SONM - Eagerly awaited.

Updated: Aug 8


Sonim Technologies Inc. (SONM) is a leading U.S. provider of ultra-rugged mobility solutions designed specifically for task workers physically engaged in their work environments, often in mission-critical roles.


The Sonim solution includes ultra-rugged mobile phones, a suite of industrial-grade accessories, and data and workflow applications designed to increase worker productivity, communication and safety on the job site.


Coverage was initiated November 2020. Below is an update.


News Releases


Dec. 1 - Announce New Distribution Agreement with AccuraFlow in Latin America: The partnership will provide field workers in public safety, oil & gas, mining, utilities, manufacturing more ultra-rugged mobility options.


Dec. 8 - XP5s Ultra-rugged Phone Now Supported by Mission-Critical Standards FirstNet® PTT Solution from AT&T.


FirstNet PTT is designed to enable public safety to use their smartphones, feature phones, and specialized ultra-rugged devices like they would use a two-way radio, with highly reliable, high-performance calling.


The Sonim XP5s is FirstNet Ready™, which means first responders can use it to tap into the power of FirstNet® — which provides public safety with the nation's fastest overall network experience.


Dec. 18 -Transfer Shenzhen Manufacturing Responsibilities to Unicair: Unicair, a communications original design manufacturer (ODM) based in China with more than 650 employees, produces over two million devices monthly, including Qualcomm-based smartphones and IoT devices.


SONM is expected to save $450,000 per quarter in cost of sales for current products.


Dec. 22 - Announces Software Development Relationship with Coforge: Coforge, a global IT solutions company based in India that serves large enterprise technology and communications deployments worldwide.


Sonim has agreed to transfer its India-based software development resources to Coforge, which will have the responsibility to provide software development services to the company in the future.


Additionally, Coforge is now a Sonim partner, focused on introducing SONM devices to enterprise customers worldwide.


Jan. 20 - Receives Nasdaq Extension: Received an extension of 180 days, until July 19, 2021 to regain compliance with the Nasdaq minimum bid price requirement for continued listing. The company previously had until January 18, 2021 to regain compliance, and received its extension notice on January 20, 2021.


Additionally, our first new SmartScanner handheld computer with integrated barcode scanner, as well as the company's first tablet device, also with integrated scanner, are expected to begin shipping in Q1 2021, opening a new worldwide addressable market opportunity estimated at approximately $2 billion in size.


The Company intends to monitor the closing bid price of its Common Stock and has given written notice to Nasdaq that it will, if necessary, implement available options to regain compliance with the minimum bid price requirement, including a reverse stock split within the range previously approved by stockholders.


Jan. 25 - Partner with Sindico to Bring Ultra-Rugged Devices to the United Kingdom: Syndico, a specialist distributor of professional communication, body-worn video and drone solutions. The new partnership will expand the distribution of Sonim's ultra-rugged mobility solutions throughout the United Kingdom.


Feb. 9 -RS80 SmartScanner Tablet Now Available in North America and Europe: An eight-inch tablet with an integrated barcode scanner that features a glove-friendly touch screen, high-capacity multi-shift battery, resistance to water and dust and a variety of additional features and capabilities to maximize its functionality on the job.


Feb. 16 - SonimWare Enterprise Software Applications Earn FirstNet Certified™ Designation: FirstNet® Subscribers Can Now Access Sonim SCAN and Sonim SOS Android Applications via the FirstNet App Catalog. Achieving a FirstNet Certified™ designation means that the Sonim SCAN and SOS applications are heavily vetted and trusted solutions for public safety, meeting FirstNet app requirements.


Before any mobile solution can be added to the FirstNet App Catalog, it must pass stringent tests for security, relevancy, data privacy and availability, as well as review by the App Review board which includes the FirstNet Authority.


Feb. 23 - Regains Compliance with Nasdaq Listing Requirements: In a letter dated February 22, 2021, Nasdaq informed SONM that it has achieved compliance with the minimum bid price rule required for continued listing.


