Company: SONM
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001641172-25-022821
Chunk: 116

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 4
Chunk 116
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TO target, and even if we do, we may not be able to complete the transaction timely, which may negatively
impact our financial condition and results of operations. 

We
publicly announced our intent to pursue two contemporaneous strategic tracks: to enter into and consummate the Asset Purchase Agreement
and to identify an RTO target and to consummate an RTO.

Expected
disposition of our legacy assets and operations under the Asset Purchase Agreement will render Sonim a “shell company,” unless
we either (a) initiate a new line of business that is unrelated to and does not compete with the divested business, or (b) complete an
RTO prior to the closing of the Asset Purchase Agreement. Accordingly, identifying a suitable RTO target and completing the
transaction in a timely manner—or otherwise ensuring the continuation of meaningful business operations—is critical to avoiding
shell company status.

If
Sonim becomes a shell company, we would be subject to significant regulatory and market disadvantages, including:

    ●
    ineligibility
    to use Form S-3 until 12 full calendar months after filing “Form 10 information” with the SEC; 

    ●
    holders of our common stock
    will not be able to sell their restricted shares due to Rule 144(i), until one year after the Form 10 information is filed with the
    SEC;

    ●
    the Company will become
    an “ineligible issuer for three years following the closing, which will prevent the combined company from (i) incorporating
    by reference in its Form S-1 filings, (ii) using a free writing prospectus, or (iii) taking advantage of well-known seasoned issuer
    status despite its public float; 

    ●
    potential delisting from
    Nasdaq; and

    ●
    market perception risks,
    including a potential depressive effect on the trading price of our common stock due to our classification as a “former shell
    company.”

In
addition, our stockholders may be less inclined to approve the Asset Purchase Agreement in the absence of a concurrently announced RTO
transaction. Failure to obtain stockholder approval would result in the termination of the Asset Purchase Agreement and would require
us to pay the Buyer (i) reimbursement of transaction-related expenses reasonably incurred by the Buyer and its affiliates, and (ii) a
termination fee of $1 million. These outcomes could materially and adversely affect our sales, financial condition, and results of operations,
as well as