Company: SONM
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001641172-25-022821
Chunk: 144

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 1A
Chunk 144
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, the Asset Purchase Agreement generally requires the Company to operate its business in the ordinary course of business consistent
with past practice, pending consummation of the Asset Purchase Agreement, and also restricts us from taking certain actions with respect
to our business and financial affairs without the consent of Social Mobile. Such restrictions will be in place until the Asset Purchase
Agreement is either consummated or terminated. Such restrictions could adversely affect our business and results of operations prior
to completion of the Asset Purchase Agreement.

33

We
may never find a suitable RTO 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 “