Mar. 3 - Announce New Distribution Agreement in North America with Energy Electronics: Energy Electronics, LLC, a premier distributor of corporate communications devices. This partnership will make the Sonim RS80 SmartScanner tablet and RS60 SmartScanner handheld accessible across North America.


Mar. 5 - Partners with FIH Mobile for Next Generation Rugged Feature Phones: FIH Mobile is a subsidiary of Foxconn Technology Group, to support the engineering and manufacturing of SONM's next generation feature phones.


These future devices are expected to leverage QUALCOMM chipsets and feature the unique characteristics that have built Sonim's reputation for the most rugged mobile phones available.


Sonim expects to benefit from FIH's integrated ODM services, including hardware, software, certification and manufacturing. Additionally, working with FIH will provide Sonim access to a best-in-class supply chain and manufacturing process. The first devices are expected to come to market in the third quarter of 2021.


Mar. 10 - Reports Fourth Quarter 2020 Results:


Mar. 18 - Self Prospectus S-3: Up to $50M in shares for working capital and general purposes.


Mar. 18 - Introduces Stone Mountain Remote Speaker Microphones with DSP Noise Cancellation and PTT-over-Cellular Solution: The Epic RSM Series with ProClearTM Digital Signal Processing (DSP) noise cancellation is compatible with the Sonim XP8 and XP5s rugged phones. These RSMs, when combined with the Sonim handsets and PTT-over-Cellular service, provide DSP noise cancellation for clear audio even in the noisiest environments.


Apr. 15 - Partners SYNNEX Corporation to Distribute Sonim's devices in North America: SYNNEX Corporation (NYSE: SNX), a leading provider of distribution, systems design and integration services for the technology industry, to distribute Sonim's RS60 and RS80 rugged SmartScanners and XP8 ultra-rugged smartphone.


Apr. 21 - Appointment of Mike Mulica and Ken Naumann as Independent Directors.


May 5 - Sonim RS60 SmartScanner Handheld Now Available in North America and Europe: Fully-Rugged Barcode Scanner with Six-Inch Glove-Friendly Screen Provides Durable All-in-One Solution.


May 11 -Reports First Quarter Results and Accelerating New Product Orders:


Ended the quarter with $13.9 million in cash and equivalents and remained essentially debt free.


May 12 - Announce New Distribution Agreement in the U.S. with Business Mobility Partners: Business Mobility Partners (BMP), an Authorized Distributor of T-Mobile For Business products and services, which serves transportation, construction, healthcare, logistics and utilities verticals as well as education and the public sector.


"Now T-Mobile for Business customers will have access to Sonim ultra-rugged devices provisioned to their specifications with software and accessories that will allow them to experience all that a mobile device can do in demanding work environments." - John Graff, CMO, Sonim Technologies,


June 1 - Appoints Robert Tirva as President and Chief Operating Officer: Robert (Bob) Tirva, currently serving as Chief Financial Officer, will be promoted to President and Chief Operating Officer. He will report directly to the Board of Directors and work closely with the Strategic Alternatives and Operating Committee.


The Strategic Alternatives and Operating Committee is chaired by Mike Mulica and includes Sonim board members Sue Swenson and Ken Naumann, all three of whom have extensive CEO and turnaround experience in the communications equipment industry. The committee was formed to consider options and strategies to better support the needs of Sonim's customers and to consider alternatives to maximize long-term shareholder value.


Also Tom Wilkinson, who has served as Chief Executive Officer since October 2019, will depart the company.


June 8 - Partners with Mem-Star Rugged to Bring Sonim’s Devices to Crown Commercial Service in United Kingdom:


Mem-Star Rugged, a preferred supplier of rugged technology, has met the rigorous conditions required to gain a place as a Governmental supplier on the CCS Technology Online Purchasing Content – RM6147 Framework.


