UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to Under §240.14a-12

Sonim Technologies, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)

Payment of Filing Fee (Check the appropriate box)all boxes that apply):

No fee required.required

Fee paid previously with preliminary materials

Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

 

 

 


PRELIMINARY PROXY – SUBJECT TO COMPLETION

SONIM TECHNOLOGIES, INC.

6836 Bee Cave Road

Building 1, Suite 279

Austin, TX 78746

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On September 29, 2020

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of Sonim Technologies, Inc., a Delaware corporation (the “Company”). The meeting will be held on Tuesday, September 29, 2020 at 9:00 a.m. local time at 6836 Bee Cave Road, Building 1, Suite 279, Austin, TX 78746 for the following purposes:

1.    To elect the seven nominees for director named herein to serve until the next annual meeting and their successors are duly elected and qualified;

2.    To approve the Company’s 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,000,000 shares (on a pre-reverse stock split basis);

3.    To approve an amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock pursuant to which any whole number of outstanding shares between and including 2 and 12 shares would be combined, converted and changed into one share of common stock, with the final exchange ratio to be determined by the Board of Directors in its discretion;

4.    To ratify the selection by the Audit Committee of the Board of Directors of Moss Adams as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020; and

5.    To conduct any other business properly brought before the meeting.

These items of business are more fully described in the Proxy Statement accompanying this Notice.

The record date for the Annual Meeting is August 14, 2020. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held

on September 29, 2020 at 9:00 a.m. at 6836 Bee Cave Road, Building 1, Ste. 279, Austin, TX 78746.

The Proxy Statement and annual report to stockholders

are available at www.sonimtech.com under Investor Relations.

By Order of the Board of Directors

Robert Tirva

Secretary

Austin, Texas

August     , 2020

You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) has been provided for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.


SONIM TECHNOLOGIES, INC.

6836 Bee Cave Road

Building 1, Suite 279

Austin, TX 78746

PROXY STATEMENT

SONIM TECHNOLOGIES, INC.

6500 River Place Blvd.

Building 7, Suite 250

Austin, TX 78730

NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS

To Be Held On                 , 2022

                , 2022

Dear Stockholder,

You are cordially invited to attend a special meeting of stockholders of Sonim Technologies, Inc., a Delaware corporation (the “Company”). The meeting will be held on                 , 2022 at 9:00 a.m. local time at 1875 South Grant Street, Suite 770, San Mateo, California 94402, and any adjournments of the special meeting (which we refer to as the “special meeting”). This proxy statement and the enclosed proxy card are furnished in connection with the solicitation of proxies by the Board of Directors (which we refer to as the “board of directors” or “board”) of the Company for use at the special meeting of the Company’s stockholders.

At the special meeting, you will be asked to consider and vote upon the following proposals: (i) to approve the transactions contemplated by the Subscription Agreement, dated April 13, 2022 (which we refer to as the “Subscription Agreement”) by and between the Company and AJP Holding Company, LLC, a Delaware limited liability company (the “Purchaser” or “AJP Holding”), pursuant to which Purchaser has agreed to purchase from the Company an aggregate of 20,833,333 shares of the Company’s common stock (which we refer to as the “Purchased Shares”) for an purchase price of $17,500,000 (which we refer to as the “Aggregate Consideration”) in two (2) tranches: (a) 14,880,952 shares of the Company’s common stock (which we refer to as the “initial shares”) will be issued in consideration for a purchase price of $12,500,000 (which we refer to as the “first purchase price”) (which we refer to as the “first closing”) and (b) subject to the occurrence of the first closing, on August 1, 2022 (except that if the first closing has not occurred by August 1, 2022, the second closing will take place no later than the fifth business day following the date of the first closing) or such other date as agreed by the Company and the Purchaser, 5,952,381 shares of the Company’s common stock (which we refer to as the “remaining shares”) will be issued in consideration for a purchase price of $5,000,000 (which we refer to as the “second purchase price) (which we refer to as the “second closing”) (collectively, which we refer to as the “Transaction Proposal”) and such transactions requires stockholder approval under Nasdaq Listing Rule 5635(b), (ii) to approve an amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock pursuant to which any whole number of outstanding shares between and including two (2) and fifteen (15) shares would be combined, converted and changed into one (1) share of common stock, with the final exchange ratio to be determined by our board of directors in its discretion (the “Reverse Stock Split Proposal”), (iii) to approve an amendment to the Company’s Certificate of Incorporation, as amended, to include a restriction on certain transactions with the Purchaser or its affiliates (the “Charter Restriction Proposal”) and (iv) a proposal to adjourn the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal.

After careful consideration, our board of directors has unanimously determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders and adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby. Accordingly, the board of directors of the Company unanimously recommends that our stockholders vote “FOR” the approval of the Transaction Proposal; “FOR” the Reverse Stock Split Proposal; “FOR” the Charter Restriction Proposal; and “FOR” the adjournment of the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal.

The accompanying proxy statement provides detailed information about the special meeting, the Subscription Agreement, the Reverse Stock Split Proposal and the Charter Restriction Proposal. A copy of the Subscription Agreement is attached as Annex A to the proxy statement. A copy of the proposed amendments to the Company’s Certificate of Incorporation are attached hereto as Annex C to the proxy statement. The proxy statement also describes the actions and determinations of the board of directors in connection with its evaluation of the Subscription Agreement and the transactions contemplated thereby. We encourage you to read the proxy


statement and its annexes, including the Subscription Agreement, carefully and in their entirety. The accompanying proxy statement is dated                 , 2022, and is first being mailed to stockholders on or about                 , 2022.

Whether or not you plan to attend the special meeting in person, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid envelope or grant your proxy electronically over the Internet or by telephone. If you hold your shares in street name, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee. Your broker, bank or other nominee cannot vote on certain of the proposals at the special meeting, including the Transaction Proposal, without your instructions.

Your vote is very important. The transactions contemplated by the Subscription Agreement cannot be completed unless the Transaction Proposal is approved by the affirmative vote of the holders of a majority of the votes cast by the stockholders present in person or by proxy at the special meeting and entitled to vote thereon, provided a quorum is present. Therefore, please submit your proxy or voting instruction form as soon as possible to ensure your shares are represented and voted at the special meeting. The Reverse Stock Split Proposal is not contingent upon the approval of the Transaction Proposal and the reverse stock split thereunder may be effected in the event the Transaction Proposal is not approved. The Charter Restriction Proposal is not contingent upon the approval of the Transaction Proposal and the charter amendment thereunder may be effected in the event the Transaction Proposal is not approved.

These items of business are more fully described in the Proxy Statement accompanying this Notice.

The record date for the special meeting is                 , 2022. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held on                 , 2022 at 9:00 a.m. at 1875 South Grant Street, Suite 770, San Mateo, California 94402.

The Proxy Statement and annual report to stockholders are available at www.sonimtech.com under Investor Relations.

If you have any questions or need assistance voting your shares, please contact our proxy solicitor:

Kingsdale Advisors

745 Fifth Avenue, 5th Floor

New York, NY 10151

North American Toll Free Phone: 1-888-518-6812

Call Collect Outside North America: 416-867-2272

Email: contactus@kingsdaleadvisors.com

By Order of the Board of Directors

LOGO

Robert Tirva

Secretary

Austin, Texas

                , 2022

You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy, or vote over the telephone or the Internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) has been provided for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.


SONIM TECHNOLOGIES, INC.

6500 River Place Blvd.

Building 7, Suite 250

Austin, TX 78730

PROXY STATEMENT

FOR THE 2020 ANNUALSPECIAL MEETING OF STOCKHOLDERS

September 29, 2020                , 2022

MEETING AGENDA

 

Proposals

  Page 

Voting Standard

 

Board
Recommendation

Election of DirectorsApprove the Subscription Agreement and the transactions contemplated thereby

  722 

Plurality of the votesAffirmative vote of the holders of sharesa majority of the votes cast by the stockholders present in person or represented by proxy at the special meeting and entitled to vote on the election of directors

For each director nominee

Amendment of the 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the 2019 Equity Incentive Plan

17

Majority of sharesthereon, provided a quorum is present in person or represented by proxy and entitled to vote on the matter

 For

Adopt the Amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock

  2970 

Majority of outstanding shares entitled to vote on the matter

 For

Ratification ofAdopt the selection of Moss Adams asAmendment to the Company’s independent registered public accounting firm for fiscal year ending December 31, 2020Certificate of Incorporation, as amended, to include a restriction on certain transactions with the Purchaser or its affiliates

  3778

Majority of outstanding shares entitled to vote on the matter

For

Vote on Adjournment

79 

Majority of shares present in person or represented by proxy and entitled to vote on the matter, irrespective of whether the quorum is present

 For


TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTINGSUMMARY

   1 

Proposal 1 Election of DirectorsParties to the Transaction

   71 

The Special Meeting

1

INFORMATION REGARDINGThe Transaction

4

Financing of the Transaction

5

Interests of Certain Persons in the Transaction

5

Material U.S. Federal Income Tax Consequences of the Transaction

5

Regulatory Approvals

6

QUESTIONS AND ANSWERS ABOUT THE BOARD OF DIRECTORSSPECIAL MEETING AND CORPORATE GOVERNANCETHE TRANSACTION

   10 

Independence of The Board of Directors

10

Board Leadership Structure

10

Role of the Board in Risk Oversight

10

Meetings of The Board of Directors

11

Information Regarding Committees of the Board of Directors

11

Audit Committee

12

Compensation Committee

13

Nominating and Corporate Governance Committee

15

Shareholder Communications With The Board Of Directors

15

Code of Ethics

16

Corporate Governance Guidelines

16

Proposal 2 Approval of 2019 Equity Incentive Plan, As AmendedCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

   17 

PARTIES TO THE TRANSACTION

18

THE SPECIAL MEETING

19

Date, Time and Place of the Special Meeting

19

Purpose of the Special Meeting

19

Deadline for Voting

19

Revocation of Proxies

19

Voting by the Company’s Directors and Executive Officers

20

Solicitation of Proxies; Payment of Solicitation Expenses

20

Householding

20

Adjournments and Postponements

21

Anticipated Date of Completion of the Transaction

21

Questions and Additional Information

21

PROPOSAL 1: APPROVAL OF THE ISSUANCE OF COMMON STOCK CONTEMPLATED BY THE SUBSCRIPTION AGREEMENT

22

THE TRANSACTION

22

Transaction Consideration

22

Description of the Common Stock

22

Background of the Transaction

22

Reasons for the Transaction; Recommendation of the Board

38

Certain Company Forecasts

42

Opinion of B. Riley Securities, Inc.

45

Financing of the Transaction

50

Closing of the Transaction

51

Interests of Certain Persons in the Transaction

51

Indemnification and Insurance

51

THE SUBSCRIPTION AGREEMENT

52

Explanatory Note Regarding the Subscription Agreement

52

Directors and Officers

52

Closing of the Transaction

52

Representations and Warranties

53

Conduct of Our Business Pending the Transaction

55

No Solicitation of Acquisition Proposals; Board Recommendation Changes

58

Stockholders Meeting

61

Filings; Other Actions

62

Employment and Severance Agreements

62

Golden Parachute Compensation

63

Other Covenants and Agreements

64

Conditions to the Transaction

64

Termination

65

Termination Fee & Reimbursement Obligation

66

Directors’ and Officers’ Indemnification and Insurance

67


Proposal 3 ApprovalUse of Proceeds

68

Expenses

68

Specific Performance

68

Amendments

68

Governing Law

68

No Appraisal Rights

68

Required Vote

69

PROPOSAL 2: AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED TO EFFECT A REVERSE STOCK SPLIT

70

Background

70

Reasons for the Reverse Stock Split

71

Board Discretion to Implement the Reverse Stock Split

72

Discretionary Authority of the Board to Abandon Reverse Stock Split

72

Criteria to be Used for Decision to Effect a Reverse Stock Split

   2972 

Proposal 4 RatificationEffects of Selection of Independent Registered Public Accounting Firmthe Reverse Stock Split

   3773 

Certain Risks and Potential Disadvantages Associated with the Reverse Stock Split

74

Effective Time

75

Cash Payment In Lieu of Fractional Shares

75

Exchange of Stock Certificates

75

No Appraisal Rights

75

Certain Material Federal Income Tax Consequences of the Reverse Stock Split to U.S. Holders

76

Required Vote

77

PROPOSAL 3: AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED TO INCLUDE A MAJORITY OF THE MINORITY VOTE FOR TAKE PRIVATE TRANSACTIONS BY AJP HOLDING

78

Background

78

Purpose and Effect of Amendment

78

Required Vote

78

PROPOSAL 4: VOTE ON ADJOURNMENT

79

Required Vote

79

MARKET PRICE OF COMMON STOCK

80

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   3981 

Delinquent Section 16(a) ReportsWHERE YOU CAN FIND MORE INFORMATION

   4083 

EXECUTIVE COMPENSATIONOTHER INFORMATION

   4183 

Executive OfficersINCORPORATION OF CERTAIN INFORMATION BY REFERENCE

   4183 

Summary Compensation TableAnnex A

  41

Outstanding Equity Awards at Fiscal year end

43

Director Compensation

49

TRANSACTIONS WITH RELATED PERSONS AND INDEMNIFICATION

51

Related-Person Transactions PolicySubscription Agreement, dated April  13, 2022, by and Procedures

51

Certain Related-Person Transactions

51

Indemnification

53

HOUSEHOLDING OF PROXY MATERIALS

54

OTHER MATTERS

55

Appendix Aamong Sonim Technologies, Inc. and AJP Holding Company, LLC

   A-1 

Annex B

Appendix BOpinion of B. Riley Securities, Inc., dated as of April 13, 2022

   B-1 

Annex C

Certificates of Amendment to Certificate of Incorporation of the Company

C-1 & C-3


QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTINGSUMMARY

Why am I receiving these materials?This summary, together with the following section entitled “Questions and Answers About The Special Meeting and The Transaction,” highlights selected information in this proxy statement and does not contain all of the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes, and the documents referred to or incorporated by reference in this proxy statement for a more complete understanding of the matters being considered at the special meeting. Each item in this summary includes a page reference directing you to a more complete description of that topic. This proxy statement is dated                 , 2022, and is first being mailed to our stockholders of record on or about                 , 2022.

We have sent you theseIn this proxy materials becausestatement, the Board of Directors ofterms “Sonim,” the “Company,” “we,” “us” and “our” refer to Sonim Technologies, Inc. (sometimes referredand, where appropriate, its subsidiaries. We refer to AJP Holding Company, LLC as the “Company”“Purchaser” or Sonim) is soliciting your proxy to vote at the 2020 Annual Meeting of Stockholders, including at any adjournments or postponements of the meeting. You are invited to attend the annual meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or through the internet.

We intend to mail these proxy materials on or about August 25, 2020 to all stockholders of record entitled to vote at the annual meeting.

How do I attend the annual meeting?

The meeting will be held on Tuesday, September 29, 2020 at 9:00 a.m. local time in Austin, Texas. Directions“AJP Holding.” All references to the annual meeting may be found at www.sonimtech.com under Investor Relations. Information on how“transaction” refer to votethe investment by AJP Holding in person at the annual meeting is discussed below.

Who can vote at the annual meeting?

Only stockholders of record at the close of business on August 14, 2020 will be entitled to vote at the annual meeting. On this record date, there wereCompany in exchange for shares of common stock outstandingof the Company and entitledall references to vote.

Stockholderthe “Subscription Agreement” refer to the Subscription Agreement, dated April 13, 2022, as it may be amended from time to time, by and between the Company and AJP Holding, a copy of Record: Shares Registered in Your Namewhich is included as Annex A to this proxy statement. ”

IfParties to the Transaction (Page 18)

Sonim Technologies, Inc., a Delaware corporation, is a leading U.S. provider of ultra-rugged mobile phones and accessories designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. The Company currently sells its ruggedized mobile phones and accessories to three of the four largest wireless carriers in the United States—AT&T, Sprint and Verizon—as well as the three largest wireless carriers in Canada—Bell, Rogers and Telus Mobility. The Company’s phones and accessories connect workers with voice, data and workflow applications in two end markets: industrial enterprise and public sector. The Company’s principal executive offices are located at 6500 River Place Boulevard, Bldg. 7, Suite 250, Austin, TX, 78730.

The Company’s common stock (which we refer to as our “common stock”) is listed on August 14, 2020, your shares were registered directly in your name with Sonim’s transfer agent, Americanthe Nasdaq Stock Transfer & TrustMarket LLC (which we refer to as “Nasdaq”), under the symbol “SONM.” Additional information about the Company LLC, then you are a stockholder of record. As a stockholder of record, you may vote in personcan be found at the meetingwww.sonimtech.com. The information provided on or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card, vote by proxy over the telephone, or vote by proxyaccessible through the internetCompany’s website is not a part of or incorporated by reference in this proxy statement or any other report or document we file with or furnish to ensure your votethe Securities and Exchange Commission (which we refer to as the “SEC”).

AJP Holding Company, LLC, a Delaware limited liability company, is counted.

Beneficial Owner: Shares Registered ina newly-created holding company formed specifically for the Namecontemplated transaction solely for the purpose of a Broker or Bank

If on August 14, 2020, your shares were held not in your name, but rather in an account at a brokerage firm, bank or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct your broker, bank or other agent regarding how to vote the shares in your account. You are also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker, bank or other agent.

What am I voting on?

There are four matters scheduled for a vote:

Election of seven directors (Proposal 1);

Approvalownership of the Company’s 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorizedof the Company.

The Special Meeting (Page 19)

Date, Time and Place of the Special Meeting (Page 19)

This proxy statement is being furnished to our stockholders of record as part of the solicitation of proxies by the Board for issuance underuse at the plan by 3,000,000 shares (on a pre-reverse stock split basis) (Proposal 2);special meeting to be held on                 ,                 , 2022 at 9:00 am, local time, at 1875 South Grant Street, Suite 770, San Mateo, California 94402, or at any adjournment or postponement thereof.

ApprovalThe Purpose of the Special Meeting (Page 19)

At the special meeting, holders of our common stock will be asked to vote on the (i) proposal to approve the Subscription Agreement and issue the shares to the Purchaser, which will result in the Purchaser owning approximately 52% of the Company (which we refer to as the “Transaction Proposal”) and thus the transaction is subject to stockholder approval pursuant to Nasdaq Listing Rule 5635(b), (ii) the proposal to approve an amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock (Proposal 3);

Ratification of selection by(which we refer to as the Audit Committee of“Reverse Stock Split Proposal”), (iii) the Board of Directors of Moss Adams as independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020 (Proposal 4).

What if another matter is properly brought before the meeting?

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxyproposal to vote on those matters in accordance with their best judgment.

How do I vote?

You may either vote “For” all the nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.

The procedures for voting are fairly simple:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote in person at the annual meeting or, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy through the internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person even if you have already voted by proxy.

To vote in person, come to the annual meeting and we will give you a ballot when you arrive.

To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the annual meeting, we will vote your shares as you direct.

To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. Your telephone vote must be received by 11:59 p.m., Eastern Time on September 28, 2020 to be counted.

To vote through the internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. Your internet vote must be received by 11:59 p.m. Eastern Time on September 28, 2020 to be counted.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a voting instruction form with these proxy materials from that organization rather than from Sonim. Simply complete and mail the voting instruction form to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker or bank. To vote in person at the annual meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact that organization to request a proxy form.

Internet proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you own as of August 14, 2020.

If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens?

If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or in person at the annual meeting, your shares will not be voted.

If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all seven nominees for director, “For” the amendment of the 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the 2019 Equity Incentive Plan, as amended, by 3,000,000 shares on a pre-reverse stock split basis, “For” the approval ofapprove an amendment to the Company’s Certificate of Incorporation, as amended, to effectinclude a reverse stock splitrestriction on certain transactions with the Purchaser or its affiliates (which we refer to as the “Charter Restriction Proposal”) and (iv) the proposal to approve a proposal to adjourn the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal (which we refer to as the “Adjournment Proposal”).

The Board has unanimously determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby and recommends that our stockholders vote “FOR” the approval of the Transaction Proposal; “FOR” the Reverse Stock Split Proposal; “FOR” the Charter Restriction Proposal; and “FOR” the adjournment of the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal.

Record Date, Notice and Quorum

You are entitled to receive notice of, and to vote at, the special meeting if you held shares of our common stock and “For”at the Ratificationclose of business on                 , 2022, which the Board has set as the record date for the special meeting. As of the selectionclose of Moss Adams asbusiness on the Company’s independent registered public accounting firm for fiscal year ending December 31, 2020. If any other matter is properly presentedrecord date, there were                  shares of our common stock outstanding. The presence at the special meeting, your proxyholder (onein person or represented by proxy, of the individuals named on your proxy card)holders of one-third of our common stock issued and outstanding and entitled to vote at the special meeting constitutes a quorum for the transaction of business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to solicit additional proxies as permitted by our Amended and Restated Bylaws (which we refer to as our “bylaws”). Abstentions will count as present and entitled to vote for purposes of determining the existence of a quorum. If you hold your shares using his or her best judgment.

If I am a beneficial owner of shares heldcommon stock in street name and I do not provide my broker or bank with voting instructions, what happens?

If you are a beneficial owner of shares held in street name and you do notfail to instruct your broker, bank or other agentnominee how to vote your shares at the special meeting, your shares will be counted for purposes of determining the existence of a quorum.

Vote Required

Each holder of our common stock is entitled to one vote for each share of our common stock held on the record date.

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the votes cast by the stockholders present in person or represented by proxy at the special meeting and entitled to vote thereon. If you do not provide voting instructions with respect to your shares of common stock, your shares will not be voted on any “non-routine” proposals. This vote is called a “broker non-vote.” The Transaction Proposal is a “non-routine” proposal. Abstentions or a broker non-vote will have no impact on the outcome of the vote on the Transaction Proposal.

Approval of the Reverse Stock Split Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. Abstentions will have the same effect as a vote “AGAINST” the Reverse Stock Split Proposal. If you hold your shares in “street name” (that is, your shares are held in an account at and registered in the name of a brokerage firm, bank, broker-dealer or similar organization), your broker or other organization may vote your shares under limited circumstances if you do not provide voting instructions before the special meeting. These circumstances include voting your shares on so-called “routine matters.” The Reverse Stock Split Proposal is a “routine” matter.

Approval of the Charter Restriction Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. If you do not provide voting instructions with respect to your shares of common stock, your shares will not be voted on any “non-routine” proposals. This vote is called a “broker non-vote.” The Transaction Proposal is a “non-routine” proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the Charter Restriction Proposal.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and entitled to vote on the matter, irrespective of whether a quorum is present. Abstentions will have no impact on the outcome of the vote on the Adjournment Proposal. If you hold your shares in “street name” (that is, your shares are held in an account at and registered in the name of a brokerage firm, bank, broker-dealer or similar organization), your broker or other organization may vote your shares under limited circumstances if you do not provide voting instructions before the special meeting. These circumstances include voting your shares on so-called “routine matters.” The Adjournment Proposal is a “routine” matter.

As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate,                  (                %) shares of our common stock (not including any shares of our common stock deliverable upon exercise or conversion of or underlying any options or the Company restricted stock unit awards). The directors have informed the Company that they currently intend to vote all such shares of our common stock “FOR” the approval of the Transaction Proposal; “FOR” the Reverse Stock Split Proposal; “FOR” the Charter Restriction Proposal; and “FOR” the adjournment of the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal.

How to Vote Your Shares

If you are a stockholder of record, you may cause your shares to be voted by using one of the following methods:

in person at the special meeting;

via the Internet, at the Internet address provided on the proxy card;

by telephone, by using the toll-free number listed on the proxy card; or

by mail, by completing, signing and dating the enclosed proxy card and returning it in the accompanying prepaid envelope.

If you hold your shares in street name, you will receive instructions from the broker, bank or other nominee that holds your shares as to how to vote your shares at the special meeting. If you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:

delivering a later dated proxy card or by submitting another proxy by telephone or the Internet (your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of the Company a written notice of revocation prior to the voting of the proxy at the special meeting; or

by voting in person at the special meeting. Attendance at the special meeting will not, by itself, revoke your proxy.

The Transaction (Page 22)

The Subscription Agreement provides that, subject to the satisfaction or waiver of the conditions set forth therein, AJP Holding will acquire the Purchased Shares. Holders of common stock of the Company will not receive any proceeds in the transaction.

Our common stock is listed on Nasdaq, and, as such, we are subject to the Nasdaq Listing Rules, including Nasdaq Listing Rule 5635. In order to comply with the Nasdaq Listing Rules and to satisfy conditions under the Subscription Agreement, we are seeking stockholder approval of this Proposal No. 1. Nasdaq Listing Rule 5635(b) requires stockholder approval for issuance of securities that will result in a “change of control” of the issuer. Nasdaq may deem a change of control to occur when, as a result of an issuance, an investor or a group would own, or have the right to acquire, 20% or more of the outstanding shares of common stock or voting power and such ownership or voting power of an issuer would be the largest ownership position of the issuer. The Board is not seeking the approval of our stockholders to authorize our entry into the Subscription Agreement. The Subscription Agreement has already been executed and delivered. We seek your approval of this proposal in order to satisfy the requirements of Nasdaq Listing Rule 5635 with respect to the issuance of the common stock to the Purchaser in a “change of control” transaction.

Transaction Consideration (Page 22)

In the transaction, AJP Holding will acquire each share of our common stock for $0.84 for an aggregate purchase price of $17,500,000 (which we refer to as the “Aggregate Consideration”).

Reasons for the Transaction; Recommendation of the Board (Page 38)

After careful consideration of various factors as described in the section entitled “The Transaction—Reasons for the Transaction; Recommendation of the Board” beginning on page 38, the Board unanimously determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, and adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby. The Board unanimously resolved, subject to certain provisions of the Subscription Agreement, to recommend that the Company’s stockholders adopt the Subscription Agreement (which we refer to as the “Board recommendation”), all upon the terms and subject to the conditions set forth therein. The Board consulted with the Company’s outside financial and legal advisors and senior management and considered a number of factors that the Board believes support its decision.

In considering the recommendation of the Board with respect to the Transaction Proposal, you should be aware that our directors and executive officers may have interests in the transaction that may be different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction agreement, and in recommending that the transaction agreement be adopted by the stockholders of the Company. See “The Transaction—Interests of Certain Persons in the Transaction” beginning on page 51.

The Board has unanimously determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby and recommends that you vote “FOR” approval of the Transaction Proposal.

Opinion of B. Riley Securities, Inc. (Page 45)

The Company engaged B. Riley Securities, Inc. (which we refer to as “B. Riley”) to provide financial advice in connection with the proposed transaction based on B. Riley’s qualifications, expertise, reputation and knowledge of the Company’s business and the industry in which the Company operates. At the meeting of the Board on

April 13, 2022, B. Riley delivered to the Board its oral opinion, subsequently confirmed in writing, to the effect that, as of April 13, 2022 and based upon and subject to the various assumptions, qualifications, limitations and other matters set forth therein, the transaction consideration to be received by the holders of shares of common stock pursuant to, and in accordance with, the terms of the Subscription Agreement was fair, from a financial point of view, to such holders.

The full text of the opinion of B. Riley, dated as of April 13, 2022, is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by B. Riley in rendering its opinion. You should read the opinion carefully in its entirety.

B. Riley’s opinion was provided to the Board and addressed only, as of the date of the opinion, the fairness, from a financial point of view, of the transaction consideration to be received by the holders of shares of common stock pursuant to, and in accordance with, the terms of the Subscription Agreement to such holders. It does not address any other aspect of the transaction. It does not constitute a recommendation to any Company stockholder as to how to vote with respect to the transaction or any other matter and does not in any manner address the prices at which the shares of common stock will trade at any time.

Financing of the Transaction (Page 50)

AJP Holding expects to fund amounts needed to acquire the Company under the Subscription Agreement through cash on hand at the closings. The Company and AJP Holding’s obligations under the Subscription Agreement are not subject to, or conditioned on, the receipt or availability of any funds or financing.

Interests of Certain Persons in the Transaction (Page 51)

In considering the recommendation of the Board that you vote to approve the Transaction Proposal, you should be aware that the Company’s directors and executive officers may have interests in the transaction that may be different from, in conflict with or in addition to, those of the Company stockholders generally. Members of the Board were aware of and considered these interests, at the time, among other matters, in evaluating and negotiating the Subscription Agreement and the transaction, approving the Subscription Agreement and in recommending to the Company stockholders that the Subscription Agreement be adopted. For more information, see the section entitled “The Transaction—Interests of Certain Persons in the Transaction” beginning on page 51.

For more information, see the sections entitled “The Transaction—Background of the Transaction” beginning on page 22 and “The Transaction—Reasons for the Transaction; Recommendation of the Board” beginning on page 38.

Material U.S. Federal Income Tax Consequences of the Transaction

The following discussion is a summary of U.S. federal income tax considerations relating to the issuance of Company common stock pursuant to the transaction. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, administrative pronouncements and judicial decisions, all in effect as of the date of this Proxy Statement and all subject to change, possibly with retroactive effect. This summary does not address consequences of the transaction under state, local and foreign tax laws.

For U.S. federal income tax purposes, the issuance of Company common stock will not result in taxable income or gain for the Company, for its subsidiaries or for stockholders that own common stock of the Company prior to the transaction.

As a result of the issuance of Company common stock, the Company and its U.S. subsidiaries (collectively, the “U.S. Subsidiaries”) will undergo an “ownership change” within the meaning of Sections 382 and 383 of the Code. In general terms, an “ownership change” with respect to a corporation occurs if the stock ownership in the corporation of one or more five-percent or greater shareholders increases by more than fifty (50) percentage points over a period of three (3) years or less. Sections 382 and 383 of the Code impose limitations on a corporation’s ability to utilize its net operating loss carryforwards (“U.S. NOLs”), capital loss carryovers and tax credits if the corporation (a “Loss Corporation”) experiences an “ownership change.” Generally the amount of otherwise available pre-ownership-change NOLs and other affected tax attributes of a Loss Corporation that can be used by the Loss Corporation in any single post-ownership-change tax year is limited to the fair market value of the Loss Corporation at the time of the ownership change, multiplied by the applicable long-term tax-exempt bond rate (which is 2.01% for ownership changes in May 2022). As of December 31, 2021, the Company and its U.S. Subsidiaries had approximately $89,245,000 of U.S. NOLs, $0 U.S. capital loss carryovers and $132,000 of U.S. federal tax credit carryovers. For U.S. tax years ending after the issuance of Company common stock pursuant to the transaction, the annual use of those favorable pre-ownership-change tax attributes will be limited as described above and may result in a portion of the U.S. NOLs and other tax attributes expiring unutilized.

Regulatory Approvals

The Company and AJP Holding have agreed to cooperate and coordinate with each other and, subject to the terms and conditions of the Subscription Agreement, use their respective reasonable best efforts to, among other matters, obtain and maintain all approvals, consents, registrations, permits, authorizations, licenses, waivers and other confirmations required to be obtained from any governmental entity or applicable law that are necessary to consummate the transactions contemplated by the Subscription Agreement.

No Solicitation of Acquisition Proposals; Board Recommendation Changes (Page 58)

Under the terms of the Subscription Agreement, subject to certain exceptions, the Company has agreed not to, directly or indirectly (i) solicit, initiate or knowingly facilitate or encourage the submission of any inquiry, proposal or offer that constitutes, or would reasonably be expected to result in, an acquisition proposal (as defined in the section entitled “The Subscription Agreement—No Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 58), (ii) enter into, continue or participate in any discussions or negotiations with, or furnish any non-public information relating to the Company or any of its subsidiaries to, any third party in connection with an acquisition proposal, (iii) approve, recommend, publicly declare advisable or enter into any agreement in principle, letter of intent, subscription agreement, acquisition agreement, joint venture agreement or other similar agreement relating to an acquisition proposal (other than a confidentiality agreement entered into in accordance with the provisions of the Subscription Agreement (we refer to such a confidentiality agreement as an “acceptable confidentiality agreement”)), or (iv) agree to or propose publicly to do any of the foregoing.

Notwithstanding these restrictions, at any time prior to the time the Subscription Agreement is adopted by our stockholders, subject to the terms and conditions described in the Subscription Agreement, the Company may engage in negotiations or discussions with a third party and its representatives and actual or potential sources of financing and furnish to such persons non-public information relating to the Company or any of its subsidiaries pursuant to an acceptable confidentiality agreement so long as such actions are in response to a written acquisition proposal from any third party that did not result from a breach of the non-solicitation obligations of the Company contained in the Subscription Agreement and that the Board determines in good faith: (i) to be bona fide, (ii) after consultation with its financial advisor and outside legal counsel, constitutes, or would reasonably be expected to result in, a superior proposal (as defined in the section entitled “The Subscription Agreement—No Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 58) or (iii) after consultation with its outside legal counsel, that the failure to take such action would reasonably be expected to result in a breach of the fiduciary duties of the Company’s directors under applicable law.

The Company must notify Purchaser both orally and in writing promptly (but in no event later than twenty-four (24) hours) after receipt of any acquisition proposal, any proposals or inquiries that would reasonably be expected to lead to an acquisition proposal, or any inquiry or request for nonpublic information relating to the Company or its subsidiaries by any person who had made or has expressly indicated that it is contemplating making any acquisition proposal.

The Subscription Agreement provides that (subject to certain exceptions described below) the Board will not (i) fail to make, withdraw or modify in a manner adverse to Purchaser (or publicly propose to withdraw, modify or qualify in any manner adverse to Purchaser) the Board recommendation, (ii) adopt, approve or publicly recommend, endorse or otherwise declare advisable the adoption of an acquisition proposal or (iii) fail to include in this proxy statement the Board recommendation (any of the foregoing, we refer to as an “adverse recommendation change”).

Notwithstanding the foregoing, the Board may make an adverse recommendation change (or terminate the Subscription Agreement as described in the section entitled “The Subscription Agreement—Termination” starting on page 65) in response to an acquisition proposal only so long as (i) such acquisition proposal was not the result of a breach of the non-solicitation obligations of the Company set forth in the Subscription Agreement and such acquisition proposal is not withdrawn, and (ii) the Board determines in good faith, after consultation with its financial advisor and outside legal counsel and after taking into account any revisions to the terms of the Subscription Agreement that may be offered in writing by Purchaser in accordance with the Subscription Agreement (including following the provision of the negotiation period set forth in the Subscription Agreement), (A) that such acquisition proposal constitutes a superior proposal, and (B) that the failure to make an adverse recommendation change would reasonably be expected to result in a breach of its fiduciary duties under applicable law. Further, the Board may make an adverse recommendation change in response to a material fact, event, circumstance, development or change (other than in connection with any acquisition proposal) that occurs, arises or comes to the attention of the Board after the date of the Subscription Agreement that affects the business, assets or operations of the Company and its subsidiaries, that was not known by, or if known, the effect of which was not reasonably foreseeable by, the Board on the date of the Subscription Agreement and the Board determines in good faith, after taking into account any revisions to the terms of the Subscription Agreement that may be offered in writing by Purchaser in accordance with the Subscription Agreement (including following the provision of the negotiation period set forth in the Subscription Agreement) and after consultation with its outside legal counsel and its financial advisors, that the failure to effect an adverse recommendation change would reasonably be expected to result in a breach of its fiduciary duties under applicable law.

Conditions to the Transaction (Page 64)

The respective obligations of the Company and AJP Holding to consummate the transaction are subject to the satisfaction or waiver of certain customary conditions, including the adoption of the Subscription Agreement by our stockholders, the absence of any legal prohibitions to the consummation of the transaction, the accuracy of the representations and warranties of the parties and compliance in all material respects by the parties with their respective obligations under the Subscription Agreement. See “The Subscription Agreement—Conditions to the Transaction” beginning on page 64.

Termination (Page 65)

The Company and Purchaser may, by mutual written agreement, terminate the Subscription Agreement and abandon the transaction at any time prior to the closing of the transaction.

The Subscription Agreement may also be terminated and the transaction abandoned at any time prior to the closing of the transaction, as follows:

by either the Company or Purchaser, if:

the first closing has not been consummated on or before the date that is six (6) months after the date of the Subscription Agreement (which we refer to as the “end date”), as described in the section entitled “The Subscription Agreement—Termination” beginning on page 65;

any order permanently restraining, enjoining or otherwise prohibiting consummation of the transaction has become final and non-appealable, so long as the breach of the terminating party in any material respect is not the primary cause of such governmental restraint; or

stockholder approval of the Transaction Proposal is not obtained at the special meeting (after giving effect to any adjournment or postponement of the special meeting), as described in the section entitled “The Subscription Agreement—Termination” beginning on page 65;

by Purchaser (with certain limitations as set forth in the Subscription Agreement), if:

prior to obtaining stockholder approval of the Transaction Proposal, (i) the Board makes an adverse recommendation change, or (ii) the Company or its representatives willfully and materially violate Section 4.1(a) of the Subscription Agreement; or

there is any inaccuracy of any representation or warranty made by the Company in the Subscription Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Company set forth in the Subscription Agreement and such inaccuracy, breach, violation or failure, if continuing at the first closing, would cause the Company to fail to satisfy the applicable condition to closing of the first closing related to performance of covenants and agreements or accuracy of representations and warranties and that inaccuracy or breach is incapable of being cured by the end date as described in the section entitled “The Subscription Agreement—Termination” beginning on page 65;

by the Company (with certain limitations as set forth in the Subscription Agreement), if:

there is any inaccuracy of any representation or warranty made by Purchaser in the Subscription Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Purchaser set forth in the Subscription Agreement and such inaccuracy or breach would cause Purchaser to fail to satisfy the applicable condition to closing of the transaction related to performance of covenants and agreements or accuracy of representations and warranties and that inaccuracy or breach is incapable of being cured by the end date (collectively, we refer to such termination trigger a “the Company terminating breach”), as described in the section entitled “The Subscription Agreement—Termination” beginning on page 65; or

if the Board authorizes the Company, pursuant to, and in compliance with the applicable terms of the Subscription Agreement, to enter into a definitive agreement concerning a superior proposal; so long as the Company pays a termination fee of $750,000 to the Purchaser and reimburses the Purchaser for up to $350,000 in reasonable, documented and out-of-pocket expenses incurred by the Purchaser in connection with the Subscription Agreement, including but not limited to, reasonable, documented and out-of-pocket legal and advisory fees paid in connection therewith, substantially concurrently with (and as a condition to) such termination (which we refer to as the “superior proposal termination event”).

Termination Fee & Reimbursement Obligation (Page 66)

In certain circumstances, the Company may be required to pay AJP Holding a termination fee of $750,000 (which we refer to as the “termination fee”) if the Subscription Agreement is terminated, as well as reimburse AJP Holding for certain reasonable, documented out-of-pocket expenses up to $350,000 (which we refer to as the “reimbursement obligation”).

The termination fee and reimbursement obligation would be payable in the following circumstances:

Purchaser terminates the Subscription Agreement pursuant to an adverse recommendation change termination event, in which case the Company must pay Purchaser the termination fee and the reimbursement obligation within two (2) business days after such termination; or

The Company terminates the Subscription Agreement pursuant to a superior proposal termination event, in which case the Company must pay Purchaser the termination fee substantially concurrently with (and as a condition to) such termination.

The reimbursement obligation would be payable in the following circumstances:

Either party terminates the Subscription Agreement due to failure to obtain stockholder approval of the Transaction Proposal, in which case the Company must pay the reimbursement obligations to the Purchaser within two (2) business days after such termination

Specific Performance (Page 68)

The Company and AJP Holding have agreed that irreparable damage for which monetary damages, even if available, would not be an adequate remedy that would occur in the event that the parties do not perform their obligations under the Subscription Agreement in accordance with its specified terms or otherwise breach such provisions. The Company and AJP Holding have further agreed that each party is entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of the Subscription Agreement and to enforce specifically the terms and provisions of the Subscription Agreement without proof of damages.

Market Price of Common Stock (Page 80)

The Company’s common stock is listed on Nasdaq under the symbol “SONM.” The closing price of our common stock on Nasdaq on April 12, 2022, the last trading day prior to the public announcement of the execution of the Subscription Agreement, was $0.66 per share. On                 , 2022, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price for our common stock on Nasdaq was $                 per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE TRANSACTION

The following questions and answers are intended to briefly address some commonly asked questions regarding the transaction, the Subscription Agreement and the special meeting. These questions and answers may not address all of the questions that may be important to you as a stockholder of the Company. Please refer to the “Summary” beginning on page 1 and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 83 or “Incorporation of Certain Information By Reference” beginning on page 83.

Q. Why am I receiving this proxy statement?

A.

On April 13, 2022, the Company entered into the Subscription Agreement providing for the transaction with AJP Holding, whereby AJP Holding would purchase 20,833,333 shares of the Company’s common stock for $17,500,000. This proxy statement and the enclosed proxy card are furnished in connection with the solicitation of proxies by the Board of the Company for use at the special meeting of the Company’s stockholders to be held on                 , 2022 at 9:00 am, local time, at the offices of the Company, located at 1875 South Grant Street, Suite 770, San Mateo, California 94402, and at any adjournments of the special meeting. You are receiving this proxy statement in connection with the solicitation of proxies in favor of the Transaction Proposal and to approve the other proposals to be voted on at the special meeting, including at any adjournments or postponements of the special meeting and because you have been identified as a stockholder of the Company as of the close of business on the record date. You are invited to attend the special meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the meeting to vote your shares. See below under “How do I vote?”

Q. What is the proposed transaction and what effects will it have on the Company?

A.

The proposed transaction is the acquisition of 20,833,333 shares of the Company’s common stock by AJP Holding. If the Transaction Proposal is approved by our stockholders and the other closing conditions under the Subscription Agreement have been satisfied or waived, AJP Holding would become a majority owner of the Company.

Q. When and where is the special meeting?

A.

The special meeting of stockholders of the Company will be held on                 , 2022 at 9:00 am, local time, at the offices of the Company, located at 1875 South Grant Street, Suite 770, San Mateo, California 94402.

Q. What am I being asked to vote on at the special meeting?

A.

At the special meeting, holders of our common stock will be asked to consider and vote on the following four proposals:

the Transaction Proposal;

the Reverse Stock Split Proposal;

the Charter Restriction Proposal; and

the Adjournment Proposal.

Q. How does the Board recommend that I vote?

A.

The Board recommends that you vote your shares of our common stock:

“FOR” the approval of the Transaction Proposal;

“FOR” the approval of the Reverse Stock Split Proposal;

“FOR” the approval of the Charter Restriction Proposal; and

“FOR” the approval of the Adjournment Proposal.

For a discussion of the factors that the Board considered in determining to approve the execution and delivery of the Subscription Agreement by the Company and to recommend the approval of the transactions contemplated by the Subscription Agreement, please see the section entitled “The Transaction—Reasons for the Transaction; Recommendation of the Board.” In considering the recommendation of the Board that you vote to approve the Subscription Agreement, you should be aware that the Company’s directors and executive officers may have interests in the transaction that may be different from, or in addition to, those of the Company stockholders generally. For a discussion of these interests, please see the section entitled “The Transaction—Interests of Certain Persons in the Transaction.”

Q. Who is entitled to vote at the special meeting?

A.

All holders of shares of the Company common stock as of the close of business on                 , 2022, the record date, are entitled to vote at the special meeting. Each holder of our common stock is entitled to one vote for each share of our common stock held on the record date. As of the close of business on the record date, there were                  shares of our common stock outstanding.

Q. What is the difference between holding shares as a stockholder of record and in street name as a beneficial owner?

A.

Our stockholders may hold their shares of our common stock through a broker, bank or other nominee (that is, in “street name”) rather than directly in their own name. Summarized below are some of the differences between shares held of record and those owned beneficially in street name.

Stockholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, the stockholder of record and this proxy statement was sent directly to you by the Company. As the stockholder of record, you have the right to vote your shares in person at the special meeting or to grant your proxy directly to certain officers of the Company to vote your shares at the special meeting.

Beneficial Owner. If your shares are held through a broker, bank or other nominee, you are considered the beneficial owner of shares held in street name, and this proxy statement was forwarded to you by your broker, bank or other nominee. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares on your behalf at the special meeting, or you may contact your broker, bank or other nominee to obtain a “legal proxy” giving you the right to vote in person at the special meeting.

Q. What must I do if I want to attend the special meeting in person?

A.

All holders of shares of the Company common stock as of the close of business on the record date, including stockholders of record and stockholders who hold our common stock through a broker, bank or other nominee, are invited to attend the special meeting. Proof of ownership of the Company common stock (such as a brokerage statement or the appearance of such stockholder’s name on the Company’s stockholder list as of the record date), along with valid photo identification (such as a driver’s license or passport), must be presented to be admitted to the special meeting. Please note that if you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote your shares at the special meeting.

Q. How do I vote?

A.

Voting in Person at the Special Meeting

All holders of shares of the Company’s common stock as of the close of business on the record date, including stockholders of record and stockholders who hold shares of our common stock in street name, may attend the special meeting and vote their shares in person. Please note that if you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

Voting by Proxy

Submitting a Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of common stock as a record holder, you may cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid envelope. You may also submit a proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. If you submit a proxy by Internet or telephone, you do not need to return a written proxy card by mail.

Submitting Voting Instructions for Shares Registered in Street Name. If you hold your shares of common stock in street name, you will receive instructions from your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to provide your voting instructions by telephone. In addition, you may submit your voting instructions by completing, signing and dating the voting instruction form that was included with this proxy statement and returning it in the accompanying prepaid envelope. If you provide voting instructions by Internet or telephone, you do not need to return a written voting instruction form by mail.

Q. What is the deadline for voting?

A.

If you are a stockholder of record, your proxy must be received by telephone or Internet by 11:59 p.m., Pacific Time, on                 , 2022, the day before the special meeting, in order for your shares to be voted at the special meeting. If you are a stockholder of record and you cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card, your proxy card must be received before the special meeting for your shares to be voted at the special meeting.

If you hold your shares in street name, please comply with the deadlines for voting provided by the broker, bank or other nominee that holds your shares.

Q.

How can I change or revoke my vote?

A.

If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:

delivering a later dated proxy card or by submitting another proxy by telephone or the Internet (your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of the Company a written notice of revocation prior to the voting of the proxy at the special meeting; or

by voting in person at the special meeting. Attendance at the special meeting will not, by itself, revoke your proxy.

Written notices of revocation should be addressed to:

6500 River Place Blvd.

Building 7, Suite 250

Austin, TX 78746

Attention: Robert Tirva, Secretary

Any change to your proxy that is provided by telephone or the Internet must be submitted by 11:59 p.m., Pacific Time, on                 , 2022, the day before the special meeting.

