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Significant Balance Sheet Components

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTE 4 —Significant Balance Sheet Components

Accounts Receivable consists of the following:

Schedule of Accounts Receivable

	September 30, 2023			December 31, 2022
Trade receivables	$	30,461		$	22,546
Allowance for doubtful accounts		(113	)		(113	)
Accounts receivable trade, net		30,348			22,433
Vendor non-trade receivables		1,630			2,269
Total accounts receivable	$	31,978		$	24,702

The Company has non-trade receivables from a manufacturing vendor resulting from the sale of components to this vendor who manufactures and assembles final products for the Company.

The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling $113 as of September 30, 2023 and December 31, 2022.

Trade receivables from the customer that purchases tablets from the Company account for 68% and 84% of total accounts receivable at September 30, 2023 and December 31, 2022 respectively. The tablets business uses the Original Device Manufacturer (“ODM”) model where the customer imports the tablets to the U.S., the tablets are rebranded, and the tablets are sold to a U.S. retailer. Due to the delay in shipping the product to the end customer, the payment terms for accounts receivable are much longer than our traditional direct sales to carriers. The customer is making regular payments, and the Company believes that the entire accounts receivable balance as of September 30, 2023 is collectible, and that no reserve is required.

SONIM TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands of U.S. dollars except share and per share amounts or as otherwise disclosed)

Inventory consists of the following:

Schedule of Inventory

	September 30, 2023		December 31, 2022
Devices – for resale	$	3,749	$	3,473
Raw materials		—		14
Accessories		470		423
Inventory, net	$	4,219	$	3,910

The Company purchases raw materials in bulk to obtain a lower price. The raw materials are resold to third-party manufacturers at the Company’s cost.

Distributor returns allowance

The Company records reductions to cost of goods sold related to future distributor product returns based on the Company’s expectation. The Company had inventory related to distributor product returns totaling approximately $4 as of September 30, 2023 and December 31, 2022.

Other assets consisted of the following:

Schedule of Other Assets

	September 30, 2023		December 31, 2022
Advances to third-party manufacturers	$	2,000	$	2,000
Director and officer insurance		437		525
Deposits		309		311
Other		243		136
Total other assets	$	2,989	$	2,972

Accrued Expenses consisted of the following:

Schedule of Accrued Expenses

	September 30, 2023		December 31, 2022
Customer allowances	$	7,300	$	4,130
Employee-related liabilities		886		1,365
Warranties		518		636
Accrual for goods received not invoiced		13		301
Contractual obligations		286		1,107
Royalties		391		256
Contract fulfillment liabilities		356		1,469
Credits due to customers		318		961
Legal		286		296
Other		260		171
Accrued liabilities, current	$	10,614	$	10,692