June 15 -XP8 Android Handset Supported by Mission-Critical Standards-Based FirstNet® PTT Solution from AT&T:


June 29 - Announces Two Awards from a Leading US Carrier for Next-Generation Rugged Phones: To be introduced in 2022. Upgraded feature phone with enhanced PTT capabilities, and a smartphone with 5G capabilities. The awards were made based on the design specifications, feature set and costs as part of an RFP process.


"We now have design win awards from the three largest US carriers for new products that we expect to introduce starting in 2H 2021 through Q3 2022. These new products, combined with the SmartScanners we began shipping this year, show our desire to enhance and grow our product portfolio and addressable market opportunity." - SONM's CMO.


June 30 - ATM Offering: Sonim Technologies, Inc. has entered into a sales agreement (the “Sales Agreement”) with B. Riley Securities, Inc. and EF Hutton, division of Benchmark Investments, LLC, or the Agents, under which we may offer and sell, from time to time, up to $10,000,000 in the aggregate of our common stock, par value $0.001 per share.

The amount of net proceeds we will receive from this offering, will depend upon the number of Shares sold and the market price at which such Shares are sold. Because there is no minimum amount required as a condition to close this offering, the actual total public offering amount, commissions and net proceeds to us, if any, are not determinable at this time.


June 30 - Introduces the RT80 Rugged Tablet


July 16 - Ken Naumann resigned as a member of the Board of Directors of Sonim Technologies, Inc. His resignation is not due to a disagreement with the Company on any matter relating to the operations, policies or practices.


July 20 -Partners with 4K Solutions to Launch Mobile Broadband Kits for Portable Communication Systems: Provides Quick Connectivity to Cellular, Wi-Fi, GPS, LMR, and Satellite Systems. The MBK-Elite is human-portable and may be deployed quickly without the need for extensive training or IT experience.


The kit comes equipped with four Sonim XP8 handsets provisioned with SonimWare, a comprehensive set of software tools, applications and utilities designed to manage and optimize the mobile ecosystem for maximum productivity.


4K Solutions has over 5,000 mobile broadband kits deployed globally, and numerous partnerships with leading manufacturers of cellular, networking, routing and switching technologies, such as Airbus, Cobham, CradlePoint, Cubic, Iridium, Kymeta, Paradigm, Silvus Technologies, Tampa Microwave and Thales.


Summary

Management

One of the biggest change during the last period was the departure of Tom Wilkinson (President and CEO). He was hired in October 2019 and departed in June 2021. Little short of two years! This was surprising for some, given his prior accomplishments with Xplore Technologies which was eventually acquired by Zebra Technologies.


Mr. Wilkinson was replaced Robert (Bob) Tirva (CFO). He was promoted to President and COO. Mr. Tirva reports directly to the Board of Directors and work closely with the Strategic Alternatives and Operating Committee.


The committee was formed to consider options and strategies to better support the needs of Sonim's customers and to consider alternatives to maximize long-term shareholder value.


This committee is chaired by Mike Mulica and included Ken Nauman, and Sue Swenson. That is until July 2021 because Mr. Ken Nauman resigned as a board member. Again, this is rather surprising given that both Mr. Mulica and Mr. Nauman were both recent addition to the Board of Director at SONM (April 2021).


Do these organizational changes reflect some directional conflict between management and the board of director?


Manufacturing & Software

December 2020, SONM announced that it was transferring the manufacturing of its XP3, XP5 and XP8 devices to Unicair Communication Technology Co and was expecting to save $450,000 per quarter in cost of sales. This transition was expected to be complete by April 2021.


Also in December 2020, SONM has agreed to transfer its India-based software development resources to Coforge, which will have the responsibility to provide software development services. CoForge also became a SONM partner and will be tasked with introducing SONM devices and applications worldwide.


Mar 2021, SONM partnered with FIH Mobile for next generation mobile devices: Specifically, support the engineering and manufacturing of Sonim's next generation feature phones. The first devices are expected to market in Q3 2021.