If your shares are held in “street name,” you must contact your broker, bank or other agent may still be ablenominee to find out how to change or revoke your voting instructions.

Q.

What happens if I do not give specific voting instructions?

A.

If you are a stockholder of record and you properly submit a signed proxy card or submit your proxy by telephone or the Internet but do not specify how you want to vote your shares on a particular proposal, then the named proxy holders will vote your shares in accordance with the recommendations of the Board on all matters presented in this proxy statement. See above under “How does the Board recommend that I vote?”

In accordance with applicable stock exchange rules, if you hold your shares in its discretion. In this regard, under the rules of the New York Stock Exchange (NYSE), brokers, banksthrough a brokerage account and other securities intermediaries that are subjectyou fail to NYSE rules may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine” under NYSE rules, but not with respect to “non-routine” matters. In this regard, Proposals 1 and 2 are considered to be “non-routine” under NYSE rules meaning that your broker may not vote your shares on those proposals in the absence of your voting instructions. However, Proposals 3 and 4 are considered to be “routine” matters under NYSE rules meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposals 3 and 4.

If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agentyour broker may generally vote your uninstructed shares of common stock in its discretion on routine matters at a stockholder meeting. However, a broker cannot vote shares of common stock held in street name on non-routine matters unless the broker receives voting instructions from the stockholder. Generally, if a broker exercises this discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the deadline providedbroker but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. The Transaction Proposal and the Charter Restriction Proposal are non-routine matters. Accordingly, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on those proposals presented at the materialsspecial meeting. The Reverse Stock Split Proposal and the Adjournment Proposal are routine matters. Accordingly, if you receivehold your shares in street name through a brokerage account, your broker will be able to exercise its discretion to vote uninstructed shares on those proposals presented at the special meeting.

Q.

What will happen if I abstain from voting or fail to vote on the proposals or fail to instruct my broker, bank or other nominee how to vote on the proposals?

A.

For the Transaction Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions or a broker non-vote will have no impact on the outcome of the vote on the Transaction Proposal. In addition, if you do not submit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the Transaction Proposal, it will have no effect on the outcome of the Transaction Proposal.

For the Reverse Stock Split Proposal, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” Abstentions will have the same effect as a vote “AGAINST” the Reverse Stock Split Proposal. In addition, if you do not submit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other agent.nominee how to vote your shares on the Reverse Stock Split Proposal, your broker will be able to exercise its discretion to vote uninstructed shares on the Reverse Stock Split Proposal.

Who is paying for this proxy solicitation?

WeFor the Charter Restriction Proposal, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” Abstentions will pay forhave the entire cost of soliciting proxies.same effect as a vote “AGAINST” the Charter Restriction Proposal. In addition, to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees willif you do not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one set of proxy materials?

If you receive more than one set of proxy materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy cards in the proxy materials to ensure that all of your shares are voted.

Cansubmit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the Charter Restriction Proposal, it will have the same effect as a vote “AGAINST” the Charter Restriction Proposal.

For the Adjournment Proposal, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” Abstentions will have no impact on the outcome of the vote on the Adjournment Proposal. In addition, if you do not submit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the Adjournment Proposal, your broker will be able to exercise its discretion to vote uninstructed shares on the Adjournment Proposal.

Q.

Who will count the votes?

A.

The votes will be counted by the inspector of elections appointed for the special meeting.

Q.

What do I do if I receive more than one proxy or set of voting instructions?

A.

If you received more than one proxy card or voting instruction form, your shares are likely registered in different names or with different addresses or are in more than one account. You must separately vote the shares shown on each proxy card or voting instruction form that you received in order for all of your shares to be voted at the special meeting.

Q.

What vote is required for the Company’s stockholders to approve the Transaction Proposal?

A.

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the votes cast by the stockholders present in person or represented by proxy at the special meeting and entitled to vote thereon.

Q.

What vote of our stockholders is required to approve the proposal to approve the Reverse Stock Split Proposal?

A.

Approval of the Reverse Stock Split Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote thereon.

Q.

What vote of our stockholders is required to approve the Charter Restriction Proposal?

A.

Approval of the proposal to approve the Charter Restriction Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote thereon.

Q.

What vote of our stockholders is required to approve the Adjournment Proposal?

A.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote thereon, irrespective of whether the quorum is present.

Q.

How does the transaction consideration compare to the market price of our common stock?

A.

The consideration for the shares sold to AJP Holding of $0.84 per share represents a premium of approximately 27% to $0.66 per share, the closing price of our common stock on Nasdaq on April 12, 2022, the last trading day prior to the public announcement of the execution of the Subscription Agreement.

Q.

When do you expect the transaction to be completed?

A.

We are working towards completing the transaction as soon as possible. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including approval by our stockholders of the Transaction Proposal, we anticipate that the transaction will be completed in the second half of calendar year 2022.

Q.

What happens if the transaction is not completed?

A.

If the Transaction Proposal is not approved by the stockholders of the Company or if the transaction is not completed for any other reason, AJP Holding will not acquire the 20,833,333 shares of common stock of the Company and the Company will not receive the $17,500,000 in consideration for such shares. Under specified circumstances, the Company may be required to pay to AJP Holding a $750,000 termination fee with respect to the termination of the Subscription Agreement, as described under “The Subscription Agreement—Termination Fee & Reimbursement Obligation” beginning on page 66 and/or reimburse AJP Holding for certain reasonable, documented out-of-pocket expenses of up to $350,000. The Reverse Stock Split Proposal is not contingent upon the approval of the Transaction Proposal and the reverse stock split thereunder may be effected in the event that the Transaction Proposal is not approved.

Q.

What conditions must be satisfied to complete the transaction?

A.

The Company and AJP Holding are not required to complete the transaction unless a number of conditions are satisfied or waived. These conditions include, among others: (i) the approval of the Transaction Proposal by our stockholders at the special meeting; (ii) no temporary restraining order, decree, ruling, injunction or judgment, preliminary or permanent injunction or other judgment issued by any governmental authority of competent jurisdiction being in effect enjoining, restraining or otherwise prohibiting the consummation of the transaction and no governmental authority of competent jurisdiction having enacted, issued, promulgated, enforced or declared applicable to the transaction any applicable law that is in effect, which has the effect of enjoining, restraining or otherwise prohibiting the consummation of the transaction, and (iii) customary conditions in favor of each of the parties regarding the accuracy of the other party’s representations and warranties (subject to customary materiality qualifiers) and the other party’s compliance with its covenants and agreements contained in the Subscription Agreement (subject to customary materiality qualifiers). For a more complete summary of the conditions that must be satisfied or waived prior to the completion of the transaction, see “The Subscription Agreement—Conditions to the Transaction” beginning on page 64.

Q.

Is the transaction expected to be taxable to me?

A.

No. For U.S. federal income tax purposes, the issuance of Company common stock will not result in taxable income or gain for the Company, for its subsidiaries or for stockholders that own stock of the Company prior to the transaction.

Q.

Do any of the Company’s directors or officers have interests in the transaction that may differ from or be in addition to my interests as a stockholder?

A.

In considering the recommendation of the Board with respect to the Transaction Proposal, you should be aware that our directors and executive officers may have interests in the transaction that may be different from, in conflict with or in addition to the interests of our stockholders generally. The Board was aware of and considered these interests, at the time, among other matters, in evaluating and negotiating the Subscription Agreement, approving the Subscription Agreement and the transaction and in recommending that the Subscription Agreement be adopted by the stockholders of the Company. See “The Transaction—Interests of Certain Persons in the Transaction” beginning on page 51.

Q.

What happens if I sell my shares of our common stock before the special meeting?

A.

The record date for stockholders entitled to vote at the special meeting is earlier than both the date of the special meeting and the consummation of the transaction. If you transfer your shares of our common stock after the record date but before the special meeting, you will retain your right to vote such shares at the special meeting.

Q.

Who will solicit and pay the cost of soliciting proxies?

A.

The Company has engaged Kingsdale Advisors (which we refer to as the “proxy solicitor”) to assist in the solicitation of proxies for the special meeting. The Company estimates that it will pay the proxy solicitor a fee of approximately $11,000, plus reimbursement of related expenses. The Company has also agreed to reimburse the proxy solicitor for certain reasonable and documented fees and expenses and will indemnify the proxy solicitor and all of its directors, officers, employees and agents against certain claims, expenses, losses, damages and/or liabilities. The Company may also reimburse banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q.

Who can help answer any other questions I might have?

A.

If you have additional questions about the transaction, need assistance in submitting your proxy or voting your shares of our common stock or need additional copies of the proxy statement or the enclosed proxy card, please contact Kingsdale Advisors, our proxy solicitor using the contact information below:

Kingsdale Advisors

745 Fifth Avenue, 5th Floor

New York, NY 10151

North American Toll Free Phone: 1-888-518-6812

Call Collect Outside North America: 416-867-2272

Email: contactus@kingsdaleadvisors.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”), and Section 21E of the Exchange Act, which statements involve substantial risks and uncertainties. All statements, other than statements of historical or current facts included in this proxy statement, are forward-looking statements. These statements are often identified by the words “believe,” “expect,” “may,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “assume,” “seek to” or other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact.

These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict and many of which we have no control over. You should not place undue reliance on our forward-looking statements. These factors, risks and uncertainties include, but are not limited to, the following: (i) the possibility that the Company may be unable to obtain the required stockholder approval or that other conditions to closing the transaction may not be satisfied, such that the transaction will not close or that the closing may be delayed; (ii) the reaction of customers to the transaction; (iii) general economic conditions; (iv) the amount of the costs, fees, expenses and charges related to the transaction; (v) the outcome of any legal proceedings related to the transaction, if any; (vi) the occurrence of any event, change my voteor other circumstances that could give rise to the termination of the Subscription Agreement; and (vii) other factors discussed from time to time in our reports filed with the SEC, including the factors discussed in Item 1A, “Risk Factors” of the Company’s 2021 Annual Report on Form 10-K filed with the SEC on March 21, 2022 and subsequent filings the Company makes with the SEC, which are available at www.sec.gov.

You should not rely upon forward-looking statements as predictions of future events. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this proxy statement. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this proxy statement relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this proxy statement to reflect events or circumstances after submitting my proxy?the date of this proxy statement or to reflect new information or the occurrence of unanticipated events, except as required by law.

PARTIES TO THE TRANSACTION

Sonim Technologies, Inc.

Sonim Technologies, Inc., a Delaware corporation, is a leading U.S. provider of ultra-rugged mobile phones and accessories designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. The Company currently sells its ruggedized mobile phones and accessories to three of the four largest wireless carriers in the United States—AT&T, Sprint and Verizon—as well as the three largest wireless carriers in Canada—Bell, Rogers and Telus Mobility. The Company’s phones and accessories connect workers with voice, data and workflow applications in two end markets: industrial enterprise and public sector.

The Company’s common stock is listed on Nasdaq under the symbol “SONM.”

AJP Holding Company, LLC

AJP Holding Company, LLC, a Delaware limited liability company, was formed specifically for the contemplated Transaction solely for the purpose of ownership of the shares of common stock of the Company.

THE SPECIAL MEETING

StockholderWe are furnishing this proxy statement to the Company stockholders as part of Record: Shares Registered in Your Name

Yes. You can revoke yourthe solicitation of proxies by the Board for use at the special meeting or any adjournment or postponement thereof. This proxy at any time beforestatement provides the finalCompany stockholders with the information they need to know to be able to vote at the special meeting or any adjournment or postponement thereof.

Date, Time and Place of the Special Meeting

The special meeting will be held on                 , 2022 at 9:00 am, local time, at the offices of the Company, located at 1875 South Grant Street, Suite 770, San Mateo, California 94402, or at any adjournment or postponement thereof.

Purpose of the Special Meeting

At the special meeting, holders of our common stock will be asked to consider and vote on the following:

the Transaction Proposal;

the Reverse Stock Split Proposal;

the Charter Restriction Proposal; and

the Adjournment Proposal.

The Board has unanimously determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby and recommends that our stockholders vote “FOR” the approval of the Transaction Proposal; “FOR” the Reverse Stock Split Proposal; “FOR” the Charter Restriction Proposal; and “FOR” the adjournment of the special meeting to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the Transaction Proposal.

If our stockholders fail to approve the Transaction Proposal, the transaction will not occur. A copy of the Subscription Agreement is attached as Annex A to this proxy statement, and the material provisions of the Subscription Agreement are summarized in the section of this proxy statement entitled “The Subscription Agreement” beginning on page 52 of this proxy statement. The Reverse Stock Split Proposal is not contingent upon the approval of the Transaction Proposal and the reverse stock split thereunder may be effected in the event the Transaction Proposal is not approved.

Deadline for Voting

If you are a stockholder of record, your proxy must be received by telephone or Internet by 11:59 p.m., Pacific Time, on                 , 2022, the day before the special meeting, in order for your shares to be voted at the special meeting. If you are a stockholder of record and you choose to cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card, your proxy card must be received before the special meeting for your shares to be voted at the special meeting.

If you hold your shares in street name, please comply with the deadlines for voting provided by the broker, bank or other nominee that holds your shares.

Revocation of Proxies

If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:

 

You may submit another properly completeddelivering a later dated proxy card with a later date.

You may grant a subsequentor by submitting another proxy by telephone or through the internet.Internet (your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of the Company a written notice of revocation prior to the voting of the proxy at the special meeting; or

 

You may send a timely written notice that you are revoking your proxy to Sonim’s Secretaryby voting in person at 6836 Bee Cave Road, Building 1, Suite 279, Austin, TX 78746, attention Robert Tirva.

You may attend the annual meeting and vote in person. Simply attendingspecial meeting. Attendance at the special meeting will not, by itself, revoke your proxy.

Your most current proxy card or telephone or internet proxy is the one that will be counted.

Beneficial Owner: Shares Registered inAny change to your proxy that is provided by telephone or the Name of Broker or BankInternet must be submitted by 11:59 p.m., Pacific Time, on                 , 2022, the day before the special meeting.

If your shares are held byin “street name,” you must contact your broker, bank or other agent, you should follow the instructions provided by your broker, banknominee to find out how to change or other agent to revoke your proxy.voting instructions.

When are stockholder proposals due for next year’s annual meeting?Voting by the Company’s Directors and Executive Officers

Requirements for stockholder proposalsAs of the record date, the directors and executive officers of the Company beneficially owned and were entitled to be brought before an annual meeting.vote, in the aggregate,                  (                 %) shares of our common stock (not including any shares of our common stock deliverable upon exercise or conversion of or underlying any options or the Company restricted stock unit awards). The directors have informed the Company that they currently intend to vote all such shares of our common stock “FOR” approval of the Transaction Proposal, “FOR” approval of the Reverse Stock Split Proposal; “FOR” the Charter Restriction Proposal; and “FOR” the Adjournment Proposal.

Our amended and restated bylaws provide that, for stockholder director nominations or other proposalsSolicitation of Proxies; Payment of Solicitation Expenses

The Company has engaged Kingsdale Advisors to be considered at an annual meeting,assist in the stockholder must give timely notice thereof in writing to our Secretary at 6836 Bee Cave Road, Building 1, Suite 279, Austin, TX 78746. To be timelysolicitation of proxies for the 2021 Annual Meetingspecial meeting. The Company estimates that it will pay the proxy solicitor a fee of Stockholders,approximately $11,000, plus reimbursement of related expenses. The Company has also agreed to reimburse the proxy solicitor for certain reasonable and documented fees and expenses and will indemnify the proxy solicitor and all of its directors, officers, employees and agents against certain claims, expenses, losses, damages and/or liabilities. The Company may also reimburse banks and brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock. The Company’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Householding

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for special meeting materials with respect to two (2) or more stockholders sharing the same address by delivering a stockholder’s notice mustsingle set of special meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

This year, a number of brokers with account holders who are Sonim stockholders will be “householding” the Company’s proxy materials. A single set of special meeting materials will be delivered to or mailed andmultiple stockholders sharing an address unless contrary instructions have been received by our Secretary at our principal executive offices between June 1, 2021 and July 1, 2021; providedfrom the affected stockholders. Once you have received notice from your broker that if the date of that annual meeting of stockholders is earlier than August 30, 2021, or later than October 29, 2021, you must give the required notice not earlier than the 120th day prior to the meeting date and not later than the 90th day prior to the meeting date or, if later, the 10th day following the day on which public disclosure of that meeting date is first made. A stockholder’s notice to the Secretary must also set forth the information required by our amended and restated bylaws.

Requirements for stockholder proposals to be considered for inclusion in our proxy materials.

Stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and intended to be presented at the 2021 Annual Meeting of Stockholders must be received by us not later than April 22, 2021 in order to be considered for inclusion in our proxy materials for that meeting.

How are votes counted?

Votesthey will be counted by“householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate set of special meeting materials, please notify your broker or Sonim. Direct your written request to Sonim Technologies, Inc., Attention: Robert Tirva, 6500 River Place Blvd., Building 7, Suite 250, Austin, TX 78730 or contact Robert Tirva, CFO at (650) 703–4002. Stockholders who currently receive multiple copies of the inspectorspecial meeting materials at their addresses and would like to request “householding” of election appointed for the meeting, who will separately count, for the proposal to elect directors, votes “For,” “Withhold” and broker non-votes; and, with respect to the other proposals, votes “For” and “Against,” abstentions and, if applicable, broker non-votes. Abstentions will be counted towards the vote total for each of Proposals 2, 3 and 4 and will have the same effect as “Against” votes. Broker non-votes on Proposals 1, 2 will have no effect and will not be counted towards the vote total for any of those proposals. With respect to Proposal 3, broker non-votes will have the same effect as “Against” votes.

Votes will be counted by the inspector of election appointed for the meeting. With respect to Proposal No. 1, you may vote “For” all the nominees to the board of directors, “Withhold” your vote for all nominees, or you maytheir communications should contact their brokers.

“Withhold” your vote for any nominee you specify. With respect to Proposal Nos. 2, 3Adjournments and 4, youPostponements

Although it is not currently expected, the special meeting may vote “For”be adjourned or “Against” or abstain from voting. Abstentions will be counted towards the vote total with respect to Proposal Nos. 2, 3 and 4, and will have the same effect as “Against” votes. Broker non-votes, which are discussed in greater detail below, will be counted for the purposes of establishing a quorum, but will not be counted for any purpose in determining whether a proposal has been approved. An automated system administered by Broadridge will tabulate all votes cast at the Annual Meeting.

What are “broker non-votes”?

As discussed above, when a beneficial owner of shares held in street name does not give voting instructions to his or her broker, bank or other securities intermediary holding his or her shares as to how to vote on matters deemed to be “non-routine” under NYSE rules, the broker, bank or other such agent cannot vote the shares. These un-voted shares are counted as “broker non-votes.” Proposals 1 and 2 are considered to be “non-routine” and we therefore expect broker non-votes to exist in connection with those proposals.

As a reminder, if you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.

How many votes are needed to approve each proposal?

For the election of directors, the seven nominees receiving the most “For” votes from the holders of shares present in person or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “For” will affect the outcome.

To be approved, Proposal 2, the amendment of the 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance thereunder by 3,000,000 shares on a pre-reverse stock split basis, must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter. Abstentions will have the same effect as an “Against” vote. Broker non-votes are not counted for the purpose of determining the number of votes cast and will therefore not have any effect on the outcome of the vote on Proposal 2.

To be approved, Proposal 3, the approval of a reverse stock split, must receive “For” votes from the holders of a majority of the outstanding shares entitled to vote on the matter. Abstentions and broker non-votes will have the same effect as an “Against” vote; however, Proposal 3 is considered a routine matter, and therefore no broker non-votes are expected to exist in connection with Proposal 3.

To be approved, Proposal 4, ratification of the selection of Moss Adams as the Company’s independent registered public accounting firm for fiscal 2020, must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter. Abstentions will have the same effect as an “Against” vote. Broker non-votes are not counted for the purpose of determining the number of votes cast and will have no effect; however, Proposal 4 is considered a routine matter, and therefore no broker non-votes are expected to exist in connection with Proposal 4.

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding a majority of the outstanding shares entitled to vote are present at the meeting in person or represented by proxy. On the record date, there were             shares outstanding and entitled to vote. Thus, the holders of at least             shares must be present in person or represented by proxy at the meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement.postponed. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting to another date.

How can I find out the resultsAnticipated Date of Completion of the voting atTransaction

We are working towards completing the annual meeting?

Preliminary voting resultstransaction as soon as possible. Assuming satisfaction of the closing conditions, including the approval by our stockholders of the Transaction Proposal, we anticipate that the transaction will be announced atcompleted in the annual meeting. In addition, finalsecond half of calendar year 2022. If our stockholders vote to approve the Transaction Proposal, the transaction will close as promptly as practicable following the satisfaction or waiver of the remaining conditions to the transaction, subject to the terms of the Subscription Agreement. See “The Subscription Agreement—Closing of the Transaction” beginning on page 52.

Questions and Additional Information

If you have questions about the transaction, need assistance in submitting your proxy or voting results will be published in a current report on Formyour shares of our common stock or need additional copies of the proxy statement or the enclosed proxy card, please contact the proxy solicitor using the contact information below:

Kingsdale Advisors

745 Fifth Avenue, 5th Floor

New York, NY 10151

North American Toll Free Phone: 8-K1-888-518-6812 that we expect to file within four business days after the annual meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.

What proxy materials are available on the internet?Call Collect Outside North America: 416-867-2272

The Proxy Statement and annual report tostockholders are available at www.sonimtech.com under Investor Relations.Email: contactus@kingsdaleadvisors.com

PROPOSAL 1PROPOSAL 1: APPROVAL OF THE ISSUANCE OF COMMON STOCK CONTEMPLATED

BY THE SUBSCRIPTION AGREEMENT

ELECTIONOF DIRECTORSTHE TRANSACTION

Sonim’s Board of Directors consists of seven directors. There are seven nominees for director this year. Each director to be elected and qualified will hold office until the next annual meeting of stockholders and until his or her successor is elected, or, if sooner, until the director’s death, resignation or removal. EachThis discussion of the nominees listed belowtransaction is currentlyqualified in its entirety by reference to the Subscription Agreement, which is attached to this proxy statement as Annex A. You should read the entire Subscription Agreement carefully and in its entirety, as it is the legal document that governs the transaction.

The Subscription Agreement provides that, subject to the satisfaction or waiver of the conditions set forth in the Subscription Agreement, AJP Holding will acquire the Purchased Shares for the Aggregate Consideration. As a directorresult of the transaction, AJP Holding will own approximately 52% of the Company. Holders of common stock of the Company will not receive any consideration from the transaction.

Our common stock is listed on Nasdaq, and, as such, we are subject to the Nasdaq Listing Rules, including Nasdaq Listing Rule 5635. In order to comply with the Nasdaq Listing Rules and to satisfy conditions under the Subscription Agreement, we are seeking stockholder approval of this Proposal No. 1. NASDAQ Listing Rule 5635(b) requires stockholder approval for issuance of securities that will result in a “change of control” of the issuer. Nasdaq may deem a change of control to occur when, as a result of an issuance, an investor or a group would own, or have the right to acquire, 20% or more of the outstanding shares of common stock or voting power and such ownership or voting power of an issuer would be the largest ownership position of the issuer. The Board is not seeking the approval of our stockholders to authorize our entry into the Subscription Agreement. The Subscription Agreement has already been executed and delivered. We seek your approval of this proposal in order to satisfy the requirements of Nasdaq Listing Rule 5635 with respect to the issuance of the common stock to the Purchaser in a “change of control” transaction.

Transaction Consideration

In the transaction, each share of common stock is being sold for $0.84. Holders of common stock of the Company will not receive any consideration from the transaction.

Description of the Common Stock

The shares of our common stock to be issued to Purchaser, if any, will be unregistered and the same class of common stock that we have listed on Nasdaq under the trading symbol “SONM.” Holders of our common stock have no preemptive rights.

Background of the Transaction

On a regular basis, the Board, together with Sonim’s management team, which we refer to as “management”, has reviewed and assessed Sonim’s performance, future growth prospects, net losses (including, as a result thereof, substantial doubt about Sonim’s ability to continue as a going concern during 2022), business strategies, opportunities and competitive position and challenges as part of its evaluation of Sonim’s prospects and strategies for enhancing stockholder value. As part of that review process, including as a result of Sonim’s current financial position and substantial doubt about Sonim’s ability to continue as a going concern during 2022), the Board and management have regularly reviewed and considered Sonim’s strategic direction and business objectives, including strategic opportunities that might be available to Sonim, such as possible acquisitions, investments, divestitures and business combination transactions.

The transaction and the terms of the Subscription Agreement are the result of arm’s length negotiations conducted between representatives of Purchaser, Sonim and their respective advisors. The following is a summary of the principal events, meetings, negotiations and actions among the parties leading to the execution and public announcement of the merger agreement.

Commencing 2021 through the execution of the Subscription Agreement, Sonim has sought to engage in a potential strategic transaction or other than Messrs. Wilkinson, Kneuer, Johnsonsale transaction with a counterparty, including engaging a financial advisor to assist Sonim and Ms. Swenson,the Board with such process, which we refer to herein as the “Prior Financial Advisor.” During the course of this process, Sonim and its advisors contacted at least 45 potential transaction partners. Certain of these potential transaction parties executed a confidentiality agreement with Sonim, participated in management meetings with Sonim management, and were provided electronic data room access. All of the confidentiality agreements or non-disclosure agreements entered into by Sonim in this process either contained a standstill provision that automatically terminated upon Sonim’s entry into the Subscription Agreement or did not contain a standstill provision. Prior to the engagement of B. Riley as Sonim’s financial advisor, Sonim received non-binding indications of interest and letters of intent from potential strategic partners (including from Party A and from Party C (each as defined below), several of which were sent by Party C to Sonim during this period), and the Board held multiple special meetings to discuss and consider the terms of such non-binding indications of interest and letters of intent. The Board, together with Prior Financial Advisor, B. Riley and Sonim’s representatives, engaged in discussions and negotiations with such potential strategic partners, none of which resulted in an executed definitive agreement for a strategic transaction.

Inclusive of the contacts listed in the paragraph above, following the engagement of B. Riley, B. Riley, on behalf of Sonim, and Sonim contacted 17 potential transaction partners, of which 16 were potential strategic transaction partners and 1 was previously electeda potential financial transaction partner, 11 executed a confidentiality agreement with Sonim, 8 participated in management meetings with Sonim management, and 6 were provided electronic data room access.

On April 1, 2021, the Board held a special meeting. Also present were members of management and representatives of O’Melveny. Management provided the Board with a financial update, which included Sonim’s then current cash position of approximately $12 million and that management expected Sonim’s cash position to decrease to under $5 million by the stockholders. Mr. Wilkinson was appointedend of the second quarter, 2021. Management stated that it recommended that Sonim pursue an equity raise transaction to bring in additional cash.

On April 12, 2021, the Board held a special meeting. Also present were members of management, a representative of O’Melveny, representatives of the Prior Financial Advisor (for a portion of the meeting) and a representative of B. Riley (for a portion of the meeting). The Board discussed, together with representatives of the Prior Financial Advisor, potential financing alternative transactions, including an At-the-Market Issuance program, which we refer to herein as an “ATM”, a director bypublic offering and a private placement transaction. The representatives of the Prior Financial Advisor then left the meeting and a representative of B. Riley joined the meeting. The representative of B. Riley discussed B. Riley’s ATM program, including the set up process and potential benefits of an ATM program.

On April 18, 2021, the Board held a special meeting. Also present were members of management, a representative of O’Melveny and a representative of the Prior Financial Advisor (for a portion of the meeting). The Board discussed, together with a representative of the Prior Financial Advisor, potential strategic opportunities.

On April 28, 2021, Sonim received a deficiency letter from the Listing Qualifications Department of Nasdaq notifying Sonim that, for the last 30 consecutive business days, the bid price for Sonim’s common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on Nasdaq under Nasdaq list rules. In accordance with Nasdaq listing rules, the Company had 180 calendar days to regain compliance with such requirement.

On May 2, 2021, the Board held a special meeting. Also present were members of management and representatives of O’Melveny. The Board discussed the formation of an advisory committee of the Board to explore potential strategic transactions, including (among other things) capital raising activities. Following such

discussion, the Board approved the formation of the Strategic Alternatives and Operating Committee, which we refer to herein as the “Strategic Committee”, to generally assist the Board in the negotiation, consideration, review and evaluation of a potential acquisition of Sonim and other strategic alternative transactions involving Sonim, including capital raising activities and certain operating matters. Ms. Sue Swenson and Messrs. Mike Mulica and Ken Naumann, each being members of the Board, were appointed members of the Strategic Committee. Following such meeting, management and certain members of the Board interviewed B. Riley and the Prior Financial Advisor to potentially engage one as Sonim’s financial advisor in connection with his appointmentits current review and consideration of potential strategic transactions. After such interviews the members of the Board (with Mr. Kenny Young, a then current member of the Board recusing himself as he is the Chief Executive Officer of B. Riley) stated their approval of the engagement of B. Riley to serve as Sonim’s financial advisor in connection with its review and consideration of potential strategic transactions.

Following the formation of the Strategic Committee, the members of the Strategic Committee, from time to time, had discussions, which at times included management and representatives of B. Riley, regarding potential strategic transactions, capital financing transactions and matters relating thereto.

On May 10, 2021, Sonim entered into an engagement letter with B. Riley.

Also on May 10, 2021, Sonim terminated its engagement with the Prior Financial Advisor.

On May 23, 2021, the Board held a special meeting. Also present were members of management and a representative of O’Melveny. The Board discussed the ATM program, including the status of the documentation for such transaction and the steps involved for launching the ATM program. Following such discussion, the Board approved, with Messrs. Alan Howe and Young, both members of the Board, abstaining, the ATM program with B. Riley and authorized the Strategic Committee to (i) from time to time in its discretion select additional investment banks to serve as sales agents and approve any sales agreements with such additional sales agents, (ii) negotiate the terms and provisions to be contained in, and to authorize the execution delivery and performance of, the sales agreement, (iii) approve and authorize certain Sonim officers to take all actions that the Strategic Committee determines to be necessary or advisable to effect the sale of shares of common stock of Sonim pursuant to the positionATM program, and (iv) determine from time to time the number and/or minimum price or specified dollar value of chief executive officer. Mr. Kneuer, Mr. Johnsonshares of common stock of Sonim to be issued and Ms. Swenson were nominatedsold by Sonim, not to exceed a specified amount, through the Company’s non-management directorssales agents pursuant to the sales agreement. Thereafter, Sonim, together with its advisors, commenced work on preparing for an ATM program.

On May 26, 2021, representatives of B. Riley contacted representatives of a potential strategic partner, which we refer to herein as “Party A”, regarding a potential strategic transaction with Sonim, including the letters of intent delivered by Party A to representatives of Sonim prior to such date.

On June 1, 2021, representatives of a potential strategic partner, a private company which we refer to herein as “Party B”, contacted representatives of B. Riley, on behalf of Sonim to discuss a potential strategic transaction between Party B and Sonim. The representatives of Party B that contacted representatives of B. Riley was another advising team of B. Riley, which we refer to herein as the “Party B Advisors.” Representatives of B. Riley informed management and members of the Strategic Committee of the outreach from the Party B Advisors and the affiliation with the Party B Advisors.

On June 5, 2021, the Board held a special meeting. Also present was a member of management, a representative of O’Melveny and a representative of B. Riley. B. Riley provided the Board with an overview of potential strategic transactions, including a potential strategic transaction with Party B, and the Board discussed and asked questions of B. Riley.

On June 6, 2021, members of the Strategic Committee discussed with the chief executive officer and appointedchief financial officer of Party B a potential strategic transaction between Party B and Sonim.

On or around June 8, 2021, Sonim and Party B entered into a confidentiality agreement, which agreement included a customary standstill provision that would automatically terminate upon Sonim’s entry into the Subscription Agreement.

On or around June 9, 2021, the Strategic Committee had discussions regarding the need to move forward with pursuing potential strategic transactions, in particular given the complexity and timing uncertainty associated with an ATM program. The Strategic Committee then expressed their support in commencing a more formal process to evaluate and consideration potential strategic transactions, including that B. Riley should reach out to potential strategic partners regarding such a transaction.

On June 11, 2021, representatives of B. Riley contacted representatives of a potential strategic partner, which we refer to herein as directors“Party C”, regarding a potential strategic transaction with Sonim.

Also on June 11, 2021, members of the Strategic Committee and representatives of B. Riley discussed with representatives of Party B the cash position of Sonim.

On June 13, 2021, the Board held a special meeting. Also present were members of management. The Board discussed Sonim’s liquidity position and following such discussion, the Board directed management to pursue fundraising opportunities and review and conserve a minimum cash balance that would be required for an orderly bankruptcy filing if the Company’s fundraising efforts were not successful. The Board then discussed potential strategic alternative transactions.

On June 15, 2021, Sonim and Party A entered into a confidentiality and non-disclosure agreement, which did not contain a standstill provision.

Also on June 15, 2021, management and representatives of Party B held a meeting during which management presented on Sonim.

On June 16, 2021, the Board held a special meeting. Also present were members of management, a representative of O’Melveny and a representative of B. Riley (for a portion of the meeting). The representative of B. Riley provided an update on potential strategic transactions. The representative of B. Riley then left the meeting. The Board continued the discussion regarding the status of its review of potential strategic transactions. The Board then discussed that B. Riley had requested that Sonim execute a consent and waiver. The Board discussed that in February 2021, B. Riley acquired National Securities Corporation, which we refer to herein as “NSC”, and that NSC then represented a potential strategic partner of Sonim, which we refer to herein as “Party D”, in connection with a potential strategic transaction with Sonim. The Board discussed such relationship and the consent and waiver that B. Riley had requested that Sonim sign, which would provide that Sonim is waiving any conflict of interest as a result of the affiliation between B. Riley and NSC. The Board also discussed that B. Riley had provided in the consent and waiver that appropriate safeguards would be implemented among the B. Riley team representing Sonim and the NSC team representing Party D. Following such discussion, the Board (with Messrs. Howe and Young recused and Mr. Mulica not in attendance) determined that it was advisable and in the best interests of Sonim and its stockholders to continue to use B. Riley as its financial advisor notwithstanding B. Riley’s affiliation with NSC. The Board (with Messrs. Howe and Young recused and Mr. Mulica not in attendance) authorized and approved the execution and delivery of such consent and waiver.

Also on June 16, 2021, representatives of Party A delivered to representatives of B. Riley, on behalf of Sonim, a non-binding a letter of intent, which we refer to herein as the “Party A Offer”, which provided that (among other things) (a) Party A, a then privately held company, would combine with Sonim pursuant to which the Sonim stockholders would own following such transaction 16.67% of the outstanding shares of Sonim calculated on a fully diluted basis using the treasury method for outstanding options and warrants (implying an equity value to Sonim of $20 million and an equity value to Party A of $100 million), (b) the current business of Sonim would be separated into a wholly owned subsidiary of Sonim and management would continue to operate such business

with a view toward selling or disposing of the business, (c) each stockholder of Sonim immediately prior to the closing of such transaction would be entitled to a contingent value right entitling the holder thereof to 90% of the consideration from the sale of the legacy Sonim business, less the costs, fees, penalties, damages and expenses associated with the resolution of the SEC investigation disclosed in Sonim’s public filings, which we refer to as the “SEC Matter” or the then ongoing stockholder derivative action disclosed in Sonim’s public filings, which we refer to as the “Stockholder Matter”, in each case to the extent not covered by insurance, and (d) that the composition of the Board following the closing of such transaction would be seven members, one of which is designated by Sonim and the remaining six are designated by Party A. The letter of intent also included a 60 day exclusivity period and a termination fee equal to $375,000 if Sonim received a superior unsolicited offer from a third party and Sonim terminated the letter of intent with Party A to pursue an unsolicited superior offer.

Also on June 16, 2021, representatives of Party B informed representatives of B. Riley that Party B was in the process of preparing a letter of intent with respect to a potential strategic transaction between Party B and Sonim and anticipated being able to provide such letter of intent in the coming days.

On June 19, 2021, representatives of Party B delivered to representatives of B. Riley, on behalf of Sonim, a non-binding letter of intent, which provided that Sonim and Party B would combine such that Party B would become a wholly owned subsidiary of Sonim. The consideration in the transaction would be the issuance of shares of common stock of Sonim to the Party B stockholders such that, immediately following such transaction, on a fully diluted basis, the pre-transaction stockholders of Sonim would own 10% of Sonim and the stockholders of Party B would own 85% of Sonim (with the remaining 5% being made up of equity incentive awards). The non-binding letter of intent also provided that a transaction between Sonim and Party B would be conditioned on (among other things) (i) Sonim must have at least $5 million of unrestricted cash at closing, net of liabilities and any amount paid with respect to the SEC Matter, (ii) the SEC Matter must have been or is agreed to be settled or terminated on terms reasonably acceptable to Party B, (iii) the Sonim stockholders approving the transaction and (iv) Party B stockholders receiving freely tradable shares of Sonim.

On June 21, 2021, management and representatives of Party A held a meeting during which management presented on Sonim and representatives of Party A presented on Party A.

On June 22, 2021, representatives of B. Riley discussed with representatives of Party A the management presentation from June 21, 2022.

Between June 22, 2021 and June 29, 2021, the Board held multiple special meetings, which were also attended by management, representatives of O’Melveny and representatives of B. Riley. During these meetings, the Board discussed, together with representatives of B. Riley, the current status of discussions regarding potential strategic transactions. The Board also reviewed, discussed and approved the carveout projections prepared by management, which were made available to the Board. In addition, the Board, together with management, also discussed potential opportunities for raising capital, including discussing the potential benefits of having a larger the authorized limited of the ATM program than initially authorized. The Board discussed increasing the aggregate limit of Sonim’s ATM program from $5 million to $10 million. Following multiple meetings discussing whether to continue to pursue a potential strategic transaction or to engage in a capital raising transaction, including that a potential strategic transaction would take longer to complete than it would to commence the ATM program and Sonim’s need for additional cash, the Board determined against pursuing a potential strategic transaction at that time and to instead move forward with a capital raising transaction and approved certain resolutions relating thereto, which provided for increasing the authorized limit of the ATM program to $10 million.

On or around June 25, 2021, representatives of a potential financial investor, which we refer to herein as “Party E”, delivered to representatives of B. Riley, on behalf of Sonim, a non-binding term sheet providing for a registered direct offering of $5 million. The term sheet provided that the purchase price in such offering would be at a 20% discount to Sonim’s trading price the day prior to announcement of such transaction and that Party E

would receive warrants. The term sheet was delivered by Party E in connection with, and priordependent upon, a potential transaction between Sonim and Party A. Thereafter, representatives of Sonim and representatives of Party E negotiated the terms of such term sheet, but ultimately did not agree upon terms and the term sheet was never executed.

On June 29, 2021, representatives of Sonim and B. Riley delivered notices to the Company’s initial public offering. It ispotential strategic partners considering a potential strategic transaction with Sonim at this time, including Party A, Party B, Party C, Party D and Party E, that Sonim had determined not to pursue a potential strategic transaction at that time and was terminating such discussions.

On June 30, 2021, Sonim entered into a sales agreement with B. Riley and another sales agent, EF Hutton, to sell shares of common stock of Sonim pursuant to the Company’s policyATM program up to invite nominees for directorsan aggregate offering price of $10 million.

On July 8, 2021, representatives of Party A delivered to attendrepresentatives of B. Riley, on behalf of Sonim, an unsolicited revised non-binding letter of intent, which was substantially similar to the Annual Meeting.

Directors are elected by a pluralitynon-binding letter of intent delivered on June 16, 2021, but (among other things) provided that the contingent value right percentage range was from 90% to 100% of the votesproceeds received from selling the legacy Sonim business (depending on how long it takes to sell such legacy Sonim business), subject to the same offsets as in the prior letter of intent and that the Sonim stockholders would own 16.67% of the holdersoutstanding shares of shares present in person or represented by proxySonim calculated on a fully diluted basis using the treasury method for outstanding options and entitledwarrants (implying an equity value to vote on the electionSonim of directors. Accordingly, the seven nominees receiving the highest number$20 million and an equity value to Party A of affirmative votes will be elected.

Nominees

The following is a brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committee to recommend that person as a nominee for director, as of the date of this Proxy Statement.

The Nominating and Corporate Governance Committee seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct the Company’s business. To that end, the Committee has identified and evaluated nominees$100 million). Because Sonim was engaging in the broader contextATM program, Sonim did not engage with Party A at this time regarding such non-binding letter of the Board’s overall composition, with the goal of recruiting members who complementintent.

Between July 9, 2021 and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Committee views as critical to effective functioning of the Board. The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the Committee to believe that that nominee should continue to serve on the Board. However, each of the members of the Committee may have a variety of reasons why he or she believes a particular person would be an appropriate nominee forJuly 26, 2021, the Board held multiple special meetings, which were also attended by management, representatives of O’Melveny and these views may differrepresentatives of B. Riley. The Board discussed, among other matters relating to potential strategic transactions, the non-binding letter of intent received from Party A on July 8, 2021 and discussed recent capital raising efforts, including through the viewsATM program. The Board also discussed Sonim’s current liquidity position. With the continuing capital raising process of other members.Sonim through the ATM program, neither Sonim nor its Representatives responded to Party A’s non-binding letter of intent sent on July 8, 2021 at this time.

NAME

  AGE   

DIRECTOR SINCE

Mr. John Kneuer

   51   2019

Mr. Maurice Hochschild

   58   2012

Mr. Thomas Wilkinson

   50   2019

Mr. Jeffrey D. Johnson

   60   2019

Ms. Susan G. Swenson

   72   2019

Mr. Kenny Young

   56   

2017

Mr. Alan Howe

   59   2017

John Kneuer has served as a member of our board of directors since March 2019 and as Chairman of our board of directors since March 2020. Since November 2007,On July 16, 2021, Mr. Kneuer has served as the founding Managing Member of JKC Consulting LLC, a strategic consulting and advisory firm. He has also served as Senior Advisor to the American Continental Group, a public policy consulting firm, since April 2017. Since June 2017, Mr. Kneuer has served on the Board of Directors of TerreStar Corporation, a telecommunications company. From 2011 until 2018, he servedNaumann resigned as a member of the BoardBoard. Mr. Naumann’s resignation was not due to a disagreement with Sonim on any matter relating to Sonim’s operations, policies or practices.

On July 21, 2021, representatives of DirectorsParty A delivered to representatives of Globalstar, Inc., a satellite communications company, where he served as a memberB. Riley, on behalf of Sonim, an updated unsolicited non-binding letter of intent, which was substantially similar to the letter of intent delivered on July 8, 2021, but (among other things) provided that the contingent value right percentage range was from 87.5% to 97.5% of the auditproceeds received from selling the Sonim business, subject to the same offsets as in the prior letter of intent and compensation committees. Fromthat the Sonim stockholders would own 14.17% of the outstanding shares of Sonim calculated on a fully diluted basis using the treasury method for outstanding options and warrants (implying an equity value to Sonim of $17 million and an equity value to Party A of $103 million).

On July 26, 2021, representatives of Sonim and B. Riley had a discussion with representatives of Party A regarding the non-binding letter of intent sent by Party A to representatives of B. Riley, on behalf of Sonim, on July 21, 2022, including informing representatives of Party A that because of the current status of Sonim’s ATM program Sonim was not going to further engage with Party A on a potential strategic transaction at this time.

On August 5, 2021, representatives of B. Riley discussed with representatives of Party C that the prior non-binding indications of interests and non-binding letters of intent received by representatives of Sonim from representatives of Party C between October 2003 to November 2007, Mr. Kneuer served first as2020 and February 2021. Representatives of B. Riley also stated that if Sonim and Party C pursue a potential transaction, even with the Deputary Assistant Secretary, and then as U.S. Assistant Secretary,current ATM program of Commerce for Communications and Information. As Assistant Secretary, Mr. Kneuer served as AdministratorSonim, Sonim may require a loan from Party C through the closing of thea potential strategic transaction between such companies.

National Telecommunications and Information Administration. Mr. Kneuer received a B.A. and J.D. from Catholic UniversityRepresentees of America. The Nominating and Corporate Governance Committee believesB. Riley then informed representatives of Party C that Mr. Kneuer’s extensive business consulting experience and leadership experience at various strategic consulting and communications companies as well as federal telecommunications authorities qualifies him to serve on our board of directors.

Maurice Hochschild has served as a member of our board of directors since November 2012 and as Chairman of our board of directors from March 2019 until March 2020. Since 2001, Mr. Hochschild served in various roles at Investec Bank plc, an international specialist banking and asset management group, including Global Headbecause of the Projectcurrent status of Sonim’s ATM program, Sonim was not going to further engage with Party C on a potential strategic transaction at this time.

On September 1, 2021, representatives of Party C delivered to representatives of B. Riley, on behalf of Sonim, a non-binding indication of interest pursuant to which Party C expressed its desire to acquire certain assets of Sonim, including accounts receivable and Infrastructure Finance division, which financedfinished gods inventory. The indication of interest indicated that the value of such assets was approximately $14.4 million, but did not include a specific offer price for such assets.

On September 15, 2021, in order to regain compliance with the Nasdaq listing rules, Sonim effected a 1-for-10 reverse stock split of its issued and developed renewableoutstanding shares of common stock on that date.

On September 6, 2021, the Board held a special meeting. Also present were members of management and thermal power generation, transportation and social infrastructure in Western Europe, Southern Africa, Australia and North America. Mr Hochschild also served as the headrepresentatives of B. Riley (for a portion of the North American Commercial and Institutional Banking divisionmeeting). Representatives of B. Riley provided the bank, which undertook securities distribution, power and infrastructure finance and fund financing in North America. Mr Hochschild resignedBoard with an overview of potential strategic transactions, including the offer received from Investec in March 2019, and became founding Managing Director of Via Novus, an institutionally backed developer, owner and operator of high power, public charging stations for electric vehicles. Mr. Hochschild received a B.A. fromParty C on September 1, 2021. Following such discussion, the University of Pennsylvania and serves on other boards including Tindall Riley & Co (UK) and Engenie Limited (UK). The Nominating and Corporate Governance believesBoard determined that, Mr. Hochschild’s extensive experience in project development and public infrastructure qualifies him to serve on our board of directors.

