile hotspots, and one product award for a consumer durable smartphone. The thirteen product awards compare to one or two product awards per year that the Company received in years prior to 2023.
Previous report
Given our primary sales channels in the U.S. and Canada consist of large wireless carriers, our customer base is somewhat concentrated. For the year ended December 31, 2023, large wireless carriers contributed 45% of our revenues, with our top three carrier customers accounting for 40%. Our tablet customer represented 48% of our revenue while smartphones constituted 34% of our revenues and feature phones 17% of our revenues. To help control and manage the quality, cost and reliability of our supply chain, we directly manage the procurement of certain final assembly materials used in our products, which include memory and LCDs. To help contain costs and improve the efficiency of our operations, we have outsourced substantially all of our manufacturing functions, software development and quality control functions to third parties, transferring the employees who previously performed this work. We continue to develop differentiated products to attract and retain customers.
Previous report
While we continue to design ultra rugged phones and accessories, we have broadened our product range to appeal to a more diverse audience. Our core value proposition, which has earned us a loyal following, remains the foundation of our expanded offerings, including rugged durable phones and wireless data devices. These new products will not only expand our portfolio of products but will also allow the Company to diversify our customer base into new markets. New product launches for hotspots, our new rugged phone for small businesses, and our consumer-oriented phone will begin in 2024 and sales are expected to grow over the next few years.
Previous report
Our key value proposition in the market is to incorporate specific elements of our rugged roots into our new products with added durability without sacrificing attractive design and value pricing. We believe this is an underserved market opportunity in the small business and consumer spaces. Our expertise in carrier mobility leads us to a natural extension into data devices, where we can leverage our technical expertise as well as our streamlined organization to bring better quality, better specs, and low cost to the marketplace.
Previous report
In the third quarter of 2023, the Company received five separate product awards for the new hotspot devices that connect users to the internet through the 4G or 5G phone network. These devices can replace a cable modem at a much lower monthly cost, are portable, and can be used anywhere that is covered by the 4G or 5G networks. These product awards are from three tier-one carriers in the U.S., one tier-one carrier in Canada, and one tier-one carrier in Australia. The Company expects to launch the hotspots with different carriers beginning in the second quarter of 2024, through the fourth quarter of 2024. Incremental revenue and incremental net income are expected once these products are launched.
Previous report
In the third quarter of 2023 and in the first quarter of 2024, the Company received three product awards for a new rugged smartphone from U.S. carriers. This phone is sleeker than our ultra-rugged smartphone and will be targeted to small businesses that are exposed to challenging environments and who want a more durable phone that looks and feels like other consumer phones and has the same great features as other Android phones. This product is expected to launch in the second half of 2024.
Previous report
In the third quarter of 2023, the Company also received a product award for a value 5G smartphone from a tier-one U.S. carrier. This phone looks and feels like other consumer phones and has the same great Android features. The differentiator is that it is much more durable than other phones, and it does not require a separate protective case. This product is expected to launch in the fourth quarter of 2024.
Previous report
Closure of the SEC Investigation with No Enforcement Action
Previous report
On March 6, 2023, we received a letter from the SEC that stated that the SEC has concluded the investigation of the Company and does not intend to recommend any enforcement action against the Company.
Previous report
In January 2024, the Bullitt Group Ltd., a competitor of the Company for rugged phones, shutdown. This creates an opportunity for the Company to sell our existing rugged phones and to develop new rugged phones for customers that were formally served by Bullitt in Europe and around the world. We are increasing our sales teams for Europe, the Middle East, and Africa and are expanding our service infrastructure to serve former Bullitt customers. We expect higher sales in Europe in 2024 and in future years.
Previous report
Nasdaq Delisting and Reverse Stock Split
Previous report
If the Company does not regain compliance during this second 180-day period, the Nasdaq staff will provide written notice to us that our common stock is subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if Sonim does appeal the delisting determination by Nasdaq to the panel, such appeal would be successful.
