Group 1 - Orbic North America, LLC has made a non-binding proposal to acquire substantially all of Sonim Technologies, Inc.'s assets for a cash purchase price of $25 million, equating to a price per share of $2.418 [1][2] - The acquisition proposal is supported by a $50 million financing commitment from a third-party lender, indicating Orbic's readiness to proceed with confirmatory due diligence and negotiate a definitive asset purchase agreement [2] - Orbic, along with AJP Holding Company, LLC, beneficially owns approximately 19% of Sonim's outstanding common stock, which may influence the acquisition process [2] Group 2 - The acquisition offer does not prevent Sonim from pursuing a parallel Reverse Take-Over transaction, as mentioned in Sonim's press release dated June 25, 2025 [2] - Orbic is positioned as a leader in mobile technology innovation, providing a range of connected solutions including smartphones, tablets, and mobile hotspots, aimed at delivering high-quality technology to a broader audience [4]

Core Viewpoint - Sonim Technologies has signed a non-binding Letter of Intent for a proposed reverse takeover with a private US-based company focused on building Nvidia-based High-Performance Computing (HPC) A.I. factories to support the growth of cloud-based AI workloads [1][3]. Company Summary - Sonim Technologies is a leading provider of rugged mobile solutions, including phones and wireless internet devices, catering to users requiring durability in demanding environments [6]. - The company aims to maximize stockholder value through the proposed RTO transaction, which follows the announced sale of its operating assets for $15 million, plus an additional earn-out of $5 million [2][4]. Industry Summary - The target company is positioned for significant growth by focusing on High-Performance Computing as a Service (HPCaaS), leveraging owned data centers to meet the increasing demand for AI infrastructure [3]. - The global demand for AI-ready high-performance computing factory capacity is projected to grow at an average annual rate of 33% through 2030, with AI workloads driving up to 70% of total demand [3]. - AI infrastructure spending is expected to exceed $200 billion by 2028, highlighting the transformative potential of this market [3]. - Leading data center players are preparing to invest $1.8 trillion from 2024 to 2030, driven by traditional enterprise workloads and the explosive growth of Generative AI [3].

Core Points - Orbic North America, LLC and AJP Holding Company, LLC have filed definitive proxy materials with the SEC for the 2025 Annual Meeting of Sonim Technologies, Inc [1] - The AJP/Orbic Parties are urging stockholders to support their nominees for Sonim's Board to facilitate real change [1] - The annual meeting is scheduled for July 18, 2025, and stockholders are encouraged to vote using the Blue Proxy Card [1]

Core Viewpoint - Sonim Technologies is urging stockholders to support its qualified director nominees at the upcoming Annual Meeting on July 18, 2025, emphasizing the importance of protecting stockholder value amidst unsolicited acquisition proposals from Orbic North America, LLC [1][2][3]. Group 1: Strategic Alternatives Process - Following an unsolicited acquisition approach from Orbic in January 2025, Sonim's Board formed a Special Committee to explore strategic alternatives aimed at maximizing stockholder value [2][4]. - The Special Committee has identified potentially superior alternatives to the Orbic proposal, including a sale of assets to Social Mobile for up to $20 million and a reverse takeover transaction targeting a $15 million valuation for Sonim [5][9]. Group 2: Orbic's Proposal and Engagement - Orbic's engagement has been characterized by strategic inconsistency and adversarial behavior, with the company having over $22.5 million in judgments against it and a history of legal disputes [5][7][10]. - Orbic's proposals have been vague and conditional, lacking material terms or financing details, raising doubts about its ability to finance any acquisition [10][11]. Group 3: Board Nominees and Stockholder Vote - Sonim's Board emphasizes the independence and credibility of its director nominees, urging stockholders to vote using the WHITE proxy card to support these nominees [12][13]. - The Board strongly recommends that stockholders protect their investment by voting as soon as possible, regardless of attendance at the Annual Meeting [14].

Company Overview - Sonim Technologies, Inc. is a leading U.S. provider of rugged mobile solutions, including phones, wireless internet data devices, accessories, and software designed for durability in demanding environments [3] - The company has been trusted by first responders, government, and Fortune 500 customers since 1999, selling its products through tier one wireless carriers and distributors in North America, EMEA, and Australia/New Zealand [3] Acquisition Interest - The Special Committee of Sonim's Board of Directors confirmed receipt of an unsolicited indication of interest from DOOGEE to acquire all outstanding shares of Sonim for $3.60 per share in cash [1] - The Special Committee stated that it lacks sufficient information to evaluate DOOGEE's offer and requires detailed information regarding financing arrangements, strategic rationale, and execution capabilities [1][2] - The Special Committee emphasized its commitment to maximizing stockholder value and is focused on advancing the current exclusive letter of intent (LOI) toward a definitive agreement [2] Market Recognition - The unsolicited indication of interest from DOOGEE highlights the market's recognition of Sonim's underlying value and business potential [3] - The Chair of the Special Committee, Mike Mulica, expressed that while the interest is welcomed, the priority remains on a disciplined evaluation process consistent with fiduciary duties [3]

