Company: SONM
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009749
Chunk: 71

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 4
Chunk 71
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 financial results. Additionally, evolving national security policies and heightened
scrutiny of foreign-manufactured telecommunications equipment may further increase compliance costs and restrict our market access.

The
adoption or expansion of trade restrictions, the escalation of a trade war, or other governmental actions related to tariffs, trade agreements,
or prohibition of components of communication equipment, could negatively impact demand for our products, increase costs, disrupt our
supply chain, and adversely affect our customers and suppliers. Any of these developments could have a material adverse effect on our
business, operating results, and financial condition.

The
risk factor titled “Our business and operations could be negatively affected if we become subject to stockholder activism or
hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price”
is amended and restated as follows:

24

Our
business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause
us to incur significant expense, hinder execution of our business strategy and impact our stock price.

Stockholder
activism—ranging from proxy contests and hostile bids to public campaigns and litigation—has become increasingly prevalent.
Declines in our stock price may heighten our vulnerability to unsolicited approaches, potentially disrupting our business strategy and
operations.

In
January 2025, Orbic North America, LLC (“Orbic”), an affiliate of a competitor currently engaged in intellectual
property litigation against us, announced an “agreement in principle” with AJP Holding Company, LLC (“AJP”),
our largest stockholder, to acquire a portion of AJP’s shares. AJP is controlled by our director Jeffrey Wang, who
beneficially owns approximately 21.5% of our outstanding common stock. Following this announcement, our board formed a Special
Committee to evaluate strategic alternatives. Thereafter, AJP, Orbic, and their affiliates formed a group pursuant to Section 13 of
the Exchange Act (the “Orbic Group”), and Orbic entered into an irrevocable proxy agreement granting it control over all
of AJP’s voting power. The Orbic Group submitted a purported acquisition proposal and a purported notice to nominate an
alternative slate of director candidates for election at our 2025 annual meeting (the “Notice”). Our board rejected the
Notice as deficient, and AJP and Orbic subsequently initiated litigation against the Company and all of our directors except for Mr.
Wang, as described in “Note