Company: SONM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001493152-25-020310
Chunk: 2

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 2
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 acquire substantially all assets of the Company and its subsidiaries related to the Company’s
enterprise 5G solutions business, including rugged handsets, smartphones, wireless internet devices, software, services, and accessories
(collectively, the “Business”) for a purchase price of $15,000 in cash, subject to (i) customary working capital, indebtedness
and transaction expense adjustments (referred to in the Asset Purchase Agreement as the “Adjustment Amount,” which may be
a positive or a negative number) and (ii) up to $5,000 in the form of an earn-out payment (the “Earn-Out Payment”), if earned.

Earn-Out

The
Earn-Out Payment, if any, will be determined based on the performance of the Business during the twelve-month period beginning July 1,
2025, and ending June 30, 2026. If, during such period, the Business generates Net Revenue (as defined in the Asset Purchase Agreement) in
excess of $70,000, the Company will be entitled to receive an amount equal to 50% of the Net Revenue above such threshold, calculated
in accordance with the terms of the Asset Purchase Agreement, provided that the Earn-Out Payment will not exceed $5,000. For purposes
of the Asset Purchase Agreement, “Net Revenue” generally means the gross revenue of the Business determined in accordance
with U.S. generally accepted accounting principles (“GAAP”) minus (a) customary trade, quantity and cash discounts actually
taken; (b) credits, allowances, rebates and chargebacks for returns, rejections, damaged goods and billing errors; (c) outbound freight,
insurance, customs duties and other transportation charges directly related to such sales; (d) sales, value-added, use and similar taxes
(other than income taxes) collected from customers and remitted to the appropriate taxing authority; and (e) any other items that, in
accordance with GAAP, are specifically and solely deductible from gross revenue to arrive at net revenue. 

No
Solicitation and Change of Recommendation

The
Asset Purchase Agreement includes covenants requiring the Company not to, directly or indirectly (i) solicit, initiate, knowingly encourage,
or knowingly induce any Alternative Transaction (as defined in the Asset Purchase Agreement), (ii) engage in discussions or negotiations
regarding any Alternative Transaction, or (iii) enter into any letter of intent, term sheet, memorandum of understanding, or other agreement
relating to any Alternative