Thomas W. Wilkinson has served as our Chief Executive Officer and a member of our board of directors since October 2019. Mr. Wilkinson has served as a strategic consultant and financial advisor to small and medium-sized public and privately held businesses since January 2014. From August 2015 until October 2017, Mr. Wilkinson served as Chief Financial Officer and later as Chief Executive Officer at Xplore Technologies Corp., a rugged tablet technology company, which was sold to Zebra Technologies in 2018. Prior to his service at Xplore, from January 2014 to October 2015, he served as Chief Financial Officer at Amherst Holdings, LLC, a financial services company. Mr. Wilkinson was the co-founder and Managing Partner of PMB Helin Donovan, a multi-office regional accounting firm. He currently serves on the board of directors of Astrotech Corporation, a science and technology development and commercialization company, and chairs the board of directors at CipherLoc Corporation, a data security solutions company, where he also served as the interim Chief Executive Officer from July 2019 to November 2019. Mr. Wilkinson received a Master’s of Professional Accounting and a Bachelors of Business Administration each from University of Texas at Austin in 1992. The Nominating and Corporate Governance believes that Mr. Wilkinson is qualified to serve as a member of our board of directors based on the perspectiveterms of the offer from Party C, including that the offer was to purchase balance sheet assets, the offer from Party C received on September 1, 2021 was not in the best interests of the Company’s stockholders and experience he brings as our Chiefthat Sonim would decline the offer from Party C. Representatives of B. Riley left the meeting and the Board then continued discussing potential strategic transactions and potential capital raising transactions. Thereafter, representatives of B. Riley informed Party C of the Board’s determination.

On September 17, 2021, the Board held a special meeting. Also present were members of management. The Board, together with management, discussed the current status of discussions regarding potential strategic transactions. In addition, the Board, together with management, also discussed potential strategic opportunities for raising capital. The Board discussed that it had previously authorized an ATM program for an aggregate amount of $10 million and discussed increasing such authorized limited to approximately $41.6 million. Following discussion whether to continue to pursue a potential strategic alternative transaction or to engage in a capital raising transaction and taking into consideration (among other things) the cash needs of Sonim and that any potential strategic transaction would take more time to complete and require capital to complete, the Board determined not to pursue a potential strategic transaction at this time and instead to move forward with a capital raising transaction and approved increasing the authorized limit of the ATM program to approximately $41.6 million.

On September 23, 2021, Sonim entered into a sales agreement with B. Riley to sell shares of common stock of Sonim pursuant to the ATM program up to an aggregate offering price of approximately $41.6 million.

On September 27, 2021, Sonim opened its ATM program.

On October 15, 2021, Sonim halted its ATM program.

In October 2021, Dr. Charles Wang and other members of the Wang family, including those who subsequently arranged the formation of the Purchaser and became its sole equityholders, informally approached Mr. Peter Liu, then the Executive Officer.Vice President for Global Operations and Engineering of Sonim, and inquired about the possibilities of investing in or purchasing Sonim. Mr. Liu subsequently discussed the same with Mr. Tirva. Thereafter, Mr. Liu introduced Mr. Tirva to the Wang family.

Alan Howe has served asOn November 1, 2021, Sonim and an entity associated with Purchaser entered into a memberOne-Way Non-Disclosure Agreement, whichdid not include a standstill provision. Thereafter, representatives of our boardSonim had periodic discussions with representatives of directors since October 2017. Since April 2001, Mr. Howe has served as co-founderPurchaser regarding a potential strategic transaction between Sonim and Managing Partner of Broadband Initiatives, LLC, a boutique corporate development and strategic consulting firm since 2001. Previously, Mr. Howe held various executive management positions at Covad Communications, Inc., a provider of broadband voice and data communications, Teletrac, Inc., a location-tracking software company, Sprint Corporation, a telecommunications company, and Manufacturers Hanover Trust Company, a commercial bank. Mr. Howe currently serves on the boards of Babcock and Wilcox, a company providing environmental technologies for the power industry, Orion Energy Systems, Inc., a LED lighting and intelligent controls company, Resonant Inc., a hardware development company for mobile devices, and Data I/O Corporation, a systems manufacturer for integrated circuits (as Chairman). Mr. Howe previously served on the board of directors for magicJack, VocalTec, Ltd., a cloud communications company, CafePress, an online retailer of user-customized products, Urban Communications, a provider of fiber optic services, Qualstar Corporation, a data storage products manufacturer, Determine. Inc., a provider of life cycle management solutions software, and Widepoint Corporation, a provider of technology products and services. The Nominating and Corporate Governance Committee believes that Mr. Howe’s extensive financial, executive and board experience with multiple private and public companies qualifies himPurchaser, but such discussions ceased prior to serve on our board of directors.

Jeffrey D. Johnson has served as a member of our board of directors since March 2019 and previously served as a member of our board of directors from July 2017 to April 2018. Since 2010, Mr. Johnson has served as theNovember 15, 2021.

Chief Executive OfficerOn November 15, 2021, Sonim opened its ATM program for the sale of additional shares of common stock of Sonim and halted such program on November 16, 2021 as a result of Sonim’s stock price being below the minimum stock price established by the Board in the ATM program.

On December 3, 2021, the Board held a special meeting. Also present were members of management and a representative of O’Melveny. The Board discussed the current status of the Western Fire Chiefs Association, a registeredATM program and approved adjusting the ATM floor price to an amount below $1.00 per share.

On December 6, 2021, representatives of Purchaser delivered to Sonim, an unsolicited non-profit,non-binding and a divisionletter of the International Association of Fire Chiefs. Since 2016, he has servedintent, which we refer to herein as the Chief Executive Officer“Initial Purchaser Offer”, which provided (among other things): (a) for the investment of Brody’s Meats, Inc.,$15 million in Sonim for at least 51% ownership at an above market price, with the transaction closing in two tranches whereby at the first closing the Purchaser would invest $5 million and at the second closes the Purchaser would invest $10 million (which would be 6 months after the first closing, (b) as a privately held smoked meat company. Since October 2015,condition to the first closing, Mr. Johnson has also served asLiu, be appointed the Chief Executive Officerchief executive officer of High Desert Holdings Commercial Prop, a privately held commercial real estate holding company. From 2012 until August 2018, he served as Vice PresidentSonim (c) all transaction expenses of Purchaser are paid from proceeds from the transaction and (d) that Purchaser would be entitled to indemnification. Sonim did not discuss with Purchaser this non-binding letter of intent at this time.

Also on December 6, 2021, Sonim reopened its ATM program.

On January 4, 2021, Sonim halted its ATM program.

On January 5, 2022, at the request of certain members of the Board, of Directors of FirstNet. From 1995 until 2010, he served as the Tualatin Valley Fire and Rescue Chief. Mr. Johnson received a B.S. in Business and Communications from Concordia University. The Nominating and Corporate Governance Committee believes that Mr. Johnson’s extensive leadership experience in local and national public safety and advisory and board roles for numerous technology companies qualifies him to serve on our board of directors.

Susan G. Swenson has served as a member of our board of directors since March 2019. From August 2012 to August 2018, Ms. Swenson served on the board of FirstNet and chaired the board of directors from August 2014 to August 2018. From October 2015 to June 2017, Ms. Swenson served as Chairperson and Chief Executive Officer of Inseego Corporation, a wireless internet solutions and telematics provider, and served as the Board Chairperson from April 2014 to June 2017. From February 2004 to October 2005, Ms. Swenson served as the President and Chief Operating Officer of T-Mobile US, Inc., a wireless network operator. From 1999 to 2004, Ms. Swenson served as President of Leap Wireless International, Inc., a telecommunications operator, and Chief Executive Officer of Cricket Communications, Inc., a prepaid wireless service provider and subsidiary of Leap. Ms. Swenson also served as Chief Executive Officer of Sage North America from 2008 to 2011. Since March 2012, Ms. Swenson has served on the board of Harmonic, Inc., a video delivery, and media company. Since October 2018, Ms. Swenson she has served as Chairman of the Board of Directors of Vislink Technologies, Inc., a video capture and broadcasting company. Ms. Swenson previously served on the board of directors of Wells Fargo from November 1994 to December 2017. Ms. Swenson received a B.A. in French from San Diego State University. The Nominating and Corporate Governance Committee believes that Ms. Swenson’s extensive leadership experience at various media and communications companies and at FirstNet qualifies her to serve on our board of directors.

Kenny Young has served as a member of our board of directors since October 2017. Since July 2018, Mr. Young has served as Presidentrepresentatives of B. Riley Financial, Inc. Since October 2017, Mr. Young has also servedcontacted representatives of a potential strategic partner, which we refer to herein as Chief Executive Officer“Party F”, regarding a potential strategic transaction with Sonim.

Later on January 5, 2022, Sonim and Party F entered into a Mutual Confidentiality Agreement, which agreement included a customary standstill provision that would automatically terminate upon Sonim’s entry into the Subscription Agreement.

Also on January 5, 2022, management and representatives of Babcock & Wilcox Enterprises Inc.,Party F held a providermeeting during which management presented on Sonim.

On January 7, 2022, the Board held a special meeting. Also present were members of energy and environmental technologies and services. Since October 2016, Mr. Young has served as Chief Executive Officer of B. Riley Principal Investments, a wholly owned subsidiary of B. Riley Financial, Inc. In addition, since November 2018, Mr. Young has served as Chief Executive Officer of magicJack VocalTec Ltd., a cloud communications company. Since 2016, Mr. Young has served as Chief Executive Officer of United Online, Inc., an internet, and communications services provider. Each of magicJack VocalTec Ltd. and United Online, Inc. is a wholly owned subsidiary of B. Riley Financial, Inc. From 2008 to 2016, Mr. Young served in numerous leadership roles at Lightbridge Communications Corporation, a telecommunications services company, including as President and Chief Executive Officer of Lightbridge Communications Corporation International and President of Americas and Chief Operating Officer of Lightbridge Communications Corporation. Mr. Young currently serves on the board of directors of Orion Energy Systems, a LED lighting and intelligent controls company. Mr. Young previously served on the boards of directors of FRG Inc. (formerly Liberty Tax Inc.), a provider of tax services, Bebe Stores, Inc., a women’s apparel retailer, Imagine Communications Corporation, a media services company, Global Star, Inc., a satellite communications company, B. Riley Financial Inc., a full service investment bank, Standard Diversified Inc., a holding company for various industrial businesses, and Proxim Wireless Corporation, a broadband wireless networking company. Mr. Young received a M.B.A. in Business from Southern Illinois University, Edwardsville,management and a B.S. in Computer Science and Mathematics from Graceland University. The Nominating and Corporate Governance Committee believes that Mr. Young’s extensive operational, executive and board experience with numerous companies primarily within the communications and finance industries qualifies him to serve on our boardrepresentative of directors.

THE BOARD OF DIRECTORS RECOMMENDS

A VOTE IN FAVOR OF EACH NAMED NOMINEE.

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

INDEPENDENCEOFTHE BOARDOF DIRECTORS

As required under the Nasdaq Stock Market, or Nasdaq, listing standards, a majority of the members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively determined by the Board of Directors.O’Melveny. The Board consultsdiscussed, together with management, the financial position of Sonim as well as a presentation prepared by management regarding the same, including that Sonim’s then current cash position was approximately $10 million, but that management believed that Sonim’s cash position would trend downward toward approximately $2 million in the second quarter of 2022 without any additional cash from the ATM program. The Board then discussed that (i) Sonim had sufficient cash to continue operations at its current spending rates until the end of June 2022, but did not expect to have sufficient cash to launch its new products in the fourth quarter of 2022, (ii) that the ATM program had been generally successful in raising capital to continue operations, but that with the Company’s counselend of 2021, Sonim would not continue the ATM program until the 2021 audit was completed and publicly disclosed and (iii) that this period provided an opportunity for Board to ensure thatconsider potential strategic transactions. The Board then discussed the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.

Consistent with these considerations, our Board undertook a review of the independence of each director and considered whether any director has a material relationship that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. After review of all relevant transactions or relationships between each director, or any of his or her family members,Initial Purchaser Offer and the Company, its senior management and its independent registered public accounting firm, the Board affirmatively determined in March 2019 that the following directors were independent directors within the meaning of the applicable Nasdaq listing standards: Ms. Swenson and Messrs. Hochschild, Howe, Johnson, Young and Kneuer. In April 2020,potential for Sonim to pursue a potential strategic transaction. Following such discussion, the Board determined that Mr. Young, by virtue of his employment with B. Riley Principal Investments, LLCit was advisable and the Company’s then-current liability to B. Riley Principal Investments, LLC pursuant to the B. Riley Convertible Note, as described in more detail below, was not an independent director within the meaning of the applicable Nasdaq listing standard. However, following the repayment, conversion and cancellation of the B. Riley Convertible Note, the Board has made a subsequent determination that Mr. Young is an independent director within the meaning of the applicable Nasdaq listing standards. In making these determinations, our Board considered certain relationships and transactions that occurred in the ordinary course of business and otherwise between the Company and entities which some of our directors are or have been affiliated. The Board determined that such transactions would not impair the particular director’s independence or interfere with the exercise of independent judgment in carrying out director responsibilities. By virtue of his employment with the Company as Chief Executive Officer, Mr. Wilkinson is not an independent director. Prior to his resignation from the Board in October 2019, our then-Chief Executive Officer, Mr. Plaschke, was not an independent director.

BOARD LEADERSHIP STRUCTURE

The Board of Directors of the Company has an independent chair, Mr. Kneuer, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Board Chair has substantial ability to shape the work of the Board. The Company believes that separation of the positions of Board Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of the Company. In addition, the Company believes that having an independent Board Chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders.stockholders to evaluate and consider potential strategic transactions and, in light of the pending 2021 audit as well as the desire to pursue a potential strategic transaction, to halt the ATM program at this time.

On January 10, 2022, representatives of B. Riley, management and certain members of the Board (which included Ms. Swenson and Messrs. Mulica and John Kneuer, a member of the Board) had an informal discussion regarding pursuing a potential strategic transaction. Representatives of B. Riley reviewed materials regarding potential strategic partners. Following such discussion, such Board members expressed their support for B. Riley to reach out to potential strategic partners regarding a potential strategic transaction with Sonim.

On January 10, 2022, representatives of B. Riley first connected with representatives of Purchaser regarding a potential strategic transaction with Sonim.

On January 18, 2022, representatives of B. Riley, management and certain members of the Board (which included Ms. Swenson and Messrs. Mulica and Kneuer) had an informal discussion regarding the current status a potential strategic transaction its discussions with potential strategic partners.

On January 20, 2022, representatives of B. Riley had an introductory discussion with representatives of Purchaser, including that Purchaser was in the process of engaging a financial advisor and legal counsel.

Also on January 20, 2022, management and representatives of Purchaser held a meeting during which management presented on Sonim.

On January 24, 2022, representatives of Party C delivered to representatives of B. Riley, on behalf of Sonim, a non-binding indication of interest substantially similar to the non-binding indication of interest delivered on September 1, 2022, except that this updated indication of interest provided that the value of the assets to be acquired was approximately $8.69 million, but again did not include a specific offer price for such assets.

On January 26, 2022, representatives of Purchaser introduced representatives of B. Riley to Purchaser’s financial advisor and legal counsel. Representatives of B. Riley and representatives of Purchaser discussed the terms of the Initial Purchaser Offer, including the amount of cash to be invested and the valuation of Sonim.

On January 27, 2022, Sonim granted access to an electronic data room to Purchaser and its advisors.

On January 31, 2022, Party A resubmitted its non-binding letter of intent for a potential strategic transaction with Sonim to representatives of B. Riley, on behalf of Sonim, and included a presentation regarding an overview of Party A and a recent acquisition by Party A, which was made available to the Board.

On February 3, 2022, the Board held a special meeting. Also present were members of management and a representative of O’Melveny. The Board discussed that B. Riley had been engaged by Party F for a financing matter unrelated to a potential strategic transaction between Sonim and Party F. The Board discussed whether to engage a different financial advisor in light of the relationship between B. Riley and Party F. The Board decided not to make a decision regarding whether to engage a new financial advisor at this time.

Also on February 3, 2022, Mr. Young resigned as a member of the Board. Mr. Young’s resignation was not due to a disagreement with Sonim on any matter relating to Sonim’s operations, policies or practices.

On February 9, 2022, representatives of Purchaser redelivered to representatives of B. Riley, on behalf of Sonim, the Initial Purchaser Offer together with a presentation providing information regarding Purchaser’s business plans with respect to Sonim following the closing of the transaction.

Also on February 9, 2022, the Board held a special meeting. Also present were members of management and a representative of O’Melveny. The Board again discussed the relationship between B. Riley and Party F and determined that, because the relationship with Party F was unrelated to a potential strategic transaction with Sonim, that B. Riley had not received any fees from Party F and that B. Riley was not actively advising Party F (notwithstanding that a formal engagement was in effect), the Board determined that it was advisable and in the best interests of the Company and its stockholders to continue to retain B. Riley as its financial advisor during this process. The Board then discussed the Initial Purchaser Offer and decided to not make any decisions at this point regarding the Initial Purchaser Offer and to discuss further at the next special meeting of the Board.

On February 11, 2022, management and representatives of Party A held a meeting during which management provided representatives of Party A with additional information on Sonim.

Also on February 11, 2022, representatives of Party F delivered to representatives of B. Riley, on behalf of Sonim, a non-binding letter of intent providing for the acquisition of certain assets of Sonim for $10 million, payable in cash. The non-binding letter of intent stated that Party F may request that certain key employees of Sonim agree to remain with the business following the closing of a transaction and that certain key members of Sonim’s management team will have the opportunity to assume expanded leadership roles after the transaction. No specific employees were identified in the letter of intent. Party F also requested 30 days of exclusivity.

On February 15, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. At the request of the Board, representatives of B. Riley reviewed a summary of the offers received from Purchaser, Party C and Party F to date. The Board did not discuss the offers from Party A at this time as any potential strategic transaction with Party A was dependent on first completing a sale of substantially all of Sonim’s assets. The Board discussed that the offer from Party F was $10 million for certain assets of Sonim, but that Sonim would retain the public company shell should it desire to pursue a potential “reverse merger” transaction with Party A or another counterparty. The Board discussed that the value of such a potential public company shell could be approximately $20 million and that with that assumption, the offer from Party F could result in an implied valuation of Sonim of approximately $39 million (taking into account assets that would be retained by Sonim, including (among others) cash and accounts receivable, and taking into account liabilities that would remain with Sonim following such transaction). The Board discussed that while pursuing a potential strategic transaction with Party F could result in an implied valuation of Sonim equal to approximately $39 million, such value was dependent not just on consummating a transaction with Party F, but also effecting a “reverse merger” thereafter with Party A or another counterparty and that there is meaningful deal risk in completing that transaction. The Board then discussed the Initial Purchaser Offer, together with the presentation provided by Purchaser on February 9, 2022. The Board noted that the presentation included projections of Sonim taking into account the investment by Purchaser, prepared by Purchaser, and the Board expressly stated that the Board would not rely on such projections and instructed B. Riley likewise not to rely on such projections. The Board discussed that the implied valuation of Sonim based on the Initial Purchaser Offer was between $27.1 million to $39.3 million (with such range due to Sonim’s future cash flows discounted at a range of different discount rates). The Board then discussed that the implied valuation of Sonim based on Party C’s offer delivered on January 24, 2022 was approximately $32.2 million. Following such discussion, the Board instructed representatives of B. Riley to communicate to Party C and Party F, separately, that each should provide their best and final offers. The Board also stated that B. Riley should continue to work with Party A on negotiating a potential “reverse merger” transaction and that the signing of any such transaction with Party A should be subject to resolution of the SEC Matter.

On February 16, 2022, representatives of B. Riley stated separately to representatives of Party C and Party F that Party C and Party F, respectively, should deliver a best and final offer with respect to a potential strategic transaction with Sonim.

Also on February 16, 2022, Sonim received a deficiency letter from the Listing Qualifications Department of Nasdaq notifying Sonim that, for the last 30 consecutive business days, the bid price for Sonim’s common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on Nasdaq under Nasdaq list rules. In accordance with Nasdaq listing rules, the Company had 180 calendar days to regain compliance with such requirement.

On February 22, 2022, the Board held a special meeting. Also present was a member of management, a representative of O’Melveny and representatives of B. Riley. The Board discussed a potential strategic transaction with Purchaser, including whether any potential regulatory filings beyond the filings with the SEC would be required in connection with the potential investment transaction. Following such discussion, the Board instructed the representative of O’Melveny to discuss with representatives of Venable whether the potential investment transaction would be subject to any regulatory approvals or clearances.

On February 23, 2022, representatives of O’Melveny and representatives of Venable discussed whether potential regulatory approvals or clearances would be required in connection with the potential investment transaction between Sonim and Purchaser, beyond filings with the SEC.

Also on February 23, 2022, management and representatives of Party C held a meeting during which management presented on Sonim.

On February 24, 2022, representatives of B. Riley discussed with representatives of Purchaser the terms of the offer provided by Purchaser on February 9, 2022 and potential revisions to such offer.

On February 25, 2022, management and representatives of Party C held a meeting during which management provided representatives of Party C with additional information on Sonim.

Also on February 25, 2022, the Board held a special meeting. Also present was a member of management, a representative of O’Melveny and representatives of B. Riley. At the request of the Board, the representative of O’Melveny reported to the Board on the discussions with Venable regarding whether any regulatory approvals are required in connection with the potential transaction and stated that, based on the statements made by Venable on such call, it was not expected that any regulatory approvals or clearances would be required in connection with the potential transaction, other than filings with the SEC. The Board then discussed the structure of a potential transaction with Purchaser, including the requirement for Sonim stockholder approval. The Board also discussed the terms of the non-binding offer received from Purchaser on February 9, 2022, including the size of the investment, the percentage ownership of the Purchaser based on the size of such investment, the desire to have certain members of the Board continue as members of the Board following the closing of such potential investment transaction until the resolution of the SEC Matter given the historical knowledge of the current members of the Board regarding the SEC Matter, that Purchaser would pay for its own expenses out of investment transaction proceeds and Purchaser’s request for indemnification. Following such discussion, the Board instructed that the non-binding offer from the Purchaser be revised to provide (a) that the investment amount be $17.5 million for the purchase of 48% ownership of Sonim, which will close in one tranche, (b) that the per share purchase price be $0.98 per share, (c) that certain current directors of Sonim would continue on the Board following the closing until resolution of the SEC Matter, (d) that Purchaser will pay its own expenses, which cannot be paid out of the investment transaction proceeds and (e) that the right of Purchaser to indemnification be removed.

On February 26, 2022, the Board held a special meeting. Also present was a member of management, a representative of O’Melveny and representatives of B. Riley. At the request of the Board, representatives of B. Riley provided an update regarding the status of discussions with Party C and Party F. Representatives of B. Riley reported to the Board that Party C had not submitted any additional indication of interest or letter of intent since the non-binding indication of interest provided on January 24, 2022 and that representatives of B. Riley had instructed Party C to formulate a valuation and deal structure for a potential strategic transaction with Sonim, but that, to date, Party C had not done so. Representatives of B. Riley then discussed the non-binding letter of intent delivered by Party F on February 11, 2022 to acquire certain assets of Sonim and that since delivery of such letter on February 11, 2022, Party F had verbally increased its offer price for such assets from $10 million to $11.25 million. Representatives of B. Riley reported that Party F had stated that it would not increase its offer price beyond $11.25 million for such assets of Sonim. Representatives of B. Riley then discussed that a call was scheduled with representatives of Party F for March 1, 2022 regarding the potential transaction structure. The Board then discussed that if Sonim were to pursue a potential strategic transaction with Party F, following the closing thereof, it may seek a potential “reverse merger” transaction whereby, as a public shell company with no further operations, a private company, such as Party A, could merge with and into Sonim (or a wholly owned subsidiary thereof) such that the merging private company would then become a public company. Representatives of B. Riley and of O’Melveny then reviewed for the Board the revised Initial Purchaser Offer, which was made available to the Board prior to the meeting. The Board then discussed the terms of such revised Initial Purchaser Offer. The Board also discussed that, to date, Purchaser had not requested exclusivity. The

Board then discussed that Purchaser had been in contact with Mr. Liu and that it was Purchaser’s intention that Mr. Liu become the Chief Executive Officer of Sonim. The Board discussed that, as of such time, to its knowledge and based on inquires made of representatives of Purchaser, Mr. Liu was not currently expected to be an equityholder in Purchaser. Following such discussion, the Board instructed representatives of B. Riley to (a) send the revised offer to Purchaser and (b) to continue discussions with Party C and Party F regarding a potential strategic transaction, including encouraging Party C to provide a valuation and deal structure for a potential strategic transaction with Sonim and to hold the conference call with representatives of Party F on March 1, 2022. The Board stated that if Purchaser requested exclusivity, it would evaluate such request at such time.

Later on February 26, 2022, representatives of B. Riley, on behalf of Sonim, delivered to representatives of Purchaser a revised draft of the Initial Purchaser Offer, which we refer to herein as the “Revised Offer”, whereby Sonim revised the draft to provide: (a) that the investment amount is $17.5 million for the purchase of 48% ownership of Sonim, which will close in one tranche, (b) that the per share purchase price be $0.98 per share, (c) that certain current directors of Sonim would continue as members of the Board following the closing until resolution of the SEC Matter, (d) that Purchaser will pay its own expenses, which cannot be paid out of the investment transaction proceeds and (e) that the right of Purchaser to indemnification is removed.

On February 28, 2022, representatives of Purchaser delivered to representatives of B. Riley, on behalf of Sonim, a response to the Revised Offer, which we refer to herein as “Purchaser’s Response”, whereby it was communicated that (a) Purchaser accepted the increased investment amount of $17.5 million, but stated that it required that such investment result in Purchaser owning 52% of the outstanding capital stock of Sonim, which results in an effective price per share of approximately $0.84, (b) Purchaser desired that the transaction be closed in two tranches, the first being for $12.5 million and the second occurring in the third calendar quarter of 2022 for $5 million, (c) Purchaser reserves on points relating to the SEC Matter and indemnification rights and (d) Purchaser desired that Sonim start to implement its business plan as early as possible and that Sonim would be cooperative and supportive of such strategy, including appointing Mr. Liu as the Chief Executive Officer of Sonim concurrent with signing the Subscription Agreement.

On March 1, 2022, representatives of B. Riley and O’Melveny discussed with representatives of Party F potential transaction structures and certain other potential deal terms relating to a potential strategic transaction between Sonim and Party F.

Later on March 1, 2022, the Board held a special meeting. Also present was a member of management, a representative of O’Melveny and representatives of B. Riley. At the request of the Board, representatives of B. Riley reviewed the status of the potential strategic transactions with Party C, Party F and Purchaser. Representatives of B. Riley reported to the Board that Party C had not yet formed a conclusion regarding an updated proposal for a potential strategic transaction with Sonim. Representatives of B. Riley and of O’Melveny then discussed the conference call they had earlier in the day with representatives of Party F, including discussion topics relating to the structure of a transaction with Party F, the assets that would be acquired, the liabilities that would be assumed (if any) and whether Party F would be entitled to indemnification. Representatives of B. Riley informed the Board that Party F had reiterated its request for 30 days of exclusivity. Representatives of B. Riley then summarized for the Board the Purchaser’s Response. The Board discussed that Purchaser had communicated the desire to start to implement Purchaser’s business plan as early as possible and that Purchaser did not want to wait until May 2022 or later to start implementing its business plan for Sonim. The Board then discussed the request to appoint Mr. Liu as Chief Executive Officer concurrent with the signing of the Subscription Agreement. The Board then asked representatives of B. Riley whether Purchaser had requested exclusivity and B. Riley responded that Purchaser had not made a request to date for exclusivity. The Board then further discussed the Purchaser’s Response, including (among other things) that (i) Purchaser had previously provided to the Board a presentation providing information regarding Purchaser’s business plans for the go-forward company, (ii) that the potential transaction with Purchaser allowed Sonim’s current stockholders to continue to hold an equity interest in Sonim and may realize any potential increase in value of Sonim should Purchaser achieve some or all of its

business plan for Sonim, (iii) the implied value of Sonim of approximately $33.7 million in the potential transaction with Purchaser, (iv) that Party C had not moved with as much speed as Purchaser and had not provided a final letter of intent setting forth valuation and structure for a transaction and (v) that the transaction with Party F involved unique complexity and uncertainty than the transaction with Purchaser as the transaction with Party F required a sale of assets (including likely third party consents to consummate the transaction) and following such sale, the Board would look to sell the Sonim “shell” company in a reverse merger. Following such discussion, the Board instructed representatives of B. Riley to inform representatives of Purchaser that the Board would continue to pursue a potential strategic transaction with Purchaser pursuant to the terms outlined in the Revised Offer, as modified by Purchaser’s Response, subject to further discussion regarding the implementation of Purchaser’s business plan and appointing Mr. Liu Chief Executive Officer of Sonim prior to the first closing. Representatives of B. Riley then left the meeting and the Board discussed the desire to have B. Riley deliver a fairness opinion in connection with the contemplated transaction with Purchaser. The Board stated that it was desirable and in the best interests of Sonim and its stockholders for the Board to obtain a fairness opinion from B. Riley in connection with the contemplated transaction with Purchaser.

On March 3, 2022, Sonim granted access to an electronic data room to Party C, but prior to such time, representatives of B. Riley and management were delivering to Party C diligence information and materials.

Also on March 3, 2022, representatives of Venable, on behalf of Purchaser, requested that Sonim grant Purchaser exclusivity through March 31, 2022 and delivered a draft exclusivity agreement. Thereafter, representatives of B. Riley alerted the Board to the request for exclusivity from representatives of Venable, on behalf of Purchaser. The members of the Board expressed that they were willing to agree to exclusivity, but wanted the exclusivity period to expire on March 15, 2022. Representatives of O’Melveny then revised the draft exclusivity agreement to, among other changes, reflect the expiration of the exclusivity period as March 15, 2022 and delivered the revised exclusivity agreement to representatives of Venable. Representatives of Venable never responded to the revised draft of the exclusivity agreement and prior to the execution of the Subscription Agreement, Sonim never entered into exclusivity with Purchaser.

On March 4, 2022, representatives of O’Melveny discussed with representatives of Venable the SEC Matter.

Also on March 4, 2022, representatives of Party C delivered to representatives of B. Riley, on behalf of Sonim, an updated non-binding indication of interest, which provided (among other things) that Party C was seeking to acquire selected accounts receivable and selected inventory (including finished goods inventory and PCBA (printed circuit board assembly) inventory, subject to further diligence), which it stated had a value of approximately $14.395 million. The indication of interest again did not include a specific offer price. The non-binding indication of interest also provided that all current carrier and key OEM and supplier contracts under which Sonim operates would be included as part of the asset transfer. In addition, Party C stated in the non-binding indication of interest that Party C would be interested in retaining select employees and that any costs associated with the termination of the employment of any employees would be the responsibility of Sonim. No specific persons were identified as employees that Party C was potentially interested in retaining.

On or around March 4, 2022, representatives of B. Riley discussed with representatives of Party C the non-binding indication of interest sent by Party C on that day, including that Party C needed to improve its offer and that it would be helpful if Party C could conduct further due diligence regarding the current financial position of Sonim.

On March 7, 2022, representatives of O’Melveny delivered the initial draft of the Subscription Agreement to representatives of Venable, which included, among other things (a) a provision providing that at least two current directors of the Board (or one current Director and Mr. Tirva) would continue to serve on the Board and would constitute the sole members of a select matters committee of the Board, which would have sole and exclusive authority to address, negotiate and resolve the SEC Matter, (b) non-solicitation and deal protection provisions and related termination rights and fees, including that the Sonim termination fee would equal $300,000 payable if

the Subscription Agreement is terminated due to an adverse recommendation change or the acceptance of a superior proposal, (c) the right of Sonim to seek to amend its certificate of incorporation to provide that following the closing of the transaction, any transaction whereby Purchaser or an affiliate of Purchaser seeks to take Sonim private, a majority of the unaffiliated stockholders of Sonim would be required to approve, (d) that Mr. Liu would be appointed Chief Executive Officer of Sonim concurrent with the first closing and (e) that the representations and warranties of Sonim in the Subscription Agreement do not survive the closing of the transaction and thus there is no indemnification.

On March 8, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. At the request of the Board, representatives of B. Riley provided the Board with an update that Party C was continuing to do work on a valuation and transaction structure and that there were no new developments with Party F since the Board determined not enter into an exclusivity agreement with Party F. Representatives of O’Melveny reported to the Board that the initial draft of the Subscription Agreement was delivered to representatives of B. Riley on March 7, 2022. Representatives of O’Melveny reviewed with the Board certain of the material terms in the initial draft of the Subscription Agreement. Representatives of O’Melveny also noted for the Board that it had not received a response from representatives of Venable to the revised exclusivity agreement. Management discussed with the Board that Party C had requested a diligence conference call with Mr. Liu. The Board determined that it was acceptable to have Mr. Liu attend such due diligence call with representatives of Party C, but that representatives of B. Riley should also attend such call.

On March 11, 2022, Mr. Liu and representatives of Party C held a meeting during which management provided representatives of Party C with additional information on Sonim. Representatives of B. Riley as well as another member of management attended the call.

On March 15, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. The Board discussed the qualitative aspects of Purchaser’s business plan for Sonim and the fact that the value of Sonim may increase based on Purchaser achieving some or all of its business plan. The Board then discussed potential transaction costs, including advisor expenses and the cost of a director and officer tail insurance policy. The Board discussed that, to date, Purchaser had not requested information regarding the potential cost of a director and officer tail insurance policy.

Later on March 15, 2022, representatives of Party C delivered to representatives of B. Riley, on behalf of Sonim, a non-binding letter of intent, which provided (among other things) that Party C would acquire certain assets for a purchase price of $10 million, subject to adjustments as provided in any definitive agreement. The non-binding letter of intent provided that Party C would not acquire any liabilities from Sonim and that Party C would acquire, among other assets identified in due diligence, Sonim’s key customer and supplier contracts. The non-binding letter of intent included a request for 45 days of exclusivity.

On March 19, 2022, representatives of Venable delivered to representatives of O’Melveny, on behalf of Sonim, a list of certain issues in the initial draft of the Subscription Agreement, including (among others) (a) that Mr. Liu should be appointed Chief Executive Officer of Sonim concurrent with the signing of the Subscription Agreement and that Sonim will make its best efforts to implement Purchaser’s business plan, subject to the Board’s fiduciary duties, (b) that Sonim would owe Purchaser a fee of $500,000 if Sonim’s stockholders do not approve the transaction or would owe Purchaser a fee of $1,500,000 if the Subscription Agreement is terminated as a result of an adverse recommendation change, due to Sonim’s acceptance of a superior proposal or as a result of a breach of the no-solicitation provision, (c) that Purchaser be entitled to receive additional shares of common stock of Sonim in the amount of any fines or expenses incurred by Sonim in connection with the SEC Matter, which we refer to herein as the “SEC Matter True-Up”, (d) that the Subscription Agreement include indemnification and (e) Sonim, as a condition to closing the transaction, must be in compliance with Nasdaq continuous listing rules, which may include effecting a reverse stock split.

On March 22, 2022, representatives of Venable and representatives of O’Melveny discussed the issues list delivered by representatives of Venable to representatives of O’Melveny on March 19, 2022, including Sonim’s positions (a) that Mr. Liu be appointed as Chief Executive Officer of Sonim concurrent with the first closing, (b) that Sonim would anticipate cooperating with Purchaser with respect to the implementation of its business plan prior to the first closing, but would not be required contractually to agree to implement the plan, (c) proposing an expense reimbursement provision payable by Sonim to Purchaser if the Sonim stockholders do not approve the transaction with such obligation capped at $250,000, (d) proposing a $500,000 termination fee in the event of a termination of the Subscription Agreement for an adverse recommendation change, the acceptance of a superior proposal or a material and willful breach of the non-solicitation provisions in the Subscription Agreement, (e) that Sonim would accept the SEC Matter True-Up, (f) that indemnification by Sonim in favor of Purchaser was not acceptable and (g) that Sonim would accept including a reverse stock split proposal in its proxy statement for the special meeting of stockholders to approve the deal, but that approval of such proposal by the Sonim stockholders would not be a condition to closing.

Later on March 22, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. At the request of the Board, representatives of O’Melveny summarized its discussion with representatives of Venable regarding the issues list to the Subscription Agreement, including that such issues were not resolved on the call and that representatives of Venable would get back to representatives of O’Melveny regarding the issues list. Representatives of O’Melveny then discussed with the Board its fiduciary duties in connection with the contemplated transaction with Purchaser, including as it relates to any implementation of Purchaser’s business plan. The Board then discussed that it had reviewed Purchaser’s business plan, but that it would be beneficial to schedule a diligence conference call with representatives of Purchaser and Mr. Liu to discuss the business plan to better assess such plan. Following such discussion, the Board instructed representatives of B. Riley to organize such diligence conference call. The Board also discussed the non-binding letter of intent received from Party C on March 15, 2022 and determined not to further proceed with Party C regarding a potential strategic transaction.

On March 24, 2022, representatives of Venable delivered to representatives of O’Melveny, on behalf of Sonim, an updated issues list in which Purchaser conveyed that (a) Mr. Liu must be appointed Chief Executive Officer of Sonim concurrent with signing the Subscription Agreement and that such position of Purchaser was a “deal braker”, (b) Sonim commence implementing Purchaser’s business plan concurrent with signing of the Subscription Agreement and that such position of Purchaser was a “deal braker”, (c) Purchaser generally accepted Sonim’s positions on expense reimbursement and the termination fee, but proposed an expense reimbursement cap of $350,000 and a termination fee of $750,000, (d) accepted that Sonim would not indemnify Purchaser and (e) accepted that approval of the reverse stock split would not be a condition to closing, but required as a condition to closing that Sonim be in compliance with Nasdaq continuous listing rules.

Between March 24, 2022 and April 4, 2022, representatives of Venable and representatives of O’Melveny, on behalf of Sonim, corresponded regarding the open points in the issues list, including that Sonim would agree to appoint Mr. Liu as Chief Executive Officer of Sonim concurrent with the signing of the Subscription Agreement, that Sonim would agree to implement Purchaser’s business plan prior to the first closing, subject to compliance with applicable laws and the Board’s fiduciary duties and regarding Purchaser’s request to condition the transaction on Sonim’s compliance with Nasdaq continuous listing rules.

On March 25, 2022, management and the Board, on the one hand, and representatives of Purchaser, on the other hand, held a meeting during which Purchaser provided management and the Board information regarding Purchaser’s business plan for Sonim following the closing of the transaction, including (i) the creation of a new product roadmap encompassing mobile carrier expansion proposals and pricing; (ii) entry into the semi-rug market; (iii) addressing the market need of 5G-capable devices; (iv) development of a performance-based KPI and incentives for employees and contractors with a focus on result-oriented growth of Sonim; (v) evaluation of the need for introduction of new key positions and roles in the marketing division; (vi) review and revision of the sales commission plan in order to optimize the volume growth incentive; and (vii) shift the focus of sales on mobile carriers as opposed to other distribution channels.

Also on March 25, 2022, management delivered to B. Riley the management projections for B. Riley’s use with respect to its fairness analysis. The management projections were derived from the carveout projections reviewed by the Board in June 2021, with management updating the management projections to reflect a non-carve out strategic transaction in which Sonim continues to incur customary overhead expenses of a publicly listed company, which resulted in an add back of such expenses, and with management updating the management projections to reflect results of operations since the preparation of the carveout projections and refining the management projections to reflect the best currently available estimates and judgments of Sonim’s management at such time.

On March 27, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. Representatives of O’Melveny discussed the current state of the open points in the issues list. The Board then discussed the cost of a director and officer tail insurance policy.

On March 29, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. Representatives of O’Melveny discussed the current state of the open points in the issues list, including relating to the Nasdaq continuous listing rules compliance condition. Representatives of B. Riley discussed that it had received evidence that Purchaser has proof of funds to pay the purchase price in the first closing and that B. Riley was working on gathering the proof of funds for Purchaser to pay the purchase price in the second closing.

On April 4, 2022, representatives of Venable delivered to representatives of O’Melveny, on behalf of Sonim, a revised draft of the Subscription Agreement, which, among other things, reflected the terms agreed upon by the parties during the negotiation of the issues list. With respect to the Nasdaq compliance issue, the revised Subscription Agreement provided that as a condition to closing, Sonim must either clear be in compliance with Nasdaq continuous listing rules or obtain an additional 180 day extension from Nasdaq in order to comply with any Nasdaq deficiency.

On April 5, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. Representatives of O’Melveny discussed the revised draft of the Subscription Agreement received from representatives of Venable on April 4, 2022, including the open point regarding the Nasdaq compliance condition. The Board discussed scheduling a conference call with representatives of Purchaser to discuss the implications of such a condition, including on the potential timing of the first closing if such condition remains in the Subscription Agreement and the impact of a delayed closing on the cash position of Sonim. Following such discussion, the Board instructed representatives of O’Melveny to schedule such a conference call with representatives of Purchaser.

On April 6, 2022, representatives of Purchaser, Sonim, B. Riley, Venable and O’Melveny discussed, among other points, the Nasdaq compliance condition. Following such discussion, representatives of Purchaser conveyed that Purchaser would agree to remove such condition from the Subscription Agreement.

On April 7, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. Representatives of O’Melveny reported on the conference call had with representatives of Purchaser on April 7, 2022 regarding the Nasdaq compliance condition, including that Purchaser had agreed to remove the Nasdaq compliance condition. The Board discussed Purchaser’s business plan and the requirement in the Subscription Agreement that the Company in good faith commence the enhancement and optimization of the Company’s business pursuant to the strategy developed by Mr. Liu, which is Purchaser’s business plan. The Board discussed that such obligation is conditioned on the Board’s continuing determination that pursuing that strategy is not contrary to the Board’s fiduciary duties. The Board then discussed the obligations of the Company to certain members of management with respect to severance.

Between April 7, 2022 and April 13, 2022, representatives of O’Melveny, on behalf of Sonim, and representatives of Venable, on behalf of Purchaser, exchanged drafts of the Subscription Agreement. Also,

during such period, representatives of Sonim and representatives of Purchaser discussed final deal points, including costs associated with the contemplated potential strategic transaction between Sonim and Purchaser.

On April 12, 2022, the Board held a special meeting. Also present was a member of management, representatives of O’Melveny and representatives of B. Riley. The Board discussed the cost of a potential director and officer tail insurance policy and the severance obligations of Sonim. The Board stated that it was supportive of pursuing a director and officer tail insurance policy with a premium not to exceed approximately $1 million. The Board also discussed the severance rights of Mr. Tirva in his current employment agreement.

On April 13, 2022, the Board held a special meeting to consider the terms of the final proposed strategic alternative transaction with Purchaser, including the terms of the Subscription Agreement. Also present were representatives of O’Melveny and representatives of B. Riley. Representatives of B. Riley highlighted for the Board the above-described process that had been conducted by the Board, management and representatives of B. Riley. The Board reviewed the management projections included in the materials provided by B. Riley and did not provide any comments or revisions to such management projections. The Board also discussed the current financial position of Sonim. The Board discussed that at its current spending rate, Sonim would not have sufficient cash to continue its operations starting in June 2022. Representatives of B. Riley then presented to the Board their financial analyses of the proposed $17.5 million investment in Sonim by Purchaser pursuant to the Subscription Agreement. At the request of the Board, a representative of B. Riley then delivered its oral opinion, which was subsequently confirmed in writing, to the effect that, based on and subject to the assumptions in the written opinion letter, B. Riley was of the opinion that, as of April 13, 2022, the aggregate consideration of $17.5 million to be received by the Company for the shares of common stock of Sonim to be issued pursuant to the Subscription Agreement to Purchaser is fair to the Company from a financial point of view. The full text of the written opinion of B. Riley, dated April 13, 2022, which sets forth, among other matters, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by B. Riley in rendering their opinion, is attached as Annex B to this proxy statement. See also “The Transaction—Opinion of B. Riley Securities, Inc.”. Representatives of O’Melveny reviewed for the Board its fiduciary duties under Delaware law. Representatives of O’Melveny also informed the Board that it had provided Purchaser’s proof of funds to complete the first closing and the second closing, and further discussion among the Board ensued. Representatives of O’Melveny then reviewed with the Board the proposed investment by Purchaser in Sonim and the final material terms of the Subscription Agreement, including that it is expected that Mr. Liu would invest approximately $800,000 of the $17.5 million, but would not be an equityholder of Purchaser. After discussion among the directors, the Board unanimously (i) determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of Sonim’s stockholders, (ii) adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby and (iii) resolved, subject to Section 4.1 of the Subscription Agreement, to recommend adoption of the Subscription Agreement by the stockholders of Sonim.

Reasons for the Transaction; Recommendation of the Board

The Board recommends that you vote “FOR” the Transaction Proposal.

The Board held numerous meetings at which the business strategies, opportunities and challenges of the Company were evaluated and potential strategic alternatives were considered.

At a meeting held on April 13, 2022, after careful consideration, the Board unanimously (i) determined that the Subscription Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, (ii) adopted and declared advisable the Subscription Agreement and the transactions contemplated thereby and (iii) resolved, subject to certain provisions of the Subscription Agreement, to recommend that the Company’s stockholders adopt the Subscription Agreement, all upon the terms and subject to the conditions set forth therein.