Core Insights - Sonim Technologies Inc. has launched the Sonim XP Pro smartphone, designed for enterprise users and first responders, available at AT&T starting June 6, 2025 [1][3][13] Product Features - The XP Pro is certified as FirstNet Ready®, enabling first responders to utilize specialized capabilities on the FirstNet network [3] - The smartphone boasts exceptional durability, with ratings including IPX9K, IP68, and MIL-STD-810H, capable of withstanding drops from 6.5 feet and water submersion for one hour at a depth of 6.5 feet [4][6] - Key features include dual loudspeakers with over 100 dB output for clear communication, programmable buttons for critical functions, and a 5000mAh battery for extended use [7][8][9] Software and Accessories - The device comes with the SonimWare™ software suite for efficient device management, including features like SonimScout for operational efficiency and SonimScan for barcode scanning [10] - A variety of rugged accessories are available to enhance workforce efficiency in various environments [11] Performance Specifications - The XP Pro is powered by the Snapdragon 7 Gen 3 processor, with 8GB of RAM and 256GB of storage, expandable to 2TB, suitable for demanding applications [12]

Core Viewpoint - Sonim Technologies has signed a Letter of Intent (LOI) to sell substantially all of its assets to Social Mobile, which is seen as a strategic opportunity to maximize shareholder value while advancing Sonim's technology offerings [1][2][3]. Group 1: Transaction Details - The proposed transaction is subject to customary closing conditions and approvals, with the Special Committee focused on maximizing stockholder value through potential reverse take-over (RTO) opportunities [3][6]. - The LOI outlines a purchase price of up to $20 million, which includes up to $5 million in earn-out consideration contingent upon achieving target revenue [6][4]. - Social Mobile will have an exclusivity period to negotiate the transaction while Sonim continues to evaluate RTO opportunities [6][7]. Group 2: Strategic Rationale - The Special Committee believes that the transaction with Social Mobile represents the best option for maximizing stockholder value compared to other offers received [2][4]. - The acquisition is expected to create synergies between Sonim and Social Mobile, enhancing their ability to serve clients effectively [4][6]. - Social Mobile's CEO highlighted that Sonim's rugged mobile solutions complement their enterprise portfolio, aligning with their mission and culture of innovation [4][9]. Group 3: Company Backgrounds - Sonim Technologies is a leading provider of rugged mobile solutions, trusted by various sectors including first responders and Fortune 500 companies, and operates in North America, EMEA, and Australia/New Zealand [8]. - Social Mobile specializes in enterprise mobility solutions and is recognized as a Google validated Android Enterprise Gold partner, focusing on custom device development for major industries [9][10].

