Sonim(US:SONM)2020-11-12 17:18Financial Performance - For the three months ended September 30, 2020, net revenues were $14.4 million, a decrease of $14.5 million, or 50%, compared to $28.9 million in the same period in 2019[138]. - For the nine months ended September 30, 2020, net revenues were $48.2 million, a decrease of $50.9 million, or 51%, compared to $99.1 million in the same period in 2019[139]. - The decline in Q3 2020 revenues was primarily driven by a 43% decrease in unit shipments, resulting in a revenue decrease of $11.6 million[138]. - Gross profit for the three months ended September 30, 2020, was $4.4 million, a decrease of $2.5 million or 36% compared to the same period in 2019, driven by a 50% decrease in net revenues of $14.5 million[142]. - Gross profit for the nine months ended September 30, 2020, was $11.5 million, down $18.9 million or 62% from $30.4 million in the same period in 2019, primarily due to a 51% decrease in net revenues[143]. - Net operating loss for the three months ended September 30, 2020, decreased by $0.1 million compared to the same period in 2019, while for the nine months ended September 30, 2020, it increased by $6.8 million, driven by a decrease in gross profit[144]. Operating Expenses - Operating expenses for the three months ended September 30, 2020, were $10.5 million, a decrease of $2.6 million, or 20%, compared to $13.1 million in the same period in 2019[137]. - Total operating expenses for the three months ended September 30, 2020, were $10.5 million, a decrease of $2.6 million or 20% compared to $13.1 million in the same period in 2019[145]. - Research and development expenses for the three months ended September 30, 2020, were $3.4 million, a decrease of $3.3 million or 49% compared to the same period in 2019[146]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2020, were $31.7 million, an increase of $20.3 million from $11.3 million on December 31, 2019, primarily due to net proceeds from a public offering[162]. - Net cash used in operating activities for the nine months ended September 30, 2020, was $0.7 million, significantly improved from $28.8 million in the same period in 2019[163]. - Cash used in investing activities for the nine months ended September 30, 2020, was $0.2 million, a decrease from $1.3 million in the same period of 2019[166][168]. - Cash provided by financing activities for the nine months ended September 30, 2020, was $21.3 million, down from $33.4 million in 2019, primarily due to a public offering net proceeds of $25.2 million[167][168]. - As of September 30, 2020, the company had existing cash and cash equivalents totaling $31.7 million, including approximately $25 million from the June 2020 public offering[170]. - The company believes the proceeds from the June 2020 capital raise will support operations for at least the next twelve months, although this is subject to risks and uncertainties[169]. Workforce and Restructuring - The company reduced its global headcount from approximately 700 employees at year-end 2018 to approximately 349 employees as of September 30, 2020[130]. - The company’s total headcount as of September 30, 2020, was 349 worldwide, reflecting the impact of restructuring efforts[152]. Market and Strategic Initiatives - Approximately 91% of net revenues for Q3 2020 were attributable to North America, Canada, and Latin America, down from 94% in Q3 2019[138]. - The merger between Sprint and T-Mobile has led to a re-evaluation of the supply chain, with certain products expected to reach end of life sooner than anticipated[140]. - The company has invested in sales and marketing efforts to drive new customer acquisition, particularly in the public safety market and international expansion[135]. - Research and development investments are crucial for the company, with costs for technical approval processes historically ranging from $1-2 million per device[134]. Tax and Foreign Exchange - The company recorded $0.2 million in income tax expense for the three months ended September 30, 2020, compared to $0.033 million for the same period in 2019[155]. - The company incurred $0.4 million in foreign exchange loss for the nine months ended September 30, 2020, down from $0.6 million in the same period in 2019[154]. Regulatory and Compliance - The company operates in one reportable segment, indicating a focused business activity[173]. - The company remains classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards[174]. - The company will maintain its emerging growth status until certain revenue or market capitalization thresholds are met[175]. - The company is not required to provide market risk disclosures as it qualifies as a smaller reporting company[176].