Previous report
This is not the first instance of Sonim’s non-compliance with the Bid Price Rule. We intend to actively monitor the closing bid price of our common stock and, as appropriate, will consider available options to resolve the deficiency and regain compliance with the Bid Price Rule, including potentially seeking to effect a reverse share split, if necessary. There can be no assurance that we will be able to regain compliance with respect to the current deficiency including by effecting a reverse share split, or that we will be able to maintain compliance with the Nasdaq Capital Market continued listing requirements in the future or regain compliance with respect to any future deficiencies. In the event we are delisted from Nasdaq, the only established trading market for our common stock would be eliminated, and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems. As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our shares. Delisting would likely also reduce the visibility, liquidity, and value of our common stock, reduce institutional investor interest in our company, and may increase the volatility of our common stock. Delisting could also cause a loss of confidence of potential industry partners, lenders, and employees, which could further harm our business and our future prospects.
Previous report
Our tablet sales were with a customer that imported the tablets to the U.S., where the tablets were branded, and sold to a U.S. retailer. Tablet sales ended in October 2023 and are not expected to be resumed in 2024.
Previous report
*Net revenues.*Net revenues for the year ended December 31, 2023, increased by $23.8 million, or 34.1% to $93.6 million compared to $69.8 million for the year ended December 31, 2022. The increase in net revenues was primarily due to an increase in smartphone sales of $13.6 million and tablet sales of $15.3 million, partially offset by a decrease in feature phone sales. Tablet sales stopped in October 2023 with the end of the product’s life cycle. We expanded our product portfolio with two low-cost smartphones that were developed through our ODM model and started shipping in December 2023, which contributed $0.4 million in revenue in 2023. We have thirteen new product awards, five for mobile hotspots, seven for new rugged phones, and one for a new consumer durable phone. These products are all expected to launch in 2024, and will result in higher revenue in the second half of 2024 and in future years.
Previous report
Cost of revenues. Total cost of revenues for the year ended December 31, 2023, increased $16.1 million, or 27.7%, to $74.3 million, or 79.4% of net revenues, compared to $58.2 million, or 83.4% of net revenues for the year ended December 31, 2022. This increase was attributable to the increase in net revenues. The lower cost of revenues as a percentage of net revenues in 2023 was due to sales mix and specifically the sale of relatively higher margin smartphones in 2023.
Previous report
Gross profit and margin. Gross profit for the year ended December 31, 2023, increased $7.7 million, or 66.3%, to $19.3 million, or 20.6% of net revenues, from $11.6 million, or 16.6% of net revenues for the year ended December 31, 2022. This increase in gross profit was primarily due to higher revenue from smartphone and tablet sales. Gross profit margins reflected a more favorable product mix due to increased sales of the refreshed XP10 rugged smartphone.
Previous report
Research and development. Research and development (“R&D”) expenses for the year ended December 31, 2023, decreased by $6.2 million, or 77.8%, to $1.8 million compared to $8.0 million for the year ended December 31, 2022. The decrease was due to 2022 including R&D on the XP10 and the XP5plus that were launched in 2022. R&D expense in 2023 included spending on the new mobile hotspots, and two new smartphones that will launch in 2024.
Previous report
Sales and marketing. Sales and marketing expenses for the year ended December 31, 2023, increased by $1.5 million, or 20.5%, to $8.8 million compared to $7.3 million for the year ended December 31, 2022. This increase is due to the hiring of new personnel to drive the Company’s expansion into data devices, and the expansion of the sales team to serve Europe, the Middle East and Australia.
Previous report
General and administrative. General and administrative expenses for the year ended December 31, 2023, decreased by $2.4 million, or 22.5%, to $8.3 million compared to $10.7 million for the year ended December 31, 2022. This decrease was primarily due to severance costs of $1.2 million incurred in 2022 due to a change in the management team, a decrease in finance headcount, and lower directors and officers insurance costs.
Previous report
Other income (expense), net. Other income (expense), net, decreased by $0.7 million primarily because 2022 had a $0.7 million gain on the termination of the San Mateo office lease.
