SCHEDULE 13D/A: Activist Investors Escalate Battle with Sonim Technologies Board Over Director Nominations Amid Steep Stock Decline and Losses

AJP Holding Company and Orbic North America have intensified their dispute with Sonim Technologies, challenging the board's rejection of their director nominations and citing significant stock price depreciation and substantial financial losses.

Summary

• AJP Holding Company, LLC and Orbic North America, LLC, along with their principals, collectively holding 30.7% of Sonim Technologies Inc. common stock, have filed an Amendment No. 6 to their Schedule 13D.
• The filing details a letter sent on April 10, 2025, to Sonim's Board of Directors, formally objecting to the board's rejection of their March 20, 2025, director nomination proposal.
• Sonim's board purportedly rejected the nominations due to an alleged omission of specific experience, qualifications, attributes, or skills of the nominees, as required by Item 401(e) of Regulation S-K.
• The Reporting Persons assert that the rejection is 'wrong' and a 'disingenuous attempt by the Sonim board to entrench itself in violation of its duties,' stating their nomination notice provided extensive detail on nominees' qualifications.
• They highlight the qualifications of their proposed nominees: Douglas Benedict (strategic/financial advisory, M&A in tech), Joseph Glynn (long-term Qualcomm officer, tech/telecom director), Gregory Johnson (officer/advisor in digital finance), Surendra Singh (senior tech roles, Microsoft, AI), and Michael Wallace (Qualcomm officer, communications network director).
• The Reporting Persons cite Delaware legal precedents, arguing that advance notice bylaws should not be 'weaponized' to frustrate legitimate stockholder action or act as 'tripwires'.
• They point to Sonim's recent financial and stock performance as context for their challenge, including a 37.4% stock price decline from $2.14 on March 31, 2025, to $1.34 on April 9, 2025.
• The April 9, 2025, stock price of $1.34 is 66.5% less than the $4.00 acquisition proposal made by AJP/Orbic on March 31, 2025.
• Sonim's common stock has experienced a 98.4% decline over the past five years, according to Yahoo Finance.
• The company announced staggering annual losses of $(33.6 million) or $(7.13) per share on March 31, 2025.
• The Reporting Persons also note Sonim's April 2, 2025, decision to more than double change of control severance payments to Mr. Liu, from six months of salary to 150% of 12 months salary.
• AJP and Orbic aim to restore Sonim to 'stability, profitability and stockholder value creation' by replacing the current Board of Directors with their nominees.
• They intend to pursue all available rights if the board continues to maintain its position on the nomination rejection.

Sentiment

Score: 2

Explanation: The document conveys a highly negative sentiment from the Reporting Persons towards Sonim Technologies' current management and board, citing severe financial underperformance, stock price collapse, and alleged corporate governance failures and entrenchment tactics. The tone is confrontational and critical.

Positives

• The Reporting Persons have proposed a slate of five highly qualified individuals with extensive experience in technology, finance, M&A, and operations, aiming to improve Sonim's performance.
• The Reporting Persons have a clear strategic vision to maximize stockholder value through an 'arms length strategic process' with Orbic, focusing on operational and financial synergies across manufacturing, R&D, supply chains, and global market expansion.

Negatives

• Sonim Technologies' common stock experienced a 37.4% decline from $2.14 on March 31, 2025, to $1.34 on April 9, 2025.
• The current stock price of $1.34 on April 9, 2025, is 66.5% lower than the $4.00 acquisition proposal made by AJP/Orbic on March 31, 2025.
• Sonim's stock price has seen a precipitous 98.4% decline over the past five years.
• The company reported staggering annual losses of $(33.6 million) or $(7.13) per share on March 31, 2025.
• The Sonim board is accused by the Reporting Persons of attempting to entrench itself by improperly rejecting valid director nominations.
• The board's decision to more than double change of control severance payments to Mr. Liu (from 6 months to 150% of 12 months salary) on April 2, 2025, is highlighted as a negative action.

Risks

• The ongoing dispute between a significant shareholder group (AJP/Orbic) and Sonim's Board of Directors creates corporate governance instability.
• The board's alleged entrenchment efforts could lead to prolonged legal battles and proxy contests, diverting management attention and resources.
• Continued stock price decline and significant financial losses pose a risk to shareholder value.
• The rejection of director nominations could prevent the company from benefiting from new perspectives and expertise that the activist investors believe are necessary for a turnaround.
• The company's financial performance, including substantial losses and long-term stock depreciation, indicates significant operational and strategic challenges.