In evaluating and reaching its decision, the Board consulted with senior management and the representatives of O’Melveny & Myers LLP and B. Riley at various times and considered a number of factors, including the following material factors (not in any relative order of importance) that the Board believes support its decision to approve the transaction and adopt the Subscription Agreement:

historical information regarding (i) the Company’s business, financial performance and results of operations, (ii) market prices, volatility and trading activity with respect to the Company Stock and (iii) market prices with respect to other industry participants and general market indices;

current information regarding (i) the Company’s business, prospects, financial condition, operations, technology, products, services, management, competitive position and strategic business goals and objectives, (ii) general economic, industry and financial market conditions and (iii) opportunities and competitive factors within the Company’s industry;

the current cash position of the Company, including that the Board anticipates that the Company will run out of cash in June 2022 based on current spending rates and the potential of liquidation, dissolution and/or bankruptcy proceedings if the Company does not affect the transaction;

the qualitative proposed business and integration plan provided by the Purchaser to the Board with respect to the Purchaser’s plans for business of the Company;

the fact that Mr. Peter Liu, the Company’s current Executive VP for Global Operations and Engineering, is required to be appointed as the Chief Executive Officer of the Company as of the date of the Subscription Agreement;

the fact that the Company will continue to exist as a public company and the Company’s stockholders will continue to own shares of capital stock of the Company and will not forego any future increase in the value of the Company as a public company that might result from the possible growth of the Company, including in connection with the Purchaser’s business plan (together with the possibility of near- and long-term fluctuations in the value of the common stock);

the fact that through Purchaser’s relationships, the Company expects to have access to low-cost product-development and manufacturing relationships that the Company would not otherwise have access to without the contemplated transaction, which the Board believes is critical to the future profitability of the Company;

the dilutive impact of the transaction to the Company’s stockholders and that following the second closing, the Purchaser will own more than 50% of the outstanding capital stock of the Company;

following the second closing, the Company will be majority owned by the Purchaser and the Purchaser will have the right, as the stockholder of the Company, to appoint the members of the Board (subject to the rights of the Continuing Directors (Messrs. Mike Mulica and Alan Howe, who we refer to as the “continuing directors”)) and, except as required by applicable law and as contemplated by the Charter Restriction Proposal, the Company’s current stockholders will have no express minority stockholder rights or protections;

the fact that (i) the Company and the Purchaser may not achieve the business plan presented by the Purchaser to the Board and (ii) that the Purchaser and the Company have no binding legal obligation to pursue the Purchaser’s proposed business plan of the Company;

the Company’s stockholders will not receive any consideration in the transaction and that the purchase price will be paid to the Company, which the Board understands will be used to support future operations of the Company, but there is no legally binding obligation for such funds to be used for such purpose;

the price per share of common stock to be paid by the Purchaser to the Company in the transaction equals $0.84, which represents a premium of approximately 27% to the stock price at the close of the market on April 12, 2022, which was $0.66;

the prospects and likelihood of realizing superior benefits if the Company does not consummate the transaction, risks associated with not consummating the transaction and possible alternative business strategies;

the consideration of other potential strategic alternative transactions offered to the Company, including sales by the Company of certain of its assets to a third party and the amount of consideration proposed to be paid therein, and the fact that such other potential strategic alternative transactions did not afford the Company’s existing stockholders an opportunity to continue to participate in any potential future growth and value increase of the Company;

the potential for other third parties to enter into strategic relationships with or to seek to acquire the Company, including a review of management’s dealings with other potential strategic partners or acquirers of the Company in the past and the assessment of the likelihood that a third party would offer a strategic alternative transaction more beneficial to the Company and its stockholders of the Company than the transaction;

the timing of the transaction;

the risk that if the Company does not accept the Purchaser’s offer now (as provided for in the Subscription Agreement), it may not have another opportunity to do so or a comparable opportunity that is as beneficial to the Company’s stockholders;

the fact that the Subscription Agreement does not contain a floor or a ceiling for the value of the shares to be purchased and that the value of the shares to be issued in the transaction could rise or fall based on the value of the common stock prior to the first closing, in the case of the initial shares, and prior to the second closing, in the case of the remaining shares;

(i) the belief of the Board that continuing with the strategic alternative review process was unlikely to result in a transaction that is more beneficial to the Company’s stockholders than offered by the Purchaser in the transaction and (ii) the fact that the Company would be permitted, under circumstances described in the Subscription Agreement, to terminate the Subscription Agreement in order to enter into an agreement with respect to a superior proposal after giving the Purchaser the opportunity to match the superior proposal and upon payment of a termination fee equal to $750,000, or 4.3% of the purchase price and reimbursement of up to $350,000 of reasonable, documented and out-of-pocket expenses incurred by the Purchaser in connection with the Subscription Agreement;

the fact that if the Company’s stockholders do not approve the transaction and the Subscription Agreement is terminated as a result thereof, the Purchaser will be entitled to the reimbursement obligation from the Company;

the fact that, under the terms of the Subscription Agreement, the Purchaser has agreed to use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transaction as promptly as practicable;

the belief of the Board that the transaction has a reasonable likelihood of closing without potential issues from any governmental authorities;

(i) the financial analyses reviewed by B. Riley with the Board and (ii) the opinion of B. Riley rendered to the Board to the effect that, as of the date hereof, and based upon and subject to the assumptions, qualifications, limitations and other matters considered in connection with the preparation of such opinion, the consideration to be received by the Company in the transaction is fair, from a financial point of view, to the Company;

the possible negative effect of the transaction and public announcement of the transaction on the Company’s financial performance, operating results and stock price and the Company’s relationships with customers, suppliers, other business partners, management and employees;

the fact that the Subscription Agreement (i) precludes the Company from actively soliciting competing acquisition proposals and (ii) obligates the Company (or its successor) to pay the Purchaser the termination fee and reimbursement obligations under specified circumstances, which could discourage the making of a competing acquisition proposal or adversely impact the price offered in such a proposal;

the fact that the Subscription Agreement imposes restrictions on the conduct of the Company’s business in the pre-closing period, which may adversely affect the Company’s business in the event the transaction is not completed (including by delaying or preventing the Company from pursuing business opportunities that may arise or precluding actions that would be advisable if the Company were to not consummate the transaction);

the fact that the Subscription Agreement provisions referenced in the immediately above bullet may significantly restrict the operation of the Company’s business;

commencing with the execution of the Subscription Agreement, the Company is required to, subject to compliance with applicable laws and the Board’s fiduciary duties, in good faith commence the enhancement and optimization of the Company’s business pursuant to the strategy developed by Mr. Liu, which has previously been reviewed by the Board, which may adversely affect the Company’s business in the event the transaction is not completed (including by delaying or preventing the Company from pursuing business opportunities that may arise or by the Company having incurred costs and expense, and become subject to obligations, in connection with implementing such business plan);

the fact that the Purchaser has represented to the Company that the Purchaser (i) has as of the date of the Subscription Agreement, and will have as of the first closing, sufficient immediately available funds to pay the first purchase price pursuant and (ii) has as of the date of the Subscription Agreement, and will have as of the second closing, sufficient immediately available funds to pay the second purchase price;

the fact that no external or third party financing is required by the Purchaser to consummate the transaction;

the risks involved with the transaction and the likelihood that the Company and Purchaser will be able to complete the transaction, the possibility that the transaction might not be consummated and the Company’s prospects going forward without the investment by the Purchaser;

the substantial transaction expenses to be incurred in connection with the transaction and the negative impact of such expenses on the Company’s cash reserves and operating results;

all known interests of directors and executive officers of the Company in the transaction that may be different from, or in addition to, their interests as stockholders of the Company or the interests of the Company’s other stockholders generally;

two (2) current members of the Board, the Continuing Directors, will remain on the Board following the first closing until the Director End Time;

the Purchaser will enter into a voting agreement to vote in favor of the appointment, election and reelection of the Continuing Directors in accordance with the terms of the voting agreement;

each member of the Board and Mr. Bob Tirva will enter into an insider voting agreement whereby, subject to the terms and provisions thereof, each such person will agree to vote in favor of the transaction;

other than the Continuing Directors, the current members of the Board will resign effective upon the first closing and the Purchaser will have the right to appoint members to the Board proportionate to the interest in the capital stock of the Company that the Purchaser owns following the first closing;

the various constituencies of the Company, as and to the extent the Board is permitted to consider such constituencies; and

all other factors the Board deems relevant.

Certain Company Forecasts

Sonim does not, as a matter of course, make public disclosure of detailed forecasts or projections of its expected financial performance for extended periods due to, among other things, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in connection with Sonim’s evaluation of potential strategic transactions involving Sonim, Sonim management prepared certain projections and estimates of future financial and operating performance with respect to Sonim’s fiscal year 2022, 2023 and 2024 (which we refer to herein as the “management projections”). Sonim made available the management projections to the Board and B. Riley. In addition, management prepared certain projections and estimates of future financial and operating performance with respect to Sonim’s fiscal year 2022, 2023 and 2024 as if the Sonim business had been sold in a “carve-out” transaction whereby such business would no longer be subject to customary overhead costs and expenses of a public company, which we refer to herein as the “carveout projections”. The management projections were derived from the carveout projections, with management updating the management projections to reflect a non-carve-out strategic transaction in which Sonim continues to incur customary overhead expenses of a publicly listed company, which resulted in an add back of such expenses, and with management updating the management projections to reflect results of operations since the preparation of the carveout projections and refining the management projections to reflect the best currently available estimates and judgments of Sonim’s management at such time. The management projections were not shared with AJP Holdings or any other potential strategic partner, but the carveout projections were shared with AJP Holdings and certain other potential strategic partners.

A summary of the management projections is being included in this proxy statement because they were made available to the Board and B. Riley and a summary of the carveout projections is being included in this proxy statement because they were made available to AJP Holdings and other potential strategic partners. This information is not intended to influence your decision whether to vote for or against the transaction proposal. The inclusion of this information should not be regarded as an indication that the Board, its advisors or any other person considered, or now considers, the management projections or the carveout projections to be material or to be a reliable prediction of actual future results, and neither management projections nor the carveout projections should be relied upon as such. The management projections and the carveout projections are subjective in many respects. There can be no assurance that the management projections or the carveout projections will be realized or that actual results will not be significantly higher or lower than reflected in the management projections or the carveout projections. The management projections and the carveout projections cover multiple years and such information by its nature becomes subject to greater uncertainty with each successive year. As a result, the Company believes that having an independent Board Chair can enhance the effectivenessinclusion of the Boardmanagement projections and the carve out projections in this proxy statement should not be relied on as necessarily predictive of actual future events.

The management projections were prepared on a whole.

ROLEOFTHE BOARDIN RISK OVERSIGHT

Onestand-alone basis and do not take into account any of the board’s key functions is informed oversighttransactions contemplated by the subscription agreement, including the acquisition of common stock and associated expenses, or Sonim’s compliance with its covenants under the Company’s risksubscription agreement. The management process. The Board does not have a standing risk management committee, but rather administers this oversight function directlyprojections assume sufficient liquidity to continue to operate through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoringplanning period, which would require Sonim to raise additional capital. For these reasons and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our audit committee hasreasons described above, actual results likely will differ, and may differ materially, from those contained in the responsibilitymanagement projections.

The carveout projections were prepared on a stand-alone basis, but do assume that the Sonim business is sold to considera strategic partner whereby customary overhead costs of a public company would no longer be applicable. For these reasons and discuss our major financial risk exposuresfor the reasons described above, actual results likely will differ, and may differ materially, from those contained in the steps our management has taken to monitor and control these exposures, including guidelines and policies tocarveout projections.

governThe management projections were prepared by, and are the processresponsibility of, Sonim’s management for internal use and use by B. Riley. The carveout projections were prepared by, and are the responsibility of, Sonim’s management, but such projections were not relied upon by the Sonim Board or B. Riley and were provided to AJP Holdings and certain other potential strategic partners. The management projections were (i) used by B. Riley in its financial analyses undertaken in connection with rendering its opinion to the Board, (ii) not prepared for purposes of public disclosure and (iii) not prepared on a basis designed to comply with published guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial data, published guidelines of the SEC (including those regarding forward-looking statements and the use of non-GAAP measures) or GAAP. Moss Adams LLP, Sonim’s independent registered public accounting firm, has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the management projections or the carveout projections contained in this proxy statement and, accordingly, Moss Adams LLP does not express an opinion or any other form of assurance with respect thereto. Further, the management projections and the carveout projections include non-GAAP financial measures. Non-GAAP financial measures are not prepared in accordance with GAAP and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Although the management projections and carveout projections presented below are presented with numerical specificity, they are estimates of future performance and not historical facts. The management projections and the carveout projections were based on numerous variables and assumptions that were deemed to be reasonable as of the respective dates when such projections were finalized. Realization of such assumptions is inherently uncertain and may be beyond the control of Sonim. Important factors that may affect actual results and cause the management projections or the carveout projections not to be achieved include, but are not limited to, risks and uncertainties relating to Sonim’s business (including, without limitation, risks relating to competition; customer risks; scale; market and product diversification; breadth of solution offerings; technology risks; innovation demands of customers; organic growth opportunities; inorganic opportunities; and industry consolidation and other factors described or referenced under “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 17. In the view of Sonim’s management, the management projections had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Sonim’s management of the future financial performance of Sonim and other matters covered thereby. In the view of Sonim’s management, the carveout projections had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Sonim’s management of the future financial performance of Sonim and other matters covered thereby, taking into account that the Sonim business was sold in a carve-out transaction and was no longer subject to customary overhead costs of a public company. In addition, the assumptions underlying the management projections and the carveout projections are subject to change and have not been revised since their preparation to reflect any changes in Sonim’s business, industry performance, the legal or regulatory environment, general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated as the management projections and the carveout projections were prepared. Neither Sonim nor AJP Holding undertakes any obligation, except as required by law, to update or otherwise revise the management projections or the carveout projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error or to not be appropriate, or to reflect changes in Sonim’s business, industry performance, the legal or regulatory environment, or general business or economic conditions. There can be no assurance that the management projections or the carveout projections will be realized or that Sonim’s future financial results will not materially vary from the management projections or the carveout projections.

Management Projections

The following is a summary of the management projections prepared by Sonim’s management and provided to the Board and B. Riley.

($ in millions, except percentages)  Year Ending December 31, 
   2022E  2023E  2024E 

Revenue

  $61.9  $ 93.3  $ 111.4 

% Growth

   13.4  50.7  19.5

Adjusted EBITDA(1)

   (14.2  2.4   6.6 

% Margin

   (23.0%)   2.6  5.9

Less: Depreciation & Amortization

   —     —     —   
  

 

 

  

 

 

  

 

 

 

Adjusted EBIT(2)

   (14.2  2.4   6.6 

% Margin

   (23.0%)   2.6  5.9

Less: Taxes (3)

   —     (0.1  (0.4
  

 

 

  

 

 

  

 

 

 

NOPAT(4)

   (14.2  2.3   6.2 

Plus: Depreciation & Amortization

   —     —     —   

Less: Working Capital Cash Adjustments (5)

   (1.6  (0.2  (0.8

Less: Δ in Net Working Capital

   (3.7  (5.7  (3.2

Less: Capital Expenditures

   (0.1  (0.2  (0.2
  

 

 

  

 

 

  

 

 

 

Unlevered Free Cash Flow(6)

  ($ 19.6 ($ 3.8 $2.0 
  

 

 

  

 

 

  

 

 

 

(1)

“Adjusted EBITDA” is a non-GAAP financial measure and is calculated as earnings before interest, taxes, depreciation and amortization. No further adjustments were made to such calculation.

(2)

“Adjusted EBIT” is a non-GAAP financial measure calculated by starting with Adjusted EBITDA and subtracting depreciation and amortization, of which there were none. No further adjustments were made to such calculation.

(3)

Taxes includes net operating losses limited to 80% of taxable income under the Tax Cuts and Jobs Act.

(4)

“NOPAT” is a non-GAAP financial measure calculated by starting with Adjusted EBIT and deducting taxes.

(5)

Working capital cash adjustments include accrued expense cash outflows for: XP5 and XP3 non-recurring engineering, minimum order obligations, accrued vacation payout and severance payments.

(6)

“Unlevered Free Cash Flow” is a non-GAAP financial measure calculated by starting with NOPAT and adding back depreciation and amortization, adjusting for working capital cash adjustments and changes in net working capital (which, in this case, were deductions) and deducting for capital expenditures.

Carveout Projections

The following is a summary of the carveout projections prepared by Sonim’s management and provided to the Board and B. Riley, each of which risk assessmentdid not rely on such projections in connection with its consideration of the subscription agreement and the transactions contemplated thereby, and was provided to AJP Holdings and certain other potential strategic partners.

($ in millions, except percentages)  Year Ending December 31, 
   2022E  2023E  2024E 

Total Revenue

  $ 63.6  $ 88.8  $ 108.4 

Total Costs of Sales

  $43.5  $58.7  $72.8 

Gross Margin

  $20.1  $30.1  $35.6 

% Gross Margin

   32.0  34  33

Less: R&D

  $0.7  $0.7  $0.7 

Less: Third Party Engineer

  $10.3  $5.4  $2.4 

($ in millions, except percentages)  Year Ending December 31, 
   2022E   2023E   2024E 

Less Sales and Marketing(1)

  $7.2   $7.2   $7.2 

Less: G&A(2)

  $0.1   $0.1   $0.1 
  

 

 

   

 

 

   

 

 

 

Total Operating Expenses

  $18.3   $13.4   $10.3 

Operating Profit (Loss)(3)

  $1.8   $16.7   $25.3 
  

 

 

   

 

 

   

 

 

 

(1)

Sales and marketing expense was assumed to be $7.2 million per year.

(2)

G&A expense was assumed to be approximately $100,000 per year.

(3)

“Operating Profit (Loss)” is calculated by starting with Gross Margin and subtracting Total Operating Expenses.

Opinion of B. Riley Securities, Inc.

On April 13, 2022, B. Riley rendered to the Board its oral opinion (which was subsequently confirmed in writing by delivery of B. Riley’s written opinion dated April 13, 2022), to the effect that, as of April 13, 2022, and based upon and subject to the qualifications, limitations, assumptions and other matters considered by B. Riley in connection with the preparation of the opinion, the Aggregate Consideration to be received by the Company in exchange for the Purchased Shares in the transaction pursuant to the Subscription Agreement was fair from a financial point of view to the Company.

B. Riley’s opinion was directed to the Board (in its capacity as such) and only addressed the fairness, from a financial point of view, to the Company of the Aggregate Consideration to be received by the Company in exchange for the Purchased Shares in the transaction pursuant to the Subscription Agreement and did not address any other aspect or implication of the transaction, the Subscription Agreement or any other agreement or understanding entered into in connection with the transaction or otherwise. The summary of B. Riley’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex B to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by B. Riley in preparing its opinion. However, neither B. Riley’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement is intended to be, and they do not constitute, a recommendation to the Board, the Company, any security holder of the Company or any other person as to how to act or vote on any matter relating to the transaction or otherwise.

For purposes of B. Riley’s opinion, the Company advised B. Riley and directed B. Riley to assume (i) the Company’s consolidated financial statements as of and for the year ended December 31, 2021, were prepared on the assumption that the Company would continue as a going concern, (ii) the Company was experiencing significant liquidity issues, (iii) the Company had not obtained, and did not expect to obtain, alternative financing on terms more favorable to the Company from a financial point of view, and (iv) in the absence of the transaction, or alternative financing for which the Company had not arranged and did not believe it could arrange to obtain on terms more favorable to the Company at the time, the Company’s ability to function as a going-concern would likely be severely impaired.

In arriving at its opinion, B. Riley, among other things:

Reviewed the financial terms of a draft, dated April 13, 2022, of the Subscription Agreement;

Reviewed certain publicly available business and financial information related to the Company;

Reviewed certain other information relating to the Company concerning its business, financial condition and operations made available to B. Riley by the Company, including (a) forecasts with respect to the future financial performance of the Company prepared by the management of the

Company relating to the Company in the absence of the transaction (the “Status Quo Projections”) and (b) solely for informational purposes, forecasts with respect to the future financial performance of the Company prepared by the management of the Purchaser relating to the Company giving effect to the transaction and the business strategy contemplated thereby (the “Financing Plan Projections”);

Held discussions with members of senior management of the Company and the Purchaser concerning the transaction and the business, financial condition, and strategic objectives of the Company;

Reviewed certain publicly available financial data, stock market performance data and trading multiples of companies which B. Riley deemed relevant;

Reviewed the publicly available financial terms of certain business combinations that B. Riley deemed relevant; and

Performed such other financial studies, analyses and investigations, and considered such other matters, as B. Riley deemed necessary or appropriate for purposes of rendering its opinion.

In preparing its opinion, at the Company’s direction, B. Riley relied, without assuming responsibility or liability for independent verification, upon the accuracy and completeness of all financial and other information available from public sources and all other information provided to B. Riley or otherwise discussed with or reviewed by B. Riley. Company management advised B. Riley and, at the Company’s direction, B. Riley assumed that the Status Quo Projections were reasonably prepared in good faith and represented Company management’s best currently available estimates and judgments with respect to the future financial performance of the Company in the absence of the transaction. In addition, at the Company’s direction, B. Riley assumed that the Financing Plan Projections were reasonably prepared in good faith and represented Purchaser management’s best currently available estimates and judgments with respect to the future financial performance of the Company giving effect to the transaction and the business strategy contemplated thereby. B. Riley assumed no responsibility for and expressed no view or opinion as to the Status Quo Projections, the Financing Plan Projections or the respective assumptions on which they were based. At the Company’s direction, B. Riley used and relied upon the Status Quo Projections for purposes of its analyses and opinion and assumed that the Status Quo Projections provided a reasonable basis upon which to evaluate the Company and the proposed transaction. B. Riley also assumed that there had been no changes in the assets, financial condition, results of operations, business or prospects of the Company since the respective dates of the last financial statements and other information, financial or otherwise, made available to B. Riley that would be material to its analyses or opinion, and that there was no information or any facts or developments that would make any of the information reviewed by B. Riley inaccurate, incomplete or misleading.

B. Riley was not asked to, and did not, undertake an independent verification of any information provided to or reviewed by it, nor was B. Riley furnished with any such verification, and B. Riley did not assume any responsibility or liability for the accuracy or completeness such information. B. Riley did not make an independent evaluation or appraisal of the assets or the liabilities (contingent or otherwise) of the Company, nor did B. Riley evaluate the solvency of the Company under any state or federal laws. B. Riley did not undertake any independent analysis of any pending or threatened litigation, possible unasserted claims or other contingent liabilities to which the Company was a party or may have been subject, including, without limitation, the ongoing investigation of the Company by the SEC, and B. Riley’s opinion made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters, including, without limitation, the additional shares of common stock that may become issuable to Purchaser in connection therewith.

B. Riley also assumed, with the Company’s consent, that (i) in the course of obtaining any regulatory or third party consents or approvals in connection with the transaction, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on the Company or the contemplated benefits of the transaction, (ii) the representations and warranties made by the parties in the Subscription Agreement were accurate and complete in all respects; (iii) each party to the Subscription Agreement would perform all of its

covenants and obligations thereunder; and (iv) the transaction would be consummated in accordance with the terms of the Subscription Agreement, without waiver, modification or amendment of any term, condition or provision thereof. B. Riley also assumed that the Subscription Agreement, when executed by the parties thereto, would conform to the draft reviewed by B. Riley in all respects material to its analyses and opinion. B. Riley is undertaken. The audit committee also monitors compliance withnot a legal, tax or regulatory advisor and relied upon, without independent verification, the assessments of the Company and its legal, tax and regulatory requirements,advisors with respect to such matters. Without limitation to the foregoing, with the Company’s consent, B. Riley did not evaluate the impact, if any, of the transaction on the Company’s ability to utilize its net operating loss carryforwards to reduce future tax liabilities.

B. Riley’s opinion was limited to the fairness, from a financial point of view, to the Company of the Aggregate Consideration to be received by the Company for the Purchased Shares in the transaction pursuant to the Subscription Agreement, and B. Riley expressed no view or opinion as to the fairness of the transaction to the holders of any class of securities, creditors or other constituencies of the Company. B. Riley’s opinion did not address any other aspect or implication of the transaction, the Subscription Agreement, or any other agreement or understanding entered into in connection with the transaction or otherwise. B. Riley also expressed no view or opinion as to the fairness of the amount or nature of the compensation to any of the Company’s officers, directors or employees, or any class of such persons, relative to the Aggregate Consideration or otherwise. B. Riley expressed no view or opinion as to the prices or range of prices at which Company common stock may trade at any time. Furthermore, B. Riley did not express any opinion as to the impact of the transaction on the solvency or viability of the Company or the Purchaser, or the ability of the Company or the Purchaser to pay its obligations when they become due.

B. Riley’s opinion was necessarily based upon economic, market, monetary, regulatory and other conditions as they existed and could be evaluated, and the information made available to B. Riley, as of the date of its opinion. Although subsequent developments may affect its opinion, B. Riley does not have any obligation to update, revise or reaffirm its opinion. As the Company was aware, the credit, financial and stock markets were experiencing significant volatility, and B. Riley expressed no view or opinion as to any potential effects of such volatility on the Company or the proposed transaction.

B. Riley’s opinion was for the information of the Board (in its capacity as such) in connection with its consideration of the proposed transaction. B. Riley’s opinion does not constitute a recommendation to the Board, the Company, any security holder of the Company or any other person as to how to act or vote on any matter relating to the transaction or otherwise including, without limitation, whether or not to participate in any offering of securities by the Company. B. Riley’s opinion did not address the relative merits of the transaction as compared to alternative transactions or strategies that might have been available to the Company or any other party to the transaction, nor did it address the underlying business decision of the Board, the Company or any other party to effect the transaction.

In preparing its opinion to the Board, B. Riley performed a variety of analyses, including those described below. The summary of B. Riley’s analyses is not a complete description of the analyses underlying B. Riley’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither B. Riley’s opinion nor its underlying analyses is readily susceptible to summary description. B. Riley arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching B. Riley’s overall conclusion with respect to fairness, B. Riley did not make separate or quantifiable judgments regarding individual analyses. Accordingly, B. Riley believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying B. Riley’s analyses and opinion.

In performing its analyses, B. Riley considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in B. Riley’s analyses for comparative purposes is identical to the Company or the proposed transaction and an evaluation of the results of those analyses is not entirely mathematical. The estimates contained in the Status Quo Projections and the implied value reference ranges indicated by B. Riley’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the Company. Much of the information used in, and accordingly the results of, B. Riley’s analyses are inherently subject to substantial uncertainty.

B. Riley’s opinion was only one of many factors considered by the Board in evaluating the proposed transaction. Neither B. Riley’s opinion nor its analyses were determinative of the Aggregate Consideration or of the views of the Board or management with respect to the transaction or the Aggregate Consideration. The type and amount of Aggregate Consideration payable in the transaction were determined through negotiation between the Company and Purchaser, and the decision to enter into the Subscription Agreement was solely that of the Board.

Material Financial Analyses

The following is a summary of the material financial analyses performed by B. Riley in connection with the preparation of its opinion and reviewed with the Board on April 13, 2022. The order of the analyses does not represent relative importance or weight given to those analyses by B. Riley. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis could create a misleading or incomplete view of B. Riley’s analyses.

For purposes of its analyses, B. Riley reviewed a number of financial metrics, including:

Enterprise Value — generally, the value as of a specified date of the relevant company’s outstanding equity securities plus the amount of debt outstanding, preferred stock and non-controlling interests, and less the amount of cash and cash equivalents

EBITDA — generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period.

Adjusted EBITDA — generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization and adjustments for non-recurring items for a specified time period.

Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of the Company’s common stock and the common stock of the selected companies listed below as of April 13, 2022, and transaction values for the selected transactions analysis described below were calculated on an enterprise value basis based on the value of the equity consideration in the announced transaction and other publicly available information at the time of the announcement. The estimates of the future financial performance of the Company relied upon for the financial analyses described below were based on the Status Quo Projections. The estimates of the future financial performance of the selected companies listed below were based on publicly available research analyst estimates for those companies.

Selected Companies Analysis. B. Riley reviewed certain financial data for selected companies with publicly traded equity securities that B. Riley deemed relevant. The financial data reviewed included enterprise value as a

multiple of revenue for the year ending December 31, 2021, or “2021 Revenue,” and enterprise value as a multiple of estimated revenue for the year ending December 31, 2022, or “2022E Revenue.”

The selected companies and corresponding multiples were:

Enterprise Value /
2021 Revenue
Enterprise Value /
2022E Revenue

Xiaomi Corporation

0.6x0.5x

Kyocera Corporation

1.2x1.2x

Lenovo Group Limited

0.2x0.2x

BK Technologies Corporation

0.7xNA

Socket Mobile, Inc.

1.3xNA

Siyata Mobile Inc.

2.4x1.0x

Sonim Technologies, Inc.

0.1x0.1x

“NA” refers to not available.

Taking into account the results of the selected companies analysis, B. Riley applied selected multiple ranges of 0.2x to 1.3x to the Company’s 2021 revenue and 0.1x to 1.3x to the Company’s estimated 2022E revenue. The selected companies analysis indicated implied aggregate equity value reference ranges for the Purchased Shares of $10.0 million to $41.1 million, based on 2021 revenue, and $7.5 million to $46.0 million, based on estimated 2022E revenue, in each case as compared to the Aggregate Consideration of $17.5 million in the transaction pursuant to the Subscription Agreement.

Selected Transactions Analysis. B. Riley reviewed certain financial terms of certain transactions involving target companies that B. Riley deemed relevant. The financial data reviewed included enterprise value as a multiple of revenue for the last twelve months available prior to the date of announcement, or “LTM Revenue.”

The selected transactions and corresponding multiples were:

Date Announced

Target

Acquiror

Enterprise
Value/
LTM
Revenue
7/22/2021

BK Technologies Corporation

Metrolina Capital

0.9x
8/14/2018

Xplore Technologies Corp.

Zebra Technologies Corporation

1.0x
5/30/2018

WinMate Inc.

Onyx Healthcare Inc.

1.5x
1/10/2018

Point Mobile Co., Ltd.

Consortium of Investors

0.9x

Taking into account the results of the selected transactions analysis, B. Riley applied a selected multiple range of 0.9x to 1.5x to the Company’s revenue for the last twelve months. The selected transactions analysis indicated an implied aggregate equity value reference range for the Purchased Shares of $29.7 million to $46.7 million, as compared to the Aggregate Consideration of $17.5 million in the transaction pursuant to the Subscription Agreement.

Discounted Cash Flow Analysis. B. Riley performed a discounted cash flow analysis of the Company based on the Status Quo Projections provided by the Company management. B. Riley applied ranges of terminal value multiples of 0.2x to 1.0x to the Company’s estimated 2024E revenue and 6.0x to 10.0x to the Company’s estimated 2024E adjusted EBITDA and, in each case, discount rates ranging from 30.0% to 40.0%. The discounted cash flow analysis indicated implied aggregate equity value reference ranges for the Purchased Shares of $0.6 million to $22.1 million, based on multiples of estimated 2024E revenue, and $3.8 million to $11.3 million, based on multiples of estimated 2024E adjusted EBITDA, in each case as compared to the Aggregate Consideration of $17.5 million in the transaction pursuant to the Subscription Agreement.

Additional Information

Illustrative Discount Paid Analysis. B. Riley performed a discount paid analysis of the Purchased Shares using the stock price discounts/premiums paid in 134 PIPE transactions involving U.S. public company issuers over the last seven years prior to April 13, 2022, including 115 small-cap transactions involving public companies with market caps of less than $500 million. B. Riley calculated the median discounts paid for the purchased shares relative to the issuer company’s single-day closing share price for the date one day prior to the announcement of the transaction. The median discount was (8.2%) for all transactions and (7.4%) for the small cap company transactions, in each case as compared to a premium of 20.0%, based on the price per share in the transaction of $0.84 and the Company’s closing price of $0.70 on April 13, 2022.

Taking into account the results of the illustrative discount paid analysis, B. Riley applied the median discounts indicated for all transactions and the small cap company transactions to the Company’s closing trading price of $0.70 on April 13, 2022. The discount paid analysis indicated illustrative aggregate equity reference values for the Purchased Shares of $13.4 million, based on the median discount for all transactions, and $13.5 million, based on the median discount for the small cap company transactions, in each case as compared to the Aggregate Consideration of $17.5 million in the transaction pursuant to the Subscription Agreement.

Other Matters

B. Riley acted as financial advisor to the Board in connection with the transaction and will receive a fee of $1,225,000 for such services, all of which is payable upon the consummation of the transaction. B. Riley also became entitled to a fee of $250,000 upon rendering its opinion, which is not contingent upon the conclusion set forth in its opinion or the successful completion of the transaction. In addition, the Company has agreed to indemnify B. Riley and certain related parties for certain liabilities arising out of or related to its engagement and to reimburse B. Riley for certain expenses incurred in connection with its engagement. The Board engaged B. Riley based on B. Riley’s knowledge of the Company and its industry, as well as its extensive experience working with the Company and its management. B. Riley is regularly engaged to render financial opinions in connection with transactions, acquisitions, divestitures, leveraged buyouts, and for other purposes.

B. Riley is a full-service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, B. Riley and its affiliates may acquire, hold or sell, for its and its affiliates’ own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of the Company, the Purchaser and their respective affiliates. During the last two years B. Riley held significant positions in equity and debt securities of the Company until August 2021, and a senior executive of its affiliates B. Riley Financial and B. Riley Principal Investments served as a member of the Board until February 2022. In addition, B. Riley and its affiliates have in the past provided, and are currently providing, investment banking and other financial services to the Company and certain of its affiliates, for which B. Riley and its affiliates have received, or would expect to receive, compensation, including, during the past two years having acted as the Company’s sales agent in connection with its “at-the-market offering” programs for which B. Riley received aggregate compensation of approximately $1,000,000. B. Riley and its affiliates may in the future provide investment banking and other financial services to the Company, the Purchaser and their respective affiliates, for which B. Riley and its affiliates would expect to receive compensation. B. Riley has adopted policies and procedures designed to preserve the independence of its research and credit analysts whose views may differ from those of the members of the team of investment banking professionals advising the Company.

Financing of the Transaction

AJP Holding will be using cash on hand to purchase the common stock of the Company in the transaction.

Closing of the Transaction

Assuming timely satisfaction of the closing conditions, including the approval by our stockholders of the Transaction Proposal, we currently expect the closing of the transaction to occur in the second half of calendar year 2022. See the section entitled “The Subscription Agreement—Closing of the Transaction” beginning on page 52.

Interests of Certain Persons in the Transaction

In considering the recommendation of the Board that you vote to approve the issuance contemplated by the subscription agreement, you should be aware that aside from their interests as Company stockholders, the Company’s directors and executive officers may have interests in the transaction that may be different from, in conflict with or in addition to oversightthose of the performanceCompany stockholders generally. Members of our internal audit function. Audit committee responsibilities alsothe Board were aware of and considered these interests, among other matters, in evaluating and negotiating the Subscription Agreement and the transaction and in recommending to the Company stockholders that the Subscription Agreement be adopted. For more information, see the sections entitled “The Transaction—Background of the Transaction” beginning on page 22 and “The Transaction—Reasons for the Transaction; Recommendation of the Board” beginning on page 38.

Interests of the Company’s directors and executive officers include, oversightbut are not limited to, the following:

effective as of cybersecurity risk management,the first closing, all of the directors (other than Messrs. Howe and Mulica) are to resign from the Board;

pursuant to the Company’s compensation policy for members of the Board who are not employed by the Company or any of its subsidiaries (“non-employee directors”), awards of restricted stock units (“RSUs”) granted by the Company to non-employee directors that end,are outstanding immediately prior to the committee typically meets annuallysecond closing will become fully vested upon the second closing. Assuming the second closing occurred on May 6, 2022, the total number of outstanding RSUs held by the non-employee directors that would have accelerated upon the second closing would be 204,197. These accelerated RSUs would have an aggregate value of $144,980 (based on a value for the Company’s common stock of $0.71 per share, which was the average closing market price of the stock over the first five business days after the first public announcement of the transaction on April 14, 2022). The non-employee directors are not receiving any other compensation in connection with ITthe Subscription Agreement or, business personnel responsiblein the case of directors other than Messrs. Howe and Mulica, the termination of their service on the Board at the first closing;

Mr. Peter Liu, the former Executive VP for cybersecurity risk managementGlobal Operations and receives reports fromEngineering was appointed the Company’s Chief Executive Officer of the Company, effective concurrently with the execution of the Subscription Agreement;

Mr. Robert Tirva’s employment with the Company will terminate on, and subject to, the first closing and upon such personnel,termination, Mr. Tirva will be entitled to receive the following severance benefits: cash severance of $1,000,000 (payable in installments over 20 months), accelerated vesting of his then-outstanding and unvested equity-based awards granted by the Company, and, subject to his providing consulting services to the Company for three months after his termination date, reimbursement for his COBRA health insurance premiums for up to 18 months following his termination; and

the Company’s directors and officers will be entitled to certain ongoing indemnification and advancement rights as well as incidental reports as matters arise. Our nominatingcoverage under directors’ and corporate governance committee monitorsofficers’ liability policies.

Indemnification and Insurance

Pursuant to the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Typically, the applicable Board committees meet at least annually with the employees responsible for risk management in the committees’ respective areas of oversight. It is the responsibilityterms of the committee chairsSubscription Agreement, the Company’s directors and officers will be entitled to report findings regarding material risk exposures tocertain ongoing indemnification and advancement rights as well as coverage under directors’ and officers’ liability insurance policies. See the Board as quickly as possible. The Board has delegated to the Board’s Chairman the responsibility of coordinating between the Boardsection entitled “The Subscription Agreement—Directors’ and management with regard to the determinationOfficers’ Indemnification and implementation of responses to any problematic risk management issues.

MEETINGSOF THE BOARDOF DIRECTORS

The Board of Directors met 16 times during the last fiscal year. Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committeesInsurance” beginning on which she or he served, held during the portion of the last fiscal yearpage 67 for which she or hewas a director or committee member.

INFORMATION REGARDING COMMITTEESOFTHE BOARDOF DIRECTORS

The Board has three committees:an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership and meeting information for fiscal 2019 for each of the Board committees:

Name

  Audit   Compensation   Nominating and
Corporate
Governance
 

John Kneuer

   X    X   

Maurice Hochschild

       X* 

Thomas Wilkinson

      

Jeffrey D. Johnson

       X 

Susan G. Swenson

   X    X*   

Kenny Young

     X   

Alan Howe

   X*     

Total meetings in fiscal 2019

   4    3    0 

*

Committee Chairperson

Below is a description of each committeesuch ongoing indemnification, advancement and coverage obligations of the Board of Directors.

Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board of Directors has determined that, except as specifically described below, each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company.

Audit CommitteeTHE SUBSCRIPTION AGREEMENT

This section describes the material terms of the Subscription Agreement. The description of the Subscription Agreement in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the Subscription Agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the Subscription Agreement that is important to you. We encourage you to read the Subscription Agreement carefully and in its entirety.

Explanatory Note Regarding the Subscription Agreement

The Audit CommitteeSubscription Agreement, a copy of which is attached as Annex A, and this summary of its terms are included in this proxy statement to provide you with information regarding its terms. Factual disclosures about the Company contained in this proxy statement or in the Company’s public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the Subscription Agreement. The representations, warranties and covenants made in the Subscription Agreement by the Company and the Purchaser were made solely to the parties to, and solely for the purposes of, the BoardSubscription Agreement and as of Directors was establishedspecific dates and were qualified and subject to important limitations agreed to by the Company and the Purchaser in connection with negotiating the terms of the Subscription Agreement. The Company’s stockholders and other investors are not third-party beneficiaries under the Subscription Agreement. In particular, in your review of the representations and warranties contained in the Subscription Agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated for the principal purposes of establishing the circumstances in which a party to the Subscription Agreement may have the right not to consummate the transaction if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Subscription Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and, in some cases, were qualified by matters set forth on the disclosure letter delivered to Purchaser in connection with the Subscription Agreement (which we refer to as the “disclosure letter”), which disclosures are not reflected in the Subscription Agreement. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Subscription Agreement.

Directors and Officers

Concurrent with the first closing, all of the current directors of the Company (other than Messrs. Howe and Mulica (whom we refer to as the “Continuing Directors”)) will resign and the Purchaser shall be entitled to designate such number of directors on the Board as will give the Purchaser, subject to compliance with applicable laws, representation on the Board equal to that number of directors, rounded down to the next whole number, that is the product of (i) the total number of directors on the Board (after giving effect to the directors elected pursuant to this sentence, and after giving effect to any resignations from the Board prior to or concurrent with the first closing) multiplied by (ii) the percentage that (A) such number of initial shares bears to (B) the total number of shares of common stock outstanding as of the first closing (after giving effect to the issuance of the initial shares).

Closing of the Transaction

The Subscription Agreement provides that the closing of the transaction will take place in two (2) tranches (which we refer to as the “first closing” and “second closing,” respectively). The first closing will take place as soon as possible, but in any event no later than the second business day following the date on which the last of the conditions to the first closing (described in the section entitled “The Subscription Agreement—Conditions to the Transaction” beginning on page 64) has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the first closing, but subject to the satisfaction or waiver of those conditions on the

first closing date), or such other time and date as may be mutually agreed in writing by the Company and Purchaser. The second closing is to occur on August 1, 2022, or such other time and place as the Continuing Directors and the Purchaser may agree in writing; provided, that if the first closing shall not have occurred by August 1, 2022, the second closing shall take place no later than the fifth business day following the date of the first closing.

Assuming timely satisfaction or waiver of the closing conditions, including the approval by our stockholders of the Transaction Proposal, we currently expect the closing of the transaction to occur in the second half of calendar year 2022. However, the parties cannot predict the exact timing of completion of the transaction or whether the transaction will be completed at an earlier or later time, as agreed by the parties, or at all.

Representations and Warranties

Representations and Warranties of the Company

We made customary representations and warranties in the Subscription Agreement that are subject, in many cases, to exceptions and qualifications contained in the Subscription Agreement, in the disclosure letter or in certain reports filed with the SEC. These representations and warranties relate to, among other things:

our and our subsidiaries’ due organization, existence, good standing and authority to carry on our and their businesses as currently conducted;

our corporate power and authority related to the Subscription Agreement, including as it relates to our entry into and performance of our obligations contemplated by the Subscription Agreement; the required vote of our stockholders to adopt the Subscription Agreement and to consummate the transactions contemplated thereby; and our Board’s recommendation that the Subscription Agreement and the transactions contemplated thereby are advisable and in the best interests of the Company’s stockholders and recommendation to adopt the Subscription Agreement by the stockholders;

required actions by or in respect of, and filings with, governmental authorities in connection with the transaction and the Subscription Agreement;

our capitalization and the absence of any voting agreements by us (except with respect to the voting agreement entered into with respect to this transaction) with respect to our securities;

our subsidiaries’ capitalization;

the offer and sale of the purchased shares pursuant to the Subscription Agreement will be exempt from registration requirements under the Securities Act of 1933, as amended;

our SEC filings since January 1, 2019, the absence of material misstatements or omissions in such filings and documents and compliance of such filings with legal requirements; any material or unresolved written comments from the SEC; compliance with Sarbanes-Oxley Act; and disclosure controls;

our financial statements and compliance with GAAP;

the absence of certain legal proceedings;

our and our subsidiaries’ compliance with applicable laws and the absence of written notices from governmental authorities alleging any such violations, and the absence of any orders from governmental authorities, including all permits and licenses required to conduct our business;

certain tax matters relating to the Company and its subsidiaries, including the filing of all tax returns required to be filed;

certain ERISA matters;

certain environmental matters relating to the Company and its subsidiaries;

certain matters relating to registration rights;

certain matters relating to the Investment Company Act of 1940, as amended;

compliance by us with the listing and corporate governance requirements of Nasdaq;

the absence of any undisclosed broker’s or finder’s fees except for those owed to B. Riley;

the compliance of the Company, since January 1, 2022, and its subsidiaries with the provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and other applicable anti-corruption and anti-bribery laws;

the compliance of the Company with applicable trade laws, and applicable export laws and certain economic sanction regimes for the past five (5) years;

certain matters with respect to affiliate transactions;

the maintenance of sufficient and customary insurance;

certain matters with respect to the intellectual property of the Company; and

certain matters with respect to customers of the Company.

The representations and warranties in the Subscription Agreement of the Company will not survive the consummation of the transaction.

Material Adverse Effect

Many of our representations and warranties are qualified by, among other things, exceptions relating to the absence of a “material adverse effect”, which means a material adverse effect upon the financial condition, assets, liabilities or results of operations of the Company and its subsidiaries, taken as a whole; provided, however, that any such effect resulting or arising from or relating to any of the following matters shall not be considered when determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur:

any change, development, occurrence or event affecting the industry in which the Company and its subsidiaries operate;

any conditions affecting the United States general economy or the general economy in any geographic area in which the Company or its subsidiaries operate or developments or changes therein or the financial and securities markets and credit markets in the United States or elsewhere in the world;

political conditions, including the continuation, occurrence, escalation, outbreak or worsening of any hostilities, war, political action, acts of terrorism, sabotage or military conflicts, whether or not pursuant to the declaration of an emergency or war;

any conditions resulting from the existence, occurrence or continuation of any force majeure events, including any earthquakes, floods, hurricanes, tropical storms, fires or other natural or manmade disasters, any epidemic, pandemic (including COVID-19) or other similar outbreak (including any non-human epidemic, pandemic or other similar outbreak) or any other national, international or regional calamity;

changes in any law, rule, regulation or GAAP;

any action taken or omitted to be taken by or at the written request or with the written consent of the Purchaser;

any announcement of the Subscription Agreement or the contemplated transactions;

changes in the market price or trading volume of common stock or any other equity, equity-related or debt securities of the Company or its affiliates (it being understood that the underlying circumstances,

events or reasons giving rise to any such change can be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur);

any failure to meet any internal or public projections, forecasts, estimates or guidance for any period (it being understood that the underlying circumstances, events or reasons giving rise to any such failure can be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); or

any effect arising out of or resulting from any claims or proceedings made by any of the Company’s stockholders arising out of or related to the Subscription Agreement;

provided, that any of the matters described in the first three matters listed above, will be taken into account for purposes of determining whether or not a Material Adverse Effect has occurred to the extent that such matter disproportionately and adversely affects the Company and its subsidiaries, taken as a whole, as compared with other companies operating in the industry in which the Company and its subsidiaries operate.

Representations and Warranties of Purchaser

The Subscription Agreement also contains customary representations and warranties made by Purchaser that are subject, in some cases, to specified exceptions and qualifications contained in the Subscription Agreement. The representations and warranties of Purchaser relate to, among other things:

its due organization, existence, good standing and authority to carry on its business as presently conducted;

its corporate power and authority related to the Subscription Agreement, including its power to enter into the Subscription Agreement, perform their obligations under, and consummate the transactions contemplated by the Subscription Agreement and the enforceability of the Subscription Agreement against it;

required actions by or in respect of, and filings with, governmental authorities in connection with the subscription agreements and transactions contemplated thereby;

availability of funds as of the date of the Subscription Agreement to pay the first purchase price at the first closing and that the Purchaser will have as of the second closing sufficient immediately available funds to pay the second purchase price at the second closing;

certain representations with respect to the Purchaser’s status as an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and the private placement of the purchased shares;

its lack of prior ownership of the Company common stock;

the absence of any undisclosed broker’s or finder’s fees

certain ERISA matters; and

its status as a wholly-owned and controlled entity of U.S. citizens and that it is not a “foreign person,” “foreign national,” “foreign government” or “foreign entity.”

The representations and warranties in the Subscription Agreement of the Company will not survive the consummation of the transaction.