Previous report
Net loss. The net loss for December 31, 2023, was $0.1 million compared to $14.1 million for December 31, 2022. This $14.0 million improvement is primarily due to a $7.7 million increase in gross profit due to higher revenue, a $6.2 million decrease in R&D expenses, and a $2.4 million decrease in General and Administrative expenses, partially offset by a $1.5 million increase in Sales and Marketing expenses.
Previous report
Liquidity and Capital Resources
Previous report
Currently, our principal source of liquidity consists of cash and cash equivalents totaling $9.4 million as of December 31, 2023. During the year ended December 31, 2023, our net loss was $0.1 million. In 2024 we will be launching new products beginning in the second quarter, and these new products are expected to incrementally improve cash flow. In 2024, we will continue to use cash to complete the certification of our new products with the carriers, to develop new products, and to expand our sales and marketing teams in Europe, the Middle East, and Australia. We will adjust our spending to ensure that our cash is sufficient to cover any future negative cash flow.
Previous report
Our management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, or through arrangements with strategic or investment partners with greater resources or access to funds, or through obtaining credit from government or financial institutions. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. The shares of our common stock offered for resale pursuant to the Form S-3 Registration Statement and Prospectus, dated December 1, 2023, represented approximately 48.4% of the outstanding shares of our common stock as of December 31, 2023, and approximately 99% of our public float. Given the substantial number of shares of our common stock registered for resale, the perception in the market that the selling securityholders of a large number of shares intend to sell shares could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock and hinder our efforts to address our capital needs by means of the sale of our securities.
Previous report
Contract Fulfillment Assets and Amortization
Previous report
Recently Accounting Pronouncements
Previous report
In June 2016, the FASB issued ASU 2016-13,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for interim and annual periods beginning after December 15, 2022. The adoption of this pronouncement did not have a material impact on the Company’s consolidated financial statements and resulted in additional disclosures only.
Reworded paragraphs (24)
Previous wording
Revenues in 2023 were primarily generated from sales of our mobile phones and industrial-grade accessories, predominantly to wireless carriers in the United States and Canada. We currently have products available at all three U.S. Tier-one carriers – AT&T, T-Mobile and Verizon as well as the three primary carriers in Canada – Bell, Telus and Rogers. These carriers then resell our products, along with network services, to end customers focusing on two primary end markets: industrial enterprise and public sector. In 2023 and 2022, tablets were sold to a customer who resold them to a carrier in the U.S. The tablet business was not part of our core business as it was under the ODM model where we designed a product for a specific customer, and we found a manufacturer to produce the product. ODM products have lower margins and shorter product lives as compared to our other products.
Current wording
Sonim Technologies, based in the United States, is a leading provider of enterprise 5G solutions, offering a robust portfolio that includes rugged handsets, smartphones, wireless internet devices, software, services, and accessories. These products are engineered for reliable communication in challenging and unpredictable environments, serving sectors such as critical communications, first responders, government, industrial, construction, hospitality, and logistics. We currently have products available at all three U.S. Tier-one carriers – AT&T, T-Mobile and Verizon as well as the three primary carriers in Canada – Bell, Telus and Rogers, and Telstra in Australia. These carriers then resell our products, along with network services, to end customers focusing on two primary end markets: industrial enterprise and public sector. We also sell our products through distributors and resellers in various markets, including Europe and South Africa.
Previous wording
The first step in selling our products through cell phone carriers is to receive a product award from the carrier. The award documents the intent of the carrier to carry the proposed product and offer it to customers through their stores or online. The carrier and Sonim agree to a launch date that is generally nine months or longer from the date of the product award. After the product award, the Company and its partners complete the design that includes the unique specifications from the carrier, test the device, obtain certification from the carrier to sell the device, and begin full scale manufacturing of the product based on purchase orders issued by the carrier.
