NOTE 4 —Significant Balance Sheet Components

Accounts Receivable consists of the following:

 Schedule of Accounts Receivable

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

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

Accrued Expenses consisted of the following:

 Schedule of Accrued Expenses