LTE  |  2022-04-15

Sonim Announces Equity Transaction to Drive Growth and Expand Addressable Market

Source: Sonim

Sonim Technologies, Inc., today announced that it has entered into a subscription agreement with U.S.-based AJP Holding Company, LLC ("AJP") whereby, subject to the terms thereof, AJP will purchase a total of 20.8 million shares at a price of $0.84 per share and an aggregate purchase price of $17.5 million. Upon completion of the transaction, which is subject to stockholder approval and other customary closing conditions, AJP will own approximately 52% of Sonim's post-transaction outstanding capital stock based on an estimated 19.3 million shares outstanding prior to the transaction.

The agreement with AJP will also include a transition of the management team as Sonim embarks on a strategy to expand from its core market in ultra-rugged mobile devices into the larger and faster growing semi-rugged and industrial 5G markets. This enhanced strategy proposed by AJP is expected to drive revenue growth, increase operating efficiency, accelerate ODM-based product development at lower cost and broaden Sonim's addressable market opportunities.

Peter Liu, who has served as Executive Vice President for Global Operations and Engineering since 2010, has been appointed Chief Executive Officer, effective April 14, 2022. Liu is part of the investment group at AJP and leading the strategic development of Sonim's expanded market focus.

"Sonim's deep relationships with all of the Tier One mobile carriers in North America provide an excellent launching point on which to bring a wider array of 5G semi-rugged and industrial devices to market," said Liu. "We believe Sonim can become the top middle market rugged and industrial device provider in North America, offering a wider range of 5G smartphones, feature phones, mobile hot spots and other industrial communications equipment that incorporate our rugged heritage. Our expanded ODM relationships will at the same time help us accelerate new products, reduce development and manufacturing cost and maximize the value of Sonim's highly regarded brand."

"We remain on track to launch our new feature phone this summer and new 5G smartphone this fall, which will complete the update of Sonim's existing rugged product line. We then plan to rapidly develop an expanded lineup of 5G products that will position Sonim in larger, faster growing semi-rugged and industrial markets where the carriers need additional product solutions for their customers," added Liu.

"I am very excited about this expanded strategy for Sonim as the company enters the growing semi-rugged space and leverages low-cost product development and manufacturing capabilities to accelerate new product introductions," said Bob Tirva, President and Chief Operating Officer. "I have worked closely with Peter over the past two and a half years, and am confident that Sonim's future is in good hands as the company transitions into broader markets ahead."

Board Changes and Special Meeting of Stockholders

The board of directors of Sonim has approved the transaction, which will involve two closings. The first closing, including the purchase of approximately 14.9 million shares of Common Stock for an aggregate purchase price of $12.5 million, is subject to customary closing conditions, including stockholder approval of the transaction at a special meeting of the Company's stockholders. The second closing, for approximately 5.9 million shares of Common Stock for an aggregate purchase price of $5.0 million, is expected to occur on or around August 1, 2022, subject to the occurrence of the first closing. The Company intends to file a Form 8-K with additional details of the transaction.