SONIM TECHNOLOGIES INC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 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-Q
Period ended 2025-03-31; filed 2025-05-12.
0001641172-25-009749
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001641172-25-022821
Item 2. 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 64 previous paragraphs and 88 current paragraphs.
37 unchanged; 22 reworded; 25 added; 4 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (25)
Current report
Pending Asset Purchase Agreement with Social Mobile and Announced Strategic Initiatives
Current report
On July 17, 2025, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) by and among the Company, as seller, Pace Car Acquisition LLC, as buyer, (the “Buyer”), the Seller Representative named in the Asset Purchase Agreement, and, Social Mobile Technology Holdings LLC (the “Parent”), solely for the purpose of guaranteeing complete payment and performance obligations of the Buyer contained in the Asset Purchase Agreement.
Current report
Pursuant to the Asset Purchase Agreement, the Buyer agreed to acquire substantially all assets of the Company and its subsidiaries related to the Company’s enterprise 5G solutions business, including rugged handsets, smartphones, wireless internet devices, software, services, and accessories (collectively, the “Business”) for a purchase price of $15.0 million in cash, subject to (i) customary working capital, indebtedness and transaction expense adjustments (referred to in the Asset Purchase Agreement as the “Adjustment Amount,” which may be a positive or a negative number) and (ii) up to $5.0 million in the form of an earn-out payment, if earned. The Asset Purchase Agreement permits the Company to pursue a reverse merger (“RTO”) with the currently anticipated target or an alternative target, provided that any such transaction is complementary to and not a substitute for the transactions contemplated by the Asset Purchase Agreement.
Current report
For additional information, refer to Note 11, Subsequent Events, to the condensed consolidated financial statements contained within this report.
Current report
Because the transaction contemplates the sale of substantially all of the Company’s assets, the Company concurrently announced a strategic initiative to pursue a potential RTO, in addition to completing the asset sale, with the objective of maximizing stockholder value. If consummated, the RTO would allow the public company to continue as an SEC-reporting entity under a new name and trading symbol, and with a new business focus. There can be no assurance that the Asset Purchase Agreement or any RTO transaction will ultimately be consummated timely or at all.
Current report
Equity Financings
Current report
Registered Public Offering
Current report
On July 2, 2025, the Company consummated a best-efforts public offering (the “Offering”) of 7,400,000 shares of its common stock at a public offering price of $0.75 per share. In connection with the Offering, the Company entered into a securities purchase agreement with certain investor signatories thereto for the purchase of shares of common stock described above.
Current report
Roth served as the exclusive placement agent in connection with the Offering. The Company paid Roth a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the Offering, and reimbursement of certain expenses and legal fees in the amount of $0.1 million. The Company also issued to designees of Roth warrants to purchase up to an aggregate of 208,875 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $0.75 per share, are not exercisable until January 2, 2026, and expire on July 2, 2030.
Current report
The net proceeds of the Offering are approximately $4.8 million, after deducting the Placement Agent fees and expenses and other estimated offering expenses payable by the Company. The Company used the net proceeds of the Offering for overall business strategy, for working capital purposes and for general corporate purposes.
Current report
Receivables Financing Agreements
Current report
Promissory Notes
Current report
On July 11, 2025, the Company entered into an additional note purchase agreement with the Lender pursuant to which the Company issued and sold to the Lender an additional promissory note (the “July Note”). Starting on January 11, 2026, the Lender may exercise its right to redeem up to $275,000 of the July Note per calendar month. Additionally, the July Note was secured by a first-priority interest in all of the Company’s assets. The July Note requires the Company to prepay an amount equal to not less than 33% of the net proceeds received from any equity or debt financing. For additional information, refer to Note 11, Subsequent Events, to the condensed consolidated financial statements contained within this report.
Current report
The exercise of the Lender’s redemption rights under either note or the Company’s obligation to make prepayments under the July Note may reduce the Company’s liquidity.