Current wording
The first step in selling our products through wireless telecommunications carriers is to receive a product award from the carrier. The award documents the intent of the carrier to carry the proposed product and offer it to customers through their stores or online. The carrier and Sonim agree to a launch date that is generally nine months or longer from the date of the product award. After the product award, the Company and its partners complete the design that includes the unique specifications from the carrier, test the device, obtain certification from the carrier to sell the device, and begin full scale manufacturing of the product based on purchase orders issued by the carrier.
Previous wording
On September 14, 2023, we received a letter from Nasdaq notifying us that, because the bid price for our common stock has fallen below $1.00 per share for 30 consecutive business days, we no longer comply with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) for continued listing. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a period of 180 calendar days, or through March 12, 2024, to regain compliance with the Bid Price Rule. On March 13, 2024, such period was extended by an additional 180 calendar days, or through September 9, 2024. To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of ten (10) consecutive business days as required under Nasdaq Listing Rule 5810(c)(3)(A) (unless the Nasdaq staff exercises its discretion to extend this 10-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)) during the 180-day period).
Current wording
On September 14, 2023, the Company received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying it that, because the bid price for its common stock had fallen below $1.00 per share for 30 consecutive business days, the Company no longer complied with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) for continued listing. On August 2, 2024, the Company received a letter from the Staff notifying the Company that it had regained compliance with the Bid Price Rule.
Previous wording
During the fiscal year 2023, we operated under challenging market conditions, influenced by global events beyond our control such as inflation, supply chain disruptions, tensions between the U.S. and China, war in Ukraine, the overall international instability, and other events discussed in “Part I. Item 1A. Risk Factors” in this Form 10-K. We have implemented and continue to implement measures to address those challenges. We also continue to actively manage our inventory and establish a relationship with third-party manufacturers in an effort to minimize supply chain disruptions. Nevertheless, the above-described events had and will continue to impact the global macroeconomic and geopolitical environments, capital and commodity markets, and global supply chains, which may have an adverse impact on our operations and hinder our ability to access capital, if needed. Our cost of revenue may increase if the component prices increase.
Current wording
We have implemented and continue to implement measures to address those challenges. We also continue to actively manage our inventory and establish a relationship with third-party manufacturers in an effort to minimize supply chain disruptions. Nevertheless, the above-described events had and will continue to impact the global macroeconomic and geopolitical environments, capital and commodity markets, and global supply chains, which may have an adverse impact on our operations and hinder our ability to access capital, if needed. Our cost of revenue may increase if the component prices increase.
Previous wording
Our smartphones include the XP10 model sold in 2023 and 2022, and our XP8 model sold in 2022. The number of smartphone units sold during the year ended December 31, 2023 compared to the year ended December 31, 2022 increased by 89%, primarily because the XP10 was launched in November 2022 and had a full year of sales in 2023. The Company’s tablet sales increased by 52% in 2023 as compared to 2022 because the tablet was launched in the third quarter of 2022, and 2023 had nine months of tablet sales. We stopped selling the tablet in October, 2023. Our feature phones include the XP3plus, XP3, XP5, XP5s, and XP5plus models. The number of feature phone units sold during the year ended December 31, 2023 compared to the year ended December 31, 2022 decreased by 32%, primarily because 2022 had higher sales of the XP3plus after it was launched in September 2021.
Current wording
Our smartphones include the XP10 model sold in 2024 and 2023, and our XP Pro and XP400 models sold in the fourth quarter of 2024. The number of smartphone units sold during the year ended December 31, 2024 compared to the same period in 2023 decreased by 17%, primarily because 2023 had higher sales of the XP10 after it was launched in November 2022. The number of white label products sold during the year ended December 31, 2024 compared to the same period in 2023 decreased by 72% because white label products were sold throughout 2023 and sales ended in the first quarter of 2024. Our feature phones include the XP3plus, and the XP5plus models sold in 2024 and 2023, and our XP100 model sold in the second half of 2024. The number of feature phone units sold during the year ended December 31, 2024 compared to the same period in 2023 increased by 41%, primarily because 2024 had higher sales of the XP3plus and XP5plus.