Conduct of Our Business Pending the Transaction

Under the Subscription Agreement, between the date of the Subscription Agreement and the earlier of the first closing or the termination of the Subscription Agreement in accordance with Section 3(a)(58)its terms, except as required by

applicable law or governmental authority or with the prior written consent of the Purchaser, the Company shall and shall cause each of its subsidiaries to conduct its business in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present directors, officers and any employee of the Company or any of its subsidiaries whose annual base compensation is $200,000 or more (which we refer to as a “key employee”) and (iii) preserve its relationships with its material customers, lenders, suppliers and others having material business relationships with it. Additionally, except as expressly permitted or required by the Subscription Agreement, as required by applicable law or with the prior written consent of the Purchaser, between the date of the Subscription Agreement and the earlier of the second closing or the termination of the Subscription Agreement in accordance with its terms, as applicable, the Company shall not nor shall it permit any of its subsidiaries to:

(i) amend the certificate of incorporation or bylaws of the Company or (ii) amend, other than immaterial changes in respect of wholly-owned subsidiaries, the comparable organizational documents of any subsidiary of the Company;

(i) split, combine or reclassify any shares of its capital stock, (ii) authorize, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its subsidiaries, other than dividends and distributions by a direct or indirect wholly-owned subsidiary of the Company to its parent or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any securities of the Company or any securities of any subsidiary of the Company, other than (A) the acquisition or withholding by the Company of shares of common stock in connection with the surrender of shares of common stock by holders of Company stock options in order to pay the exercise price thereof, (B) the acquisition or withholding of shares of common stock to satisfy tax obligations with respect to awards granted pursuant to the stock plans, (C) the acquisition by the Company of any restricted shares in connection with the forfeiture of such awards and (D) as required by any stock plan as in effect on the date of the Subscription Agreement;

(i) issue, deliver, sell, grant, pledge, transfer, subject to any Lien or otherwise encumber or dispose of, any securities of the Company or any securities of any subsidiary of the Company, other than the issuance of (A) any shares of common stock upon the exercise of Company stock options or any options or purchase rights under the Company’s 2019 ESPP (as defined herein) or settlement of Company RSUs, in each case, that are outstanding on the date of the Subscription Agreement and in each case in accordance with their terms on the date of the Subscription Agreement, (B) awards of Company RSUs to consultants under the stock plans and awards of Company RSUs under the stock plans to any newly hired or promoted employees or to employees for retention purposes, in each case, in the ordinary course of business consistent with past practice or (C) any securities of any subsidiary of the Company to the Company or any other wholly-owned subsidiary of the Company; or (ii) amend any term of any securities of the Company or any securities of any subsidiary of the Company ;

adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, each with respect to the Company or any of its subsidiaries (other than the dissolution of any inactive subsidiary of the Company and reorganizations solely among subsidiaries of the Company) or consummate any of the foregoing;

acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any equity interest or securities in, or any material amount of other assets, properties, interests or businesses of, any person, or enter into any new line of business that is material to the Company and its subsidiaries, taken as a whole;

sell, lease, exclusively license, exchange, swap, abandon, allow to lapse or cancel any intellectual property owned by the Company (other than the natural expiration thereof or, with respect to allowing intellectual property owned by the Company to become abandoned, lapsed or cancelled, in connection with the Company’s exercise of its reasonable business judgment); or sell, lease, exchange, swap or

otherwise transfer or dispose of any of the Company’s or its subsidiaries’ material assets, securities, properties, interests or businesses, other than (i) pursuant to existing Contract in effect prior to the date of the Subscription Agreement, or (ii) sales of Company products and services, inventory or used equipment in the ordinary course of business consistent with past practice;

(i) repurchase, prepay, redeem, defease, assume, endorse, guarantee, incur or otherwise become liable for or modify the terms of any indebtedness for borrowed money or sell or issue any debt securities or other rights to acquire any debt securities (directly, contingently or otherwise), or (ii) make any loans, advances or capital contributions to, or investments in, any other person (other than to the Company or any of its wholly-owned subsidiaries in the ordinary course of business and advances of expenses to employees in the ordinary course of business);

except as required by the terms of any employee benefit plan of the Company as in effect on the date of the Subscription Agreement: (i) grant any severance, retention or termination pay to, or enter into or amend any employment, severance, retention, termination, change in control or severance agreement with, any current or former key employee, (ii) hire any new employee who would constitute a key employee, other than in the ordinary course of business consistent with past practice in order to replace a key employee whose employment terminates (so long as the applicable replacement key employee receives compensation and benefit terms that are no more favorable to the new key employee than compensation and benefits held by the key employee that is being replaced), (iii) grant to any current or former director or key employee of the Company or any of its subsidiaries any material increase in compensation, target bonus or benefits, in addition to those pursuant to arrangements in effect on the date hereof, other than in the ordinary course of business, (iv) establish, adopt, enter into or materially amend or modify any employee benefit plan of the Company (other than entering into offer letters that contemplate “at will” employment that is terminable without payment or notice or, where required by applicable law, employment agreements consistent with the Company’s practices in the applicable jurisdiction, or cash bonus or cash incentive plans for performance periods not exceeding one (1) year in the ordinary course of business consistent with past practice to replace such plans covering performance periods that end prior to the second closing), (v) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors employees or other service providers, other than in the ordinary course of business consistent with past practice, (vi) establish, enter into, adopt or amend any works council, collective bargaining or similar labor-related agreement, except as required by applicable law, (vii) announce, implement or effect any material reduction in labor force, lay-off, early retirement program or other effort concerning termination of employment of employees of the Company or any of its subsidiaries (other than routine employee terminations in the ordinary course of business) or (viii) terminate any key employee other than for cause;

make any change in any financial accounting principles, methods or practices (including any tax accounting policies or procedures) or any of its methods of reporting income, deductions or other material items for financial or tax accounting purposes, in each case except for any such change required by GAAP or applicable law, including Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to oversee the Company’s corporate accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions, including:

The principal duties and responsibilities, among others, of our audit committee include:

recommending and retaining an independent registered public accounting firm to serve as independent auditor to audit our financial statements, overseeing the independent auditor’s work and determining the independent auditor’s compensation;amended;

 

approvingmake, change or revoke any material tax election (other than in advance all audit services and non-audit servicesthe ordinary course of business consistent with past practice), change any annual tax accounting period, adopt or change any method of material tax accounting, amend, refile or otherwise revise any previously filed tax returns, enter into any closing agreement, settle or compromise any tax claim or assessment, consent to be providedany extension or waiver of the statutory period of limitations applicable to us by our independent auditor;any claim or assessment in respect of taxes, enter into any tax indemnity or similar agreements or arrangements (other than customary commercial agreements not primarily related to taxes), undertake any restructuring or engage in any transaction that may transfer the ownership of any intellectual property;

 

establishing proceduresdischarge, pay, settle or offer or propose to settle, (i) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its subsidiaries, (ii) any

shareholder litigation or dispute against the Company or any of its officers or directors, or (iii) any litigation, arbitration, proceeding or dispute that relates to the contemplated transactions;

enter into, as a tenant or subtenant, any lease of real property, under which the rent to be charged exceeds two hundred fifty thousand ($250,000) for any twelve (12)-month period, other than ordinary course of business extensions and renewals of leases existing as of the receipt, retention and treatmentdate hereof with a term of complaints received by us regarding accounting, internal accounting controls, auditing or compliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;no more than one (1) calendar year;

 

overseeing our risk assessmentexcept in the ordinary course of business consistent with past practice and risk management processes;except as provided in an annual operating plan as approved by the Board, make any new capital expenditure or expenditures, or commit to do so;

 

reviewing and ratifying all related party transactions, based onterminate, cancel, amend or modify any insurance coverage policy maintained by the standards set forthCompany or any of its subsidiaries that is not concurrently replaced by a comparable amount of insurance coverage, other than renewals in our related party transactions policy;the ordinary course of business;

 

reviewing and discussingexcept in the ordinary course of business consistent with management and our independent auditorpast practice, (i) enter into any contract that would, if entered into prior to the resultsdate hereof, be a material contract that was required to be filed or furnished by the Company as exhibits to the SEC documents to which the Company is a party or the property or assets of the annual auditCompany is subject (which we refer to as “material contracts”) (ii) materially modify, materially amend or terminate any material contract or (iii) waive, release, terminate, amend, renew or assign any material rights or claims of the Company or any of its subsidiaries under any material contract;

enter into or adopt any “poison pill” or similar stockholder rights plan that would prevent or preclude the contemplated transactions; or

agree, authorize or commit to do any of the foregoing

No Solicitation of Acquisition Proposals; Board Recommendation Changes

No Solicitation or Negotiation

Except as permitted by the terms of the Subscription Agreement described below, from and after the independent auditor’s reviewdate of our quarterlythe Subscription Agreement until the earlier of the first closing or the termination of the Subscription Agreement in accordance with its terms, the Company has agreed that neither the Company nor any of its subsidiaries will, nor will the Company or any of its subsidiaries authorize or knowingly permit any of the directors of the Company, the officers or employees of the Company, or any investment bankers, attorneys, accountants or other advisors or other representatives retained by the Company or its subsidiaries (collectively, we refer to such persons as “the Company representatives”) to, directly or indirectly:

solicit, initiate or knowingly facilitate or encourage the submission of any inquiry, proposal or offer that constitutes, or would reasonably be expected to result in, an acquisition proposal (as defined below);

enter into, continue or participate in any discussions or negotiations with, or furnish any non-public information relating to the Company or any of its subsidiaries to, any third party in connection with an acquisition proposal;

approve, recommend, publicly declare advisable or enter into any agreement in principle, letter of intent, merger agreement, acquisition agreement, joint venture agreement or other similar agreement relating to an acquisition proposal (other than an acceptable confidentiality agreement); or

agree to or propose publicly to do any of the foregoing.

The Subscription Agreement defines the term “acquisition proposal” to mean, other than the transactions contemplated by the Subscription Agreement, any written or oral offer, or proposal of any third party or “group”

(as such term is defined in Rule 13d-3 promulgated under the Exchange Act) relating to a transaction or series of related transactions involving: (i) any acquisition or purchase (including through any lease, exchange, exclusive license, transfer or disposition, in each case, other than in the ordinary course of business), direct or indirect, of assets equal to 20% or more of the consolidated assets or businesses of the Company and its subsidiaries, taken as a whole, or to which 20% or more of the consolidated revenues or earnings of the Company and its subsidiaries, taken as a whole, are attributable, or 20% or more of any class of equity or voting securities of the Company, (ii) any tender offer or exchange offer that, if consummated, would result in such third party or group beneficially owning 20% or more of any class of equity or voting securities of the Company or (iii) a merger, consolidation, business combination, sale of all or substantially all of the assets, liquidation, dissolution or other similar extraordinary transaction (A) involving the Company or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of the Company or to which 20% or more of the consolidated revenues or earnings of the Company and its subsidiaries, taken as a whole, are attributable or (B) pursuant to which the stockholders of the Company immediately prior to the consummation of such transaction would, as a result of such transaction, hold less than 80% of the equity interests in the surviving entity of such transaction.

No Solicitation Exceptions

Notwithstanding the foregoing, any time after the date of the Subscription Agreement and prior to the Company stockholders’ adoption of the Subscription Agreement, the Company, directly or indirectly through the Company representatives, may (i) engage in negotiations or discussions with a third party and its representatives and actual or potential sources of financing (including making any counterproposal) and (ii) furnish to such persons non-public information relating to the Company or any of its subsidiaries pursuant to an acceptable confidentiality agreement, but only in the event all of the following occur:

the Company, any subsidiary of the Company or a Company representatives receives a written acquisition proposal from such third party that did not result from a breach of the Company’s non-solicitation obligations and that the Board determines in good faith: (i) to be bona fide, (ii) after consultation with its financial statements;advisor and outside legal counsel, constitutes, or would reasonably be expected to result in, a superior proposal, or (iii) after consultation with its outside legal counsel, that the failure to take such action would reasonably be expected to result in a breach of the fiduciary duties of the Company’s directors under applicable law; and

 

conferringprior to or substantially concurrently with management and our independent auditor about the scope, adequacy and effectiveness of our internal accounting controls,time any non-public information relating to the objectivity of our financial reporting and our accounting policies and practices.Company is made available to such third party, the Company makes available to Purchaser any such information that is made available to the third party that was not previously made available to Purchaser.

Both our independent registered public accounting firm and management periodically will meet privately with our audit committee.

In March 2019,The Subscription Agreement defines the term “superior proposal” to mean a bona fide, written acquisition proposal (with all percentages included in connection with our initial public offering, Mr. Howe, Ms. Swenson and Mr. Kneuer were appointed and currently serve as membersthe definition of our audit committee, with Mr. Howe serving as“acquisition proposal” changed to 50%) made after the chairpersondate of the audit committee. Our boardSubscription Agreement that the Board determines in good faith, after consultation with its financial advisor and outside legal counsel, and taking into account all relevant terms and conditions of directorssuch acquisition proposal (including any termination or break-up fees and conditions to consummation), the person making such acquisition proposal, the likelihood and timing of consummation of such acquisition proposal and all financial, legal, regulatory and other aspects of such acquisition proposal, is more favorable to the Company’s stockholders from a financial point of view than the transactions contemplated by the Subscription Agreement.

The Company agrees to promptly (but in no event later than twenty-four (24) hours) notify Purchaser orally and in writing of its receipt of any acquisition proposal, any proposals or inquiries that would reasonably be expected to lead to an acquisition proposal or any inquiry or request for nonpublic information relating to the Company or any of its subsidiaries by any person who has determinedmade, or has expressly indicated that Mr. Howesuch person is an audit committee financial expert, as defined by SEC rulescontemplating making, any acquisition proposal. The notice provided to Purchaser must identify the third party making, and regulations.

Our boardthe material terms and conditions of directors determined that each(or the nature of), any such acquisition proposal, inquiry or request and must include a copy of Mr. Howe, Ms. Swenson and Mr. Kneuer were independent directors as defined in the Nasdaq listing rules in 2019. Our board of directors has further determined that eachany written acquisition proposal (or summary of the membersterms of the audit committee satisfy the financial literacyany oral acquisition proposal) and sophistication requirements of the SEC and Nasdaq listing rules.

Reporta copy of all written materials provided by such Person with respect to such acquisition proposal. Further, the Company has agreed to keep Purchaser reasonably informed promptly (but in no event later than twenty-four (24) hours) after any material changes in status or material terms of any acquisition proposal and shall provide to Parent promptly (but in no event later than twenty-four (24) hours) after receipt thereof of copies of proposed transaction agreements or proposal letters sent or provided to the Company or any of its subsidiaries that describe any material terms or conditions of any acquisition proposal. The Company has also agreed to keep Purchaser reasonably informed as to the nature of any information requested of the AuditCompany with respect thereto. Upon the request of Purchaser, the Company must apprise Purchaser of the status of any such acquisition proposal, inquiry or request.

If an acquisition proposal is publicly announced (other than by Purchaser, its subsidiaries or any of their respective affiliates or representatives), the Company has agreed to publicly reaffirm the Board recommendation within ten (10) business days after receipt of a written request by Purchaser to provide such reaffirmation, unless an adverse recommendation change (as defined below) is permitted under the terms of the Subscription Agreement, except that the Company is not obligated to publicly reaffirm such recommendation on more than one occasion with respect to each such publicly announced acquisition proposal by any third party or on more than one occasion with respect to each publicly announced material modification thereto.

Adverse Recommendation Change

The Subscription Agreement provides that (subject to certain exceptions described below) the Board will not (i) fail to make, withdraw or modify in a manner adverse to Purchaser (or publicly propose to withdraw, modify or qualify in any manner adverse to Purchaser) the Board recommendation, (ii) adopt, approve or publicly recommend, endorse or otherwise declare advisable the adoption of, an acquisition proposal or (iii) fail to include in this proxy statement the Board recommendation (any of the foregoing, we refer to as an “adverse recommendation change”).

Adverse Recommendation Change Exceptions

Notwithstanding the foregoing, the Board, at any time before the Company stockholders adopt the Subscription Agreement, may make an adverse recommendation change (or terminate the Subscription Agreement as described in the section entitled “The Subscription Agreement—Termination” starting on page 65) in response to an acquisition proposal, only so long as (i) such acquisition proposal was not the result of a breach of the non-solicitation obligations of the Company described above and such acquisition proposal is not withdrawn, and (ii) the Board determines in good faith, after consultation with its financial advisor and outside legal counsel and after taking into account any revisions to the terms of the Subscription Agreement that may be offered in writing by Purchaser in accordance with the Subscription Agreement, (A) that such acquisition proposal constitutes a superior proposal, and (B) that the failure to make an adverse recommendation change would reasonably be expected to result in a breach of its fiduciary duties under applicable law.

In addition, the Board may not effect an adverse recommendation change (or terminate the Subscription Agreement as described in the section entitled “The Subscription Agreement—Termination” starting on page 65) unless:

the Company notifies Purchaser in writing (which we refer to as a “change notice”) at least three (3) business days (which we refer to as the “negotiation period”) before the making of any adverse recommendation change or the Board’s determination that such acquisition proposal constitutes a superior proposal and of its intention to make an adverse recommendation change, with the most current version of all proposed agreements under which such superior proposal is proposed to be consummated and all other material terms and conditions in respect of such acquisition proposal and the identity of the third party making such superior proposal attached to the change notice;

during the negotiation period, the Company was available to negotiate in good faith with Purchaser (if requested by Purchaser) any proposal by Purchaser to amend the terms and conditions of the

Subscription Agreement such that the acquisition proposal would no longer constitute a superior proposal (provided that the Company delivered a new change notice and entered into a new two (2) business day negotiation period for any amendment, supplement or modification to any acquisition proposal); and

at the end of the negotiation period (and any subsequent negotiation periods with respect to an amended, supplemented or modified acquisition proposal), the Board, after considering in good faith any revisions to the terms of the Subscription Agreement offered in writing by Purchaser pursuant to the Subscription Agreement, determined in good faith, after consultation with its financial advisor and outside legal counsel, that such acquisition proposal remained a superior proposal.

Further, the Board may make an adverse recommendation change if (i) an intervening event (as defined below) has occurred, (ii) the Board determines in good faith and after taking into account any revisions to the terms of the Subscription Agreement that may be offered in writing by Purchaser in accordance with the Subscription Agreement, after consultation with outside legal counsel and its financial advisors, that the failure to make an adverse recommendation change would reasonably be expected to result in a breach of its fiduciary duties under applicable law and (iii) prior to making the adverse recommendation change, the Company (A) provided Purchaser at least two (2) business days’ prior written notice that it intends to take such action and specifying in reasonable detail the facts underlying the decision by the Board to take such action (provided that the Company delivered a new notice and entered into a new two (2) business day period for any material change in the facts or circumstances relating to an intervening event) and (B) during such period, if requested by Purchaser, engaged in good faith negotiations with Purchaser to amend the Subscription Agreement in such a manner that obviates the need for such adverse recommendation change.

The Subscription Agreement defines “intervening event” to mean a material fact, event, circumstance, development or change that occurs, arises or comes to the attention of the Board after the date of the Subscription Agreement that (w) affects the business, assets or operations of Company and its subsidiaries, (x) was not known by, or if known, the effect of which was not reasonably foreseeable by, the Board (assuming consultations with appropriate officers and representatives of the Company) on the date of the Subscription Agreement, (y) becomes known to the Board prior to receipt of the company stockholder approval and (z) did not result from or arise out of the announcement or pendency of, or any actions required to be taken (or refrained from taken) pursuant to the Subscription Agreement; provided, however, that in no event shall any of the following, alone or in combination, constitute an intervening event: (1) the receipt, existence of or terms of an acquisition proposal, (2) changes in the trading price or trading volume of the Company common stock, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such changes may be taken into account the extent otherwise permitted by the definition of “intervening event”); or (3) meeting or exceeding any published analyst estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or exceeding the Company’s internal or external budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to the Company meeting or exceeding such estimates, projections, budgets, plans or forecasts may be taken into account to the extent otherwise permitted by the definition of “intervening event”).

Stockholders Meeting

The Company has agreed to cause the special meeting to be duly called and held as soon as reasonably practicable following clearance of this proxy statement by the SEC for the purpose of voting on the Transaction Proposal by the Company’s stockholders. The Company’s Board has agreed to, subject to the provisions of the Subscription Agreement discussed above under “The Subscription Agreement—No Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 58), recommend that the Company stockholders adopt the Subscription Agreement, to use its reasonable best efforts to obtain stockholder approval of the Transaction Proposal and to otherwise comply with all legal requirements applicable to the special meeting.

Filings; Other Actions

The Company and Purchaser have agreed to cooperate with each other and use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Subscription Agreement as promptly as practicable, including:

preparing and filing as promptly as practicable after the date of the Subscription Agreement with any governmental authority all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, financial statements, records, applications and other documents, in each case, to the extent applicable;

obtaining and maintaining all approvals, consents, registrations, permits, authorizations, licenses, waivers and other confirmations required to be obtained from any governmental authority that are necessary to consummate the transactions contemplated by the Subscription Agreement; and

executing and delivering any additional instruments necessary to consummate the transactions contemplated by the Subscription Agreement.

Employment and Severance Agreements

In connection with the Company’s entry into the Subscription Agreement, the Board appointed Peter Liu, who had been serving as the Company’s Executive VP for Global Operations, as Chief Executive Officer of the Company. However, if the Subscription Agreement is terminated prior to the first closing, Mr. Liu’s title will change back to Executive VP for Global Operations. Mr. Liu did not receive any additional compensation as a result of his appointment as Chief Executive Officer or the transactions contemplated by the Subscription Agreement. Mr. Liu and the Company have entered into an offer letter, dated July 31, 2013 and as amended on February 1, 2016, that provides Mr. Liu with an initial annual base salary of $253,000. His current annual base salary is $265,650. Mr. Liu is also eligible for an annual bonus, with his current target bonus opportunity being 50% of his base salary. Mr. Liu is also eligible to participate in the employee benefit plans generally available to the Company’s employees. The offer letter also provides that if Mr. Liu’s employment with the Company is terminated by the Company without cause or by Mr. Liu for good reason, in any such case prior to a change in control or more than thirteen (13) months after a change in control, or due to Mr. Liu’s death or permanent disability, Mr. Liu will receive six (6) months of continued base salary. If Mr. Liu’s employment with the Company is terminated by the Company without cause, or if he terminates his employment with the Company for good reason, in either case at any time within thirteen (13) months after a change in control, Mr. Liu will receive six (6) months of continued base salary and accelerated vesting of any then-outstanding options or stock awards granted by the Company to him that would have vested had Mr. Liu remained employed for two (2) years following the date of such termination. The severance benefits described above would, if triggered, be conditioned on Mr. Liu providing the Company with a release of claims in a form acceptable to the Company. For these purposes, “cause,” “good reason” and “change in control” are defined in the offer letter. Mr. Liu’s offer letter was amended on April 13, 2022 solely to provide for his appointment as Chief Executive Officer and to confirm that he would not be entitled to resign for “good reason” under his offer letter if the Subscription Agreement terminated and his appointment as Chief Executive Officer were rescinded as described above.

On April 13, 2022, the Compensation Committee of the Board approved a letter agreement with Robert Tirva, the Company’s President, Chief Financial Officer and Chief Operating Officer (the “Tirva Letter Agreement”). The agreement provides that Mr. Tirva’s employment with the Company will terminate on, and subject to, the first closing and that upon such termination, Mr. Tirva would be entitled to receive the following severance benefits: cash severance of Directors (1)$1,000,000 (payable in installments over twenty (20) months), accelerated vesting of his then-outstanding and unvested equity-based awards granted by the Company and, subject to his providing consulting services to the Company for three (3) months after his termination date, reimbursement for his COBRA health insurance premiums for up to eighteen (18) months following his termination. Mr. Tirva’s right

to receive these benefits is conditioned on his providing the Company with a release of claims in a form acceptable to the Company and continued compliance with his obligations under his proprietary information agreement with the Company (including the non-competition and non-solicitation provisions thereof). If the first closing occurs, the severance benefits provided in the Tirva Letter Agreement will supersede the severance benefits provided in Mr. Tirva’s existing employment agreement with the Company. If the first closing does not occur, the Tirva Letter Agreement will terminate, and the severance provisions in Mr. Tirva’s employment agreement will apply in accordance with their terms.

Golden Parachute Compensation

The Audit Committee has reviewed and discussedfollowing table sets forth the audited financial statements forestimated amounts of “golden parachute” compensation (for purposes of Item 402(t) of Regulation S-K) that each of our named executive officers could receive in connection with the fiscal year ended December 31, 2019 with managementtransactions contemplated by the Subscription Agreement. The named executive officers are not entitled to receive any other payments or benefits solely as a result of such transactions or any other transaction that constitutes a change in control of the Company. The Audit Committee has discussed withamounts in the independent registered public accounting firmtable assume, where applicable, that the matters requirednamed executive officer’s employment is terminated in circumstances that would trigger the right to be discussed byreceive severance benefits under the applicable requirementsagreements described above (a “qualifying termination”), and that such a qualifying termination of the Public Company Accounting Oversight Board (“PCAOB”) andexecutive’s employment occurred on May 6, 2022. The actual amounts that would be paid upon a named executive officer’s termination of employment can be determined only at the SEC. The Audit Committee has also received the written disclosures and the lettertime of such executive’s separation from the independent registered public accounting firm requiredCompany. As a result, the actual amounts received by applicable requirements ofa named executive officer may differ in material respects from the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.amounts set forth below.

Mr. Alan Howe (Chairperson)

Mr. John Kneuer

Ms. Susan G. Swenson

Name

  Cash
Severance

($)(1)
   Equity
($)(2)
   Perquisites/
Benefits

($)(3)
   Tax
Reimbursement

($)(4)
   Total 

Robert Tirva

   1,000,000    56,494    40,122    —      1,096,616 

President, Chief Financial Officer and Chief Operating Officer

          

Thomas W. Wilkinson(5)

   —      —      —      —      —   

Former Chief Executive Officer

          

 

(1)

The materialamount reported in this report is not “soliciting material,” is not deemed “filed” withcolumn represents the Commission and is notpotential cash severance payments that would be made to Mr. Tirva assuming a qualifying termination of his employment upon the first closing as provided in the Tirva Letter Agreement, such amount to be incorporatedpaid in 20 monthly installments following his termination.

(2)

The amount reported in this column reflects the value of Mr. Tirva’s equity awards granted by referencethe Company that were outstanding as of May 6, 2022 and that would vest assuming a qualifying termination of his employment upon the first closing as provided in any filingthe Tirva Letter Agreement. These amounts were calculated based on the number of shares subject to the portion of the Company underaward that would accelerate and a value for the Securities Act orCompany’s common stock of $0.71 per share, which was the Exchange Act, whether made before or afteraverage closing market price of the date hereofstock over the first five business days following the first public announcement of the transaction on April 14, 2022 (and, in the case of options and irrespectivesimilar awards, less the exercise price for the shares subject to the accelerated portion of any general incorporation language in any such filing.the option).

(3)

The amount reported in this column represents the estimated cost to provide the health and welfare benefits described above (including reimbursement of COBRA premiums for the applicable period) to Mr. Tirva assuming a qualifying termination of his employment upon the first closing and his provision of consulting services for three months after his termination, each as provided in the Tirva Letter Agreement.

(4)

None of the named executive officers is entitled to a “gross-up” payment for any excise taxes that may be due by reason of Sections 280G and 4999 of the U.S. Internal Revenue Code.

(5)

Mr. Wilkinson resigned as the Company’s Chief Executive Officer on May 31, 2021.

Compensation CommitteeOther Covenants and Agreements

The primary purpose of our Compensation Committee is to discharge the responsibilities of our Board in overseeing our compensation policies, plansSubscription Agreement contains certain other covenants and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate.

The principal duties and responsibilities, among others, of our compensation committee include:agreements, including covenants relating to:

 

establishing and approving, and making recommendationswith respect to the board of directors regarding, performance goals and objectives relevantCompany, access to certain information during the period prior to the compensationfirst closing, and reasonable access during normal business hours to employees, offices, properties, books and records, including arranging meetings and facilitating access for Purchaser and its representatives with customers and suppliers of our chief executive officer, evaluating the performance of our chief executive officer in light of those goalscompany and objectives and setting, or recommending to the full board of directors for approval, the chief executive officer’s compensation, including incentive-based and equity-based compensation, based on that evaluation;its subsidiaries;

 

settingeach party’s agreement to use commercially reasonable efforts not to take or omit to take any action that impedes, interferes with, hinders or delays in any material respect, or would reasonably be expected to prevent or materially impede, interfere with, hinder or delay in any material respect, the compensation of our other executive officers, based in part on recommendationsconsummation of the chief executive officer;transaction contemplated by the Subscription Agreement on a timely basis;

 

exercising administrative authority under our equity incentive plancooperation between the Company and employee benefit plans;Purchaser in the preparation of this proxy statement;

 

establishing policiescooperation between the Company and making recommendationsPurchaser in connection with press releases and other public announcements with respect to our board of directors regarding director compensation;the transactions contemplated by the Subscription Agreement;

 

overseeing risksnotification by each party in response to certain events, including, among others, (i) any notice or other communication from any person alleging that the consent of such person is required in connection with the transactions contemplated by the Subscription Agreement; (ii) any notice or other communication from any governmental authority in connection with the transactions contemplated by the Subscription Agreement; (iii) any actions, suits, claims, investigations or proceedings commenced or, to their knowledge, threatened against the Company or any of its subsidiaries or Purchaser or any of its subsidiaries, as the case may be, that relate to the consummation of the transactions contemplated by the Subscription Agreement; and exposures associated with executive(iv) any representation or warranty made in the Subscription Agreement becoming untrue or inaccurate and director compensation planssuch inaccuracy would cause the applicable party to fail to satisfy any condition to closing of the transaction related to performance of covenants and arrangements;agreements or accuracy of representations and warranties;

 

reviewingwith respect to the Company and discussing with managementPurchaser entering into a registration rights agreement at or prior to the compensation discussion and analysis that we may be required from time to time to include in SEC filings;first closing; and

 

preparingwith respect to the obligation of the Company to issue additional shares of Company common stock to Purchaser for certain reasonable and documented out of pocket expenses relating to the current investigation of the Company by the SEC that cannot be recovered under the Company’s insurance policy.

Conditions to the Transaction

The respective obligations of the Company and the Purchaser to consummate the transaction are subject to the satisfaction at or prior to the first closing of the following conditions:

the affirmative vote in favor of the Transaction Proposal by the holders of a compensation committee reportmajority of the votes cast by the stockholders present in person or by proxy at the special meeting and entitled to vote thereon, provided a quorum is present; and

no temporary restraining order, decree, ruling, injunction or judgment, preliminary or permanent injunction or other judgment issued by any governmental authority of competent jurisdiction will be in effect enjoining, restraining or otherwise prohibiting the consummation of the transaction, and no governmental authority of competent jurisdiction will have enacted, issued, promulgated, enforced or declared applicable to the transaction any applicable law that is in effect, which has the effect of enjoining, restraining or otherwise prohibiting the consummation of the transaction.

The obligations of Purchaser to consummate the transaction are subject to the satisfaction at or prior to the first closing of the following conditions:

The Company must have performed or complied with, in all material respects, all of its obligations under the Subscription Agreement required to be performed by it at or prior to the first closing;

the representations and warranties of the Company regarding organization and power of the Company, authorization to enter into the transaction and use of a broker must be true in all material respects;

the representations and warranties of the Company regarding its capitalization must be true and correct in all but de minimis respects;

the Company’s other representations and warranties set forth in the Subscription Agreement must be true and correct, except as would not have, individually or in the aggregate, a Material Adverse Effect on executivethe Company;

the Company shall have performed or complied with, in all material respects, all covenants and agreements required to be performed by it at or prior to the first closing;

the Company shall have obtained the resignation of all of its current directors (other than the continuing directors); and

Mr. Robert Tirva and each director compensationof the Company shall have executed and delivered to the Company a voting agreement and voted his/her shares for each of the proposals on this proxy statement.

The Company’s obligation to consummate the transaction is subject to the satisfaction at or prior to the first closing of the following conditions:

the Purchaser must have performed, in all material respects, all of its obligations under the Subscription Agreement required to be performed by it at or prior to the first closing;

the representations and warranties of the Purchaser regarding organization and power of the Company, authorization to enter into the transaction and sufficiency of funds to complete the transaction must be true in all material respects;

the representations and warranties of the Purchaser regarding its foreign control status must be true and correct in all but de minimis respects;

the Purchaser’s other representations and warranties set forth in the Subscription Agreement must be true and correct, except as would not have, individually or in the aggregate, a Material Adverse Effect on the Company;

the Purchaser shall have paid, or cause to be paid, the first purchase price for the initial shares in full at the first closing; and

the Purchaser shall have executed and delivered to the Company a voting agreement and such voting agreement shall be in full force and effect.

Termination

The Company and Purchaser may, by mutual written agreement, terminate the Subscription Agreement and abandon the transactions contemplated thereby at any time prior to the first closing.

The Subscription Agreement may also be terminated and the transactions contemplated thereby abandoned at any time prior to the first closing, as follows:

by either the Company or Purchaser if:

the first closing has not been consummated on or before the date that is six (6) months after the date of the Subscription Agreement (which we refer to as the “end date”);

any order permanently restraining, enjoining or otherwise prohibiting consummation of the transaction has become final and non-appealable, so long as the breach of the terminating party in any material respect is not the primary cause of such governmental restraint; or

stockholder approval of the Transaction Proposal is not obtained at the special meeting (after giving effect to any adjournment or postponement of the special meeting);

by Purchaser (with certain limitations as set forth in the Subscription Agreement), if:

prior to obtaining stockholder approval of the Transaction Proposal, (i) the Board makes an adverse recommendation change, or (ii) the Company or its representatives willfully and materially violate section 4.1(a) of the Subscription Agreement; or

there is any inaccuracy of any representation or warranty made by the Company in the Subscription Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Company set forth in the Subscription Agreement and such inaccuracy, breach, violation or failure, if continuing at the first closing, would cause the Company to fail to satisfy the applicable condition to closing of the first closing related to performance of covenants and agreements or accuracy of representations and warranties and that inaccuracy or breach is incapable of being cured by the end date;

by the Company (with certain limitations as set forth in the Subscription Agreement), if:

there is any inaccuracy of any representation or warranty made by Purchaser in the Subscription Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Purchaser set forth in the Subscription Agreement and such inaccuracy or breach would cause Purchaser to fail to satisfy the applicable condition to closing of the transaction related to performance of covenants and agreements or accuracy of representations and warranties and that inaccuracy or breach is incapable of being cured by the end date (collectively, we refer to such termination trigger as a “the Company terminating breach”); or

if the Board authorizes the Company, pursuant to, and in compliance with the applicable terms of the Subscription Agreement, to enter into a definitive agreement concerning a superior proposal; so long as the Company pays a termination fee of $750,000 to Purchaser and reimburses Purchaser for up to $350,000 in reasonable, documented and out-of-pocket expenses incurred by the Purchaser in connection with the Subscription Agreement, including but not limited to reasonable, documented and out-of-pocket legal and advisory fees paid in connection therewith, substantially concurrently with (and as a condition to) such termination (which we refer to as the “superior proposal termination event”).

Termination Fee & Reimbursement Obligation

In certain circumstances, the Company may be required to pay AJP Holding a termination fee of $750,000 (which we refer to as the “termination fee”) if the Subscription Agreement is terminated, as well as reimburse AJP Holding for certain reasonable, documented, out-of-pocket expenses up to $350,000 (which we refer to as the “reimbursement obligation”).

The termination fee and reimbursement obligation would be payable in the following circumstances:

Purchaser terminates the Subscription Agreement pursuant to an adverse recommendation change termination event or the Company or its representatives willfully and materially violate the non-solicit obligations of the Company , in which case the Company must pay Purchaser the termination fee and the reimbursement obligation within two (2) business days after such termination; or

The Company terminates the Subscription Agreement pursuant to a superior proposal termination event, in which case the Company must pay Purchaser the termination fee substantially concurrently with (and as a condition to) such termination.

The reimbursement obligation would be payable in the following circumstances:

Either party terminates the Subscription Agreement due to failure to obtain stockholder approval of the Transaction Proposal, in which case the Company must pay the reimbursement obligations to the Purchaser within two (2) business days after such termination.

Directors’ and Officers’ Indemnification and Insurance

The obligations of the Company and its subsidiaries under their respective organizational documents and all agreements in respect of all rights to indemnification, exculpation of liability and advancement of expenses, in effect as of the date of the Subscription Agreement between the Company or any of its subsidiaries and any of their respective present or former directors, officers, employees or agents (which we refer to as the “indemnified persons”) shall survive the transactions contemplated by the Subscription Agreement and may not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any indemnified person.

For six (6) years after the first closing, Company and each of its subsidiaries shall, and the Purchaser shall, if applicable, vote its shares of common stock to cause the Company and each of its Subsidiaries to cause the organizational documents of the Company and its subsidiaries to contain provisions no less favorable with respect to elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses than are presently set forth in the organizational documents of the Company and its subsidiaries.

Additionally, for six (6) years after the first closing, the Company shall, and the Purchaser shall, if applicable, vote its shares of common stock to cause the Company to indemnify and hold harmless all indemnified persons to the fullest extent permitted by the DGCL in the event of any threatened or actual claim, suit, action, proceeding or investigation, whether civil, criminal or administrative, based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that such indemnified person is or was a director, officer, employee or agent of the Company, its subsidiaries or any of their respective predecessors prior to the first closing or (ii) the Subscription Agreement or any of the transactions contemplated thereby, against any losses, claims, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and expenses) in advance of the final disposition of any claim, suit, proceeding or investigation to the fullest extent permitted by applicable law. The Company shall not settle or consent to the entry of a judgment in any threatened or actual claim for which indemnification could be sought by an indemnified person under the Subscription Agreement, unless such settlement or consent includes an unconditional release of such indemnified person from all liability arising out of such claim or such indemnified person otherwise consents in writing to such settlement or consent. The Company will cooperate with an indemnified person in the defense of any matter for which such indemnified person could seek indemnification under the Subscription Agreement.

Prior to the first closing, the Company shall obtain and fully pay the premium for the non-cancellable extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability insurance policies (collectively, we refer to such insurance as the “D&O insurance”), in each case for a claims reporting or discovery period of at least six (6) years from and after the first closing with respect to any claim related to any period of time at or prior to time to be included in future annual proxy statements or annual reports on Form 10-K filedthe first closing from an insurance carrier with the SEC.same or better credit rating as the Company’s current insurance carrier with respect to D&O insurance with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Company’s existing policies; provided that in no event will the Company be obligated to pay annual premiums for insurance in excess of $1,100,000.

The Compensation Committee is composed of three directors: Ms. Swenson and Messrs. Young and Kneuer. All three membersindemnified persons have the right to enforce the provisions of the Compensation Committee were independent (as independence is currently definedSubscription Agreement relating to their indemnification. Such provisions may not be terminated, amended or otherwise modified in such a manner as to adversely affect any indemnified person without the prior written consent of such person. In addition, the Company shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any indemnified person in enforcing the indemnity and other obligations provided in the Subscription Agreement.

Rule 5605(d)(2)If the Company (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then proper provision must be made so that such continuing or surviving corporation or entity or transferee of such assets, as the case may be, assumes the obligations set forth above relating to the indemnified person.

Use of Proceeds

The Company shall use the net proceeds from the transaction for working capital, capital expenditure and other general corporate purposes, including but not limited to, the implementation of the Nasdaq listing standards) during 2019. The Board has adopted a written Compensation Committee charter that is availableplans to stockholders onenhance and optimize the Company’s website at www.sonimtech.com under Investor Relations.business pursuant to the strategy developed by Mr. Liu as the Chief Executive Officer.

Compensation Committee ProcessesExpenses

Except as otherwise provided in the Subscription Agreement, all costs and Proceduresexpenses incurred in connection with the Subscription Agreement will be paid by the party incurring such cost or expense.

Specific Performance

The agendaCompany and Purchaser have agreed that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties do not perform their obligations under the Subscription Agreement in accordance with its specified terms or otherwise breach such provisions. The Company and Purchaser have further agreed each meetingparty is entitled to an injunction or injunctions, specific performance or any other equitable relief to prevent breaches of the Compensation CommitteeSubscription Agreement and to enforce specifically the terms and provisions of the Subscription Agreement without proof of damages. If, prior to the end date, any party brings any suit, action or proceeding to prevent breaches of the Subscription Agreement and to enforce specifically the terms and provisions thereof, the end date shall automatically be extended by (A) the amount of time during which such suit, action or proceeding is usually developedpending, plus twenty (20) business days or (B) such other time period established by the Chaircourt presiding over such suit, action or proceeding, as the case may be.

Amendments

The Subscription Agreement may be amended, modified or waived by a writing signed by both parties. However, from and after the first closing, the approval of the Compensation Committee, in consultation withcontinuing directors shall be required for the CEO andCompany to (i) amend, modify or terminate the head of Human Resources. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisorsSubscription Agreement, (ii) exercise or consultantsmay be invited by the Compensation Committee to makepresentations, to provide financial or otherbackground information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during,waive any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expenseright of the Company adviceunder the Subscription Agreement or (iii) extend the time for performance of any obligation of the Purchaser under the Subscription Agreement. The Subscription Agreement may not be modified or amended from and assistance from compensation consultantsafter the second closing and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriateCompany cannot waive any provision in the performance of its duties. Subscription Agreement from and after the second closing.

Governing Law

The Compensation Committee has direct responsibility forSubscription Agreement shall be governed by and construed in accordance with the oversightlaws of the workState of any consultants or advisers engaged forDelaware, without regard to the purposeconflicts of advising the Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluationlaw rules of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. such state.

No Appraisal Rights

Under the charter, the Compensation Committee may select, or receive advice from,DGCL, our stockholders do not have a compensation consultant, legal counsel or other adviserright to the compensation committee, other than in-house legal counseldissent and certain other types of advisers, only after taking into consideration six factors, prescribed by the SECare not entitled to appraisal rights with respect to this proposal and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement thatwe will not independently provide our stockholders with any adviser be independent.

During the last fiscal year, the Company engaged Aon Plc and its affiliates as a compensation consultant to provide market data, peer group analysis and conduct an executive compensation assessment analyzing the cash and equity compensation of our then-current executive officers and directors against compensation for similarly situated executives at our peer group. The decision to engage Aon Plc and its affiliates to perform these consulting services for the Company was made by management. During the past fiscal year, the Compensation Committee has relied upon the data and recommendations provided by Aon Plc and its affiliates.

The Compensation Committee considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of the Company’s compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year. Generally, the Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines any adjustments to his compensationas well as awards to be granted. For all executives as part of its deliberations, the Compensation Committee may review and consider, as appropriate,materials such as financial reports and projections, operational data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives in various hypothetical scenarios, executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels and recommendations of the Compensation Committee’s compensation consultant, including analyses of executive and director compensation paid at other companies identified by the consultant.rights.

Nominating and Corporate Governance CommitteeRequired Vote

The principal duties and responsibilities, among others, of our nominating and corporate governance committee include:

assessing the need for new directors and identifying individuals qualified to become directors;

recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;

assessing individual director performance, participation and qualifications;

developing, recommending, overseeing the implementation of and monitoring compliance with, our corporate governance guidelines, and periodically reviewing and recommending any necessary or appropriate changes to our corporate governance guidelines;

monitoring the effectiveness of the board and the quality of the relationship between management and the board; and

overseeing an annual evaluation of the board’s performance.

The Nominating and Corporate Governance Committeeis composed of 2 directors: Messrs. Hochschild and Johnson. All members of the Nominating and Corporate Governance Committee were independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards) in 2019. The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on the Company’s website and www.sonimtech.com under Investor Relations.

The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of the Company’s stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee considers diversity (including gender, racial and ethnic diversity), age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability.

At this time, the Nominating and Corporate Governance Committee does not have a policy with regard to the consideration of director candidates recommended by stockholders. The Nominating and Corporate Governance Committee believes that it is in the best position to identify, review, evaluate and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board.

STOCKHOLDER COMMUNICATIONS WITHTHE BOARD OF DIRECTORS

Historically, the Company has not provided a formal process related to stockholder communications with the Board. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. The Company believes its responsiveness to stockholder communications to the Board has been excellent. Nevertheless, during the upcoming year, the Nominating and Corporate Governance Committee will give full consideration to the adoption of a formal process for stockholder communications with the Board and, if adopted, publish it and post it to the Company’s website.

CODEOF BUSINESS CONDUCTAND ETHICS

We have adopted a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of our employees, executive officers, and directors. The Code of Conduct is available on our website at www.sonimtech.com under Investor Relations. The nominating and corporate governance committee of our board of directors will be responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers, and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.

CORPORATE GOVERNANCE GUIDELINES

In March 2019, the Board of Directors documented the governance practices followed by the Company by adopting Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate the Company’s business operations as needed and to make decisions that are independent of the Company’s management. The guidelines are also intended to align the interests of directors and management with those of the Company’s stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to board composition and selection, including diversity, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, corporate social responsibility and board committees and compensation. The Corporate Governance Guidelines, as well as the charters for each committee of the Board, may be viewed at www.sonimtech.com under Investor Relations.

PROPOSAL 2

AMENDMENTTOTHE COMPANYS 2019 EQUITY INCENTIVE PLAN

In May 2020, our Board approved an amendment to the 2019 Equity Incentive Plan (the “2019 Plan”), subject to stockholder approval. We refer to the 2019 Plan, as amended by the Board in June 2020, as the Amended 2019 Plan throughout this Proxy Statement.

The material terms of the Amended 2019 Plan are summarized below. The Amended 2019 Plan contains the following material changes from the 2019 Plan:

Subject to adjustment for certain changes in our capitalization (including the reverse stock split described in Proposal 3), the aggregate number of shares of our common stock that may be issued under the Amended 2019 Plan will not exceed 5,340,678 shares, which is an increase of 3,000,000 shares over the aggregate number of shares of our common stock that may be issued under the 2019 Plan.

Such increase also constitutes a corresponding increase in the number of shares available for issuance under the Amended 2019 Plan pursuant to the exercise of incentive stock options.

Why You Should Vote for the Amended 2019 Plan

Equity Awards Are an Important Part of Our Compensation Philosophy

The Board believes that it is very important that our eligible employees, consultants and directors receive part of their compensation in the form of equity awards to foster their investment in us, reinforce the link between their financial interests and those of our other stockholders and maintain a competitive compensation program. Equity compensation fosters an employee ownership culture, motivates employees to create stockholder value and, because the awards are typically subject to vesting and other conditions, promotes a focus on long-term value creation. The equity incentive programs we have in place have worked to build stockholder value by attracting and retaining extraordinarily talented employees, consultants and directors. The Board believes we must continue to offer competitive equity compensation packages in order to attract and motivate the talent necessary for our continued growth and success.

We Expect to Continue to Experience Substantial Growth in Our Business

Our Board approved the Amended 2019 Plan to help ensure that we have sufficient shares available to attract and retain qualified employees to support our operations.