Distribution

SONM made several alliances in North America, United Kingdom and Latin America, namely: AccuraFlow (Dec. 2020), Syndico (Jan. 2021), Energy Electronics (Mar. 2021), Synnex (Apr 2021), Business Mobility Partners; a T-Mobile Original Distributor (May 2021), and Mem-Star (Jun 2021).


Products & Services

A number of development were made on the product side

Dec 2020 - XP5s Ultra-rugged Phone on Mission-Critical Standards FirstNet® PTT Solution (AT&)T

Feb 2021 - RS80 SmartScanner Tablet became available in North AMerica and Europe.

Feb 2021 - SonimWare Enterprise Software Applications Earn FirstNet Certified™ Designation

Mar 2021 - Stone Mountain Remote Speaker Microphones with DSP Noise Cancellation and PTT

Apr 2021 - Sonim RS60 SmartScanner Handheld became available in North AMerica and Europe.

Jun 2021 - XP8s Ultra-rugged Phone on Mission-Critical Standards FirstNet® PTT Solution (AT&T)

Jun 2021 - Introduced the RT80 Rugged Tablet: glove-friendly and sunlight-readable 8-inch screen.

July 2021- Partnered with 4K Solutions to Launch Mobile Broadband Kits for Portable Communication System.


Earnings

While Q4 2020 revenues were slightly up from Q3 2020, they were still down from Q4 2019. However, the Comp. Loss were contained to (6.4M) over Q3 2020 (6.5M) and signaled a significant improvement from Q4 2019 (8.3M).


Nonetheless, FY 2020 revenue were almost 50% lower than FY 2019 with a much higher Comp. Loss (29.9M).

For Q1 2021, Revenue and Comp Loss (9.3M) was similar than Q1 2020. In addition working capital (13.9M) was reported to be drastically lower than Q4 2020 (22.1M). This was explained accordingly by the company.


Sonim's liquidity has been negatively impacted by a decline in sales of legacy products while next generation products are still under development. In addition, as noted above, legal expenses have been higher than expected and may continue to impact results in the foreseeable future. As a result, substantial doubt exists regarding Sonim's ability to continue as a going concern. Sonim plans to explore raising additional capital from the sale of equity securities or the incurrence of indebtedness to allow it to continue operations. Sonim has also retained B. Riley as its investment bank to explore capital market financing ideas as well as strategic alternatives for the company including both buy and sell side opportunities.


Financing

The filing of a Self Prospectus S-3 for Up to $50M in shares for working capital were a possible indicator for Q1 2021 earnings but the subsequent ATM Offering: sell up to $10M of stock was indeed a confirmation.


In Short

SONM got off to a blistering start in November 2020 from the mid sixty cents all the way up to $1.70 in February 2021. However, from Mid-February to May 2021 the price reverted to its earlier baseline and broke on the Q1 2021 earnings.


The transition from legacy to the next generation product impacted revenues and the higher than expected legal cost have weight in on the working capital. Hence, the fact that SONM reported to be "debt-free" was not well received.


Moreover, SONM still continues to meet NASDAQ listing requirements by virtue of extensions. Remember that at the last AGM (Oct. 1, 2020), SONM approved a possible reverse stock split ranging from (1 to 2) to (1 to 12).


Hence, the recent ATM financing has not helped valuation given that the latest Public Offerings was at $0.75 cents. This coupled with the departure of Mr. Wilkinson and subsequently Mr. Nauman has done little to reverse the trend.


Therefore, it will be key for SONM to further disclose some of the ongoing activities of the Strategic Alternatives and Operating Committee going forward especially with regards to maximizing shareholder value.


Nonetheless, SONM has launched a number of new products (RS60 & RS80 SmartScanner Tablet, RT80 Rugged Tablet) and improved functionality on existing one (XP5s and XP8s on Mission Critical Standards FirstNet PTT Solutions (AT&T), SonimWare Entreprise Software Application Certification on FirstNet). In addition, SONM has continued to broaden its distribution network in North America, Latin America, and in the United Kingdom.


While the next generation of product is not expected before Q3 2021, Q2 2021 earnings will be eagerly awaited.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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