Previous wording
We define Adjusted EBITDA as net loss adjusted to exclude the impact of stock-based compensation expense, depreciation and amortization, interest expense, and income taxes. Adjusted EBITDA is a useful financial metric in assessing our operating performance from period to period by excluding certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments, such as stock-based compensation.
Current wording
We define Adjusted EBITDA as net loss adjusted to exclude the impact of stock-based compensation expense, depreciation and amortization, interest expense, income taxes, restructuring charges, and asset impairment charges. Adjusted EBITDA is a useful financial metric in assessing our operating performance from period to period by excluding certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments, such as stock-based compensation.
Previous wording
We believe that our performance is significantly dependent on the investments we make in research and development and that we must continue to develop and introduce innovative new products on a two- to three-year cycle. Our partnerships with ODMs are expected to enable us to shift between different types and numbers of devices under development while increasing the size of our internal team at a slower pace than our growth in revenue.
Current wording
We believe that our performance is significantly dependent on the investments we make in research and development and that we must continue to develop and introduce innovative new products on a two- to three-year cycle. Our partnerships with ODMs are expected to enable us to shift between different types and numbers of devices under development while increasing the size of our internal team at a slower pace than our growth in revenue. We incur research and development costs internally, primarily from the salary costs of our employees, and externally through the use of ODMs for specific research and development projects.
Previous wording
While the hardware design of our phones is generally the same for all wireless carriers, each device must be configured to conform to the requirements of each wireless carrier’s network, resulting in higher development expenses as the number of wireless carriers we sell through increases. In addition to the design and configuration costs, each device must undergo a multi-month technical approval process at each carrier before it can be certified to be stocked at each carrier. The approval process for each device for each carrier has historically cost between $1 million and $3 million. We capitalize these certification costs as contract fulfillment assets and amortize them over the estimated life of the product. Prior to the commencement of development of a product for certification, we generally do not receive any purchase orders or commitments. Following a carrier’s review of product concepts, we may receive a product award letter from that carrier to move forward with the development and certification process, at which time we may begin receiving advance purchase orders or commitments. Since the timing of when we seek technical approval with our wireless carriers tends to be cyclical in nature, quarter-over-quarter expenditures may vary significantly depending on the number of approvals in process during the quarter. If we fail to innovate and enhance our product offerings, our brand, market position and revenues may be adversely affected. If our research and development efforts are not successful, then we will not recover these investments that we make.
Current wording
While the hardware design of our phones and connected devices is generally the same for all wireless carriers, each device must be configured to conform to the requirements of each U.S. wireless carrier’s network, resulting in higher development expenses as the number of wireless carriers we sell through increases. In addition to the design and configuration costs, each device must undergo a multi-month technical approval process at each carrier before it can be certified to be stocked at each carrier. The approval process for each device for each carrier has historically cost between $0.5 million and $3 million. For certifications outside the U.S., there may be one certification requirement for an entire country or region. Certification requirements for distributors vary by product and by region. We capitalize these certification costs as contract fulfillment assets and amortize them over the estimated life of the product. Prior to the commencement of development of a product for certification, we generally do not receive any purchase orders or commitments. Following a carrier’s review of product concepts, we may receive a product award letter from that carrier to move forward with the development and certification process, at which time we may begin receiving advance purchase orders or commitments. Since the timing of when we seek technical approval with our wireless carriers tends to be cyclical in nature, quarter-over-quarter expenditures may vary significantly depending on the number of approvals in process during the quarter. If we fail to innovate and enhance our product offerings, our brand, market position and revenues may be adversely affected. If our research and development efforts are not successful, then we will not recover these investments that we make.
Previous wording
We are focused on continuing to acquire new customers, in North America, Europe, the Middle East, and Australia, to support our long-term growth. Historically, we have been dependent on a small number of wireless carriers distributing our products. We have invested, and expect to continue to invest, in our sales and marketing efforts to drive new customer acquisitions. We are currently pursuing former customers of Bullitt in Europe and the Middle East to introduce our rugged phone products. A key part of our strategy is to further expand our connected solutions products. We also intend to continue to invest in and expand our international sales teams. As a result, we expect our sales and marketing costs to increase as we seek to acquire new customers. Sales and marketing investments will often occur in advance of any sales benefits from these activities, and it may be difficult for us to determine if we are efficiently allocating our sales and marketing resources.