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 June 30, 2025, and December 31, 2024, the net contract fulfillment assets were $8,014 and $6,399, 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 three months ended June 30, 2024, the Company recorded an impairment of contract fulfillment assets of $3.2 million due to a decrease in projected profit of one of its hotspots and the cancellation of a consumer durable product. This product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product. During the three months ended June 30, 2025, the Company recorded an impairment of contract fulfillment assets of $1.1 million due to the end of life of a legacy smartphone, which is included in cost of revenues in the Condensed Consolidated Statements of Operations.
Current report
Total net revenues for the three months ended June 30, 2025, decreased by $0.3 million compared to 2024. This decrease reflects the decrease in sales of our legacy phones, partially offset by sales of replacement products that were launched after the second quarter of 2024. During the second quarter of 2025, certification and testing delayed shipments of our new XP Pro smartphone that replaced our legacy XP10 smartphone. We expect sales of our XP Pro to increase in the third quarter of 2025 as our production increases to meet demand and as we launch the product with additional carriers. Third quarter of 2025 revenue for our XP Pro with a thermal camera will be higher because shipments that were expected to be completed in the second quarter were delayed and were delivered in July of 2025.
Current report
Cost of revenues for the three months ended June 30, 2025, increased by $1.8 million as compared to 2024. The second quarter of 2025 included $1.1 million related to the impairment of contract fulfillment assets, as well as additional costs related to tariffs.
Current report
Cost of revenues for the six months ended June 30, 2025, decreased by $3.7 million as compared to 2024. The six months ended June 30, 2025, includes $5.5 million in revenue related to the expiration of customer allowance agreements, which had no related cost of revenues. The six months ended June 30, 2024, had higher cost of revenues from white label product sales that had a cost of revenues percentage of approximately 94%.
Current report
Gross profit for the three months ended June 30, 2025, decreased by $2.1 million compared to 2024 primarily due to the $1.1 million impairment of contract fulfillment assets, as well as additional costs related to tariffs in the second quarter of 2025. Gross margin for the three months ended June 30, 2025, was 8%, which reflects the negative impact of the impairment of contract fulfillment assets and additional tariff costs mentioned above, compared to 17% in 2024.
Current report
General and administrative expenses for the three months ended June 30, 2025, increased by $0.8 million compared to 2024 primarily due to an increase in legal and other expenses related to the hostile takeover attempt, and the divestiture activity being pursued by the Company.
Current report
Impairment of Contract Fulfillment Assets
Current report
Impairment of contract fulfillment assets for both the three and six months ended June 30, 2024, was $3.2 million, 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 product.
Current report
For the six months ended June 30, 2024, the Company received $3.8 million in cash, net of issuance costs, from an investor for the purchase of its shares and the issuance of warrants.
Removed paragraphs (4)
Previous report
Equity Financing
Previous report
Receivables Financing Agreement
Previous report
Promissory Note
Previous report
Cost of revenues for the three months ended March 31, 2025, decreased by $5.5 million as compared to 2024. The first quarter of 2024 included white label phones with cost of revenues of $7.2 million. The decrease resulting from the loss of this revenue was partially offset by higher cost of revenues in the first quarter 2025 because of higher revenue from feature phones and hotspots.
Reworded paragraphs (22)
Previous wording
During the second half of 2024 and through the filing date of this report, Sonim launched the following products:
Current wording
During the second half of 2024 and through the filing date of this report, the Company launched the following products:
Previous wording
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 wording
Additionally, the XP10 is available through the Company’s distribution partners in EMEA and Australia. Most of these products are supported by the SonimWare™ platform and enterprise services. In the first half of 2025, all of our new products that launched with tier-one carriers in the United States included a certification associated with carrier first responder initiatives, including FirstNet Ready, FirstNet Trusted, Verizon Frontline Certified, and T-Mobile certified for T-Priority. In the first half 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.
