Sonim rejects Orbic offer, favors Social Mobile asset sale deal

SAN DIEGO - Sonim Technologies (NASDAQ:SONM), whose stock has declined over 90% in the past year according to InvestingPro data, announced Wednesday that its Special Committee has rejected an unsolicited, non-binding proposal from Orbic North America, LLC, deeming it inferior to a previously announced Letter of Intent with Social Mobile.

The committee determined that Social Mobile’s proposal for purchasing substantially all of Sonim’s operating assets offers greater transaction value and certainty compared to Orbic’s June 26 offer. With a current market capitalization of just $6.8 million and rapidly diminishing cash reserves, the company’s focus on transaction certainty appears crucial.

According to the company statement, the Social Mobile deal does not require third-party financing and provides a clear path for the sale of legacy assets, coupled with a concurrent reverse takeover transaction.

The committee cited several concerns with Orbic’s proposal, including its conditional nature, financing uncertainties, and high execution risks. Sonim also expressed concerns about Orbic’s track record, noting the company and its affiliates have been named as defendants in more than ten legal actions over the past decade.

"The Special Committee has determined that the sale to Social Mobile and contemplated RTO transaction represent a much higher certainty to close and deliver the best value and other terms reasonably available to Sonim’s stockholders," the company stated in its press release.

Sonim and Social Mobile are actively negotiating the definitive agreement and report the process is progressing within the framework of their Letter of Intent.

Sonim Technologies, a provider of rugged mobile solutions including phones and wireless internet data devices, sells its products through wireless carriers and distributors in North America, EMEA, and Australia/New Zealand.

The company urged stockholders to support its strategic direction as it moves forward with the Social Mobile transaction.

In other recent news, Sonim Technologies announced the pricing of a public offering involving 7,400,000 shares of common stock at $0.75 per share, expected to raise approximately $5.55 million. The company plans to use the proceeds to support its business strategy, working capital, and potentially refinance existing debt. Additionally, Sonim provided an update on a proposed reverse takeover with a private U.S. company focused on Nvidia-based High-Performance Computing AI factories, with the transaction requiring several approvals, including from Sonim’s stockholders and Nasdaq. Concurrently, Sonim received an unsolicited $25 million acquisition offer from Orbic North America for its operating assets, which the company’s Special Committee is currently evaluating. Major investors AJP Holding Company and Orbic North America, holding a 19% stake in Sonim, have called for a leadership overhaul, citing financial challenges and strategic concerns. They have nominated five director candidates to replace the current board, criticizing the company’s recent strategic decisions, including the reverse takeover and asset sale plans. These developments come amidst Sonim’s ongoing financial challenges, with the company having reported significant losses in recent years.

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