The Amended 2019 Plan Combines Compensation and Governance Best Practices Designed to Protect our Stockholders’ Interests

We recognize that equity compensation awards dilute stockholder equity and must be used judiciously. Our equity compensation practices are designed to be in line with industry norms, and we believe our historical share usage has been responsible and mindful of stockholder interests. Certain provisions in the Amended 2019 Plan are designed to protect our stockholders’ interests and to reflect corporate governance best practices including:

Flexibility in designing equity compensation scheme. The Amended 2019 Plan allows us to provide a broad array of equity incentives, including traditional stock option grants, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, performance stock awards and performance cash awards. By providing this flexibility we can quickly and effectively react to trends in compensation practices and continue to offer competitive compensation arrangements to attract and retain the talent necessary for the success of our business.

No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the Amended 2019 Plan must have an exercise price or strike price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted.

Limits on non-employee director compensation. The maximum number of shares of common stock subject to awards granted under the Amended 2019 Plan or otherwise during any one calendar year to any non-employee director, taken together with any cash fees paid by us to the non-employee director during that year for service on our board of directors, will not exceed $600,000 in total value (calculating the value of the awards based on the grant date fair value for financial reporting purposes), or, with respect to the calendar year in which a non-employee director is first appointed or elected to our board of directors, $1,000,000.

Awards subject to forfeiture/clawback. Awards granted under the Amended 2019 Plan are subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, we may impose other clawback, recovery or recoupment provisions in a stock award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause.

No single trigger accelerated vesting upon change in control. The Amended 2019 Plan does not provide for any automatic mandatory vesting of awards upon a change in control.

No liberal change in control definition. The change in control definition in the Amended 2019 Plan is not a “liberal” definition. A change in control transaction must actually occur in order for the change in control provisions in the Amended 2019 Plan to be triggered.

Termination of stock options and stock appreciation rights on a participant’s termination for cause. If a participant’s service is terminated for cause, which is defined under the Amended 2019 Plan as (i) the participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States, any state thereof, or any applicable foreign jurisdiction; (ii) the participant’s attempted commission of or participation in a fraud or act of dishonesty against us; (iii) the participant’s intentional, material violation of any contract or agreement with us, or any statutory duty the participant owes to us; (iv) the participant’s unauthorized use or disclosure of our confidential information or trade secrets; or (v) the participant’s gross misconduct, the participant’s stock options and stock appreciation rights terminate immediately, and the participant is prohibited from exercising his or her stock options and stock appreciation rights.

We Manage Our Equity Award Usage Carefully

The following table provides certain additional information regarding our equity incentive plans.

   As of August 10,
2020
 

Total number of shares of common stock subject to outstanding stock options

   1,774,231 

Weighted-average exercise price of outstanding stock options

  $3.46 

Weighted-average remaining term of outstanding stock options

   7.33 years 

Total number of shares of common stock subject to outstanding full value awards

   2,150,000 

Total number of shares of common stock available for grant under the 2019 Plan

   385,259 

Total number of shares of common stock available for grant under other equity incentive plans (1)

   408,453 

Total number of shares of common stock outstanding

   65,930,191 

Per-share closing price of common stock as reported on Nasdaq Global Market

  $1.09 

(1)

Represents shares issuable pursuant to our 2019 Employee Stock Purchase Plan.

The following table provides detailed information regarding the activity related to our equity incentive plans for fiscal years 2017, 2018 and 2019.

   Fiscal Year
2019
  Fiscal Year
2018
  Fiscal Year
2017
 

Total number of shares of common stock subject to stock options granted

   1,635,853   458,156   591,518 

Total number of shares of common stock subject to full value awards granted

   287,500   0   0 

Weighted-average number of shares of common stock outstanding

   18,603,582   3,447,283   1,026,616 

Burn Rate (1)

   10%   13%   58% 

(1)

Burn rate is the summation of the total number of stock options granted and full value awards granted divided by the weighted-average shares outstanding

If Proposal 2 Is Not Approved, We Will Not Have Enough Shares Available under the Amended 2019 Plan to Make Grants to Help Us Attract and Retain Top Employees

If our stockholders approve this Proposal 2, the Amended 2019 Plan will become effective on the date of the Annual Meeting. If our stockholders fail to approve this Proposal 2, the 2019 Plan will remain as is without any changes thereto. If this Proposal 2 is not approved, we will not have sufficient shares available under the 2019 Plan to make grants to help us retain top employees and, unless we adopt a new inducement plan without the approval of our stockholders (pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules), we will not be able to use equity compensation awards to attract new employees.

Vote Required

Stockholders are requested in this Proposal 2 to approve the Amended 2019 Plan. The affirmative vote of the holders of a majority of the votes cast by the stockholders present in person or by proxy at the Annual Meetingspecial meeting and entitled to vote thereon will be required to approve the Amended 2019 Plan. Vote cast online during the virtual Annual Meeting will constitute votes cast in person at the Annual Meeting for purposesTransaction Proposal. A copy of the votes. Abstentions and broker non-votes are not counted for the purpose of determining the number of votes cast and will therefore not have any effect on the outcome of the vote on this Proposal 2.Subscription Agreement is attached hereto as Annex A.

THE BOARD OF DIRECTORS RECOMMENDS

THE BOARDA VOTE IN FAVOR OF DIRECTORS RECOMMENDS PROPOSAL 1.

A VOTEIN FAVOROF PROPOSAL 2.

Description of the Amended 2019 Plan

The material features of the Amended 2019 Plan are outlined below. This summary is qualified in its entirety by reference to the complete text of the Amended 2019 Plan. Stockholders are encouraged to read the actual text of the Amended 2019 Plan, which is appended to this proxy statement as Appendix A and may be accessed from the SEC’s website at www.sec.gov.

Awards. The Amended 2019 Plan provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other stock awards, or collectively, stock awards.

Eligibility. Employees, non-employee directors, and consultants are eligible to participate in the Amended 2019 Plan. All of our 291 employees, six non-employee directors and 66 consultants are currently eligible to participate in the Amended 2019 Plan and may receive all types of stock awards, other than ISOs, under the Amended 2019 Plan. ISOs may be granted under the Amended 2019 Plan only to our employees in the United States.

Authorized Shares. If this Proposal 2 is approved, the total number of our common stock reserved for issuance under the Amended 2019 plan will not exceed 5,340,678, which number is the sum of (i) 1,885,039 shares that

were approved in connection with the Amended 2019 Plan’s initial adoption, (ii) the number of shares subject to outstanding stock options or other stock awards that were granted under our 2012 Equity Incentive Plan, as amended, as of the initial adoption of the Amended 2019 Plan, to the extent such awards are forfeited, terminated, expire or are otherwise not issued, and (iii) 3,000,000 shares to be added pursuant to this Proposal No. 2. Additionally, the number of shares of our common stock reserved for issuance under the Amended 2019 Plan automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020 and ending on and including January 1, 2029, in an amount equal to 5% of the total number of shares of our capital stock outstanding on December 31 of the prior calendar year, unless our board of directors or compensation committee determines prior to the date of increase that there will be a lesser increase, or no increase. The foregoing share amounts do not reflect the effect of the reverse stock split described in Proposal 3 and such amounts would be adjusted pursuant to the terms of the Amended 2019 Plan to account for the changes to our capital structure resulting from such reverse stock split, as described below under “Changes to Capital Structure” below.

Shares subject to stock awards granted under our Amended 2019 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under our Amended 2019 Plan. Additionally, shares become available for future grant under our Amended 2019 Plan if they were issued under stock awards under our Amended 2019 Plan and we repurchase them or they are forfeited. This includes shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stock award. Plan Administration. Our board of directors, or a duly authorized committee of our board of directors, will administer our Amended 2019 Plan. Our board of directors may also delegate to one or more of our officers the authority to (i) designate employees (other than officers) to receive specified stock awards, and (ii) determine the number of shares subject to such stock awards. Under our Amended 2019 Plan, our board of directors has the authority to determine and amend the terms of awards, including:

recipients;

the exercise, purchase or strike price of stock awards, if any;

the number of shares subject to each stock award;

the fair market value of a share of our common stock in the event no public market exists for our common stock;

the vesting schedule applicable to the awards, together with any vesting acceleration; and

the form of consideration, if any, payable upon exercise or settlement of the award.

Under our Amended 2019 Plan, our board of directors also generally has the authority to effect, with the consent of any adversely affected participant:

the reduction of the exercise, purchase or strike price of any outstanding award;

the cancellation of any outstanding stock award and the grant in substitution therefor of other awards, cash or other consideration; or

any other action that is treated as a repricing under generally accepted accounting principles.

Non-Employee Director Limitation. The maximum number of shares of common stock subject to awards granted under the Amended 2019 Plan or otherwise during any one calendar year to any non-employee director, taken together with any cash fees paid by us to the non-employee director during that year for service on our board of directors, will not exceed $600,000 in total value (calculating the value of the awards based on the grant date fair value for financial reporting purposes), or, with respect to the calendar year in which a non-employee director is first appointed or elected to our board of directors, $1,000,000.

Stock Options. ISOs and NSOs are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and

conditions of our Amended 2019 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under our Amended 2019 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator. The plan administrator determines the term of stock options granted under the Amended 2019 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. The option term may be extended in the event that exercise of the option following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability and 18 months in the event of death. Except as otherwise provided in the applicable stock option agreement or other written agreement between us or any of our affiliates and the participant, options terminate immediately upon the termination of the individual’s employment for cause. In no event may an option be exercised beyond the expiration of its term. Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1) cash, check, bank draft or money order, (2) a broker-assisted cashless exercise, (3) the tender of shares of our common stock previously owned by the optionholder, (4) a net exercise of the option if it is an NSO, and (5) other legal consideration approved by the plan administrator.

Tax Limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (ii) the term of the ISO does not exceed five years from the date of grant. The maximum number of shares of our common stock that may be issued upon the exercise of ISOs under our Amended 2019 Plan is equal to three times the aggregate number of shares reserved under the Amended 2019 Plan.

Restricted Stock Unit Awards. Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited once the participant’s continuous service ends for any reason.

Restricted Stock Awards. Restricted stock awards are granted pursuant to restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to us or any other form of legal consideration (including future services) that may be acceptable to our board of directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ceases for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.

Performance Awards. The Amended 2019 Plan permits the grant of performance awards. A performance award is a stock or cash award that is payable (including that may be granted, may vest, or may be exercised) contingent upon the achievement of pre-determined performance goals during a performance period. A performance award

may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will generally be determined by the plan administrator.

Performance goals under the Amended 2019 Plan will be based on any one or more of the following performance criteria: (1) earnings (including earnings per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation and amortization; (4) total stockholder return; (5) return on equity or average stockholder’s equity; (6) return on assets, investment, or capital employed; (7) stock price; (8) margin (including gross margin); (9) income (before or after taxes); (10) operating income; (11) operating income after taxes; (12) pre-tax profit; (13) operating cash flow; (14) sales or revenue targets; (15) increases in revenue or product revenue; (16) expenses and cost reduction goals; (17) improvement in or attainment of working capital levels; (18) economic value added (or an equivalent metric); (19) market share; (20) cash flow; (21) cash flow per share; (22) share price performance; (23) debt reduction; (24) implementation or completion of projects or processes; (25) subscriber satisfaction; (26) stockholders’ equity; (27) capital expenditures; (28) debt levels; (29) operating profit or net operating profit; (30) workforce diversity; (31) growth of net income or operating income; (32) billings; (33) the number of subscribers, including but not limited to unique subscribers; (34) employee retention; and (35) other measures of performance selected by the plan administrator.

Performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the plan administrator at the time the performance goals are established, the plan administrator will appropriately make adjustments in the method of calculating the attainment of performance goals for a performance period as follows:: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles.

Stock Appreciation Rights. Stock appreciation rights are granted pursuant to stock appreciation grant agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under our Amended 2019 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator.

Other Stock Awards. Our plan administrator may grant other awards based in whole or in part by reference to our common stock. Our plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.

Changes to Capital Structure. In the event that there is a specified type of change in our capital structure, such as a stock split or recapitalization, appropriate adjustments will be made to (i) the class and the maximum number of shares reserved for issuance under our Amended 2019 Plan, (ii) the class and the maximum number of shares that may be issued upon the exercise of ISOs, and (iii) the class and the number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.

Corporate Transactions. Our Amended 2019 Plan provides that in the event of certain specified significant corporate transactions including: (i) a sale of all or substantially all of our assets, (ii) the sale or disposition of more than 50% of our outstanding securities, (iii) the consummation of a merger or consolidation where we do not survive the transaction and (iv) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding prior to such transaction are converted or exchanged into other property by virtue of the transaction, each outstanding award will be treated as the plan administrator determines unless otherwise provided in an award agreement or other written agreement between us and the award holder. The plan administrator may take one of the following actions with respect to such awards:

arrange for the assumption, continuation or substitution of a stock award by a successor corporation;

arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation;

accelerate the vesting, in whole or in part, of the stock award and provide for its termination prior to the transaction;

arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us; or

cancel or arrange for the cancellation of the stock award, to the extent not vested or not exercised prior to the effective time of the transaction, in exchange for such cash consideration, if any, as the plan administrator may deem appropriate; or

make a payment, in the form determined by the plan administrator, equal to the excess, if any, of the value of the property the participant would have received on exercise of the awards before the transaction over any exercise price payable by the participant in connection with the exercise, multiplied by the number of shares subject to the stock award. Any escrow, holdback, earnout or similar provisions in the definitive agreement for the transaction may apply to such payment to the holder of a stock award to the same extent and in the same manner as such provisions apply to holders of our common stock.

The plan administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner in the event of a corporate transaction.

In the event of a change in control, awards granted under our Amended 2019 Plan will not receive automatic acceleration of vesting and/or exercisability, although this treatment may be provided for in an award agreement or in any other written agreement between us and the participant. Under our Amended 2019 Plan, a change in control generally will be deemed to occur in the event: (i) the acquisition by any a person or company of more than 50% of the combined voting power of our then outstanding stock; (ii) a merger, consolidation, or similar transaction in which our stockholders immediately before the transaction do not own, directly or indirectly, more than 50% of the combined outstanding voting power of the surviving entity or the parent of the surviving entity; (iii) a sale, lease, exclusive license or other disposition of all or substantially all of our assets other than to an entity more than 50% of the combined voting power of which is owned by our stockholders; or (iv) an unapproved change in the majority of our board of directors.

Transferability. A participant generally may not transfer stock awards under our Amended 2019 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our Amended 2019 Plan.

Amendment or Termination. Our board of directors has the authority to amend, suspend, or terminate our Amended 2019 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our board of directors originally adopted our Amended 2019 Plan. No stock awards may be granted under our Amended 2019 Plan while it is suspended or after it is terminated.

U.S. Federal Income Tax Consequences

The following is a summary of the principal United States federal income tax consequences to participants and us with respect to participation in the Amended 2019 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local, state or foreign jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant’s tax adviser regarding the federal, state, local and other tax consequences of the grant or exercise of an award or the disposition of stock acquired the Amended 2019 Plan. The Amended 2019 Plan is not qualified under the provisions of Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of our tax reporting obligations.

Nonstatutory Stock Options

Generally, there is no taxation upon the grant of an NSO if the stock option is granted with an exercise price equal to the fair market value of the underlying stock on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the participant is employed by us or one of our affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to their fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date.

Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.

Incentive Stock Options

The Amended 2019 Plan provides for the grant of stock options that are intended to qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of an ISO. If the participant holds a share received upon exercise of an ISO for more than two years from the date the stock option was granted and more than one year from the date the stock option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax basis in that share will be long-term capital gain or loss. If, however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year.

For purposes of the alternative minimum tax, the amount by which the fair market value of a share of stock acquired upon exercise of an ISO exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that share. In

computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option is exercised.

We are not allowed an income tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant, subject to the requirement of reasonableness and the provisions of Section 162(m) of the Code, and provided that either the employee includes that amount in income or we timely satisfy our reporting requirements with respect to that amount.

Restricted Stock Awards

Generally, the recipient of a restricted stock award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. If, however, the stock is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the stock award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient for the stock.

The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested.

Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock award.

Restricted Stock Unit Awards

Generally, the recipient of a restricted stock unit award structured to conform to the requirements of Section 409A of the Code or an exception to Section 409A of the Code will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. To conform to the requirements of Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A of the Code, in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed.

The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered.

Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award.

Stock Appreciation Rights

Generally, if a stock appreciation right is granted with an exercise price equal to the fair market value of the underlying stock on the grant date, the recipient will recognize ordinary income equal to the fair market value of the stock or cash received upon such exercise. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock appreciation right.

New Plan Benefits

Name and position

  Dollar value  Number of shares 

Thomas W. Wilkinson

       (1)   200,000(1) 

Chief Executive Officer

   

Robert Plaschke

   —     —   

Former Chief Executive Officer

   

Robert Tirva

       (1)   100,000(1) 

Chief Financial Officer

   

James Walker

   —     —   

Former Chief Financial Officer

   

Charles Becher

   —     —   

Former Chief Sales and Marketing Officer

   

All current executive officers as a group

       (1)   300,000(1) 

All current directors who are not executive officers as a group

   
$720,000 per calendar
year(2)
 
 
      (2) 

All employees, including all current officers who are not executive officers, as a group

       (1)   125,000(1) 

(1)

Awards granted under the Amended 2019 Plan to our executive officers and other employees are discretionary and are not subject to set benefits or amounts under the terms of the Amended 2019 Plan. However, in May 2020, our board of directors approved for grant a number of RSU awards to certain employees (including our executive officers) under the 2019 Plan subject to stockholder approval of this Proposal 2, and the number of shares subject to each such award is indicated in this table.

(2)

Awards granted under the Amended 2019 Plan to our non-employee directors are discretionary and are not subject to set benefits or amounts under the terms of the Amended 2019 Plan. However, pursuant to our current director compensation program, each of our current non-employee directors automatically will be granted an annual RSU award on the date of each of our annual meetings of stockholders, provided that such individual will be continuing as a non-employee director following such date. The total dollar value of such annual RSU awards will be $120,000 for each of our continuing non-employee directors. The number of shares of our common stock subject to each such award is not determinable at this time. On and after the date of the Annual Meeting, any such RSU awards will be granted under the Amended 2019 Plan if this Proposal 2 is approved by our stockholders. For additional information regarding our current director compensation program, see the “Director Compensation” section below.

2019 Plan Benefits

The following table sets forth, for each of the individuals and groups indicated, the number of shares of our common stock subject to awards granted (even if not currently outstanding) under the 2019 Plan since its original effectiveness and through August 10, 2020.

Name and position

Number of shares

Thomas W. Wilkinson

725,000

Chief Executive Officer

Robert Plaschke

0

Former Chief Executive Officer

Robert Tirva

811,500

Chief Financial Officer

James Walker

0

Former Chief Financial Officer

Charles Becher

0

Former Chief Sales and Marketing Officer

All current executive officers as a group

1,536,500

All current directors who are not executive officers as a group

814,640

Each nominee for election as a director:

John Kneuer

162,928

Maurice Hochschild

162,928

Jeffrey D. Johnson

162,928

Susan G. Swenson

162,928

Kenny Young

0

Alan Howe

162,928

Each associate of any executive officers, current directors or director nominees

—  

Each other person who received or is to receive 5% of awards

—  

All employees, including all current officers who are not executive officers, as a group

1,267,500

Equity Compensation Plan Information

The following table provides certain information with respect to all of the Company’s equity compensation plans in effect as of the end of fiscal year 2019.

Plan Category  Number of
Securities
to be Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights
(a)
  Weighted-Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
(b)
  Number of Securities
Remaining Available for
Future
Issuance Under Equity
Compensation Plans
(Excluding
Securities Reflected in
Column (a))
(c)
 

Equity compensation plans approved by security holders

   2,895,214(1)  $3.50(2)   1,142,748(3) 

Equity compensation plans not approved by security holders

   —     —     —   

Total

   2,895,214  $3.50   1,142,748 

(1)

The aggregate number consists of the following: 1,647,074 shares subject to options to purchase common stock issued pursuant to our 2012 Equity Incentive Plan as of December 31, 2019, 998,640 shares subject to options to purchase common stock issued pursuant to our 2019 Plan as of December 31, 2019, 90,000 shares issuable upon vesting of outstanding restricted stock units issues pursuant to our 2012 Equity Incentive Plan as of December 31, 2019 and 159,500 shares issuable upon vesting of outstanding restricted stock units issued pursuant to our 2019 Plan as of December 31, 2019.

(2)

Excludes restricted stock units because they have no exercise price.

(3)

Includes 874,347 shares authorized for future issuance under our 2019 Plan and 268,401 shares authorized for future issuance under our 2019 Employee Stock Purchase Plan as of December 31, 2019. Under our 2019 Employee Stock Purchase Plan, the number of shares of common stock reserved for issuance will automatically increase on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1% of the total number of shares of capital stock outstanding on December 31st of the prior calendar year, and (ii) 500,000 shares, unless the board of directors or compensation committee determines prior to such date that there will be a lesser increase, or no increase. Effective January 1, 2020, 204,372 additional shares were added to our 2019 Employee Stock Purchase Plan. The number of shares of common stock reserved for issuance under our 2019 Plan will automatically increase by the number of shares subject to outstanding stock options or other stock awards that were granted under our 2012 Equity Incentive Plan that are forfeited, terminated, expire, or are otherwise not issued. Additionally, the number of shares of common stock reserved for issuance under our 2019 Plan will automatically increase on January 1 of each calendar year for 10 years, starting January 1, 2020 and ending on and including January 1, 2029, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31 of the prior calendar year, unless the board of directors or compensation committee determines prior to the date of increase that there will be a lesser increase, or no increase. Effective January 1, 2020, 1,021,861 additional shares were added to our 2019 Plan.

PROPOSAL 3PROPOSAL 2: AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED TO EFFECT A REVERSE STOCK SPLIT

AMENDMENTTOTHE COMPANYS CERTIFICATEOF INCORPORATION,ASAMENDEDBackground

TOEFFECTAREVERSESTOCKSPLIT

Background

The Board has approved a proposed amendment to the Company’s amended and restated certificate of incorporation, as amended or the Certificate(the “Certificate of Incorporation,Incorporation”) that would effect a reverse stock split whereby a number of outstanding shares of our common stock between and including two (2) and twelve,fifteen (15), such number consisting only of whole shares, will be combined into one share of our common stock, or the Reverse Stock Split. The amendment corresponding to this proposal is attached hereto as Appendix B.Annex C. This Proposal No. 2. is not contingent on the outcome of Proposal No. 1.

Under the proposed amendment, any whole number of outstanding shares between and including two (2) and twelvefifteen (15) shares would be combined, converted and changed into one share of common stock. The Board believes that stockholder approval of the range of potential exchange ratios (rather than a single exchange ratio) provides the Board with the flexibility to achieve the desired results of the Reverse Stock Split and, therefore, is in the best interests of the Company and its stockholders. If the stockholders approve this proposal, the Board would effect the Reverse Stock Split only upon the Board’s determination that such Reverse Stock Split would be in the best interests of the Company and its stockholders at that time.

The effectiveness of this amendment or the abandonment of this amendment will be determined by the Board following the Annual Meeting in its discretion. To effect the Reverse Stock Split, the Board would set the timing for such a split and select the specific ratio from the range of ratios described in this Proposal 3.2. No further action on the part of stockholders will be required to either implement or abandon the Reverse Stock Split.

The Board has recommended that this proposed amendment be presented to the Company’s stockholders for approval.

Upon receiving stockholder approval of the proposed amendment, the Board will have the sole discretion to elect pursuant to Section 242(c) of the Delaware General Corporation Law or the DGCL,(the “DGCL”) as it determines to be in the best interests of the Company and its stockholders, whether to effect a Reverse Stock Split and, if so, the number of shares of our common stock between and including two (2) and twelve whichfifteen (15) that will be combined into one share of our common stock, at any time before the first anniversary of the Annual Meeting.special meeting. If the proposal is approved by stockholders, and the Board determines to implement a Reverse Stock Split, we would communicate to the public the specific ratio the Board selects.

If the Board determines to effect a Reverse Stock Split by filing the amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, the Certificate of Incorporation would be amended accordingly. The text of the form of amendment to the Certificate of Incorporation, which would be filed with the Secretary of State of the State of Delaware to effect the Reverse Stock Split reflected therein, is set forth in Appendix BAnnex C to this Proxy Statement. However, such text is subject to amendment to include such changes as may be required by the office of the Secretary of State of the State of Delaware or as the Board deems necessary and advisable to effect one of the Reverse Stock Split, if any.

Except for adjustments that may result from the treatment of fractional shares as described below, each stockholder will hold the same percentage of outstanding common stock immediately following the Reverse Stock Split as such stockholder held immediately prior to such Reverse Stock Split. The par value of the common stock would remain unchanged at $0.0001 per share. The amendment would not change the number of authorized shares of common stock. Accordingly, the Reverse Stock Split selected, if any, will have the effect of creating additional unreserved shares of our authorized common stock. These additional shares may be used by us for various purposes in the future without further stockholder approval, including, among other things:

 

raising capital to fund our development of our next generation of products or otherwise;

establishing strategic relationships with other companies;

providing equity incentives to our employees, officers or directors; and

 

expanding our business through the acquisition of other businesses or products.

You should keep in mind that the implementation of a Reverse Stock Split does not have an effect on the actual or intrinsic value of the Company’s business or your proportional ownership in the Company. You should also consider that in many cases, the market price of a company’s shares declines after events similar to the Reverse Stock Split.

Reasons for the Reverse Stock Split

Our common stock is listed on the Nasdaq GlobalCapital Market or Nasdaq,(which we refer to as “Nasdaq”) under the symbol “SONM.” Nasdaq has several continued listing criteria that companies must satisfy in order to remain listed on the exchange. One criteria for continued listing is that we maintain a closing bid price that is greater than or equal to $1.00 per share.

We announced on July 28, 2020February 18, 2022 that we had received a letter dated July 22, 2020February 16, 2022 from the Listing Qualifications Department of Thethe Nasdaq Stock Market or the Staff,(the “Staff”) notifying the Company that, for 30thirty (30) consecutive business days, the bid price for the Company’s common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on The Nasdaq Stock Market pursuant to the Nasdaq Listing Rules, or the “Minimum Bid Requirement”. In accordance with the Nasdaq Listing Rules, the Company has 180one hundred and eighty (180) calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance with the Minimum Bid Requirement, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of 10ten (10) consecutive business days during this 180-dayone hundred and eighty (180)-day compliance period, which expires on January 18, 2021,August 15, 2022, unless the Staff exercises its discretion to extend this period pursuant to the Nasdaq Listing Rules. If we do not regain compliance with the Minimum Bid Requirement by January 18, 2021,August 15, 2022 but meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Requirement, and provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary, we may be granted an additional 180one hundred and eighty (180) calendar day compliance period. If we fail to regain compliance during the grace period, our common stock could be subject to delisting.

Our Board believes that the continued listing of our common stock on Nasdaq is in the best interests of our stockholders. If our common stock was delisted from Nasdaq, trading, if any, in our securities may then continue to be conducted in the over-the-counter market on the OTC bulletin board, OTC Markets or in the “pink sheets.” In this case, we could face significant material adverse consequences, including:

 

the issuance of our securities may require compliance with the individual securities laws or “blue sky” laws of several states, which may be time consuming and costly;

 

limited availability of market quotations for our securities;

 

the determination that our common stock is a “penny stock,” which would require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

 

more limited amount of news and analyst coverage for us;

 

decreased ability to issue additional securities or obtain additional financing in the future; and

 

decreased ability of our security holders to sell their securities in certain states.

The purpose of the Reverse Stock Split is to increase the market price of our common stock. The Board intends to implement a Reverse Stock Split with a specific conversion ratio only if it believes that a decrease in the

number of shares outstanding is likely to improve the trading price for our common stock and improve the

likelihood that we will be allowed to maintain our listing on Nasdaq. If the trading price of our common stock increases without implementing one of the Reverse Stock Split exchange ratios, the Board may exercise its discretion not to implement any of the Reverse Stock Split exchange ratios.

Further, the Board also believes that the increased market price of our common stock expected as a result of implementing a Reverse Stock Split will improve the marketability and liquidity of our common stock and will encourage interest and trading in our common stock. Because of the trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of thosethese policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher. It should be noted that the liquidity of our common stock may be harmed by the proposed Reverse Stock Split given the reduced number of shares that would be outstanding after the Reverse Stock Split. The Board is hopeful, however, that the anticipated higher market price will reduce, to some extent, the negative effects on the liquidity and marketability of the common stock inherent in some of the policies and practices of institutional investors and brokerage houses described above.

The Board does not intend for this transaction to be the first step in a series of plans or proposals of a “going private” transaction within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934, as amended or the Exchange Act.(the “Exchange Act”).

Board Discretion to Implement the Reverse Stock Split

If the Reverse Stock Split is approved by the Company’s stockholders at the Annual Meeting,special meeting, the actual reverse stock splitReverse Stock Split will be effected, if at all, only upon a subsequent determination by the Board that a Reverse Stock Split (with a reverse split ratio determined by the Board as described above) is in the best interests of the Company and its stockholders at the time. Such determination will be based upon many factors, including existing and expected marketability and liquidity of the common stock, prevailing market conditions and the likely effect on the market price of the common stock. Notwithstanding approval of the Reverse Stock Split by the stockholders, the Board may, in its sole discretion, abandon the proposed amendment and determine prior to the effectiveness of any filing with the Delaware Secretary of State not to effect the Reverse Stock Split prior to the one year(1)-year anniversary of this Annual Meeting,the special meeting, as permitted under Section 242(c) of the DGCL. If the Board fails to implement the Reverse Stock Split prior to the one-yearone (1)-year anniversary of this Annual Meeting,the special meeting, stockholder approval would again be required prior to implementing any Reverse Stock Split.

Discretionary Authority of the Board to Abandon Reverse Stock Split

The Board reserves the right to abandon the Reverse Stock Split without further action by our stockholders at any time before the effectiveness of the certificate of amendment, even if the Reverse Stock Split has been authorized by our stockholders. By voting in favor of the Reverse Stock Split, you are expressly also authorizing our Board to determine not to proceed with, and abandon, the Reverse Stock Split if it should so decide.

Criteria to be Used for Decision to Effect a Reverse Stock Split

If the stockholders approve the Reverse Stock Split, the Board will be authorized to proceed with any of the alternative Reverse Stock Split exchange ratios that it selects in its sole discretion. In determining whether to proceed with one of the Reverse Stock Split exchange ratios, the Board expects to consider a number of factors, including market conditions, existing and expected trading prices of our common stock, the Nasdaq listing

requirements, our additional funding requirements and the amount of our authorized but unissued common stock.

Effects of the Reverse Stock Split

After the Effective Time (as defined below) of the Reverse Stock Split, each stockholder will own a reduced number of shares of common stock. This would affect all of the Company’s stockholders uniformly and would not affect any stockholder’s percentage ownership in the Company, except to the extent that the Reverse Stock Split results in a stockholder owning a fractional share as described below. The number of stockholders of record would not be affected by the Reverse Stock Split, except to the extent that any stockholder holds only a fractional share interest and receives cash for such interest after the Reverse Stock Split.

Proportionate voting rights and other rights of the holders of common stock would not be affected by the Reverse Stock Split (other than as a result of the payment of cash in lieu of fractional shares as described below). For example, a holder of 2% of the voting power of the outstanding shares of common stock immediately prior to the Reverse Stock Split would continue to hold 2% of the voting power of the outstanding shares of common stock after the Reverse Stock Split.

The Reverse Stock Split would reduce the number of shares of common stock available for issuance under our 2019 Equity Incentive Plan, or the 2019 Plan“2019 Plan” and our 2019 Employee Stock Purchase Plan, or the 2019 ESPP,“2019 ESPP”, in proportion to the reverse split ratio of the Reverse Stock Split. As of June 30, 2020,March 31, 2022, the number of shares of common stock authorized for issuance but unissued under the 2019 Plan is 356,072, which does not reflect the 3,000,000 additional shares that would be added to the 2019 Plan’s share reserve upon approval of Proposal 2,1,086,701, and the number of shares of common stock authorized for issuance but unissued under the 2019 ESPP is 408,453.58,337.

As of June 30, 2020,March 31, 2021, the Company has outstanding stock options to purchase approximately 1,806,49392,643 shares of common stock, 2,150,000323,949 shares of common stock subject to outstanding restricted stock units and warrants to purchase 292 shares of common stock, all of which were granted under the 2019 Plan and various other prior plans and non-plan agreements. Under the terms of each of the various plans and agreements governing the Company’s outstanding options, warrants and preferred stock, the Reverse Stock Split will effect a reduction in the number of shares of the Company’s common stock issuable upon the exercise of such options, warrants and preferred stock conversion, in proportion to the reverse split ratio of the Reverse Stock Split. The Reverse Stock Split will effect a proportionate increase in the exercise prices of the Company’s outstanding stock options and warrants. In connection with the Reverse Stock Split, the number of shares of the Company’s common stock issuable upon the exercise of outstanding options and warrants or conversion of outstanding preferred stock will be rounded down to the nearest whole share, and no cash payment will be made in respect of such rounding.

Similarly, under the terms of the 2019 Plan and the agreements governing the Company’s outstanding restricted stock units, the Reverse Stock Split will effect a reduction in the number of shares of the Company’s common stock issuable upon the vesting of such restricted stock units in proportion to the reverse split ratio of the Reverse Stock Split. In connection with the Reverse Stock Split, the number of shares of the Company’s common stock issuable upon the vesting of outstanding restricted stock units will be rounded down to the nearest whole share, and no cash payment will be made in respect of such rounding.

The following table contains approximate information relating to the common stock under three specific ratios within the range, based on share information as of June 30, 2020:March 31, 2022:

 

  Number of
Shares of
Common Stock
Before Reverse
Stock Split
   Estimated Number of Shares of Common
Stock After the Reverse Stock Split
   Number of
Shares of
Common Stock
Before Reverse
Stock Split
   Estimated Number of Shares of Common
Stock After the Reverse Stock Split
 
  2:1   6:1   12:1  2:1   6:1   15:1 

Issued and outstanding (1)(2)

   65,927,316    32,963,658    10,987,886    5,493,943    19,269,338    9,634,669    3,211,556    1,284,622 

Reserved for future issuance pursuant to 2019 Plan and 2019 ESPP (2)(3)

   764,525    382,262    127,420    63,710    1,145,038    572,518    190,838    76,335 

Reserved for future issuance pursuant to outstanding options, RSUs, and warrants

   3,956,522    1,978,261    659,420    329,710    416,594    208,297    64,432    27,772 

 

(1)

The shares presented do not reflect the additional 20,833,333 shares that would be issued and outstanding upon approval of Proposal 1.

(2)

The shares presented are an estimate as we do not know the number of fractional shares that will be required to be paid out in cash following the Reverse Stock Split.

(2)(3)

Share reserve for 2019 Plan does not include 3,000,000 additional shares that would be available for future issuance upon approval of Proposal 2.issuance.

No fractional shares of common stock will be issued in connection with any of the proposed Reverse Stock Split exchange ratios. Holders of a common stock who would otherwise receive a fractional share of common stock pursuant to the Reverse Stock Split will receive cash in lieu of the fractional share as described below.

The common stock is currently registered under Section 12(b) of the Exchange Act, and the Company is subject to the periodic reporting and other requirements of the Exchange Act. The Reverse Stock Split would not affect the registration of the common stock under the Exchange Act. After the Reverse Stock Split, provided that the Company continues to meet the minimum bid price and other listing requirements, the common stock would continue to be reported on the Nasdaq GlobalCapital Market under the symbol “SONM”.

Certain Risks and Potential Disadvantages Associated with the Reverse Stock Split

If the Reverse Stock Split is implemented, some stockholders may consequently own less than one hundred (100) shares of common stock. A purchase or sale of less than one hundred (100) shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own less than one hundred (100) shares following the Reverse Stock Split may be required to pay modestly higher transaction costs should they then determine to sell their shares in the Company.

The effect of the Reverse Stock Split upon the market prices for the common stock cannot be accurately predicted, and the history of similar stock split combinations for companies in like circumstances is varied. In particular, there is no assurance that the price per share of the common stock after the Reverse Stock Split will be 2two (2) to 12fifteen (15) times, as applicable, the price per share of the common stock immediately prior to the Reverse Stock Split. Furthermore, there can be no assurance that the market price of the common stock immediately after the proposed Reverse Stock Split will be maintained for any period of time. Even if an increased share price can be maintained, the Reverse Stock Split may not achieve the other desired results which have been outlined above. Moreover, because some investors may view a Reverse Stock Split negatively, there can be no assurance that approval of the Reverse Stock Split will not adversely impact the market price of the common stock or, alternatively, that the market price following the Reverse Stock Split will either exceed or remain in excess of the current market price.

In addition, although we believe the Reverse Stock Split may enhance the desirability of our common stock to certain potential investors, we cannot assure you that, if implemented, our common stock will be more attractive to institutional and other long termlong-term investors or that the liquidity of our common stock will increase since there would be a reduced number of shares outstanding after the Reverse Stock Split.

The increase in the number of shares of authorized but unissued and unreserved common stock may have an anti-takeover effect by permitting the issuance of shares to purchasers who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions of the Certificate of Incorporation or the Amended and Restated Bylaws of the Company, or the Bylaws.Company.

The increased number of available authorized but unissued shares as a result of the Reverse Stock Split would give the Company’s management more flexibility to resist or impede a third-party takeover bid that provides an above-market premium that is favored by a majority of the independent stockholders. Any such anti-takeover effect of the Reverse Stock Split would be in addition to existing anti-takeover provisions of the Certificate of Incorporation and Bylaws.

Effective Time

If the proposed Reverse Stock Split is approved at the Annual Meetingspecial meeting and the Board elects to proceed with one of the Reverse Stock Split in one of the approved ratios, the Reverse Stock Split would become effective as of the filing or(which we refer to as the Effective Time,“Effective Time”) of the applicable certificateCertificate of amendmentAmendment to the Certificate of Incorporation with the office of the Secretary of State of the State of Delaware. Except as explained below with respect to fractional shares, at the Effective Time, all shares of common stock issued and outstanding immediately prior thereto will be, automatically and without any action on the part of the stockholders, combined and converted into new shares of common stock in accordance with the Reverse Stock Split ratio determined by the Board among the choices set forth in this Proposal 3.2.

Cash Payment In Lieu of Fractional Shares

No fractional shares of common stock will be issued as a result of the Reverse Stock Split. Instead, in lieu of any fractional shares to which a holder of common stock would otherwise be entitled as a result of the Reverse Stock Split, the Company shall pay cash equal to such fraction multiplied by the average closing sale price of shares of common stock for the 10ten (10) trading days immediately prior to the Effective Time (calculated on a post- reverse split basis) or, if no such sale takes place on such days, the average of the closing bid and asked prices for such days, as officially reported on the Nasdaq. Upon stockholder approval of this proposal, if the Board elects to implement the Reverse Stock Split at a reverse split ratio ranging between and including 2:1 to 12:15:1, stockholders owning less than 2two (2) to 12fifteen (15) shares, as applicable, of common stock prior to the Reverse Stock Split would be eliminated. However, even if the Board selects the maximum Reverse Stock Split ratio of 12:15:1, the Company does not expect that cashing out fractional stockholders would substantially reduce the number of stockholders of record.

Exchange of Stock Certificates

As soon as practicable after the effective date of the Reverse Stock Split, stockholders will be notified that the Reverse Stock Split has been effected. American Stock Transfer & Trust Company, our transfer agent, will act as exchange agent for purposes of implementing the exchange of stock certificates. Holders of pre-split shares will be asked to surrender to the exchange agent certificates representing pre-split shares in exchange for certificates representing post-split shares in accordance with the procedures to be set forth in a letter of transmittal that will be delivered to our stockholders. No new certificates will be issued to a stockholder until the stockholder has surrendered to the exchange agent his, her or its outstanding certificate(s) together with the properly completed and executed letter of transmittal. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM FROM OUR EXCHANGE AGENT. STOCKHOLDERS ARE ENCOURAGED TO PROMPTLY SURRENDER CERTIFICATES TO THE EXCHANGE AGENT FOLLOWING RECEIPT OF TRANSMITTAL FORMS IN ORDER TO AVOID HAVING SHARES POSSIBLY BECOMING SUBJECT TO ESCHEAT LAWS.

Stockholders whose shares are held in book-entry form or by their stockbroker do not need to submit old share certificates for exchange. These stockholders’ book-entry records or brokerage accounts will automatically reflect the new quantity of shares based on the selected Reverse Stock Split ratio. As soon as practicable after the Effective Time, our transfer agent will send to such stockholders or their brokers a transmittal letter along with a statement of ownership indicating the number of post-Reverse Stock Split shares of common stock held. As of the Effective Time, each certificate or other share ownership record representing pre-split shares will be deemed for all corporate purposes to evidence ownership of post-split shares.

No Appraisal Rights

Under the DGCL, our stockholders do not have a right to dissent and are not entitled to appraisal rights with respect to the proposed amendment to our Certificate of Incorporation to effect the Reverse Stock Split, and we will not independently provide our stockholders with any such rights.

Certain Material Federal Income Tax Consequences of the Reverse Stock Split to U.S. Holders

The following is a summary of certain material federal income tax considerations of the proposed Reverse Stock Split to certain U.S. Holders (as defined below) of our common stock but does not purport to be a complete analysis of all potential tax effects. This summary is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations thereunder and administrative rulings, court decisions and other legal authorities related thereto, each as in effect as of the date of this proposal and all of which are subject to change or differing interpretations. Any such change or differing interpretation, which may or may not be retroactive, could alter the tax consequences to the stockholders described herein. This discussion is included for general informational purposes only and does not purport to consider all aspects of U.S. federal income taxation that might be relevant to a U.S. Holder. It addresses only stockholders who hold the pre-Reverse Stock Split shares and post-Reverse Stock Split shares as capital assets. It does not purport to be complete and does not address stockholders subject to special rules, such as financial institutions, tax-exempt organizations, insurance companies, dealers in securities, mutual funds, real estate investment trusts, regulated investment companies, stockholders who hold their pre-Reverse Stock Split shares through individual retirement or other tax-deferred accounts, stockholders who are not U.S. Holders (as defined below), stockholders who have a functional currency other than the U.S. dollar, partnerships or other entities classified as partnerships or disregarded entities for U.S. federal income tax purposes (or persons holding pre-Reverse Stock Split shares through such entities), stockholders who hold the pre-Reverse Stock Split shares as part of a straddle, hedge or conversion transaction, stockholders who hold the pre-Reverse Stock Split shares as qualified small business stock within the meaning of Section 1202 of the Code or Section 1244 stock for purposes of Section 1244 of the Code, stockholders who acquired their stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code, stockholders who are subject to the alternative minimum tax or Medicare contribution tax provisions of the Code or stockholders who acquired their pre-Reverse Stock Split shares pursuant to the exercise of employee stock options or otherwise as compensation. In addition, this summary does not address any tax consequences other than certain U.S. federal income tax consequences of the Reverse Stock Split, including the tax consequences of the Reverse Stock Split under state, local or non-U.S. tax laws, or under estate, gift, excise or other non-income tax laws, the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the Reverse Stock Split (whether or not any such transactions are consummated in connection with the Reverse Stock Split) including, without limitation, the tax consequences to holders of options, warrants or similar rights to acquire our common stock. Furthermore, we have not obtained a ruling from the Internal Revenue Service or an opinion of legal or tax counsel with respect to the consequences of the Reverse Stock Split. There can be no assurance that the IRS will not take a position contrary to these statements or that a contrary position taken by the IRS would not be sustained by a court. Each stockholder is advised to consult his, her or its tax advisor as to the federal income tax consequences of the Reverse Stock Split in such stockholder’s situation.

For purposes of this discussion, a “U.S. Holder” means a beneficial owner of shares of our common stock that is any of the following:

 

an individual who is a citizen or resident of the United States or someone treated as a U.S. citizen or resident for U.S. federal income tax purposes;

 

a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

 

a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) are authorized or have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes.

The Reverse Stock Split is intended to be treated as a “recapitalization” for U.S. federal income tax purposes, and the remainder of this discussion assumes the Reverse Stock Split so qualifies. The federal income tax consequences of the Reverse Stock Split will vary depending on whether a stockholder receives solely a reduced number of shares in the Reverse Stock Split or receives cash for fractional shares. A stockholder who solely receives solely a reduced number of shares generally will not recognize gain or loss in the Reverse Stock Split. A stockholder who receives cash for fractional shares generally willshould recognize gain or loss(but not loss) equal to the difference between the portion of the tax basis of the pre-Reverse Stock Split shares allocated to the fractional share interest and the cash received for such fractional shares. Such gain or loss will be a capital gain or loss and will be short termshort-term if the pre-Reverse Stock Split shares were held for one (1) year or less and long termlong-term if held more than one (1) year at the time of the Reverse Stock Split. Long-term capital gains of non-corporate U.S. Holders are generally subject to preferential tax rates. There are limitations on the deductibility of capital losses under the Code. The aggregate tax basis of the post-Reverse Stock Split shares received will be equal to the aggregate tax basis of the pre-Reverse Stock Split shares exchanged therefor (excluding any portion of the holder’s basis allocated to fractional shares), and the holding period of the post-Reverse Stock Split shares received will include the holding period of the pre-Reverse Stock Split shares exchanged. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of common stock surrendered to the shares of common stock received in a recapitalization pursuant to the Reverse Stock Split. U.S. Holders should consult their tax advisors as to application of the foregoing rules where shares of common stock were acquired at different times or at different prices.

No gain or loss will be recognized by Sonimthe Company as a result of the Reverse Stock Split.

STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Required Vote

The affirmative vote of the holders of a majority of the shares of the common stock outstanding will be required to approve the Reverse Stock Split Proposal and the corresponding amendment to the Certificate of Incorporation to effect the Reverse Stock Split. A copy of the proposed amendment to the Certificate of Incorporation is attached hereto as Annex C.

THE BOARDTHE BOARD OF DIRECTORS RECOMMENDS DIRECTORS RECOMMENDS

A VOTE VOTE IN FAVOR FAVOR OF PROPOSAL 3. PROPOSAL 2.

PROPOSAL 4PROPOSAL 3: AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED TO INCLUDE A MAJORITY OF THE MINORITY VOTE

FOR TAKE PRIVATE TRANSACTIONS BY AJP HOLDING

RATIFICATIONOF SELECTIONOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBackground

The Audit CommitteeBoard has approved a proposed amendment to the Company’s amended and restated certificate of incorporation, as amended (the “Certificate of Incorporation”). Such amendment would include a provision requiring that any transaction entered into with AJP Holding or an affiliate of AJP Holding that would result in the common stock of the Company no longer being listed on a nationally recognized securities exchange shall require the approval by a majority of the holders of common stock of the Company that are unaffiliated with AJP Holding prior to the closing of such transaction. The amendment corresponding to this proposal is attached hereto as Annex C.