Current wording
We are focused on continuing to acquire new customers, in North America, Europe, the Middle East, and Australia, to support our long-term growth. Historically, we have been dependent on a small number of North American wireless carriers to purchase our products. We have invested, and expect to continue to invest, in our sales and marketing efforts to drive new customer acquisitions. We are currently pursuing new customers in Europe and the Middle East to introduce our products. A key part of our strategy is to further expand our connected solutions products. As a result, we expect our sales and marketing costs to increase as we seek to acquire new customers. Sales and marketing investments will often occur in advance of any sales benefits from these activities, and it may be difficult for us to determine if we are efficiently allocating our sales and marketing resources.
Previous wording
Revenues are recognized on the date that the customer receives the products sold or when title is passed to the customer upon shipment. For products shipped on consignment, revenue is not recognized until the products are sold to the end customer. Any discounts, marketing development funds, product returns or other revenue reductions are treated as offsets to revenues, which is presented on a net basis. A return reserve reduces revenue for products that are sold to distributors with a right of return. We have also historically entered into customer agreements with channel partners that include a combination of products and non-recurring engineering services, or NRE services. When a customer agreement includes NRE services which involve significant design modification and customization of the product software that is essential to the functionality of the hardware, revenues are also recognized as control transfers to the customer under Accounting Standards Codification (“ASC”) 606,Revenue from Contracts with Customers. All of our revenues are derived from a single segment.
Current wording
Revenues are recognized on the date that the customer receives the products sold or when title is passed to the customer upon shipment. For products shipped on consignment, revenue is not recognized until the products are sold to the end customer. Any discounts, marketing development funds, product returns or other revenue reductions are treated as offsets to revenues, which is presented on a net basis. A return reserve reduces revenue for products that are sold to distributors with a right of return. We have also historically entered into customer agreements with channel partners that include a combination of products and non-recurring engineering services, or NRE services. When a customer agreement includes NRE services which involve significant design modification and customization of the product software that is essential to the functionality of the hardware, revenues are recognized as control transfers to the customer under Accounting Standards Codification (“ASC”) 606,Revenue from Contracts with Customers. All of our revenues are derived from a single segment. NRE services in 2024 and 2023 were less than 1% of our revenues.
Previous wording
The Company recognizes revenue primarily from the sale of products, including our mobile phones, connected devices, tablets, and accessories, and most of the Company’s contracts include only one performance obligation, namely the delivery of product. A performance obligation is a commitment 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 commitments as individual performance obligations if they are both capable of being distinct and are distinct within the context of the contract.
Current wording
The Company recognizes revenue primarily from the sale of products, including our mobile phones, connected devices, and accessories, and most of the Company’s contracts include only one performance obligation, namely the delivery of the product. A performance obligation is a commitment 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 commitments as individual performance obligations if they are both capable of being distinct and are distinct within the context of the contract.
Previous wording
Research and development. Research and development expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation and employee benefits, as well as outsourced costs incurred through our ODM partnerships and other third parties. Research and development expenses also include the costs of developing new products and supporting existing products. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. We consider costs associated with achieving technical acceptance with each product at each carrier to be a contract fulfillment cost that we capitalize. We expect our research and development expenses to fluctuate over time as we experience the various product cycles of our devices.
Current wording
Research and development. Research and development expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation and employee benefits, as well as outsourced costs incurred through our ODM partnerships and other third parties. Research and development expenses include the costs of developing new products and upgrading existing products. Research and development activities include the design of new products, the refinement of existing products, and the design of test methodologies to ensure compliance with required specifications. We consider costs associated with achieving technical acceptance with each product for each carrier to be a contract fulfillment cost that we capitalize. We expect our research and development expenses to fluctuate over time as we experience the various product cycles of our devices.
