Company: SONM
Filing Date: 2025-11-24
Form Type: PREM14A
Source: 0001493152-25-024848
Chunk: 66

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-11-24
Form: PREM14A
Chunk 66
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 the event the members of the Board were not re-elected, the transaction would be terminated or otherwise jeopardized, as the majority of the Orbic Nominees were Orbic-affiliated. As such, Social Mobile insisted on a break-up fee payable to Social Mobile if the Social Mobile LOI did not result in a definitive agreement due to the Company pursuing an alternative transaction involving the Legacy Business, including by reason of change of control resulting from the proxy contest loss. Social Mobile also inquired whether the corporate formalities were followed in connection with the assessment of the proposals from Orbic, and whether the process was properly documented, and requested information about Roth Capital’s outreach. The Company acknowledged continuing stockholder-approval risk and emphasized that the LOI should contemplate strategic alternatives beyond the Legacy Business to maximize stockholder value, explaining why the Social Mobile transaction alone might not be in the best interests of stockholders.

On May 10, 2025, Social Mobile delivered a revised draft of the Social Mobile LOI contemplating $15.5 million in cash and up to $7 million in earn-out consideration. The draft did not contemplate any financial contingency and included information evidencing Social Mobile’s access to cash to complete the transaction. The earn-out assumed $70 million of the Legacy Business net revenue for the fiscal year 2025, and provided for earn-out payments equal to $0.33 per $1 of revenue above $70 million. The draft also contemplated customary working capital adjustments and an escrow account in connection with the definitive documents. Finally, the draft included a break-up fee payable by the Company in the amount of $1 million if the Company breached the exclusivity provisions by proceeding with an alternative transaction, and required the Company to reimburse Social Mobile’s attorneys’ fees in such event. The draft permitted a joint press release announcing the execution of the Social Mobile LOI and contemplated a 90-day exclusivity period. That same day, the Special Committee conferred with Roth Capital and requested that Roth Capital communicate to Social Mobile that the earn-out formula be more favorable to the Company and that the exclusivity period be reduced to 60 days.

On May 11, 2025, the Special Committee and the board, upon recommendation of the Special Committee (with Mr. Wang abstaining due to conflicts of interests), determined it was advisable and in the best interests of Sonim to waive the deficiency in the Director Nomination Notice rather than to engage in a protracted litigation. On the same day, the Company’s Delaware counsel notified Orbic’s counsel accordingly