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 with an additional note on August 2021.
News Releases
Aug. 16 - Reports Second Quarter Results
Sep. 9 - Introduces Waterproof Headsets and RSMs with 3 Year Comprehensive Warranty from Klein Electronics
Sep. 13 -Launches New XP3plus Ultra-Rugged Flip Phone.
Sep. 14 -Announces Reverse Stock Split:
Sep. 30 -Launches Ultra-Rugged XP3plus Flip Phone for Verizon Business Customers.
Oct. 26 - Announces Adjournment of Annual Meeting of Stockholders Due to Lack of Quorum
Oct. 27 - XP3plus Now Available in T-Mobile Stores Nationwide
Nov. 10 - Reports Third Quarter 2021 Financial Results
Summary
Earnings
Q3 2021 revenue were flat from Q3 2020, Gross Profit was much lower, and Comp Loss much higher at nearly $11M!
Overall SONM continues to report a loss ($26.9M Year to Date) and has been unable to meaningfully grow revenues.
Sonim ended the quarter with $10.2M in cash and equivalents and remained essentially debt free. The Company raised an additional $10.4M in net proceeds through its at-themarket equity offering program during the third quarter and raised an additional $14.3M in net proceeds through our at-the-market equity offering program subsequent to September 30, 2021.
Financing
A week after the reverse split (10 to 1) was announced, a Form 8-K filing was issued (without a press release).
On September 23, 2021, Sonim Technologies, Inc. (the “Company”) entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (the “Sales Agent”) to sell shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”),having an aggregate offering price of up to $41,636,612 (the “Shares”), from time to time, through an “at the market offering” program (the “ATM Program”).
Products & Services
The launch of XP3plus Ultra-Rugged Flip Phone was the main announcement made in the past four months.
Management
Due to a lack of quorum the Annual General Meeting was postponed to November 12, 2021.
A quorum consists of a majority of the outstanding shares entitled to vote. There were fewer than a majority of outstanding shares entitled to vote, either present in person or represented by proxy, at the Annual Meeting. The Annual Meeting therefore had no quorum and was adjourned to 9:00 a.m. Pacific Time on Friday, November 12, 2021.
On November 5 2021, another Form 8-K filing was issued (also without a press release).
On and effective as of November 5, 2021, the Board of Directors (the “Board”) of Sonim Technologies, Inc. approved the amendment and restatement of the Company’s Amended and Restated Bylaws (as so amended and restated, the “Bylaws”). Specifically, the Board amended Article III, Section 8 to reduce the quorum required for meetings of stockholders from a majority to one-third (1/3) of the voting power of the outstanding shares of stock entitled to vote.
In short
Since our last note, SONM's valuation has declined from $0.45 cents ($4.50 equivalent after the reverse stock split) to closing at $1.55 today ($0.155 cents equivalent before the reverse split). The announcement of an up to $41 million ATM fund raise one week after the consolidation appears to be a helpful catalyst. Indeed, the timing seems impeccable.
The fact that SONM does a reverse stock split and is unable/unwilling to raise funds at a set price is questionable. In addition to being lite on product announcements, reporting weak earnings with a record Comprehensive Loss in Q3 2021 ($10.9M) surely assisted in driving valuation down by 65% in the last four months.
Being debt free does not resonate with the market given continued losses and an ATM (up to $41M) that could exceed YTD 2021 revenues. It comes to no surprise that SONM was not able to obtain quorum for its AGM but it was revealing that the board of directors amended the By-laws for quorum lowering from a majority to one third.
Since becoming President and CEO, Mr. Tirva has held no conference call on earnings to explain directions. Overall, the absence of institutional backing after the departure of Mr. Wilkinson is clear and it is reflected in the stock price.
Maximizing shareholder value seems to have lost its meaning at SONM. As such, no further coverage will be issued. Unfortunately, its difficult to envision much for the future other than further dilution and more short squeeze.
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