Previous wording
Sales and marketing. Sales expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation, commissions to sales representatives, travel costs and employee benefits, as well as field support and customer training costs. Marketing expenses include all social media and collateral print media, and brand development expenses.
Current wording
Sales and marketing. Sales expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation, commissions to sales representatives, travel costs and employee benefits, as well as field support and customer training costs. Marketing expenses include all social media and collateral print media, brand development expenses, and trade shows.
Previous wording
General and administrative. General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation, travel costs and employee benefits, as well as professional and consulting fees, legal fees, and insurance costs.
Current wording
General and administrative. General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, stock-based compensation, travel costs and employee benefits, as well as professional and consulting fees, legal fees, external audit fees, IT costs, and insurance costs.
Previous wording
Income tax expense. We recognized an income tax provision of $0.4 million in 2023 as compared to $0.2 million in 2022. This increase in tax expense in 2023 is primarily due to the Company’s increase in foreign tax expense for its foreign subsidiaries in 2023 as compared to 2022.
Current wording
Income tax expense. Income tax provision for the year ended December 31, 2024, decreased $0.1 million compared to the same period in 2023 primarily due to the Company’s decrease in foreign tax expense for its foreign subsidiaries in 2024 as compared to 2023.
Previous wording
Adjusted EBITDA. Adjusted EBITDA was $4.0 million for the year ended December 31, 2023, compared to negative $9.9 million for the year ended December 31, 2022. This improvement was primarily due to the same factors in the improvement to Net Loss.
Current wording
Adjusted EBITDA. Adjusted EBITDA was negative $21.3 million for the year ended December 31, 2024, compared to $4.0 million for the year ended December 31, 2023. This decrease was primarily due to the same factors mentioned in the categories above.
Previous wording
Historically, we have funded operations from a combination of public and private equity financings, convertible loans from existing investors and borrowings under loan agreements. As of December 31, 2023, we did not have any convertible loans or any other borrowing structures in place.
Current wording
Historically, we have funded operations from a combination of public and private equity financings, convertible loans from existing investors and borrowings under loan agreements. As of December 31, 2024, we did not have any equity financing or convertible loans in place.
Previous wording
Currently, our principal source of liquidity consists of cash and cash equivalents totaling $9.4 million, as of December 31, 2023. During the year ended December 31, 2023, our netlosswas $0.1 million and our use of cash in operationswas $4.1 million. Our cash balance is expected to cover any negative cash flow that may be caused by developing new products over the next year. Increased revenue from new products is expected to increase cash flow in the second half of 2024. We expect to meet all obligations with existing cash and operating cash flow for a period of at least one year from the date of release of the financial statements included in this Form 10-K.
Current wording
For the year ended December 31, 2024, we reported a net loss of $33.7 million and used $8.5 million in operating cash flow. At December 31, 2024 our cash balance was $5.3 million. Additionally, we have raised $6.7 million in capital since year-end, which we expect to be sufficient to offset operating losses and to fund the development of new products over the next year. Increased revenue from new products is expected to further improve cash flow over the next year. We expect to meet all obligations with existing cash and operating cash flow for a period of at least one year from the date of release of the consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
For the year ended December 31, 2022, cash used in operating activities was $12.4 million, primarily attributable to a net loss of $14.1 million. Non-cash charges were $1.3 million and changes in operating assets and liabilities were $0.2 million. Non-cash charges primarily consisted of $1.5 million in stock-based compensation, $0.5 million in payment for services with common stock, partially offset by non-cash lease liability amortization, and $0.7 million in a non-cash gain on the termination of a lease. The changes in our net operating assets and liabilities were primarily due to an increase of $11.7 million in accounts payable due to amounts payable to the tablet vendors, a decrease in prepaid expenses of $3.5 million due to the release of prepaid taxes, deposits for manufacturing inventory and prepaid NRE, and a decrease in inventory of $1.3 million. These were partially offset by a $11.3 million increase in accounts receivable from the tablet customer, an increase in capitalized contract fulfillment costs of $4.8 million, and a decrease in accrued expenses of $1.1 million.