Previous wording
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 wording
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. Partners include 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.
Previous wording
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 three months ended March 31, 2025, wireless carriers contributed 84% of our total net revenues, 32% of which related to the expiration of customer allowance agreements as three of our legacy phones approach end-of-life, with our top three carrier customers accounting for 74% of our total net revenues, 32% of which related to the expiration of customer allowance agreements. Our rugged smartphones represented 66% of our total net revenues, 30% of which related to the expiration of customer allowance agreements, while feature phones were 29% of our total net revenues, and connected solutions were 4% of our total net revenues.
Current wording
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 six months ended June 30, 2025, wireless carriers contributed 86% of our total net revenues, 20% of which related to the expiration of customer allowance agreements as three of our legacy phones approach end-of-life, with our top three carrier customers accounting for 74% of our total net revenues, 18% of which related to the expiration of customer allowance agreements. Our rugged smartphones represented 57% of our total net revenues, 19% of which related to the expiration of customer allowance agreements, while feature phones were 31% of our total net revenues, and connected solutions were 11% of our total net revenues. For the three months ended June 30, 2025, wireless carriers contributed 88% of our total net revenues, with our top three carrier customers accounting for 80% of our total net revenues. Our rugged smartphones represented 43% of our total net revenues, while feature phones were 34% of our total net revenues, and connected solutions were 20% of our total net revenues.
Previous wording
As of the filing date of this report, Sonim is completing the development, testing and certification of new products that it expects to launch in the second or third quarter of 2025 with various carriers.
Current wording
As of the filing date of this report, Sonim is completing the development, testing and certification of new products that it expects to launch in the second half of 2025 with various carriers.
Previous wording
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 wording
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.
Previous wording
We have no obligation to sell shares under the Sales Agreement, and we have sold shares from time to time. During the three months ended March 31, 2025, a total of 1,349,840 shares of common stock were sold under the Sales Agreement for net proceeds of $3.7 million after payment of commission fees and other related expenses of $0.1 million. Subsequent to March 31, 2025, a total of 2,130,437 shares of common stock were sold under the Sales Agreement for net proceeds of $4.5 million after payment of commission fees and other related expenses of $0.1 million. As of the filing date of this report, the Company has completed its sales of shares of common stock under the Sales Agreement and the ATM program has been terminated.
Current wording
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 could sell up to an aggregate of $8.9 million in shares of common stock through Roth, as sales agent. During the six months ended June 30, 2025, a total of 3,480,277 shares of common stock were sold under the Sales Agreement for net proceeds of $8.2 million after payment of commission fees and other related expenses of $0.3 million. As of June 30, 2025, the Company has completed its sales of shares of common stock under the Sales Agreement and the ATM program has been terminated.
Previous wording
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 5 — Stockholders’ Equity to the condensed consolidated financial statements contained within this report under the title “ATM Offering.”
Current wording
Sales of shares of our common stock made pursuant to the Sales Agreement were made under the effective Registration Statement on Form S-3. Roth was entitled to compensation at a commission rate of 3% of the gross sales price per share. For additional information, refer to Note 5, Stockholders’ Equity, to the condensed consolidated financial statements contained within this report under the title “ATM Offering.”
Previous wording
To improve its liquidity, 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 March 31, 2025, there was $0.6 million outstanding under the Receivables Financing Agreement, which is included in Accrued Liabilities in the Condensed Consolidated Balance Sheets. For additional information, refer to Note 1—The Company and Its Significant Accounting Policies to the condensed consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”
Current wording
To improve its liquidity, 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 June 30, 2025, there were no borrowings outstanding under the Receivables Financing Agreement. For additional information, refer to Note 1, The Company and Its Significant Accounting Policies, to the condensed consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”
Previous wording
On February 21, 2025, the Company entered into the Purchase Agreement with the Lender pursuant to which the Company issued and sold to the Lender the Note. Starting on August 21, 2025, the Lender may exercise its right to redeem up to $330,000 of the Note per calendar month. If the Lender exercises this right, the Company’s liquidity will decrease. For additional information, refer to Note 4 — Promissory Note to the condensed consolidated financial statements contained within this report.