Future Outlook

The Reporting Persons intend to pursue all rights to challenge the board's rejection of their nominations, potentially leading to a proxy solicitation to replace the Board of Directors. Their goal is to restore Sonim to stability, profitability, and stockholder value creation, including exploring strategic synergies with Orbic North America across various operational and market expansion areas.

Management Comments

• "This position is wrong and reflects a disingenuous attempt by the Sonim board to entrench itself in violation of its duties."
• "The nomination notice provides extensive detail as to the experience and qualifications of the nominees, including employment details and relevant experience going back 20 or more years for most candidates. The notice plainly sets forth the experience and qualifications of our nominees which formed the basis for the nominations. Nothing more is required."
• "AJP and Orbic strongly believe that AJP's proposed five Candidates will be in the stockholders', the Company's, its employees' and its customers' best interests."
• "AJP and Orbic believe that the slate of five highly qualified individuals will assist the Company in realizing its potential and maximizing value for all stockholders."
• "These Candidates were chosen through a comprehensive evaluation process to identify professionals with complementary backgrounds and experiences related to improving operations, R&D, manufacturing, supply chain strategy, finance, sales, vendor and customer management and strategy and corporate development in the context of the opportunities that are available and offered by an association and cross shareholding with Orbic."
• "We strongly encourage you to reconsider your position on this matter and to revoke immediately your purported rejection of our nomination notice."
• "We ask that you immediately stop your entrenchment efforts that strike us as benefitting the Sonim management team and aligned members of the Board of Directors at the expense of your—and our fellow—stockholders and permit your stockholders to make the decision as to which slate of Board nominees is best suited to lead Sonim."
• "If you continue to maintain your spurious position, we intend to pursue all rights, and waive none."

Industry Context

This document highlights a significant corporate governance dispute within the technology and telecommunications sector, specifically involving a company (Sonim Technologies) that has experienced severe financial underperformance and stock depreciation. The activist investor's push for board change and strategic realignment, including potential synergies with another company (Orbic North America), reflects a broader trend of shareholder activism targeting underperforming companies in mature or competitive tech segments.

Comparison to Industry Standards

• The Reporting Persons cite Delaware legal precedents, such as *BlackRock Credit Allocation Income Tr. v. Saba Cap. Master Fund, Ltd.* (224 A.3d 964, 980 (Del. 2020)), *Allen v. Prime Computer, Inc.* (540 A.2d 417, 420 (Del. 1988)), and *Kellner v. AIM ImmunoTech Inc.* (320 A.3d 239, 265 (Del. 2024)), to argue that advance notice bylaws should not be used by boards to 'weaponize' provisions or act as 'tripwires' to frustrate legitimate stockholder action, setting a standard for proper corporate governance and shareholder electoral rights.

Corporate Governance

Legal Proceedings

• The Reporting Persons state their intent to 'pursue all rights' if the Sonim board continues to reject their nomination notice, implying potential legal action or a proxy contest to enforce their shareholder rights.

Stakeholder Impact

• **Shareholders**: Directly impacted by the ongoing corporate governance dispute, potential proxy contest, and the significant decline in stock value. The outcome of the dispute will determine future leadership and strategic direction, potentially affecting long-term value creation.
• **Employees**: Potential impact from strategic changes, operational restructuring, or changes in management if the activist investors succeed in replacing the board. The increased severance for Mr. Liu might signal instability.
• **Customers and Suppliers**: Potential impact from changes in company strategy, product development, or supply chain management if new leadership is installed and implements its vision for synergies with Orbic.

Next Steps

• The Reporting Persons intend to pursue all rights, including potentially a proxy solicitation, to challenge the board's rejection of their nomination notice.
• They urge the Sonim board to reconsider its position and revoke the rejection of the nomination notice immediately.
• The Reporting Persons propose discussions with the Nominating and Governance Committee regarding their nominees and ideas for maximizing stockholder value through a strategic process with Orbic.

Key Dates

Recommendation

Keywords

Sonim Technologies, AJP Holding Company, Orbic North America, Schedule 13D, SEC filing, Director nominations, Corporate governance, Shareholder activism, Proxy contest, Stock price decline, Financial losses, Board entrenchment, Regulation S-K, Delaware law, Acquisition proposal