Current wording
For the year ended December 31, 2024, cash used in operating activities was $8.5 million, primarily attributable to a net loss of $33.6 million, partially offset by non-cash charges of $14.9 million and net cash provided by a change in net operating assets and liabilities of $10.3 million. Non-cash charges primarily consisted of $3.6 million in depreciation and amortization, $1.5 million in stock-based compensation, $6.5 million in impairment of contract fulfillment assets, and $2.3 million in the provision for credit loss. The change in net operating assets and liabilities was primarily due to an increase in accounts payable of $14.3 million primarily due to an increase in unpaid R&D costs, and an increase in accrued liabilities of $8.0 million primarily due to an increase in accrued customer allowances. These increases were partially offset by a $7.1 million increase to contract fulfillment assets.
Previous wording
For the year ended December 31, 2023, cash used in operating activities was $4.1 million. Non-cash charges were $4.3 million and changes in operating assets and liabilities were a net use of $8.3 million. Non-cash charges primarily consisted of $2.2 million in depreciation and amortization, $1.5 million in stock-based compensation, $0.4 million in payment for services with common stock, partially offset by non-cash lease liability amortization. The changes in our net operating assets and liabilities were primarily due to an increase in contract fulfillment assets of $4.5 from the capitalization of certification costs, an increase of $3.0 million in accounts receivable due to the timing of sales at year-end, and an increase of $2.6 million in inventory due to the timing of shipments at year-end. These cash decreases were partially offset by a decrease of $1.3 million in non-trade receivables due to the timing of parts deliveries to our manufacturers.
Current wording
For the year ended December 31, 2023, cash used in operating activities was $4.1 million, primarily attributable to non-cash charges of $4.3 million and net cash used in a change in net operating assets and liabilities of $8.3 million. Non-cash charges primarily consisted of $2.2 million in depreciation and amortization, $1.5 million in stock-based compensation, and $0.4 million in payment for services with common stock. The change in net operating assets and liabilities was primarily due to an increase in contract fulfillment assets due to the capitalization of certification costs, an increase in accounts receivable due to the timing of sales at year-end, and an increase in inventory due to the timing of shipments at year-end, partially offset by a decrease in non-trade receivables due to the timing of parts deliveries to our manufacturers.
Previous wording
For the years ended December 31, 2023 and 2022, cash used in investing activities was less than $0.1 million each year.
Current wording
For the years ended December 31, 2024 and 2023, there were no significant investing activities.
Previous wording
For the year ended December 31, 2022, cash provided by financing activities was $14.3 million, primarily due to proceeds from the AJP transaction (see Note 9).
Current wording
For the year ended December 31, 2024, cash provided by financing activities was $4.6 million, primarily due to $4.0 million in proceeds from an investor for the purchase of shares, as well as ATM sales.
Previous wording
We had approximately $13.5 million in noncancelable purchase orders for inventory and other operating expenses as of December 31, 2023. We anticipate the source of funds to meet these obligations to be existing cash and future product sales.
Current wording
We had approximately $15.8 million in noncancelable purchase orders for inventory and other operating expenses as of December 31, 2024. We anticipate the source of funds to meet these obligations to be existing cash and future product sales.
Previous wording
The Company determined that the NRE technical approval costs and the NRE field test costs are contract fulfillment costs and recognizes the associated NRE asset as these costs are incurred. The Company tracks the NRE assets by product and customer, then amortizes the NRE assets to Cost of Revenues over a period of four years, which is management’s estimated average product life for each model phone, starting from the date of the first significant sales.
Current wording
The Company determined that the NRE technical approval costs and the NRE field test costs are contract fulfillment costs and recognizes the associated NRE asset as these costs are incurred. The Company tracks the NRE assets by product and customer, then amortizes the NRE assets to cost of revenues over a period of three to four years, which is management’s estimated average product life for each model phone or connected device, starting from the date of the first significant sales. The Company determined that all products launched in 2024 have a product life of three years. If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Expansion into Europe and the Middle East