Current wording
On February 21, 2025, the Company entered into the Purchase Agreement with the Lender pursuant to which the Company issued and sold to the Lender the Note. Starting on August 21, 2025, the Lender may exercise its right to redeem up to $330,000 of the Note per calendar month. For additional information, refer to Note 4, Promissory Note, to the condensed consolidated financial statements contained within this report.
Previous wording
The results of operations for the first quarter of 2025 are not necessarily indicative of the operating results to be expected for the full year or in any future period. Historically, we have experienced higher revenues following the release of new products and start of sales with additional carriers and distributors.
Current wording
The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results to be expected for the full year or in any future period. Historically, we have experienced higher revenues following the release of new products and start of sales with additional carriers and distributors.
Previous wording
Total net revenues for the three months ended March 31, 2025, decreased slightly by $0.1 million compared to 2024. The three months ended March 31, 2025, included $5.3 million related to the expiration of customer allowance agreements as three of our legacy phones approach end-of-life. The three months ended March 31, 2024, included $7.7 million in revenue from white label products sold to a related party. We discontinued our white label program during the first quarter of 2024. Sales of our feature phones increased $1.5 million period over period and hotspot sales from products that were launched after the first quarter of 2024 were $0.7 million in 2025. Excluding the impact of the expiration of customer allowance agreements mentioned above, we expect revenue to increase significantly in the second quarter of 2025 due to increasing sales of our hotspots in the U.S. and our phones in EMEA.
Current wording
Total net revenues for the six months ended June 30, 2025, decreased by $0.4 million compared to 2024. The six months ended June 30, 2024, includes $7.7 million in revenue from white label products sold to a related party, and we had no white label revenue in 2025. The six months ended June 30, 2025, includes $5.5 million related to the expiration of customer allowance agreements as three of our legacy phones approach end-of-life. Sales of our H500 hotspot that we launched with a U.S. carrier in the second half of 2024 increased revenue in 2025 by $2.0 million. We expect an increase in revenue in the second half of 2025 as our new XP Pro launches with additional carriers, as shipments of our XP Pro with a thermal camera increase, and after we launch our new HPUE hotspot.
Previous wording
Gross profit for the three months ended March 31, 2025, increased by $5.5 million compared to 2024 because of the $5.3 million adjustment to revenue from the expiration of customer allowance agreements in the first quarter of 2025. Gross margin for the three months ended March 31, 2025, was 50%, which reflects the positive impact from the expiration of customer allowance agreements that has no related cost of sales, compared to 17% in the first quarter of 2024, which reflects the negative impact of white label products that had a gross margin of approximately 6%.
Current wording
Gross profit for the six months ended June 30, 2025, increased by $3.3 million compared to 2024 primarily due to the $5.5 million in revenue related to the expiration of customer allowance agreements in 2025. Gross margin for the six months ended June 30, 2025, was 33%, which reflects the positive impact from the expiration of customer allowance agreements that have no related cost of sales, compared to 21% in 2024, which reflects the negative impact of white label products that had a gross margin of approximately 6%.
Previous wording
R&D expenses for the three months ended March 31, 2025, increased by $1.2 million compared to 2024, primarily due to there being limited R&D projects during the first half of 2024. In 2025 R&D expenses were primarily from internal work on the development of new variants of our XP Pro, including a version with a thermal camera, the HPUE hotspot, the XP400 phone for Europe, and the updated 5G version of our XP3plus. In the second quarter of 2025 we expect to continue to incur R&D expenses for these products.