The Board of Directors has selected Moss Adams asrecommended that this proposed amendment be presented to the Company’s independent registered public accounting firmstockholders for approval.

Purpose and Effect of Amendment

The principal purpose and effect of the fiscal year ending December 31, 2020Charter Restriction Proposal is to provide protection to the minority shareholders of the Company if the Transaction Proposal is approved. If the Transaction Proposal is approved, AJP Holding will own a majority of the Company, approximately 52%. By including the proposed provision as described above in the Company’s charter, it would provide the minority investors with a vote on any transaction with AJP that would result in the Company no longer being listed on a nationally recognized securities exchange and has further directed that management submitlikely all minority holders of the selection of its independent registered public accounting firm for ratificationCompany being bought out. If the Charter Restriction Proposal is not approved then AJP Holding could approve such a transaction by the stockholdersfact that it owns the majority of the common stock outstanding of the Company.

Required Vote

The affirmative vote of the holders of a majority of the shares of the common stock outstanding will be required to approve the Charter Restriction Proposal and the corresponding amendment to the Certificate of Incorporation.A copy of the proposed amendment to the Certificate of Incorporation is attached hereto as Annex C.

THE BOARD OF DIRECTORS RECOMMENDS

A VOTE IN FAVOR OF PROPOSAL 3.

PROPOSAL 4: VOTE ON ADJOURNMENT

If at the annualspecial meeting there are not sufficient votes to approve the Transaction Proposal and adopt the Subscription Agreement, we intend to move to vote on this Adjournment Proposal. We do not intend to move to a vote on this Adjournment Proposal if the Transaction Proposal is approved by the requisite number of shares of the Company common stock at the special meeting. Moss Adams has audited

In this Adjournment Proposal, the Company’s financial statements since 2013. Representativesstockholders are being asked to approve a proposal that will give the Board authority to adjourn the special meeting to a later date or time, if necessary, to solicit additional proxies in favor of Moss Adamsthe Transaction Proposal if there are expected to be presentinsufficient votes at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Neither the Company’s Bylaws nor other governing documents or law require stockholder ratificationtime of the selection of Moss Adams asspecial meeting to approve the Company’s independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Moss Adams to the stockholders for ratification as a matter of good corporate practice.Transaction Proposal. If the stockholders fail to ratifyapprove this Adjournment Proposal, we could adjourn the selection, the Audit Committeespecial meeting and any adjourned session of the Board will reconsider whether or notspecial meeting and use the additional time to retainsolicit additional proxies, including the solicitation of proxies from stockholders that firm. Evenhave previously voted. Among other things, approval of this Adjournment Proposal could mean that, even if we had received proxies representing a sufficient number of votes against the selection is ratified,Transaction Proposal to defeat that proposal, we could adjourn the Audit Committeespecial meeting without a vote on the Transaction Proposal and seek to convince the holders of those shares to change their votes to votes in favor of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.Transaction Proposal.

Required Vote

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matterproposal at the Annual Meetingspecial meeting, irrespective of whether the quorum is present, will be required to ratifyadjourn the selectionspecial meeting to solicit additional proxies in favor of Moss Adams.the Transaction Proposal, if necessary or appropriate.

THE BOARD OF DIRECTORS RECOMMENDS

PRINCIPALACCOUNTANT FEESAND SERVICES VOTE IN FAVOR OF PROPOSAL 4 IF THERE ARE INSUFFICIENT VOTES AT THE SPECIAL MEETING TO APPROVE THE TRANSACTION PROPOSAL.

The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2019 and December 31, 2018, by Moss Adams, the Company’s principal accountant.

Type of Fees  Fees for Fiscal 2019   Fees for Fiscal 2018 

Audit Fees (1)

  $651,881   $1,590,306 

Audit-Related Fees (2)

   —      —   

Tax Fees (3)

   132,022    —   

All Other Fees (4)

   —      —   
  

 

 

   

 

 

 

Total Fees

  $783,903   $1,590,306 
  

 

 

   

 

 

 

(1)

Audit Fees consist of fees for: professional services rendered for the audit of our consolidated financial statements included in our annual report, the review of our interim consolidated financial statements included in our quarterly reports, and services in connection with our Registration Statement on Form S-1 and Form S-3 related to our initial public offering and services in connection with regulatory filings for 2018.

(2)

There were no Audit-Related Fees in 2019 and 2018.

(3)

Tax Fees consist of fees for tax compliance, advice, and planning.

(4)

There were no All Other Fees in 2019 and 2018.

PRE-APPROVAL POLICIESAND PROCEDURES.

The Audit Committee must pre-approve all audit related services and permissible non-audit services (unless in compliance with exceptions available under applicable laws and rules related to immaterial aggregate amounts of services) provided by our independent registered public accounting firm. However, the Audit Committee may delegate preapproval authority to one or more committee members so long as any such preapproval decisions are presented to the full committee at the next scheduled meeting.

The Audit Committee has determined that all such services rendered by the independent registered public accounting firm are permissible under applicable laws and regulations, and during 2019, were pre-approved by

MARKET PRICE OF COMMON STOCK

Our common stock is listed for trading on the Audit Committee in accordance withNasdaq Capital Market under the audit committee pre-approval policy. A copysymbol “SONM.”

The closing price of our audit committee charter andcommon stock on Nasdaq on April 12, 2022, the pre-approval policy attached as Exhibit Alast trading day prior to the public announcement of the execution of the Subscription Agreement, was $0.66 per share. On                 , 2022, the most recent practicable date before this proxy statement was mailed to our audit committee charterstockholders, the closing price for our common stock on Nasdaq was $                 per share. In addition, the transaction consideration represents a discount of approximately 29% and 25% to the thirty (30)-day and ninety (90)-day, respectively, volume weighted average price per share of our common stock prior to the public announcement of the execution of the Subscription Agreement. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

We have never declared or paid a cash dividend on our common stock and we intend to retain all available funds and any future earnings to fund the development and growth of our business. We do not anticipate paying any cash dividends on our common stock in the investor relations section of our website at www.sonimtech.com under Investor Relations.

The Audit Committee has determined the services provided by Moss Adams are compatible with maintaining the independence of Moss Adams.

THE BOARD OF DIRECTORS RECOMMENDS

A VOTE IN FAVOR OF PROPOSAL 4.foreseeable future.

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regardingwith respect to the beneficial ownership of the Company’s commonour capital stock as of August 14, 2020 by: (i) each director; (ii) April 29, 2022 for:

each of theour named executive officers named in the Summary Compensation Table; (iii) officers;

each of our directors;

all of our current directors and executive officers and directors of the Company as a group; and (iv) all those

each person known by the Companyus to be the beneficial ownersowner of more than five percent5% of itsthe outstanding shares of our common stock.

The number of shares owned and percentage ownership in the following table is based on 65,930,191 shares of common stock outstanding on August 14, 2020. Except as otherwise indicated below, the address of each officer and director listed below is c/o 6838 Bee Cave Road, Building 1, Suite 279, Austin TX 78746.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possessSEC, and thus it represents sole or shared voting power or investment power with respect to thoseour securities. In addition, these rules requireUnless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that we includethey beneficially owned, subject to community property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Sections 13(d) and 13(g) of the Securities Act.

We have based our calculation of the percentage of beneficial ownership on 19,269,338 shares of our common stock issuable pursuantoutstanding as of April 29, 2022. In accordance with SEC rules, we have deemed shares of our common stock subject to the exercise of stock options and warrants that are either immediatelycurrently exercisable or exercisable within 60sixty (60) days of August 14, 2020. TheseApril 29, 2022 and shares of our common stock underlying RSUs that are deemedcurrently releasable or releasable within sixty (60) days of April 29 to be outstanding and to be beneficially owned by the person holding thosethe common stock options and warrantsor RSUs for the purpose of computing the percentage ownership of that person, but they areperson. We did not treated asdeem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, we believe that the persons or entities identifiedaddress of each beneficial owner listed in thisthe table have sole votingbelow is c/o Sonim Technologies, Inc., 6500 River Place Blvd., Building 7, Suite 250, Austin, TX 78730. The information provided in the table is based on our records, information filed with the SEC and investment power with respectinformation provided to all shares shown as beneficially owned by them, subject to applicable community property laws.us, except where otherwise noted.

 

Name and Address of Beneficial Owner  Total   Percent 

5% Stockholders:

    

Entities Affiliated with B. Riley Financial, Inc. (1)

   11,819,577    17.93

180 Degree Capital Group (2)

   9,251,547    14.03

Directors and Named Executive Officers:

    

Thomas W. Wilkinson

   202,500    

Robert Plaschke (3)

   670,036    1.02

Robert Tirva (4)

   169,395    

James Walker

   0    

Charles Becher

   2,274    

John Kneuer

   9,147    

Maurice Hochschild

   20,000    

Alan Howe (5)

   20,034    

Jeffrey D. Johnson (6)

   8,334    

Susan G. Swenson

   5,000    

Kenny Young (7)

   11,819,577    17.93

All Directors and Executive Officers as a Group (8)

   12,253,987    18.59
   Shares Beneficially Owned 
Name of Beneficial Owner  Number   Percent 

Directors and Named Executive Officers

       

Robert Tirva (1)

   318,875    1.65

Peter Liu (2)

   109,603    * 

Tom Wilkinson

   0    * 

John Kneuer (3)

   7,144    * 

Alan Howe (4)

   8,266    * 

Susan G. Swenson (5)

   6,700    * 

Mike Mulica (6)

   6,626    * 

All executive officers and directors as a group (7 persons)

   457,184    2.37

 

*

Represents beneficial ownership of less than 1%one percent (1%) of the outstanding shares of our common stock.

(1)

Based solely on, and in reliance upon, and without independent investigation of, information provided by B. Riley Financial, Inc., B. Riley Capital Management, LLC, BRC Partners Management GP, LLC, BRC Partners Opportunity Fund, L.P., B. Riley Principal Investments, LLC, B. Riley FBR, Inc., Kenneth Young and Bryant R. Riley in a Schedule 13D filed with the SEC on June 29, 2020. Entities affiliated B. Riley Financial, Inc.

have beneficial ownership of (i) 1,139,085 shares of common stock held of record by B. Riley Financial, Inc., (ii) 3,560,167 shares of common stock held of record by B. Riley Principal Investments, LLC, and (iii) 7,120,325 shares held of record by BRC Partners Opportunity Fund. L.P. B. Riley Financial, Inc., B. Riley Principal Investments, LLC and BRC Partners Opportunity Fund, L.P. are collectively referred to as the B. Riley Entities. BRC Partners Management GP, LLC is the general partner of BRC Partners Opportunity Fund, LP. B. Riley Capital Management, LLC, is the parent company of BRC Partners Management GP, LLC. B. Riley Capital Management, LLC is the sole member of BRC Partners Management GP, LLC and a wholly-owned subsidiary of B. Riley Financial, Inc. Bryant Riley, as Chief Executive Officer of B. Riley Capital Management, LLC and Chairman and Co-Chief Executive Officer of B. Riley Financial, Inc., has voting and dispositive power over the shares held by the B. Riley Entities. The address for B. Riley Financial, Inc. is 21255 Burbank Blvd. Suite 400 Woodland Hills, CA 91367, and the address for BRC Partners Opportunity Fund, LP is 11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025.

(2)

Based solely on, and in reliance upon, and without independent investigation of, information provided by 180 Degree Capital Group in a Schedule 13G/A filed with the SEC on July 6, 2020. 180 Degree Capital Corp. (“180”) disclaims beneficial ownership of 3,350,000 of these shares that are beneficially owned by a separately managed account (“SMA”). 180 has shared dispositive and voting power over these shares through its position as Investment Manager of the SMA. 180 disclaims beneficial ownership of the shares owned by the SMA except for its pecuniary interest therein. The address of 180 Degree Capital Group is 7 N. Willow Street, Suite 4B, Montclair, New Jersey 07042. The Schedule 13G filed by the reporting person provides information only as of June 30, 2020, and, consequently, the beneficial ownership of the above-mentioned reporting person may have changed since June 30, 2020.

(3)

Consists of 437,250 shares held directly by Robert Plaschke, and 232,786 shares issuable upon the exercise of outstanding options.

(4)

Consists of 102,500259,809 shares held directly by Robert Tirva, which includes 21,125in addition to 47,445 shares subject to RSUs and 45,77011,621 shares issuable upon the exercise of outstanding options held by Robert Tirva exercisable within 60 days of August 14, 2020.April 26, 2022.

(5)(2)

Consists of 18,33399,336 shares held directly by Alan Howe, 1,701Peter Liu, 2,038 shares issuable upon the exercise of outstanding optionssubject to RSUs vesting and held by Alan Howe exercisable within 60 days of August 14, 2020.

(6)

Consists of 5,000 shares held directly by Jeffrey D. Johnson, 3,334April 26, 2022 and 8,229 shares issuable upon the exercise of outstanding options held by Jeffrey D. JohnsonPeter Liu exercisable within 60 days of August 14, 2020.April 26, 2022.

(7)

Mr. Young does not own shares in his individual capacity. He is the Chief Executive Officer of B. Riley Principal Investments, LLC and President of B. Riley Financial, Inc. Mr. Young does not have either sole voting or investment control over the B. Riley Entities’ shares and he disclaims beneficial ownership of the B. Riley Entities’ shares.

(8)

Only includes current Directors and Executive Officers as a Group.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on a review of the copies of such reports filed on the SEC’s EDGAR system and written representations that no other reports were required, during the fiscal year ended December 2019, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were timely filed, except for one transaction that was reported late on Form 4 by John Kneuer.

EXECUTIVE COMPENSATION

Executive Officers

Name

Age

Position

Executive Officers

Thomas W. Wilkinson

50Chief Executive Officer and Director

Robert Tirva

54Chief Financial Officer

Biographical information with regard to Mr. Wilkinson is presented under “Election of Directors” in this proxy statement.

Robert Tirva has served as our Chief Financial Officer since September 2019. Mr. Tirva previously served as the Chief Financial Officer of Intermedia, a private cloud UCaaS and business application provider from August 2016 to February 2019. From August 2014 to August 2016, Mr. Tirva was corporate controller at Dropbox, Inc., a collaboration platform provider. Prior to his service at Dropbox, he held various finances roles of increasing responsibility at Broadcom Corporation, including Senior Vice President, Principal Accounting Officer and Vice President of Finance. He currently serves on the Board of Directors of Resonant Inc., a hardware development company for mobile devices. Mr. Tirva received an M.B.A. from the Yale School of Management and a Bachelor of Business Administration in Accounting from the University of Notre Dame.

Summary Compensation Table

Our named executive officers for the year ended December 31, 2019, consisting of all individuals who served as our principal executive officer during the year ended December 31, 2019, the two most highly compensated executive officers other than the principal executive officer who were serving as executive officers as of December 31, 2019 and one former executive officer for whom disclosure would have been provided but for the fact that such individual was not serving as an executive officer as of December 31, 2019, were:

Thomas W. Wilkinson, our Chief Executive Officer;

Robert Plaschke, our former Chief Executive Officer;

Robert Tirva, our Chief Financial Officer;

James Walker, our former Chief Financial Officer; and

Charles Becher, our former Chief Sales and Marketing Officer.

The following table sets forth information regarding compensation earned during the years ended December 31, 2019 and December 31, 2018 by our named executive officers, or NEOs.

Name and Principal
Position

 Year  Salary ($)  Bonus ($)  Stock
Awards ($) (1)
  Option
Awards

($) (1)
  Non-Equity
Incentive Plan
Compensation
($)
  All Other
Compensation
($)
  Total ($) 

Thomas W. Wilkinson

  2019  $93,269(2)  $—    $—    $246,100  $—    $—    $339,369 

Chief Executive Officer

        

Robert Plaschke

  2019  $333,333  $—    $4,948,147  $685,486  $—    $222,741(3)  $6,189,707 

Former Chief Executive Officer

  2018  $381,250  $575,000  $—    $—    $400,000  $22,500  $1,378,750 

Robert Tirva

  2019  $66,667(4)  $—    $190,970  $188,756  $—    $—    $446,393 

Chief Financial Officer

        

James Walker

  2019  $194,792  $—    $415,720  $386,552  $—    $206,250(5)  $1,203,314 

Former Chief Financial Officer

  2018  $291,667  $—    $—    $372,800  $206,250  $—    $870,717 

Charles Becher

  2019  $350,000  $—    $251,620  $231,931  $78,970(6)  $—    $912,521 

Former Chief Sales and Marketing Officer

  2018  $350,000  $—    $—    $246,399  $250,000  $—    $846,399 

(1)

This column reflects the full grant date fair value for options or stock awards granted during the year ended December 31, 2019 as measured pursuant to ASC Topic 718 as stock-based compensation in our consolidated financial statements. The assumptions we used in valuing options are described in Note 8 to our consolidated financial statements included elsewhere in this annual report. These amounts do not necessarily correspond to the actual value that may be recognized from the stock options by the NEOs.

(2)

Mr. Wilkinson served as our Chief Executive Officer since October 2019 and was paid prorated salary amounts based on an annual salary of $400,000.

(3)

Represents $7,349 for World Presidents Organization activitiesConsists of 4,0,14 shares held directly by John Kneuer and 3,100 shares subject to which Mr. Plaschke was entitled pursuant to his employment agreementRSUs vesting and $207,349 in salary continuation payments and $15,392 in reimbursement for COBRA health insurance premiums to which Mr. Plaschke is entitled pursuant to his transition agreement.exercisable within 60 days of April 26, 2022.

(4)

Mr. Tirva served as our Chief Financial Officer since September 2019Consists of 4,933, shares held directly by Alan Howe and was paid prorated salary amounts based on an annual salary3,100 shares subject to RSUs vesting and exercisable within 60 days of $300,000.April 26, 2022 and 233 shares issuable upon the exercise of outstanding options that are fully vested.

(5)

Represents $206,250 in salary continuation paymentsConsists of 3,600 shares held directly by Susan Swenson and 3,100 shares subject to which Mr. Walker is entitled pursuant to his separation agreement.RSUs vesting and exercisable within 60 days of April 26, 2022.

(6)

Represents $78,970 in revenue bonus payments based on our financial performance and certain agreed-upon targets.Consists of 6,626 shares subject to RSUs held by Mike Mulica exercisable within 60 days of April 26, 2022.

Outstanding Equity Awards at December 31, 2019WHERE YOU CAN FIND MORE INFORMATION

The following table providesCompany files annual, quarterly and current reports, proxy statements and other information about outstanding equity awards held by eachwith the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including us. The address of that site is www.sec.gov.

You can also review the Company’s SEC filings on its web site at www.sonimtech.com. Through links on the “Investors” portion of our namedwebsite, we make available free of charge our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, any amendments to those reports and other information filed with, or furnished to, the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act. Such material is made available through our website as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The information contained on or that can be accessed through our website does not constitute part of this proxy statement, other than documents that we file with the SEC that are specifically incorporated by reference into this proxy statement.

OTHER INFORMATION

Submission of Stockholder Proposals for the 2022 Annual Meeting of Stockholders

Our amended and restated bylaws provide that, for stockholder director nominations or other proposals to be considered at an annual meeting, the stockholder must give timely notice thereof in writing to our Secretary at 6500 River Place Blvd., Building 7, Suite 250, Austin, TX 78730. To be timely for the 2022 Annual Meeting of Stockholders, a stockholder’s notice must be received by our Secretary at our principal executive officersoffices between June 28, 2022 and July 28, 2022; provided that if the date of that annual meeting of stockholders is earlier than September 26, 2022, or later than November 25, 2022, you must give the required notice not earlier than the 120th day prior to the meeting date and not later than the 90th day prior to the meeting date or, if later, the 10th day following the day on which public disclosure of that meeting date is first made. A stockholder’s notice to the Secretary must also set forth the information required by our amended and restated bylaws. Stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act and intended to be presented at December 31, 2019. Awardsthe 2022 Annual Meeting of Stockholders must be received by us not later than May 26, 2022 in order to be considered for Mr. Plaschke, Mr. Walker,inclusion in our proxy materials for that meeting.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to “incorporate by reference” information into this proxy statement, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference herein is deemed to be part of this proxy statement. This proxy statement incorporates by reference the documents and Mr. Becher were granted under our 2012 Equity Incentive Planreports listed below (other than, in each case, the portions that are deemed to have been furnished and awards for Mr. Wilkinson and Mr. Tirva were granted under our 2019 Equity Incentive Plan.not filed in accordance with SEC rules):

   Option Awards           Stock Awards 
   

 

Number of Securities

Underlying Unexercised

Options (#)

  Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number
of

Shares
or Units

of Stock
That

Have
Not

Vested
(#)
  Market
Value of
Shares or
Units of
Stock
That

Have Not
Vested
($) (13)
 
Name  Exercisable  Unexercisable 

Tom W. Wilkinson

   —     200,000(1)   —     2.48   12/1/2029   

Robert Plaschke

   103,703   —     —     0.45   10/30/2020(2)   
   83,055(3)   70,278   —     0.45   10/30/2020(2)   
   —     133,000(4)   —     10.94   10/30/2020(2)   67,000(5)   243,210 

Robert Tirva

   —     169,000(6)   —     2.26   10/31/2029   84,500(7)   306,735 

James Walker

   201,666   —     —     0.90   1/17/2020(8)   

Charles Becher

   145,831(9)   54,168   —     0.75   2/13/2027   
     133,333(10)   0.90   9/9/2028   
    45,000(11)   —     10.94   4/9/2023   23,000(12)   83,490 

 

(1)

25%our Annual Report on Form 10-K, for the fiscal year ended December 31, 2021, filed with the SEC on March 21, 2022, as amended by Amendment No.  1 on Form 10-K/A filed with the SEC on May 2, 2022 and our Quarterly Report on Form 10-Q for the fiscal period ended March 31, 2022, filed with the SEC on May 10, 2022;

our Current Report on Form 8-K, filed with the SEC on April 14, 2022; and

the description of the shares ofour common stock underlyingcontained in our Registration Statement on Form 8-A, filed with the option,SEC on May 9, 2019, and any amendment or 50,000 shares, will vest in October 2020,report filed with the first anniversarySEC for the purpose of updating the vesting commencement date, and the remainder will vest in 36 equal monthly installments thereafter, subject to Mr. Wilkinson’s continuous service through the relevant vesting dates. During the 13 months following a change in control, if we terminate Mr. Wilkinson’s employment without cause or if Mr. Wilkinson resigns for good reason, vesting of this option will accelerate in full.

(2)

Pursuant to Mr. Plaschke’s transition agreement, his post-separation option exercise period was extended until October 30, 2020.

(3)

25% of the shares of common stock underlying the option, or 38,333 shares, vested in October 2018, the first anniversary of the vesting commencement date, and 44,722 shares vested in equal monthly installments thereafter based on Mr. Plaschke’s continuous service through the relevant vesting dates.

(4)

25% of the shares, or 33,250 shares, will vest annually beginning in April 2020, the first anniversary of the vesting commencement date, subject to Mr. Plaschke’s continuous service through the relevant vesting dates.

(5)

25% of the shares, or 16,750 shares, will vest annually beginning in April 2020, the first anniversary of the vesting commencement date, subject to Mr. Plaschke’s continuous service through the relevant vesting dates.

(6)

25% of the shares of common stock underlying the option, or 42,250, shares, will vest in September 2020, the first anniversary of the vesting commencement date, and the remainder will vest in 36 equal monthly installments thereafter, subject to Mr. Tirva’s continuous service through the relevant vesting dates. During the 13 months following a change in control, if we terminate Mr. Tirva’s employment without cause or if Mr. Tirva resigns for good reason, vesting of this option will accelerate in full.

(7)

25% of the shares, or 21,125 shares, will vest annually beginning in September 2020, the first anniversary of the vesting commencement date, subject to Mr. Tirva’s continuous service through the relevant vesting dates. During the 13 months following a change in control, if we terminate Mr. Tirva’s employment without cause or if Mr. Tirva resigns for good reason, vesting of this award will accelerate in full.description.

(8)

Pursuant to Mr. Walker’s separation agreement, his post-separation option exercise period was extended until January 17, 2020.

(9)

25% of the shares of common stock underlying the option, or 49,999 shares, vested in January 2018, the first anniversary of the vesting commencement date, and the remainder will vest in 36 equal monthly installments thereafter, subject to Mr. Becher’s continuous service through the relevant vesting dates. During the 13 months following a change in control, if we terminate Mr. Becher’s employment without cause or if Mr. Becher resigns for good reason, vesting of this option will accelerate with respect to such number of shares that would have vested had Mr. Becher remained employed for 24 months following the date of termination. Mr. Becher’s continuous service terminated in January 2020.

(10)

33,333 shares of common stock underlying this option will vest at the end of each fiscal year in which the revenue plan set forth in Mr. Becher’s employment agreement is exceeded by at least 25%, 33,333 shares underlying this option will vest at the end of each fiscal year in which our gross margin exceeds 39%, and 33,333 shares underlying this option will vest at the end of each fiscal year in which our gross margin exceeds 42%. During the 13 months following a change in control, if we terminate Mr. Becher’s employment without cause or if Mr. Becher resigns for good reason, 25% of the shares underlying this option will accelerate. Mr. Becher’s continuous service terminated in January 2020.

(11)

25% of the shares of common stock underlying the option, or 11,250 shares, will vest in April 2020, the first anniversary of the vesting commencement date, and the remainder will vest in 36 equal monthly installments thereafter, subject to Mr. Becher’s continuous services through the relevant vesting dates.

(12)

25% of the shares, or 5,750 shares, will vest annually beginning in April 2020, the first anniversary of the vesting commencement date, subject to Mr. Becher’s continuous service through the relevant vesting dates.

(13)

Based on closing price of common stock ($3.63) as reported on Nasdaq Global Market on December 31, 2019.

AgreementsWe also incorporate by reference the information contained in all other documents we file with Our Named Executive Officers

Set forth below are descriptions of our employment agreements with our named executive officers. For a discussionthe SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the severance payExchange Act (other than the portions that are deemed to have been furnished and other benefitsnot filed in accordance with SEC rules, unless otherwise indicated therein) on or after the date of this statement and through the date on which the special meeting is held (including any adjournments or postponements thereof). Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this proxy statement to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this proxy statement.

We will provide, free of charge, to each person, including any beneficial owner, to whom a proxy statement is delivered a copy of any or all of the documents incorporated by reference into this proxy statement (including any exhibits that are specifically incorporated by reference in those documents). Any such request can be made by writing or telephoning us at the following address and telephone number:

SONIM TECHNOLOGIES, INC.

6500 River Place Blvd.

Building 7, Suite 250

Austin, TX 78730

ANNEX A

SUBSCRIPTION AGREEMENT

This Subscription Agreement dated as of April 13, 2022 (this “Agreement”) is by and between Sonim Technologies, Inc., a Delaware corporation (the “Company”), and AJP Holding Company, LLC, a Delaware limited liability company (the “Purchaser”). Capitalized terms used but not defined herein have the meanings assigned to them in Exhibit A.

WHEREAS, the Purchaser desires to purchase from the Company, and the Company desires to issue and sell to the Purchaser, the aggregate of 20,833,333 of the Company’s common stock, par value $0.001 per share (the “Common Stock”) comprising of the Initial Shares (as defined below) and the Remaining Shares (as defined below) (collectively, the “Purchased Shares”), on the terms and subject to the conditions hereinafter set forth (the “Purchase and Sale”).

In consideration of the premises and the mutual representations, warranties, covenants, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I

PURCHASE AND SALE OF PURCHASED SHARES

Section 1.1 Purchase and Sale. On the terms and subject to the satisfaction or waiver of the conditions set forth in this Agreement, at the First Closing, the Purchaser shall purchase, and the Company shall issue and sell to the Purchaser 14,880,952 shares of Common Stock (the “Initial Shares”), free and clear of any liens (other than liens incurred by Purchaser or its Affiliates, restrictions arising under applicable securities laws, or restrictions imposed by this Agreement) for an aggregate purchase price of twelve million five hundred thousand dollars ($12,500,000) (the “First Purchase Price”), provided that up to 952,381 shares of Common Stock shall be issued to a person or entity designated by the Purchaser subject to such person or entity executing, concurrent with the receipt of such shares of Common Stock, a Purchaser Voting Agreement (subject to adjustments required to such Purchaser Voting Agreement to reflect such person or entity being the signatory thereto instead of Purchaser). On the terms and subject to the occurrence of the First Closing, at the Second Closing, the Purchaser shall purchase, and the Company shall issue and sell to the Purchaser 5,952,381 shares of Common Stock (the “Remaining Shares”), free and clear of any liens (other than liens incurred by Purchaser or its Affiliates, restrictions arising under applicable securities laws, or restrictions imposed by this Agreement) for an aggregate purchase price of five million dollars ($5,000,000) (the “Second Purchase Price”). The number of shares Common Stock comprising the Purchaser Shares is subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock.

Section 1.2 First Closing. On the terms and subject to the satisfaction or waiver of the conditions set forth in Article VII, the closing of the issuance, sale, and purchase of the Initial Shares (the “First Closing”) shall take place remotely via the exchange of final documents and signature pages, no later than the second Business Day following the satisfaction or waiver of all of the conditions set forth in Article VII, or such other time and place as the Company and the Purchaser may agree in writing. The date on which the First Closing is to occur is herein referred to as the “First Closing Date.” At the First Closing, upon receipt by the Company of payment of the full First Purchase Price, which shall be paid at the First Closing by the Purchaser to the Company by wire transfer of immediately available funds to an account designated in writing by the Company, the Company will deliver to the Purchaser evidence reasonably satisfactory to the Purchaser of the issuance of the Initial Shares in the name of the Purchaser by book-entry on the books and records of the Company. At the First Closing, the Purchaser shall deliver to the Company a duly executed, valid, accurate, and properly completed Internal Revenue Service

Form W-9 certifying that the Purchaser is a U.S. person and that the Purchaser is not subject to backup withholding.

Section 1.3 Second Closing. On the terms and subject to the occurrence of the First Closing only, the closing of the issuance, sale, and purchase of the Remaining Shares (the “Second Closing”) shall take place on August 1, 2022, or such other time and place as the Continuing Directors and the Purchaser may agree in writing; provided, that if the First Closing shall not have occurred by August 1, 2022, the Second Closing shall take place no later than the fifth Business Day following the First Closing Date. The date on which the Second Closing is to occur is herein referred to as the “Second Closing Date.” At the Second Closing, upon receipt by the Company of payment of the full Second Purchase Price, which shall be paid at the Second Closing by the Purchaser to the Company by wire transfer of immediately available funds to an account designated in writing by the Continuing Directors, the Company will deliver to the Purchaser evidence reasonably satisfactory to the Purchaser of the issuance of the Remaining Shares in the name of the Purchaser by book-entry on the books and records of the Company. At the Second Closing, the Purchaser shall deliver to the Company a duly executed, valid, accurate, and properly completed Internal Revenue Service Form W-9 certifying that the Purchaser is a U.S. person and that the Purchaser is not subject to backup withholding.

Section 1.4 Purchaser Director Nominees. Management. Concurrent with the consummation of the First Closing, (i) all the members of the Board of Directors other than the Continuing Directors shall resign and (ii) the Purchaser shall be entitled to designate such number of directors on the Board of Directors as will give the Purchaser, subject to compliance with applicable Laws, representation on the Board of Directors equal to that number of directors, rounded down to the next whole number, which is the product of (i) the total number of directors on the Board of Directors (after giving effect to the directors elected pursuant to this sentence, and after giving effect to any resignations from the Board of Directors prior to or concurrent with the First Closing) multiplied by (ii) the percentage that (A) such number of Initial Shares bears to (B) the total number of shares of Common Stock outstanding as of the First Closing (after giving effect to the issuance of the Initial Shares) (such directors, the “Purchaser Designees”). The Company shall, at such time, cause the Purchaser Designees to be so elected or appointed. Promptly following the election or appointment of the Purchaser Designees, the Company, subject to the terms and provisions of this Agreement and the Nasdaq Listing Rules, shall also cause the Purchaser Designees selected by the Purchaser, to constitute the number of members, rounded down to the next whole number, on (i) each committee of the Board of Directors and (ii) each board of directors (or similar body) of each Subsidiary of the Company identified by the Purchaser (and each committee thereof) that represents the same percentage as such individuals represent on the Board of Directors. In connection with the foregoing, the Company shall promptly take all action necessary to accomplish the foregoing set forth in this Section 1.4, including by increasing the size of the Board of Directors; providedhowever, that nothing herein shall amend or modify the rights with respect to the Continuing Directors.

Section 1.5 Continuing Directors. Notwithstanding anything herein to the contrary, until the Director End Time, the Board of Directors shall have at least two (2) directors (the “Continuing Directors”) who are either (i) Michael Mulica and Alan Howe or (ii) if a Continuing Director ceases to be a director (including by reason of removal, resignation, death or disability), the subsequently appointed Continuing Director shall be an independent director and such appointment shall be approved by the remaining Continuing Director, if and as applicable. No Continuing Director shall be removed from the Board of Directors without cause prior to the Director End Time. Following the First Closing and until the Director End Time, the affirmative vote of the Continuing Directors shall be required to (x) amend, modify, enforce, or terminate this Agreement and/or the Voting Agreement on behalf of the Company, (y) exercise or waive any of the Company’s rights or remedies hereunder or under the Voting Agreement, or (z) extend the time for performance of the Purchaser’s obligations hereunder or under the Voting Agreement.

Section 1.6 Appointment of Chief Executive Officer. Strategic Enhancement of Business. As of the date hereof, the Company shall appoint the Appointed Chief Executive Officer. Subject to compliance with applicable Law and the fiduciary duties of the Board of Directors, the Company shall in good faith commence the

enhancement and optimization of the Company’s business pursuant to the strategy developed by the Appointed Chief Executive Officer (the “Integration Plans”). The Company shall issue a press release and file a Current Report on Form 8-K in connection with the appointment of the Appointed Chief Executive Officer and disclose a terminationsummary of employment and/or a changethe anticipated enhancement and optimization of the Company’s business model in control under the arrangements with our named executive officers that were providing services tomanner mutually agreeable by the Company as of December 31, 2019, see “—Potential Payments upon Termination or Change in Control.”

Mr. Wilkinson. In October 2019, we entered into an employment agreement with Mr. Wilkinson. Underand the Purchaser. The terms of the employment agreement Mr. Wilkinson will receive an annual base salary of $400,000. Further, he is eligible, beginningbetween the Company and the Appointed Chief Executive Officer shall be negotiated in good faith by the Company and the Appointed Chief Executive Officer prior to the First Closing.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchaser that, except (a) as set forth in the fiscal year 2020, for an annual bonusSEC Documents (other than disclosures in the “Risk Factors” or “Forward-Looking Statements” sections or similarly captioned sections of 100%any such filings) and (b) as set forth on Exhibit B (the “Disclosure Letter”) (all such exceptions disclosed in the Disclosure Letter being numbered to correspond to the applicable Section of his base salary based on performance against targetsthis Article II, provided, however, that any such exception shall be deemed to be determineddisclosed with respect to each other representation or warranty to which the relevance of such exception is reasonably apparent on the face of such disclosure):

Section 2.1 Organization and Power. The Company and each of its Subsidiaries is a corporation, limited liability company, partnership, or other entity validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation (as applicable) and has all requisite corporate, limited liability company, partnership or other entity power and authority to own or lease its properties and to carry on its business as presently conducted and as proposed to be conducted. The Company and each of its Subsidiaries is duly licensed or qualified to do business as a foreign corporation, limited liability company, partnership, or other entity in each jurisdiction wherein the character of its property or the nature of the activities presently conducted by it, makes such qualification necessary, except where the failure to so qualify has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.2 Authorization. The execution, delivery, and performance by the Board atCompany of this Agreement and the beginning of each year. InRegistration Rights Agreement and the Wilkinson Agreement,consummation by the Company has agreed to establish a transaction bonus plan, which will be funded by 10% of the consideration payable to company stockholders intransactions contemplated hereby and thereby (collectively, with the eventPurchase and Sale, but excluding the Reverse Stock Split Proposal and the Charter Amendment Approval, the “Contemplated Transactions”) are within the Company’s corporate powers and, except for the Company Stockholder Approval, have been duly and validly authorized by all necessary corporate action on the part of the Company. The affirmative vote by the holders of a changemajority of the shares of Common Stock cast thereon in control after deducting transaction expenses,favor of which Mr. Wilkinson shall have a 50% interest. In addition, Mr. Wilkinsonthe adoption of this Agreement is entitled to receive up to $15,000 each year for his participation in World Presidents Organization activities and a monthly stipendthe only vote of $2,000 through July 2020 for office space in Austin, Texas. Mr. Wilkinson is eligible to participate in the employee benefit plans generally available to our employees, as well as in discretionary bonuses (if any) approved by the Board from time to time. In December 2019, we granted to Mr. Wilkinson an option to purchase 200,000 sharesholders of any of the Company’s capital stock which option vests overnecessary in connection with the consummation of the Contemplated Transactions (the “Company Stockholder Approval”). Assuming due authorization, execution, and delivery by the Purchaser, this Agreement constitutes a four-year periodvalid and binding agreement of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity). At a meeting duly called and held, the Board of Directors has (i) determined that this Agreement and the Contemplated Transactions are fair to and in the best interests of the Company’s stockholders, (ii) adopted and declared advisable this Agreement and the Contemplated Transactions and (iii) resolved, subject to continued serviceSection 4.1, to recommend adoption of this Agreement by the Company.

Mr. Plaschke. In August 2018, we entered into an employment agreement with Mr. Plaschke. Under the termsstockholders of the employment agreement, Mr. Plaschke was entitled to an annual base salary of $400,000 and eligible to receive an annual performance bonus with a target of 100% of his base salary based on our performance against EBITDA objectives, as determined by our board of directors. In addition, Mr. Plaschke was entitled to receive up to $22,500 in funds each year from us for his participation in World Presidents Organization activities. Mr. Plaschke was also eligible to participateCompany (such recommendation in the employee benefit plans generally available to our employees. Uponpreceding clause (iii), the listingCompany Board Recommendation”).

Section 2.3 Government Approvals. No consent, approval, or authorization of, our common stockor filing with, any court or governmental authority is or will be required on Nasdaq, we issued Mr. Plaschke a restricted stock award, or the Liquidity Bonus, for 383,197 shares,part of which we withheld 172,439 shares to satisfy tax obligations associatedthe Company in connection with the grant. 50%execution, delivery, and performance by the Company of this Agreement and the Registration Rights Agreement, or in connection with the issuance of the sharesPurchased Shares, except for (a) those which have already been made or

subject togranted; (b) the restrictedfiling of a Form D (including any “Blue Sky” filing, if required) and Current Report on Form 8-K with the SEC; or (c) filings with applicable state securities commissions.

Section 2.4 Authorized and Outstanding Stock.

(a) The authorized capital stock award vested once our enterprise value (as defined in Mr. Plaschke’s employment agreement) equaled $125 million, and 100% vested once our enterprise value equaled $150 million.

Mr. Tirva. In September 2019, we entered into an employment agreement with Mr. Tirva, which was amended in December 2019. Under the terms of the employment agreement, Mr. Tirva is entitled to an annual base salaryCompany consists of $300,000 and is eligible to receive an annual bonus of 50% of his base salary based on our performance against EBITDA objectives, as determined by our board of directors. In November 2019, we granted to Mr. Tirva an option to purchase 169,000100,000,000 shares of common stockCommon Stock and 84,500 restricted stock units. 25% of the5,000,000 shares of commonpreferred stock, underlying the option, or 42,250 shares, will vest in September 2020, the first anniversarypar value $0.001 per share (“Preferred Stock”). As of the vesting commencement date, and the remainder will vest in 36 equal monthly installments thereafter, subject to Mr. Tirva’s continuous service through the relevant vesting dates and accelerated vesting upon a change in control (as defined in Mr. Tirva’s employment agreement). The shares underlying the restricted stock units will vest in four equal annual installments starting in September 2020, the first anniversary of the vesting commencement date, subject to Mr. Tirva’s continuous service through the relevant vesting dates and accelerated vesting upon a change in control (as defined in Mr. Tirva’s employment agreement).

Mr. Walker. In August 2018, we entered into an employment agreement with Mr. Walker. Under the terms of the employment agreement, Mr. Walker was entitled to an annual base salary of $275,000 and eligible to receive an annual performance bonus with a target of 75% of his base salary based on our performance against EBITDA objectives, as determined by our board of directors. In September 2018, we granted to Mr. Walker an option to purchase 201,066April 11, 2022, (i) 19,269,338 shares of common stock. 25% of theCommon Stock were issued and outstanding, (ii) no shares of common stock underlying the option, or 50,416Preferred Stock were issued and outstanding, (iii) 91,809 shares vested in January 2019, the first anniversary of the vesting commencement date, and the remainderCommon Stock were subject to accelerated vesting based on our enterprise value (as defined in Mr. Walker’s employment agreement). Mr. Walker was also eligibleoutstanding stock options to participate in the employee benefit plans generally availablepurchase shares of Common Stock (“Company Stock Options”) and (iv) 320,762 shares of Common Stock were subject to our employees.outstanding restricted stock unit awards (“Company RSUs”).

Mr. Becher. In February 2019, we entered into an employment agreement with Mr. Becher. Under the terms(b) All of the employment agreement, Mr. Becher was entitled to an annual base salary of $350,000issued and was eligible to receive an annual performance bonus based on our performance against EBITDA objectives, as determined by our board of directors. In addition to the annual cash performance bonus, Mr. Becher was also eligible to receive a revenue bonus based on our financial performance and certain agreed-upon targets. In September 2018, we granted to Mr. Becher an option to purchase 133,333outstanding shares of common stock subject to performance-based vesting. Mr. Becher is also eligible to participate in the employee benefit plans generally available to our employees.

Potential Payments upon Termination or Change in Control

Each of our named executive officers that were providing services to the Company as of December 31, 2019 is eligible to receive certain benefits pursuant to his employment agreement with us, as described below. “Cause,” “good reason,” “enterprise value,” “financial investors” and “change in control” are defined in the applicable employment agreements with each of our named executive officers.

Mr. Wilkinson. Upon Mr. Wilkinson’s termination without cause, or due to his death, permanent disability or for good reason, in either case at any time prior to a change in control or more than 13 months after a change in control, Mr. Wilkinson will receive 12 months of continued base salary and reimbursement for COBRA health insurance premiums for up to 12 months following the date of termination. If Mr. Wilkinson’s employment is terminated without cause, or his employment is terminated for good reason, in either case at any time within 13 months after a change in control, Mr. Wilkinson will receive 18 months of continued base salary, reimbursement for COBRA health insurance premiums for a period of up to 18 months, 150% of his target bonus for the year of termination (assuming full achievement, but no over-achievement, of performance targets under the bonus plan), and accelerated vesting of any then-outstanding options or stock awards. Such payments and benefits are conditioned upon Mr. Wilkinson continuing to comply with certain restrictive covenants applicable to him and upon execution, delivery, and non-revocation of a general release of claims. In addition, any amount payable upon a termination of employment under the Wilkinson Agreement will be paid only if the termination constitutes a separation from service under Section 409A of the Code.

Mr. Tirva. In the event Mr. Tirva’s employment is terminated without cause, or his employment is terminated due to death, permanent disability or for good reason, in either case within 90 days of Mr. Tirva’s start date, Mr. Tirva will receive two months of continued base salary and two months of vesting of stock options and stock awards. In the event Mr. Tirva’s employment is terminated without cause, or his employment is terminated due to death, permanent disability or for good reason, in either case at any time prior to a change in control or more than 13 months after a change in control, Mr. Tirva will receive nine months of continued base salary and reimbursement for COBRA health insurance premiums for a period of up to nine months following the date of termination. In the event that Mr. Walker’s employment is terminated by us for any reason, his employment terminates due to his death or permanent disability, or he resigns for good reason, he will be entitled to a pro rata portion of his target bonus for the year of termination. In the event Mr. Tirva’s employment is terminated without cause or he resigns for good reason within 13 months after our change in control, Mr. Tirva will receive 12 months of continued base salary, reimbursement for COBRA health insurance premiums for a period of up to 12 months following the date of termination and immediate vesting of any then-outstanding options and stock awards. Such payments and benefits are conditioned upon Mr. Tirva continuing to comply with certain restrictive covenants applicable to him and upon execution of an effective general release of claims. In addition, any amount payable upon a termination of employment under the employment agreement will be paid only if the termination constitutes a separation from service under Section 409A of the Code.

Mr. Becher. In the event Mr. Becher’s employment is terminated without cause, or his employment is terminated due to death, permanent disability or for good reason, in either case at any time prior to a change in control or more than 13 months after a change in control, Mr. Becher will receive six months of continued base salary. In the event Mr. Becher’s employment is terminated without cause or he resigns for good reason within 13 months after a change in controlCommon Stock of the Company Mr. Becherare, and, when issued in accordance with the terms hereof, the Purchased Shares will receive 12 monthsbe, duly authorized and validly issued and fully paid and non-assessable and free of continued base salary, reimbursement for COBRA health insurance premiums for a periodpre-emptive rights. When issued in accordance with the terms hereof, the Purchased Shares will be free and clear of up to six months followingall liens (other than liens incurred by Purchaser or its Affiliates, restrictions arising under applicable securities laws, or restrictions imposed by this Agreement or the Registration Rights Agreement).

(c) Except as otherwise expressly described in this Agreement, as of the date hereof there are no issued, reserved for issuance or outstanding: (i) shares of termination, accelerated vestingcapital stock or other voting securities of or ownership interests in the Company, (ii) securities of the Company convertible into or exchangeable for shares granted under Mr. Becher’s option grantedof capital stock or other voting securities of or ownership interests in February 2017 that would have vested within 24 months after the date of termination, and accelerated vesting of 25%Company, (iii) warrants, calls, options or other rights to acquire from the Company, or other obligation of the shares granted under Mr. Becher’s option granted in September 2018. Such payments and benefits are conditioned upon Mr. Becher continuingCompany to comply with certain restrictive covenants applicable to him and upon execution of an effective general release of claims. In addition,issue, any amount payable upon a termination of employment under the employment agreement will be paid only if the termination constitutes a separation from service under Section 409Acapital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Code.

Mr. PlaschkeCompany, or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or voting securities of the Company (the items in clauses (i) through (iv) being referred to collectively as the “Company Securities”). In October 2019, Mr. Plaschke ceased serving as our chief executive officer and resigned from our boardExcept for the Voting Agreement, neither the Company nor any of directors. We entered intoits Subsidiaries is a transitionparty to any voting agreement with Mr. Plaschke pursuant to which Mr. Plaschke will serve as a senior advisor to our board of directors until April 30, 2020, unless his employment is terminated prior to such time. Pursuantrespect to the transition agreement, Mr. Plaschke is entitled to salary continuation, benefits continuation, and continued vesting under his outstanding equity awards duringvoting of any Company Securities.