Financial Performance - Net revenues for Q1 2025 were $16,721,000, a 83.5% increase from $9,118,000 in Q1 2024[18] - Gross profit for Q1 2025 was $8,356,000, compared to $2,902,000 in Q1 2024, reflecting a significant improvement[18] - The company reported a net income of $458,000 in Q1 2025, a turnaround from a net loss of $2,906,000 in Q1 2024[18] - Net income for the three months ended March 31, 2025, was $458,000, a significant improvement from a net loss of $2,906,000 in the same period of 2024[24] - For the three months ended March 31, 2025, total net revenues were $16,721 million, a slight decrease from $16,776 million in the same period of 2024[48] - Total revenues for the three months ended March 31, 2025, were $16,721,000, a slight decrease from $16,776,000 in the prior year[100] Expenses and Liabilities - Operating expenses increased to $7,711,000 in Q1 2025 from $5,591,000 in Q1 2024, driven by higher research and development and sales and marketing costs[18] - Cash flows from operating activities resulted in a net cash used of $9,606,000 for Q1 2025, compared to only $168,000 for Q1 2024[24] - Cash and cash equivalents decreased to $2,115,000 as of March 31, 2025, down from $5,343,000 at December 31, 2024[16] - Total current liabilities decreased to $34,677,000 as of March 31, 2025, compared to $43,740,000 at December 31, 2024[16] Assets and Equity - Total assets decreased to $35,958,000 as of March 31, 2025, down from $39,739,000 at December 31, 2024[16] - The company’s accumulated deficit improved to $(283,150,000) as of March 31, 2025, from $(283,608,000) at December 31, 2024[16] - The weighted-average shares used in computing net income per share increased to 5,839,764 in Q1 2025 from 4,438,131 in Q1 2024[18] Product Development and Strategy - The company emphasized the importance of developing next-generation products to meet user needs effectively, which is critical for future growth[12] - A strategic expansion initiative is underway, focusing on new product categories and geographical reach, targeting enterprise and small to medium business segments[27] - The company launched several new products in the first quarter of 2025, including the XP Pro 5G and H500 5G, both certified by Verizon Frontline[28] - The company emphasizes a strong execution strategy in its market expansion efforts, highlighting the introduction of rugged smartphones and connected solutions[27] Revenue Sources - Smartphone sales accounted for $11,032 million, significantly up from $5,580 million year-over-year, while feature phone sales increased to $4,810 million from $3,348 million[48] - A significant revenue driver in Q1 2024 was low-priced products developed under the ODM model, which concluded due to the end of their life cycle[29] - One customer accounted for 60% of total net revenues for the three months ended March 31, 2025[102] Receivables and Financing - As of March 31, 2025, net accounts receivable was $4,849 million, an increase from $4,339 million as of December 31, 2024[53] - The Company has non-trade receivables from manufacturing vendors, with one customer accounting for 23% of accounts receivable as of March 31, 2025[55] - The Receivables Financing Agreement allows the Company to factor receivables up to $2,500 million, with an advance rate of 80%[59] Stock and Compensation - The Company executed a 1-for-10 reverse stock split on July 17, 2024, which did not affect the overall stockholder equity but increased net income per share due to fewer shares outstanding[30][32] - Stock-based compensation expense for the three months ended March 31, 2025, was $290,000, down from $324,000 in the same period of 2024[78] - The Company had approximately $1,262,000 of unamortized stock-based compensation cost related to unvested stock options as of March 31, 2025[80] - The compensation committee approved the acceleration of vesting for 733,157 RSUs as of April 17, 2025[104] Tax and Legal Matters - The effective income tax rate for the three months ended March 31, 2025, was 22.4%, compared to a negative 4.5% for the same period in 2024[83] - The Company is involved in ongoing tax examinations with a gross amount of unrecognized tax benefits of approximately $1,506,000 as of March 31, 2025[85] Inventory and Purchases - The Company’s inventory decreased to $8,620 million as of March 31, 2025, down from $10,621 million at the end of 2024[57] - Inventory in the United States was $3,467 million and in the Asia Pacific region was $5,153 million as of March 31, 2025[102] - The aggregate amount of noncancelable purchase orders as of March 31, 2025, was approximately $17,057,000, an increase from $15,753,000 as of December 31, 2024[86] Capital and Financing Activities - Subsequent to March 31, 2025, the company raised net proceeds of $4,497,000 through its At-The-Market stock sales program, enhancing liquidity[34] - The Company sold 1,349,840 shares of common stock under the Sales Agreement for net proceeds of $3,731,000 after commission fees and expenses[77] - A total of 2,130,437 shares of common stock were sold for net proceeds of $4,497 million after expenses[103] - The Company issued a promissory note with a principal amount of $3,300 million, carrying an effective interest rate of 24.5%[73] - The Company incurred total interest expense of $71 million related to the promissory note for the three months ended March 31, 2025[73] Shareholder Rights and Dividends - A dividend of one preferred share purchase right was declared for each outstanding share of common stock[105] - Each Right allows the purchase of one one-thousandth of a share of Series A Junior Participating Preferred Stock for $4.00[106] - The Rights become exercisable if a person or group acquires 15.5% or more of the Company's outstanding common stock[106] - The adoption of the shareholder rights plan had no impact on the financial position of the Company to date[107] Company Classification - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[148]