Current wording
R&D expenses for the three months ended June 30, 2025, increased by $0.4 million compared to 2024, primarily due to there being limited R&D projects during the second quarter of 2024. In 2025, R&D expenses were primarily from internal work on the development of new variants of our XP Pro, including a version with a thermal camera, the HPUE hotspot, the XP400 phone for Europe, and the updated 5G version of our XP3plus. In the third quarter of 2025 we expect to continue to incur R&D expenses for many of these products.
Previous wording
Sales and marketing expenses for the three months ended March 31, 2025, increased by $0.7 million compared to 2024 primarily due to an increase in marketing spend to support new products in 2025, compliance work for Europe, as well as an increase in compensation primarily related to sales in Europe.
Current wording
Sales and marketing expenses for the three months ended June 30, 2025, increased by $0.2 million compared to 2024 primarily due to an increase in marketing spend to support new products in 2025, and compliance work for Europe.
Previous wording
General and administrative expenses for the three months ended March 31, 2025, increased by $0.2 million compared to 2024 primarily due to an increase in legal expenses.
Current wording
General and administrative expenses for the six months ended June 30, 2025, increased by $1.0 million compared to 2024 primarily due to an increase in legal expenses.
Previous wording
Historically, we have funded operations from a combination of public and private equity financings, and through the issuance of debt. During the first quarter of 2025 we received net proceeds of $3.5 million from the sale of our stock through our ATM program, and we received net proceeds of $2.8 million from the issuance of the Note.
Current wording
Historically, we have funded operations from a combination of public and private equity financings, and through the issuance of debt. During the six months ended June 30, 2025 we received net proceeds of $9.0 million from the sale of our common stock, and we received net proceeds of $2.8 million from the issuance of the Note.
Previous wording
During the three months ended March 31, 2025, we reported net income of $0.5 million and used $9.6 million in operating cash flow. As of March 31, 2025, our principal source of liquidity consisted of cash and cash equivalents totaling $2.1 million. Subsequent to March 31, 2025, we have received $4.5 million in proceeds from the sale of equity through our ATM program. 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. We expect these sources of liquidity to be sufficient to offset any future 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 Quarterly Report on Form 10-Q.
Current wording
During the six months ended June 30, 2025, we reported a net loss of $7.0 million and used $14.5 million in operating cash flow. As of June 30, 2025, our principal source of liquidity consisted of cash and cash equivalents totaling $2.0 million. Subsequent to June 30, 2025, we received net proceeds of approximately $4.8 million from the sale of shares through our registered public offering and net proceeds of approximately $2.3 million from the sale of the July Note. We also have access to up to $2.5 million under our Receivables Financing Agreement. Subsequent to June 30, 2025, we signed an additional receivables financing agreement for international receivables, which gives us access to up to €3.0 million. As a result of the July Note, we are obligated to use not less than 33% of the amount raised in any fundraising or financing transaction for prepayment of the July Note. We plan to continue to leverage multiple sources of liquidity to maintain flexibility to meet our capital needs. We expect these sources of liquidity to be sufficient to offset any future 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 subsequent funding for a period of at least one year from the date of release of the consolidated financial statements included in this Quarterly Report on Form 10-Q.
Previous wording
For the three months ended March 31, 2025, cash used in operating activities was $9.6 million, primarily attributable to net cash used in a change in net operating assets and liabilities of $6.1 million and net income of $0.5 million, excluding net non-cash operating activity of $4.0 million. The change in net operating assets and liabilities was primarily due to net payments made on accounts payable and an increase in contract fulfillment assets, which are capitalized costs for product certifications, partially offset by a decrease in inventory. Non-cash charges primarily consist of $5.3 million related to the expiration of customer allowance agreements, $1.1 million in depreciation and amortization and $0.3 million for stock-based compensation.
