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SAN DIEGO - Sonim Technologies, Inc. (NASDAQ:SONM), a micro-cap company with a market capitalization of $12.8 million, announced it has identified strategic alternatives that it believes offer superior value compared to proposals from Orbic North America, LLC, according to a press release statement issued Wednesday. The stock has shown significant volatility, gaining over 25% in the past week despite a challenging year. According to InvestingPro analysis, the company currently trades near its Fair Value.
The company has signed a Letter of Intent with Social Mobile for the sale of substantially all operating assets for up to $20 million, including a potential $5 million earn-out. Additionally, Sonim intends to pursue a reverse takeover transaction targeting a $15 million valuation. This strategic move comes as InvestingPro data reveals the company has been quickly burning through cash, with negative free cash flow of $18.1 million in the last twelve months.
These developments come amid a proxy contest initiated by Orbic ahead of Sonim’s Annual Meeting scheduled for July 18. Sonim’s Board formed a Special Committee in January 2025 following Orbic’s unsolicited acquisition approach.
The company characterized Orbic’s proposals as "illusory" and cited concerns about Orbic’s financial condition, noting over $22.5 million in judgments against Orbic and its affiliates, along with multiple lawsuits over the past decade.
"The Special Committee has already found a potentially better alternative for Sonim stockholders to a transaction with Orbic," the company stated in its release.
Sonim’s Board is urging stockholders to vote for its slate of director nominees—James Cassano, Peter Liu, Mike Mulica, Jack Steenstra, and George Thangadurai—using the white proxy card for the upcoming Annual Meeting.
The company, which provides rugged mobile solutions primarily for first responders and enterprise customers, indicated that Orbic has demonstrated "strategic inconsistency" and "adversarial behavior" throughout the engagement process. Financial metrics from InvestingPro highlight the company’s challenges, including a -31% revenue decline and weak gross profit margins of 20.45%. Subscribers can access 16 additional ProTips and comprehensive financial analysis through InvestingPro’s advanced platform.
Sonim believes Orbic’s proxy contest is an attempt to "derail Sonim’s strategic alternatives process" and "seize control of the Board and Company without paying a premium to all Sonim stockholders."
In other recent news, Sonim Technologies has confirmed receiving an unsolicited offer from DOOGEE to acquire all its outstanding shares at $3.60 per share in cash. The Special Committee of Sonim’s Board of Directors is currently evaluating this proposal, seeking more information on DOOGEE’s financing and strategic plans. Meanwhile, Sonim has signed a Letter of Intent with Social Mobile for a potential asset acquisition valued at up to $20 million, which includes earn-out considerations based on revenue targets. This transaction is seen as a strategic opportunity to enhance shareholder value and could involve a reverse takeover to leverage Sonim’s public company status.
Additionally, Sonim is preparing to launch new products across several key markets, including North America and Europe, with partnerships involving Tier 1 carriers and major operators like Deutsche Telekom. The company has diversified its manufacturing operations to Taiwan and Vietnam for its next-generation 5G products. In a protective measure, Sonim has adopted a Stockholder Rights Agreement to deter hostile takeovers, granting rights to shareholders if an entity acquires a significant portion of the company.
Moreover, Sonim has amended the employment agreement with its CFO, Clay Crolius, to include enhanced severance benefits and a revised definition of "Change in Control." These changes aim to ensure financial security for the CFO in specific termination scenarios. These developments reflect Sonim’s ongoing efforts to navigate strategic opportunities and protect shareholder interests.
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