[First Quarter 2025 and Recent Highlights](index=1&type=section&id=First%20Quarter%202025%20and%20Recent%20Highlights) Sonim Technologies achieved $16.7 million revenue in Q1 2025, a 12% sequential increase, with $0.5 million GAAP net income Q1 2025 Key Financial Metrics | Metric | Q1 2025 (in millions) | Q4 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $16.7 million | $15.0 million | +12% Sequential | | GAAP Net Income (Loss) | $0.5 million | ($21.6 million) | Significant Improvement | | Adjusted EBITDA | ($3.2 million) | ($16.6 million) | Significant Improvement | - **Raised $6.5 million** in capital through ATM sales and debt issuance to expand product offerings and finance European expansion[3](index=3&type=chunk) - **Positioned for growth** in 2025 with new product launches, including the XP Pro Thermal 5G smartphone, and continued expansion in Europe[3](index=3&type=chunk) - Set to launch five new products in Q2 through Tier 1 carriers and global partners[3](index=3&type=chunk) - **Enhanced partnerships** with major carriers, earning Verizon Frontline Verified status for the XP Pro 5G and Sonim H500, and launching the XP3plus 5G at T-Mobile[3](index=3&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Peter Liu highlighted expanded sales via new product launches with North American and European carriers, affirming positive results - The company is **focused on expanding its sales base** by launching new products with carriers in North America and Europe[5](index=5&type=chunk) - Management confirms that strategic investments in new products are **delivering results**, with more carriers and distributors offering Sonim products[5](index=5&type=chunk) [First Quarter 2025 Financial Performance](index=2&type=section&id=First%20Quarter%202025%20Financial%20Performance) Q1 2025 revenue increased to $16.7 million, achieving $0.5 million net income and 50% gross margin, driven by allowance expiration and R&D reduction Financial Performance: Q1 2025 vs. Q4 2024 | Metric | Q1 2025 (in millions) | Q4 2024 (in millions) | | :--- | :--- | :--- | | Revenue | $16.7 million | $15.0 million | | Gross Profit (Loss) | $8.4 million | ($0.2 million) | | Gross Margin | 50% | -1% | | Operating Expenses | $7.7 million | $21.9 million | | Net Income (Loss) | $0.5 million | ($21.6 million) | - Q1 2025 revenue included **$5.3 million** related to the expiration of customer allowance agreements, which also significantly boosted gross profit[6](index=6&type=chunk)[7](index=7&type=chunk) - Operating expenses decreased primarily because R&D costs fell by **$10.9 million** due to the completion of development for new products in 2024[8](index=8&type=chunk) [Financial Condition and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Working%20Capital) Sonim ended Q1 2025 with $2.1 million cash, $4.8 million receivables, and $8.6 million inventory, strengthening its financial position Key Balance Sheet Items (as of March 31, 2025) | Account | Amount (in millions) | | :--- | :--- | | Cash | $2.1 million | | Trade Accounts Receivable | $4.8 million | | Inventory | $8.6 million | - Subsequent to quarter end, the company received net proceeds of **$4.5 million** from sales of common stock through its At-The-Market (ATM) program[11](index=11&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Sonim's condensed consolidated financial statements, detailing the company's financial position and performance Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were $36.0 million, total liabilities $37.0 million, with stockholders' deficit improving to $1.1 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $26,935 | $32,165 | | **Total Assets** | **$35,958** | **$39,739** | | Total Current Liabilities | $34,677 | $43,740 | | **Total Liabilities** | **$37,037** | **$45,439** | | **Total Stockholders' Equity (Deficit)** | **($1,079)** | **($5,700)** | Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2025, total net revenues were $16.7 million, resulting in a net income of $0.5 million ($0.08 diluted EPS) Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Total Net Revenues | $16,721 | $16,776 | | Gross Profit | $8,356 | $2,902 | | Income (Loss) from Operations | $645 | ($2,689) | | **Net Income (Loss)** | **$458** | **($2,906)** | | **Diluted EPS** | $0.08 | ($0.65) | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) Sonim uses Adjusted EBITDA, a non-GAAP measure, to assess operating performance by excluding non-cash and non-recurring items - Adjusted EBITDA is defined as net loss adjusted for stock-based compensation, depreciation & amortization, interest, taxes, expiration of customer allowance agreements, impairment of assets, and restructuring charges[20](index=20&type=chunk) - The company uses Adjusted EBITDA internally for performance assessment, planning, resource allocation, and evaluating business strategies[21](index=21&type=chunk) Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 improved to negative $3.2 million from negative $16.6 million in Q4 2024 Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands) | Q4 2024 (in thousands) | | :--- | :--- | :--- | | Net Income (Loss) | $458 | ($21,614) | | Release of customer allowance liabilities | ($5,271) | — | | Impairment of contract fulfillment assets | — | $3,267 | | Restructuring charges | — | $514 | | **Adjusted EBITDA** | **($3,245)** | **($16,604)** |

Core Insights - Sonim Technologies is executing its expansion strategy effectively, showing strong momentum in the second quarter of 2025, with a focus on long-term growth and operational excellence [1][2] - The company has laid a solid foundation through strategic investments in 2024, leading to new product development, customer acquisitions, and market expansion across multiple regions [1][2] Product Launches - Sonim plans to launch three new products, including the flagship Sonim XP Pro rugged 5G smartphone, in North America with Tier 1 carriers during the second quarter [3] - Additionally, three more products are set to launch with leading distribution partners and Tier 1 operators, including Deutsche Telekom in Germany, enhancing Sonim's presence in key markets [4] - Purchase orders have already been placed for these upcoming product launches, indicating strong market demand [5] Enterprise Customer Growth - The company is successfully attracting and retaining enterprise customers, securing major upgrade agreements with leading Fortune 500 companies, including two of the top 10 healthcare systems in the U.S. and a large integrated energy infrastructure company [6] Manufacturing and Supply Chain - Sonim has diversified its manufacturing options outside of China, with production of next-generation 5G products based in Taiwan and Vietnam, which helps in cost optimization and risk mitigation [7] - This proactive move minimizes the impact of tariffs on new products, demonstrating the company's commitment to maintaining a robust supply chain [9]