sonm-10q_20210331.htm

10-Q 1 sonm-10q_20210331.htm 10-Q sonm-10q_20210331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission File Number: 001-38907

Sonim Technologies, Inc.

(Exact -name of -registrant as -specified in its -charter)

Delaware

94-3336783

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

6836 Bee Cave Road, Bldg. 1, S#279,

Austin, TX 78746

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (650) 378-8100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock par value $0.001 per share

SONM

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2021, the registrant had 66,317,949 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholder’s Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2021 and DECEMBER 31, 2020 (UNAUDITED)

(IN THOUSANDS OF U.S. DOLLARS EXCEPT SHARE AND

PER SHARE AMOUNTS)

	March 31, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	13,912		$	22,141
Accounts receivable, net		5,834			4,605
Inventory		10,556			11,344
Prepaid expenses and other current assets		5,961			7,481
Total current assets		36,263			45,571
Property and equipment, net		749			843
Other assets		3,734			3,898
Total assets	$	40,746		$	50,312
Liabilities and stockholders’ equity
Current portion of long-term debt	$	177		$	177
Accounts payable		11,194			8,856
Accrued expenses		8,540			11,436
Deferred revenue		—			5
Total current liabilities		19,911			20,474
Income tax payable		1,256			1,243
Long-term debt, less current portion		148			185
Total liabilities		21,315			21,902
Commitments and contingencies (Note 10)
Stockholders' equity
Common stock, $0.001 par value per share; 100,000,000 shares authorized: and 66,317,949 and 66,310,867 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively.		66			66
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, and no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively.		—			—
Additional paid-in capital		224,823			224,522
Accumulated deficit		(205,458	)		(196,178	)
Total stockholders’ equity		19,431			28,410
Total liabilities and stockholders’ equity	$	40,746		$	50,312

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2021 and 2020 (UNAUDITED)

(IN THOUSANDS OF U.S. DOLLARS EXCEPT SHARE AND PER SHARE AMOUNTS)

	Three Months Ended March 31,
	2021			2020
Net revenues	$	12,240		$	12,706
Cost of revenues		9,777			10,541
Gross profit		2,463			2,165
Operating expenses:
Research and development		4,664			3,936
Sales and marketing		2,181			3,131
General and administrative		2,262			2,563
Legal expenses		2,406			509
Restructuring costs		—			1,087
Total operating expenses		11,513			11,226
Loss from operations		(9,050	)		(9,061	)
Interest expense		—			(319	)
Other expense, net		(169	)		(401	)
Loss before income taxes		(9,219	)		(9,781	)
Income tax expense		(61	)		(183	)
Net loss	$	(9,280	)	$	(9,964	)
Net loss per share, basic and diluted	$	(0.14	)	$	(0.48	)
Weighted–average shares used in computing net loss per share, basic and diluted		66,316,797			20,613,849

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)

(IN THOUSANDS OF U.S. DOLLARS EXCEPT SHARE AMOUNTS)

	Common stock				Additional paid-in		Accumulated			Total stockholders’
	Shares		Amount		capital		deficit			equity
Balance at January 1, 2020		20,437,235	$	20	$	191,751	$	(166,246	)	$	25,525
Issuance of common stock upon exercise of stock options		240,125		1		209		—			210
Employee and nonemployee stock-based compensation		—		—		223		—			223

Net loss			—				—				—				(9,964	)			(9,964	)
Balance at March 31, 2020			20,677,360			$	21			$	192,183			$	(176,210	)		$	15,994



Balance at January 1, 2021	66,310,867	$	66	$	224,522	$	(196,178	)	$	28,410
Issuance of common stock upon exercise of stock options	7,082		—		5		—			5
Employee and nonemployee stock-based compensation	—		—		296		—			296
Net loss	—		—		—		(9,280	)		(9,280	)
Balance at March 31, 2021	66,317,949	$	66	$	224,823	$	(205,458	)	$	19,431

The accompanying notes are an integral part of these condensed consolidated financial statements.

SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2021 and 2020 (UNAUDITED)

(IN THOUSANDS OF U.S. DOLLARS)

	Three Months Ended
	March 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(9,280	)	$	(9,964	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		554			887
Stock-based compensation		296			223
Inventory write-downs		—			407
Non-cash interest expense		—			255
Accretion of debt discount		—			30
Loss on disposal of asset		18			—
Deferred income taxes		(3	)		53
Changes in operating assets and liabilities:
Accounts receivable		(1,229	)		5,083
Inventory		779			2,989
Prepaid expenses and other current assets		1,496			1,367
Other assets		(278	)		32
Accounts payable		2,338			(1,746	)
Accrued expenses		(2,896	)		1,354
Deferred revenue		(5	)		15
Income tax payable		13			90
Net cash provided by (used in) operating activities		(8,197	)		1,075
Cash flows from investing activities:
Purchase of property and equipment		—			(184	)
Net cash used in investing activities		—			(184	)
Cash flows from financing activities:
Repayment on long-term debt		(37	)		(37	)
Proceeds from exercise of stock options		5			210
Net cash provided by (used in) financing activities		(32	)		173
Net increase (decrease) in cash and cash equivalents		(8,229	)		1,064
Cash and cash equivalents at beginning of period		22,141			11,298
Cash and cash equivalents at end of period	$	13,912		$	12,362
Supplemental disclosure of cash flow information:

SEC Form 10-Q filed by Sonim Technologies, Inc.