Current wording
For the six months ended June 30, 2025, cash used in operating activities was $14.5 million, primarily attributable to net cash used in a change in net operating assets and liabilities of $6.2 million and a net loss of $7.0 million, excluding net non-cash operating activity of $1.3 million. The change in net operating assets and liabilities was primarily due to net payments made on accounts payable and accrued liabilities and an increase in contract fulfillment assets, which are capitalized costs for product certifications, partially offset by a decrease in accounts receivable. Non-cash charges primarily consist of $5.5 million related to the expiration of customer allowance agreements, $1.9 million in depreciation and amortization, $1.2 million for stock-based compensation, and $1.1 million for the impairment of contract fulfillment assets related to the end of life of our legacy products.
Previous wording
For the three months ended March 31, 2024, cash used in operating activities was $0.2 million, primarily attributable to a net loss of $2.9 million, partially offset by net cash provided by a change in our operating assets and liabilities of $1.5 million and net non-cash charges of $1.3 million. The change in net operating assets and liabilities was primarily due to a decrease in accounts receivable and inventory, partially offset by an increase in contract fulfillment assets. Non-cash charges primarily consist of $0.9 million in depreciation and amortization and $0.3 million for stock-based compensation.
Current wording
For the six months ended June 30, 2024, cash used in operating activities was $3.6 million, primarily attributable to a net loss of $9.5 million, excluding net non-cash operating activity of $5.9 million, partially offset by net cash provided by a change in net operating assets and liabilities of $0.1 million. Non-cash charges primarily consist of $3.2 million in impairment charges related to contract fulfillment assets, $1.7 million in depreciation and amortization, and $0.8 million for stock-based compensation. The change in net operating assets and liabilities was primarily due to a decrease in trade accounts receivable and inventory and an increase in account payables and accrued expenses, partially offset by an increase in non-trade and related party receivables, prepaid inventory, and contract fulfillment assets.
Previous wording
For the three months ended March 31, 2025, and 2024, there were no significant investing activities.
Current wording
For the six months ended June 30, 2025, and 2024, there were no significant investing activities.
Previous wording
For the three months ended March 31, 2025, the Company received $3.5 million in cash, net of issuance costs, from ATM sales, as well as $2.8 million in net proceeds from the issuance of the Note.
Current wording
For the six months ended June 30, 2025, the Company received $9.0 million in cash, net of issuance costs, from sales of common stock, as well as $2.8 million in net proceeds from the issuance of the Note and repaid $0.6 million borrowed under the Receivables Financing Agreement.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
On May 12, 2025, we consummated a private placement with two investors and sold 1,100,000 shares of our common stock and warrants to purchase up to 550,000 shares of our common stock for an exercise price of $1.3864 per share for an aggregate purchase price of $1.38 million. We used the net proceeds from the private placement for working capital and general corporate purposes.
Current report — wording carried from elsewhere
To improve its liquidity, on August 7, 2025, the Company entered into a factoring agreement (the “Additional Receivables Financing Agreement”) with Tradewind GmbH (“Tradewind”), pursuant to which Tradewind will provide international receivables factoring to the Company, pursuant to which Tradewind will advance 85% of the face value of the receivables being sold by the Company, up to a maximum of €3.0 million of eligible customer invoices from the Company. For additional information, refer to Note 11, Subsequent Events, to the condensed consolidated financial statements contained within this report under the title “Additional Receivables Financing Agreement.”
Current report — wording carried from elsewhere
R&D expenses for the six months ended June 30, 2025, increased by $1.5 million compared to 2024, primarily due to there being limited R&D projects during the first half of 2024. In 2025, R&D expenses were primarily from internal work on the development of new variants of our XP Pro, including a version with a thermal camera, the HPUE hotspot, the XP400 phone for Europe, and the updated 5G version of our XP3plus.
Current report — wording carried from elsewhere
Sales and marketing expenses for the six months ended June 30, 2025, increased by $1.0 million compared to 2024 primarily due to an increase in marketing spend to support new products in 2025, and compliance work for Europe.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the three months ended March 31, 2024, there were no significant financing activities.