Section 2.5 Subsidiaries. The Company’s Subsidiaries consist of all the transition period. If we terminate Mr. Plaschke’s employment without cause prior to April 30, 2020, vesting of his equity awards shall accelerate as if Mr. Plaschke were employed through April 30, 2020. Also pursuantentities listed on Exhibit 21.1 to the transition agreement, if Mr. Plaschke resigns for any reason prior to April 30, 2020, Mr. Plaschke shall be entitled to salary continuation and COBRA health insurance premiums through April 30, 2020. If we terminate Mr. Plaschke without cause prior to April 30, 2020 or Mr. Plaschke remains employed through April 30, 2020, Mr. Plaschke will be entitled to salary continuation through April 30, 2020, a lump sum payment in an amount to be determined by the Board, which shall be between three and six months of his base salary, COBRA health insurance premiums up to July 30, 2020, and an extension of his post-separation option exercise period until October 30, 2020. Such payments and benefits are conditioned upon Mr. Plaschke continuing to comply with certain restrictive covenants applicable to him and upon execution, delivery, andCompany’s Form non-revocation10-K of a general release of claims. In addition, any amount payable upon a termination of employment under the transition agreement will be paid only if the termination constitutes a separation from service under Section 409A of the Code.

Mr. Walker. In September 2019, Mr. Walker ceased serving as our chief financial officer. Pursuant to the terms of the separation agreement with Mr. Walker, he is entitled to nine months of continued base salary and

reimbursement for COBRA health insurance premiums for a period of up to nine months following the date of termination. Such payments and benefits are conditioned upon Mr. Walker continuing to comply with certain restrictive covenants applicable to him and his execution of an effective general release of claims. Also pursuant to the separation agreement, we extended his post-separation option exercise period to January 17, 2020.

Transaction Bonus Plan

In December 2019, our board of directors approved a transaction bonus plan that is intended to incentivize Company employees who are in a position to significantly impact the value received by the Company’s stockholders in a change of control transaction. Pursuant to the plan, upon consummation of a change of control transaction, 10% of the consideration payable to Company stockholders, after deducting transaction expenses, will be distributed to plan participants, including Mr. Wilkinson and Mr. Tirva. The Plan has a three-year term and may be extended by the administrator. Subject to the terms of the plan, participants must be continuously providing services to the Company through the date of the closing of a change in control transaction to be eligible to receive a bonus thereunder, and payment is contingent upon delivery and non-revocation of a general release of claims. Our board of directors has allocated a 50% interest in the plan to Mr. Wilkinson and a 10% interest in the plan to Mr. Tirva, which was contingent upon Mr. Tirva’s agreement to serve as our chief financial officer.

Executive Bonus Plan

Our board of directors has approved an executive bonus plan in 2018 whereby the board has approved a target bonus pool for allocation to our executive officers, including our named executive officers, and includes a discretionary fund to be distributed to employees with a title of “vice president” or “director” as well as an additional discretionary pool for our Chief Executive Officer. Each eligible participant has an opportunity to earn a payment based on achievement of corporate performance goals relating to EBITDA targets for the year ended December 31, 2018. Executive officers2021. Except as described in the SEC Documents, the Company, directly or indirectly, owns of record and beneficially, free and clear of all liens, all of the issued and outstanding capital stock or equity interests of each of its Subsidiaries. All of the issued and outstanding capital stock or equity interests of each of the Company’s Subsidiaries (collectively, the “Company Subsidiary Securities”) has been duly authorized and validly issued, and in the case of corporations, is fully paid and non-assessable. Except as described in the SEC Documents, there are eligibleno outstanding rights, options, warrants, preemptive rights, conversion rights, rights of first refusal or similar rights for a merit-based bonusthe purchase or acquisition from any of the Company’s Subsidiaries of any securities of such Subsidiaries nor are there any commitments to issue or execute any such rights, options, warrants, preemptive rights, conversion rights or rights of first refusal.

Section 2.6 Private Placement. Assuming the accuracy of the representations and warranties of the Purchaser set forth in an amount set based on employment grade (ranging from 37.5% to 100%Section 3.5 (Investment Representations), the offer and sale of base annual salary), which is then multiplied by a percentage (ranging from 40% up to 175%) based on achievement of EBITDA targets. For 2018, we paid an aggregate of approximately $1.3 millionthe Purchased Shares pursuant to such executive bonus plan. Certain executives, including our named executive officers, were eligiblethis Agreement will be exempt from the registration requirements of the Securities Act.

Section 2.7 SEC Documents; Financial Information; Sarbanes-Oxley Act.

(a) Since January 1, 2019, the Company has filed with or furnished to earnthe SEC all SEC Documents on a bonus based on achievement of corporate performance goals relating to EBITDA targets for the year ended December 31, 2019. The EBIDTA targets were not met so no bonus payments were made to our named executive officers in the year ended December 31, 2019.

Pension Benefits

Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by us during 2019.

Nonqualified Deferred Compensation

Our named executive officers did not participate in, or earn any benefits under, a nonqualified deferred compensation plan sponsored by us during 2019.

Employee Benefit Plans

We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our executive officers with the financial interests of our stockholders. In addition, we believe that our ability to grant options and other equity-based awards helps us to attract, retain and motivate executive officers and encourages them to devote their best efforts to our business and financial success. Vesting of equity awards is generally tied to continuous service with us and serves as an additional retention measure. Our executive officers generally are awarded an initial new hire grant upon commencement of employment.timely basis.

Each(b) No Subsidiary of our named executive officers currently holds equity awards under our 2019 Equity Incentive Planthe Company is required to file or 2012 Equity Incentive Plan, as applicable, that were granted subjectfurnish any report, statement, schedule, form or other document with, or make any other filing with, or furnish any other material to, the general terms thereof and the applicable forms of award agreement thereunder. The specific vesting terms of each named executive officer’s equity awards are described above under “Outstanding Equity Awards as of December 31, 2019.”

Prior to our initial public offering, we granted all equity awardsSEC pursuant to our 2012 Equity Incentive Plan. We currently grant all equity awards pursuantthe Securities Act or the Exchange Act.

(c) As of its filing date (or, if amended or superseded by a filing prior to our 2019 Equity Incentive Plan. All options are granted with a per share exercise price equal to no less than the fair market value of a share of our Common Stockdate hereof, on the date of the grant, and generally vest on a monthly basis over 48 months, subjectsuch filing), each SEC Document filed pursuant to the continued serviceExchange Act complied in all material respects with us through each vesting date. All options havethe requirements of the Exchange Act and did not contain any untrue statement of a maximum term of upmaterial fact or omit to 10 years fromstate any material fact necessary in order to make the date of grant, subject to earlier expiration following the cessation of an executive officer’s continuous service with us. Option vesting is subject to acceleration as described above under “Potential Payments upon Termination or Change in Control.” Options generally remain exercisable for three months following an executive officer’s termination, exceptstatements made therein, in the event of a termination for cause or due to disability or death. Restricted stock unit awards, or RSUs, generally vest annually over 4 years, subject to the continued service with us through each vesting date.

Health and Welfare Benefits

We pay premiums for medical insurance, dental insurance, and vision insurance for all full-time employees, including our named executive officers. These benefits are available to all full-time employees, subject to applicable laws.

401(k) Plan

We maintain a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax, or after-tax, basis, up to the statutorily prescribed annual limits on contributions under the Code. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their contributions. The 401(k) plan is intended to be qualified under Section 401(a)light of the Code with the 401(k) plan’s related trust intended to be tax exemptcircumstances under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us whenwhich they were made, and contributions and earnings on those amounts are not taxable to the employees until withdrawn or distributed from the 401(k) plan. We do not currently provide a matching contribution under the 401(k) plan.

misleading.

Director Compensation

(d) The following table sets forth information regarding compensation earned during the year ended December 31, 2019 by our non-employee directors who served as directors during such year. Messrs. Plaschke and Wilkinson, our former Chief Executive Officer and current Chief Executive Officer, respectively, served on our board of directors but did not receive compensation for their service as directors and the compensation paid to each of Messrs. Plaschke and Wilkinson for their services as employees during the year ended December 31, 2019, is set forth in the “Summary Compensation Table” above.

Name  Fees
earned or
Paid in
Cash
($)
  Stock
awards (1)
(S)
   Option
awards (1)
($)
  Total 

Maurice Hochschild

   43,071   37,200    84,447(2)   164,718 

Alan Howe

   32,143   37,200    84,447(2)   153,790 

Jeffrey Johnson

   25,071   37,200    101,631(2)   163,902 

John Kneuer

   30,857   37,200    84,447(2)   152,504 

Sue Swenson

   34,071   37,200    84,447(2)   155,718 

Kenny Young

   50,000(3)   0    0  

Toru Amakasu

   0(4)   0    0  

Rajan Naik

   0(5)   0    0  

Bryant Riley

   0(6)   0    0  

(1)

This column reflects the full grant date fair value for options or stock awards granted during the year ended December 31, 2019 as measured pursuant to ASC Topic 718 as stock-based compensation in our consolidated financial statements. The assumptions we used in valuing options are described in Note 8 to our consolidated financial statements included elsewhere in this annual report. These amounts do not necessarily correspond to the actual value that may be recognized from the stock awards by the non-employee directors

(2)

Includes $84,447 as the full grant date fair value for an option issued in December 2019 with performance-based vesting, which grant date fair value assumes the highest level of achievement had been met.

(3)

During the first quarter of 2019, fees for Mr. Young’s service as a director were paid to B. Riley Principal Investments, LLC, Mr. Young’s employer, pursuant to a management services agreement entered into in October 2017, which terminated in connection with our initial public offering. Thereafter, Mr. Young has declined to receive any compensation for his services as a member of the board of directors and any committee thereof.

(4)

Mr. Amakasu resigned from the board of directors in March 2019. Mr. Amakasu did not receive any compensation for his services as a member of the board of directors during the year ended December 31, 2019.

(5)

Mr. Naik resigned from the board of directors in February 2019. Mr. Naik did not receive any compensation for his services as a member of the board of directors during the year ended December 31, 2019.

(6)

Mr. Riley resigned from the board of directors in March 2019. Mr. Riley did not receive any compensation for his services as a member of the board of directors during the year ended December 31, 2019.

Non-Employee Director Compensation Policy

In April 2019, we adopted a non-employee director compensation policy pursuant to which our non-employee directors are eligible to receive compensation for service on our board of directors and committees of our board of directors.

Equity Compensation

Each new non-employee director who joins our board of directors is granted an initial award of restricted stock units under our 2019 Plan having an aggregate value of $165,000 which vest annually over three years from the grant date, subject to continued service as a director through the applicable vesting date.

Notwithstanding the foregoing, the initial award of restricted stock units were not awarded to our non-employee directors until November 13, 2019, at which time the closing price of a share of our common stock was $2.48 share. In an effort to reflect the fact that these awards were intended to be made in connection with our initial public offering, the number of shares subject to each initial award of restricted stock units was determined by reference to the price of our common stock in our initial public offering, or $11 per share.

On the date of each annual meeting of our stockholders, each non-employee director who will continue as a non-employee director following such meeting is granted an annual award of restricted stock units under our 2019 Plan having an aggregate value of $120,000, which units vest in full on the earlier of the first anniversary of the grant date or immediately prior to the next annual meeting of stockholders, subject to continued service as a director through the vesting date.

If a non-employee director is appointed or elected to our board of directors other than in connection with an annual meeting of stockholders, then such non-employee director shall be awarded the full initial grant upon such non-employee director’s appointment or election, and the annual grant to be awarded to such non-employee director at the first annual meeting of stockholders following such appointment or election shall be pro-rated for the number of months served prior to such annual meeting of stockholders.

Each restricted stock unit award granted under the policy will fully vest upon a change of control and the non-employee director’s death or disability.

Cash Compensation

Each non-employee director will receive an annual cash retainer of $35,000 for serving on our board of directors. The non-executive chairperson of our board of directors will receive an additional annual cash retainer of $25,000.

The chairperson and members of the three principal standing committees of our board of directors will be entitled to the following annual cash retainers:

Board Committee  Chairperson
Fee
   Member
Fee
 

Audit Committee

  $15,000   $7,500 

Compensation Committee

  $10,000   $5,000 

Nominating and Corporate Governance Committee

  $7,500   $3,750 

All annual cash compensation amounts will be payable in equal quarterly installments in arrears, pro-rated based on the days served in the applicable fiscal quarter.

We also reimburse all reasonable out-of-pocket expenses incurred by non-employee directors for their attendance at meetings of our board or directors or any committee thereof.

In addition to the above compensation, in December 2019, in recognition of additional committee work and board assignments, all non-employee directors were awarded options to purchase 43,928 shares of common stock which vest with respect to 75% of the shares at such time as the price of our common stock equals or exceeds $5.00 per share, with respect to 15% of the shares at such time as the price of our common stock equals or exceeds $7.00 per share; and with respect to 10% of the shares at such time as the price of our common stock equals or exceeds $8.00 per share, provided that all shares shall vest in full upon consummation of a change in control transaction.

In October 2017, we entered into a management services agreement with B. Riley Principal Investments, LLC pursuant to which, among other things, Mr. Young served as a member of our board of directors, which agreement was terminated in connection with our initial public offering. Pursuant to the management services agreement, we paid B. Riley Principal Investments, LLC an annual fee of $200,000 for services provided, including for Mr. Young’s continued service on our board of directors.

TRANSACTIONS WITH RELATED PERSONS AND INDEMNIFICATION

RELATED-PERSON TRANSACTIONS POLICYAND PROCEDURES

In 2019, the Company adopted a written Related-Person Transactions Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration and approval or ratification of “related-persons transactions.” For purposes of the Company’s policy only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company and any “related person” are participants involving an amount that exceeds $120,000. Transactions involving compensation for services provided to the Company as an employee, director, consultant or similar capacity by a related person are not covered by this policy. A related person is any executive officer, director, or more than 5% stockholder of the Company including anyincluded in the SEC Documents (the “Financial Statements”) comply as of their immediate family members,respective dates in all material respects with applicable accounting requirements and any entity owned or controlled by such persons.

Under the policy, where a transaction has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent bodyrules and regulations of the Board) for consideration and approvalSEC with respect thereto (except as may be indicated in the notes thereto or, ratification. The presentation must include a description of, among other things,in the material facts, the interests, direct and indirect,case of the related persons,unaudited statements, as permitted by Form 10-Q promulgated by the benefits toSEC), and present fairly in all material respects as of their respective dates the Company of the transaction and whether any alternative transactions were available. To identify related-person transactions in advance, the Company relies on information supplied by its executive officers, directors and certain significant stockholders. In considering related-person transactions, the Committee takes into account the relevant available facts and circumstances including, but not limited to (a) the risks, costs and benefits to the Company, (b) the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products and (e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. In the event a director has an interest in the proposed transaction, the director must recuse himself or herself form the deliberations and approval. The policy requires that, in determining whether to approve, ratify or reject a related-person transaction, the Committee consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interestsconsolidated financial position of the Company and its stockholders,Subsidiaries as at the Committee determines indates thereof and the good faith exerciseconsolidated results of its discretion.

CERTAIN RELATED-PERSON TRANSACTIONS

The following is a description of transactions since January 1, 2018 to which we have been a participanttheir operations and in which (i) the amount involved exceeded or will exceed the lesser of $120,000 or one percenttheir consolidated cash flows for each of the average of our total assetsrespective periods, all in conformity with GAAP, applied on a consistent basis during the periods involved (except as of December 31, 2019 and 2018, and (ii) any of our directors, executive officers or holders of more than 5% of our share capital, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are describedmay be indicated in the sections titled “Executive Compensation” and “Management—Non-Employee Director Compensation.”

Private Financing

From November 2018 through January 2019, we issued and sold an aggregate of 1,498,533 shares of our common stock at a purchase price of $7.18 per share to certain investors party to a securities purchase agreement,such Financial Statements or the SPA, for an aggregate purchase pricenotes thereto). The Company and its Subsidiaries do not have any liabilities or obligations that would be required under GAAP, as in effect on the date of approximately $10.8 million. The following table summarizes purchases of our common stock by holders of more than 5% of our capital stock and their affiliated entities. None of our directors or executive officers purchased shares of common stock.

Name  Shares of
Common
Stock
   Aggregate
Purchase
Price
 

Nokomis Capital Master Fund, L.P.

   696,378   $4,999,994 

Entities Affiliated with B. Riley Financial, Inc. (1)

   355,411    2,551,851 

Verdoso Holdings Limited

   55,710    399,998 

(1)

Represents shares of common stock purchased by B. Riley Financial, Inc. and BRC Partners Opportunity Fund, LP.

B. Riley Loan Agreement

In October 2017, we entered into a subordinated term loan and security agreement, or the Loan Agreement, with B. Riley Principal Investments, LLC pursuant to which we borrowed $10.0 million in principal secured subordinated indebtedness pursuant to the B. Riley Convertible Note. In March 2018, we amended the Loanthis Agreement, to increase the available aggregate principal borrowings to $12.0 million and borrowed an additional $2.0 million in principal secured subordinated indebtedness pursuant to the B. Riley Convertible Note, as amended. In July 2019, we prepaid $3.25 million in principal and interest under the B. Riley Convertible Note.

On June 1, 2020, we entered intobe reflected on a Note Amendment and Debt Cancellation Agreement with B. Riley Principal Investments, LLC, or the Note Amendment, which provided that, contingent upon the closing of the underwritten public offering pursuant to a registration statement Form S-1 (File No. 333-238869), that certain principal amount, accrued interest and other amounts outstanding under the B. Riley Convertible Note would convert into shares of common stock to be issued to B. Riley Principal Investments, LLC or its affiliates at the public offering price of shares of our common stock in the offering.

Pursuant to the Note Amendment, as amended to date, $6,170,125.51 of principal amount, accrued interest and other amounts outstanding under the B. Riley Convertible Note converted into an aggregate of 8,226,834 shares of the Company’s common stock issued to the selling stockholders, or the “Conversion Shares”. Also on June 11, 2020, we entered into a registration rights agreement with the selling stockholders pursuant to which we agreed to file a registration statement covering the resale by the selling stockholders of the Conversion Shares and to use our best efforts to cause such registration statement to become effective upon the time frames set forth in the registration rights agreement. We filed a registration statement on Form S-1 covering the resale of the Conversion Shares on July 2, 2020 (File No. 333-239664), which was declared effective by the SEC on July 13, 2020.

Management Services Agreement

In October 2017, we entered into a management services agreement with B. Riley Principal Investments, pursuant to which B. Riley Investments agreed to provide advisory and consulting services to us for management fees of up to $200,000 per year. We incurred approximately $47,000 and $200,000 of fees under this agreement during the years ended December 31, 2017 and 2018, respectively. The management services agreement terminated at the closing of our initial public offering.

Agreements with Motorola

In August 2016, we entered into a supply and distribution agreement, or the MSI Supply Agreement, with MSI, who was previously a more than 5% holder, pursuant to which we supply hardware and software to MSI and certain of its affiliates at predetermined price schedules set forth in the MSI Supply Agreement. The MSI Supply Agreement has an initial term of three years, after which time the agreement remains in effect until terminated by either party. Since August 2016, we have received approximately $2.2 million in total payments under the MSI Supply Agreement.

In April 2017, we entered into the WAVE® 7000 Public Safety Communication Services Software Development Kit License Agreement, or the WAVE License, with MSI pursuant to which we licensed the WAVE 7000 workgroup communication platform, including related proprietary interfaces, in North America. The WAVE License has an initial term of three years, plus a one year extension at MSI’s election. In addition, in April 2017, we entered into the Radio Application Link Protocol License Agreement, or the Radio Link License, with MSI pursuant to which we licensed the iDEN® radio application link protocol from MSI for the development of products to interface with MSI’s products. The Radio Link License has a term of three years. Each of the WAVE License and the Radio Link License were entered into with MSI in connection with our master services agreement with Southern Communications Services, Inc.

Registration Rights

We are party to an investors’ rights agreement which provides, among other things, that certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing. The parties to the investors’ rights agreement include Robert Plaschke, our former Chief Executive Officer and a member of our board of directors, and entities affiliated with B. Riley Financial, Inc., BRC Partners Opportunity Fund, L.P., Nokomis Capital Master Fund, L.P., Verdoso Holdings Limited, Verdoso Investments S.A., Investec Investments (UK) Limited, Motorola Solutions, Inc. and JVC KENWOOD Corporation.

Policies and Procedures for Related Party Transactions

Our audit committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed the lesser of $120,000 or one percent of the average of our total assets at year- end for the last two completed years in which a related person has or will have a direct or indirect material interest. Our policy regarding transactions between us and related persons will provide that a related person is defined as a director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and any of their immediate family members. Our audit committee charter that will be in effect upon completion of this offering will provide that our audit committee shall review and approve or disapprove any related party transactions.

All of the transactions described in this section were entered into prior to the adoption of this policy.

INDEMNIFICATION

The Company provides indemnification for its directors and officers so that they will be free from undue concern about personal liability in connection with their service to the Company. Under the Company’s Bylaws, the Company is required to indemnify its directors and officers to the extent not prohibited under Delaware or other applicable law. The Company has also entered into indemnity agreements with certain officers and directors. These agreements provide, among other things, that the Company will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agentconsolidated balance sheet of the Company and otherwise to the fullest extent permitted under Delaware law and(accrued, absolute, contingent or otherwise), other than liabilities or obligations (i) reflected on, reserved against, or disclosed in the Company’s Bylaws.

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single set of Annual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

This year, a number of brokers with account holders who are Sonim stockholders will be “householding” the Company’s proxy materials. A single set of Annual Meeting materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participateconsolidated balance sheet included in “householding” and would prefer to receive a separate set of Annual Meeting materials, please notify your broker or Sonim. Direct your written request to Sonim Technologies, Inc., Attention: Robert Tirva, CFO, 6836 Bee Cave Road, Building 1, Ste 276, Austin, TX, 78746 or contact Robert Tirva, CFO at (650) 703–4002. Stockholders who currently receive multiple copies of the Annual Meeting materials at their addresses and would like to request “householding” of their communications should contact their brokers.

OTHER MATTERS

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.

By Order of the Board of Directors

Robert Tirva

Secretary

August     , 2020

A copy of the Company’s Annual Report to the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 2019,2021 (including the notes thereto), (ii) incurred in the ordinary course of business since December 31, 2021, (iii) incurred in connection with the transactions contemplated hereby or (iv) that would not have, individually or in the aggregate, a Material Adverse Effect.

(e) Each SEC Document that is a registration statement, as amended is available without charge upon written request to: Corporate Secretary, Sonim Technologies, Inc., 6836 Bee Cave Road, Building 1, Suite 279, Austin, TX 78746.

Appendix A

SONIM TECHNOLOGIES, INC.

2019 EQUITY INCENTIVE PLAN

ADOPTEDBYTHE BOARDOF DIRECTORS: MARCH 2019

APPROVEDBYTHE STOCKHOLDERS: MAY 2019

IPO DATE/EFFECTIVE DATE: MAY 9, 2019

AMENDEDBYTHE BOARDOF DIRECTORS: MAY 2020

APPROVEDBYTHE STOCKHOLDERS: [DATE]

1.    GENERAL.

(a)Successoror supplemented, if applicable, filed pursuant to and Continuation of Prior Plan. The Plan is the successor to and continuationSecurities Act, as of the Sonim Technologies, Inc. 2012 Equity Incentive Plan (the “Prior Plan”). From and after 12:01 a.m. Pacific time ondate such registration statement or amendment became effective, complied in all material respects with the Effective Date, no additional stock awards will be granted under the Prior Plan. All Awards granted on or after 12:01 a.m. Pacific Time on the Effective Date will be granted under this Plan. All stock awards granted under the Prior Plan will remain subject to the termsrequirements of the Prior Plan.

(i)    Any shares that would otherwise remain available for future grants under the Prior Plan asSecurities Act and did not contain any untrue statement of 12:01 a.m. Pacific Time on the Effective Date (the “Prior Plan’s Available Reserve”) will ceasea material fact or omit to state any material fact required to be available understated therein or necessary to make the Prior Plan at such time. Instead, that numberstatements therein not misleading.

(f) As of shares of Common Stock equal to the Prior Plan’s Available Reserve will be added todate hereof, (i) there are no material outstanding or unresolved written comments from the Share Reserve (as further described in Section 3(a) below) and will be immediately available for grants and issuance pursuant to Stock Awards hereunder, up to the maximum number set forth in Section 3(a) below.

(ii)    In addition, from and after 12:01 a.m. Pacific Time on the Effective Date,SEC with respect to the aggregate number of shares of Common Stock subject, at such time, to outstanding stock awards granted under the Prior Plan that (1) expire or terminate for any reason prior to exercise; (2) are forfeited or repurchased because of the failure to meet a contingency or condition required to vest such shares or otherwise returnSEC Documents and (ii) to the Company; or (3) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award (such shares the “Returning Shares”) will immediately be added to the Share Reserve as shares of Common Stock (as further described in Section 3(a) below) as and when such a share becomes a Returning Share, up to the maximum number set forth in Section 3(a) below.

(b)Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards.

(c)Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.

(d)Purpose. The Plan, through the grant of Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the successknowledge of the Company, and any Affiliate, and provide a means by which the eligible recipients may benefit from increases in valuenone of the Common Stock.

2.    ADMINISTRATION.

(a)Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b)Powers of Board. The Board will have the power,SEC Documents is subject to and withinongoing SEC review.

(g) The Company is in compliance in all material respects with the limitations of, the expressapplicable provisions of the Plan:

(i)    To determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.

(ii)    To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards.Sarbanes-Oxley Act. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.

(iii)    To settle all controversies regarding the Plan and Awards granted under it.

(iv)    To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or the time at which cash or shares of Common Stock may be issued in settlement thereof).

(v)    To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Award Agreement, suspension or termination of the Plan will not impair a Participant’s rights under the Participant’s then-outstanding Award without the Participant’s written consent, except as provided in subsection (viii) below.

(vi)    To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or Awards granted under the Plan compliant with the requirements for Incentive Stock Options or exempt from, or compliant with, the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan. Except as provided in the Plan (including subsection (viii) below) or an Award Agreement, no amendment of the Plan will impair a Participant’s rights under an outstanding Award unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.

(vii)    To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 422 of the Code regarding “incentive stock options” or (B) Rule 16b-3.

(viii)    To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that a Participant’s rights under any Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the

amendment, taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable laws or listing requirements.

(ix)    Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interestsmanagement of the Company has, in compliance with Rule 13a-15 under the Exchange Act, designed disclosure controls and procedures to ensure that are not in conflict withmaterial information relating to the provisionsCompany, including its consolidated Subsidiaries, is made known to the management of the Plan or Awards.

(x)    To adopt such rules, proceduresCompany by others within those entities, and sub-plans related to the operation and administration of the Plan as are necessary or appropriate under local laws and regulations to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement made to ensure or facilitate compliance with the laws or regulations of the relevant foreign jurisdiction).

(xi)    To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or (6) other valuable consideration determined by the Board, indisclosed, based on its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles (collectively (A) through (C), an “Exchange Program”).

(c)    Delegation to Committee.

(i)General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(ii)Rule 16b-3 Compliance. The Committee may consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3.

(d)Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however,that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 13(x)(iii) below.

(e)Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

3.    SHARES SUBJECTTOTHE PLAN.

(a)    Share Reserve.

(i)    Subject to Section 9(a) relating to Capitalization Adjustments, and the following sentence regarding the annual increase, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 5,340,678, which number is the sum of (A) 1,885,039 shares that were approved in connection with the initial adoption of the Plan on the Effective Date, plus (B) the number of shares that remained available for issuance under the Prior Plan’s Available Reserve as of the initial adoption of the Plan on the Effective Date, plus (C) the Returning Shares, if any, which become available for grant under this Plan from time to time, plus (D) 3,000,000 shares that were approved at the Company’s 2020 Annual Meeting of Stockholders (such aggregate number of shares described in (A), (B), (C) and (D) above, the “Share Reserve”). In addition, the Share Reserve will automatically increase on January 1st of each calendar year, beginning on January 1 in the calendar year following the calendar year in which the IPO Date occurs and ending on (and including) January 1, 2029 (each, an “Evergreen Date”) in an amount equal to five percent (5%) of the total number of shares of Capital Stock outstanding on the last day of the preceding calendar year. Notwithstanding the foregoing, the Board may actrecent evaluation prior to the Evergreen Datedate hereof, to the Company’s auditors and the audit committee of a given year to provide that there will be no increasethe Company’s Board of Directors (i) any significant deficiencies and material weaknesses in the Share Reservedesign or operation of internal control over financial reporting (as defined in Rule 13a-15 under the Exchange Act) which would adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for such year or that the increaseCompany’s auditors any material weaknesses in the Share Reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.

(i)    For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common StockCompany’s internal control over financial reporting and (ii) any fraud, whether or not material, that may be issued pursuant to the Plan. As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in Section 3(b) below), the Share Reserve is not a limit on the number of Stock Awards that can be granted.

(ii)    Shares may be issued in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711involves management or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.

(b)Reversion of Shares to the Share Reserve. Ifemployees who have a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such sharessignificant role in the Participant or shares of Common Stock that are surrendered to theCompany’s internal control over financial reporting.

(h) The Company pursuant to an Exchange Program, then the shares that are forfeited, repurchased or so surrendered will again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.

(c)Incentive Stock Option Limit. Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be will be a number of shares of Common Stock equal to three (3) multiplied by the Share Reserve.

(d)Limitation on Compensation of Non-Employee Directors. During any one calendar year, no Non-Employee Director may receive Stock Awards under the Plan that, when combined with cash compensation

received for service as a Non-Employee Director, exceeds $600,000 in a calendar year, increased to $1,000,000 in the calendar year of his or her initial services as a Non-Employee Director (calculating the value of any such Stock Awards based on the grant date fair value of such Stock Awards for financial reporting purposes). Stock Awards granted to an individual while he or she was serving in the capacity as an Employee or Consultant but not a Non-Employee Director will not count for purposes of the limitations set forth in this Section 3(d).

(e)Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

4.    ELIGIBILITY.

(a)Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereofhas established and maintains disclosure controls and procedures (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of13a-15 and 15d-15 under the Securities Act, unless (i)Exchange Act) that are designed to provide reasonable assurance that material information relating to the stock underlying such Stock AwardsCompany, including its Subsidiaries, that is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuantrequired to a corporate transaction such as a spin off transaction), (ii) be disclosed by

the Company in consultation with its legal counsel, has determinedthe reports that it furnishes or files under the Exchange Act is reported within the time periods specified in the rules and forms of the SEC and that such Stock Awards are otherwise exempt from material information is communicated to the Company’s management to allow timely decisions regarding required disclosure.

Section 409A2.8 Disclosure Documents. The information supplied by the Company for inclusion in the proxy statement, or any amendment or supplement thereto, to be sent to the Company stockholders in connection with the Contemplated Transactions (the “Proxy Statement”) shall not, on the date the Proxy Statement, and any amendments or supplements thereto, is first mailed to the stockholders of the Code,Company or (iii)at the time of the Company Stockholder Approval contain any untrue statement of a material fact or omit to state any material fact necessary in consultation with its legal counsel, has determined that such Stock Awardsorder to make the statements therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement will comply in all material respects as to form with the requirements of the Exchange Act. The representations and warranties contained in this Section 2.8 shall not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon information supplied by the Purchaser or any of its Representatives specifically for use or incorporation by reference therein.

Section 409A2.9 Litigation. There is no litigation or governmental proceeding pending or, to the knowledge of the Company, threatened in writing, against the Company or any of its Subsidiaries or affecting any of the business, operations, properties, or assets of the Company or any of its Subsidiaries which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in default with respect to any order, writ, injunction, decree, ruling, or decision of any court, commission, board, or other government agency that is expressly applicable to the Company or any of its Subsidiaries which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.10 Compliance with Laws; Permits. The Company and its Subsidiaries are in compliance with all applicable Laws, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company and its Subsidiaries possess all permits and licenses of governmental authorities that are required to conduct their business, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.11 Taxes. The Company and each of its Subsidiaries has filed all Tax Returns required to be filed within the applicable periods for such filings (with due regard to any extension) and has timely paid all Taxes required to be paid, except for any such failures to file or pay that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company is not a United States real property holding corporation within the meaning of Section 897 of the Code.

(b)Ten Percent Stockholders. A Ten Percent Stockholder willSection 2.12 Employee Matters. Except where the failure to comply has not had, and would not reasonably be granted an Incentive Stock Option unlessexpected to have, individually or in the exercise price of such Option is at least 110% ofaggregate, a Material Adverse Effect, the Fair Market Value on the date of grantCompany and the Option is not exercisable after the expiration of five years from the date of grant.

5.    PROVISIONS RELATINGTO OPTIONSAND STOCK APPRECIATION RIGHTS.

Each Option or SAR will beits Subsidiaries are in such form and will contain suchcompliance with all applicable Laws relating to labor, employment, fair employment practices, terms and conditions asof employment, and wages and hours, and with the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or allterms of the Option failsERISA Documents, and each such ERISA Document is in compliance with all applicable requirements of ERISA. No labor dispute with the employees of the Company or any of its Subsidiaries exists, or to qualify as an Incentive Stock Option under the applicable rules, thenknowledge of the Option (or portion thereof) willCompany, is imminent, in either case which dispute would reasonably be a Nonstatutory Stock Option. The provisions of separate Optionsexpected to have, individually or SARs need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the aggregate, a Material Adverse Effect.

Section 2.13 Environmental Matters. The Company and its Subsidiaries are in compliance with all applicable Award AgreementRequirements of Environmental Law and required Environmental Permits, except, in each case, where the failure to comply has not had, and would not reasonably be expected to have, individually or otherwise) the substance of each of the following provisions:

(a)Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of its grant or such shorter period specified in the Award Agreement.

(b)Exercise Price. Subjectaggregate, a Material Adverse Effect. The Company and its Subsidiaries have not received within the past three (3) years any written notice from any governmental authority of any violation or alleged violation of any Requirements of Environmental Law or Environmental Permit in connection with their respective properties, except as has not had, and would not reasonably be expected to have, individually or in the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant toaggregate, a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.Material Adverse Effect.

(c)Purchase Price for Options. The purchase price of Common Stock acquired pursuant toSection 2.14 Registration Rights. Except as provided in this Agreement or the exercise of an Option may be paid, toRegistration Rights Agreement or disclosed in the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent ofSEC Documents, the Company to use a particular method of payment. The permitted methods of payment are as follows:

(i)    by cash, check, bank draft or money order payable to the Company;

(ii)    pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(iii)    by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv)    if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

(v)    in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.

(d)Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.

(e)Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

(i)Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable laws or regulations. Except as explicitly provided in the Plan, neither an Option nor a SAR may be transferred for consideration.

(ii)Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital

settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2) or comparable non-U.S. law. If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii)Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company or to any third party designated by the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate or the Participant’s legal heirs will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

(f)Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

(g)Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date which occurs three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.

(h)Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of the period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.

(i)Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date which occurs 12 months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

(j)Death of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement for exercisability after the termination of the Participant’s Continuous Service for a reason other than death, then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.

(k)Termination for Cause. Except as explicitly provided otherwise in the applicable Award Agreement or other written agreement between the Participant and the Company, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date of such termination of Continuous Service. If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Option or SAR will also be suspended during the investigation period.

(l)Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the U.S. Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.

6.    PROVISIONSOF STOCK AWARDSOTHERTHAN OPTIONSAND SARS.

(a)Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject

to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i)Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii)Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

(iii)Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

(iv)Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

(v)Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares of Common Stock subject to the Restricted Stock Award to which they relate.

(b)Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i)Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii)Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii)Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

(iv)Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v)Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

(vi)Termination of Participants Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(c)    Performance Awards.

(i)Performance Stock Awards. A Performance Stock Award is a Stock Award that is payable (including that may be granted may vest or may be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may but need not require the Participant’s completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Board or Committee, in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

(ii)Performance Cash Awards. A Performance Cash Award is a cash award that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Board or Committee, in its sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.

(iii)Board Discretion. The Board retains the discretion to adjust or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.

(d)Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

7.    COVENANTSOFTHE COMPANY.

(a)Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

(b)Compliance with Law. The Company will seek to obtain from each regulatory commission or agency, as necessary, such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act any of its presently outstanding securities or any of its securities that may be issued subsequently.

Section 2.15 Investment Company Act. The Company is not, and immediately after giving effect to the Plansale of the Purchased Shares in accordance with this Agreement and the application of the proceeds thereof will not be required to be registered as, an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act.

Section 2.16 Nasdaq. As of the date hereof, the Company’s Common Stock is listed on The Nasdaq Stock Market, LLC (“Nasdaq”), and except for a deficiency letter (the “Notice”) described in the Company’s Current Report on Form 8-K filed with the SEC on February 18, 2022, no event has occurred, and the Company is not aware of any event that is reasonably likely to occur, that would result in the Common Stock being delisted from the Nasdaq. The Company is in compliance with applicable continued listing requirements of Nasdaq except for the minimum bid requirement described in the Notice (“Minimum Bid Requirement”). The Company has not been informed that it is ineligible for an additional one hundred eighty (180) calendar day compliance period as described in the Notice and is not aware of any facts or circumstances that would cause the Company to lose such eligibility.

Section 2.17 No Brokers or Finders. No Person has or will have, as a result of the Contemplated Transactions, any right, interest or claim against or upon the Company, any of its Subsidiaries or the Purchaser for any commission, fee, or other securitiescompensation as a finder or applicable laws,broker because of any Stock Awardact of the Company or any Common Stockof its Subsidiaries, other than B. Riley Securities, Inc. whose fees are the sole responsibility of the Company.

Section 2.18 Illegal Payments; FCPA Violations. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, since January 1, 2022, none of the Company, any of its Subsidiaries or, to the knowledge of the Company, any officer, director, employee, agent, representative or consultant acting on behalf of the Company or any of its Subsidiaries (and only in their capacities as such) has, in connection with the business of the Company: (a) unlawfully offered, paid, promised to pay, or authorized the payment of, directly or indirectly, anything of value, including money, loans, gifts, travel, or entertainment, to any Government Official with the purpose of (i) influencing any act or decision of such Government Official in his or her official capacity; (ii) inducing such Government Official to perform or omit to perform any activity in violation of his or her legal duties; (iii) securing any improper advantage; or (iv) inducing such Government Official to influence or affect any act or decision of such Governmental Authority, except, with respect to the foregoing clauses (i) through (iv), as permitted under the U.S. Foreign Corrupt Practices Act or other applicable Law; (b) made any illegal contribution to any political party or candidate; (c) made, offered or promised to pay any unlawful bribe, payoff, influence payment, kickback, unlawful rebate, or other similar unlawful payment of any nature, directly or indirectly, in connection with the business of the Company, to any person, including any supplier or customer; (d) knowingly established or maintained any unrecorded fund or asset or made any false entry on any book or record of the Company or any of its Subsidiaries for any purpose; or (e) otherwise violated the U.S. Foreign Corrupt Practices Act of 1977, as amended or any other applicable anti-corruption or anti-bribery law.

Section 2.19 Economic Sanctions. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company is not, and within the past five (5) years has not been, in contravention of any sanction, and has not engaged in any conduct sanctionable, under U.S. economic sanctions Laws, including applicable Laws administered and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, 31 C.F.R. Part V, the Iran Sanctions Act, as amended, the Comprehensive Iran Sanctions, Accountability and Divestment Act, as amended, the Iran Threat Reduction and Syria Human Rights Act, as amended, the Iran Freedom and Counter-Proliferation Act of 2012, as amended, and any executive order issued or issuable pursuant to any such Stock Award. If, after reasonable effortsof the foregoing.

Section 2.20 Transactions with Affiliates. Except as disclosed in the SEC Documents, none of the officers or directors of the Company and, at a reasonable cost,to the knowledge of the Company, none of the employees of the Company is unablepresently a party to obtain from any such regulatory commission or agency the authority that counsel fortransaction with the Company deems necessary or advisable for the lawful issuance and saleany of Commonits Subsidiaries (other than as holders of Company Stock under the Plan, theOptions, Company will be relieved from any liability for failureRSUs, and/or warrants to issue and sell Common Stock upon exercise or vesting of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable law.

(c)No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner or tax treatment of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.

8.    MISCELLANEOUS.

(a)Use of Proceeds from Sales of Common Stock. Proceeds from the sale ofpurchase shares of Common Stock, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case that would require disclosure in an SEC filing made by the Company (if such filing were being made on the date hereof) pursuant to Stock Awards will constitute general fundsItem 404 of Regulation S-K under the Exchange Act.

Section 2.21 Insurance Coverage. The Company and its Subsidiaries maintain in full force and effect insurance coverage from a reputable insurer that is customary for similarly situated companies for the business being conducted and properties owned or leased by the Company and its Subsidiaries, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for similarly situated companies to insure. As of the date hereof, approximately $[*******] of the $[*******] retention under the Company’s directors’ and officers’ insurance policy has been exhausted with respect to the SEC Matter.

Section 2.22 Intellectual Property. The Company owns or possesses sufficient rights to use all Intellectual Property which is necessary to conduct its businesses as currently conducted, except where the failure to own or possess such sufficient rights would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect. The Company has not received, since January 1, 2022, any written notice of, and has no actual knowledge of, any infringement of or conflict with asserted rights of others with respect to any Intellectual Property which, either individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect. For the purposes of this agreement, “Intellectual Property” means all of the following: (a) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (b) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (c) copyrights and copyrightable works; (d) registrations, applications and renewals for any of the foregoing; and (e) proprietary computer software (including but not limited to data, data bases and documentation).

Section 2.23 Customer Matters. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company has not received, since January 1, 2022, any written notice that any of its customers has ceased, or intends to cease using its goods or services, or to otherwise terminate or reduce its relationship with the Company.

(b)Corporate Action Constituting GrantSection 2.24 No Additional Representations. Except for the representations and warranties made by the Company in this Article II, neither the Company nor any other Person makes any express or implied representation or warranty with respect to the Company or any Subsidiaries or their respective businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other Person makes or has made any representation or warranty to the Purchaser, or any of Awards. Corporate action constitutingits Affiliates or representatives, with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its Subsidiaries or their respective business, or (b) any oral or written information presented to the Purchaser or any of its Affiliates or representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the Contemplated Transactions. Notwithstanding anything to the contrary herein, nothing in this Agreement shall limit the right of the Purchaser and its Affiliates to rely on the representations, warranties, covenants, and agreements expressly set forth in this Agreement, nor will anything in this Agreement operate to limit any claim by any Purchaser or any of its respective Affiliates for actual and intentional fraud.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Company that:

Section 3.1 Organization and Power. The Purchaser is a grantlimited liability company duly formed, validly existing, and in good standing under the laws of the jurisdiction of its formation and has all requisite limited partnership or other entity power and authority to own its properties and to carry on its business as presently conducted.

Section 3.2 Authorization, Etc. The execution, delivery, and performance by the Purchaser of this Agreement and the Registration Rights Agreement and the consummation by the Purchaser of the Contemplated Transactions do not and will not: (a) violate or result in the breach of any provision of the certificate of formation (or similar organizational document) of the Purchaser; or (b) with the exceptions that are not reasonably likely to have, individually or in the aggregate, a material adverse effect on its ability to perform its obligations under this Agreement and the Registration Rights Agreement: (i) violate any provision of, constitute a breach of, or default under, any judgment, order, writ, or decree applicable to the Purchaser or any material contract to which the Purchaser is a party; or (ii) violate any provision of, constitute a breach of, or default under, any applicable state, federal or local law, rule or regulation. Assuming due authorization, execution and delivery by the Company, this Agreement constitutes a valid and binding agreement of the Purchaser enforceable against the Purchaser in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

Section 3.3 Government Approvals. No consent, approval, license or authorization of, or filing with, any court or governmental authority is or will be required on the part of the Purchaser in connection with the execution, delivery, and performance by the Purchaser of this Agreement and the Registration Rights Agreement, except for: (a) those which have already been made or granted; (b) the filing with the SEC of a Schedule 13D or Schedule 13G and a Form 3 to report the Purchaser’s ownership of the Purchased Shares; or (c) those where the failure to obtain such consent, approval or license would not have a material adverse effect on the ability of the Purchaser to perform its obligations hereunder.

Section 3.4 Sufficient Funds. The Purchaser has as of the date hereof, and will have as of the First Closing, sufficient immediately available funds to pay the First Purchase Price pursuant to Article I at the First Closing. The Purchaser has as of the date hereof, and will have as of the Second Closing sufficient immediately available funds to pay the Second Purchase Price pursuant to Article I at the Second Closing.

Section 3.5 Investment Representations.

(a) The Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Purchaser was not organized solely for the purpose of acquiring the Purchased Shares and is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

(b) The Purchaser has been advised by the Company that the Purchased Shares have not been registered under the Securities Act, that the Purchased Shares will be issued on the basis of the statutory exemption provided by Section 4(a)(2) under the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar exemptions under certain state securities laws, that the Contemplated Transactions have not been reviewed by, passed on or submitted to any federal or state agency or self-regulatory organization where an exemption is being relied upon, and that the Company’s reliance thereon is based in part upon the representations made by the Purchaser in this Agreement and the Registration Rights Agreement. The Purchaser acknowledges that it has been informed by the Company of, an Award to any Participant will be deemed completed asor is otherwise familiar with, the nature of the date of such corporate action, unless otherwise determinedlimitations imposed by the Board, regardlessSecurities Act and the rules and regulations thereunder on the transfer of whensecurities, including that such securities may be resold without registration under the instrument, certificate, or letter evidencingSecurities Act only in certain limited circumstances.

(c) The Purchaser is purchasing the Award is communicatedPurchased Shares for its own beneficial account for investment purposes only and not with a view to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

(c)Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered into the books and records of the Company.

(d)No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder orsale in connection with, any Award granted pursuant thereto will confer upon any Participant any right to continue to servedistribution thereof in violation of federal or state securities laws. The Purchaser acknowledges and agrees that the CompanyPurchased Shares may not be sold, transferred, offered for sale, pledged, hypothecated or an Affiliate inotherwise disposed of without registration under the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate,Securities Act and any applicable provisionsstate securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws.

(d) By reason of its business or financial experience, the Purchaser has the capacity to protect its own interest in connection with the Contemplated Transactions.

(e) The Company has provided to the Purchaser all documents and information that the Purchaser has requested relating to an investment in the Company. The Purchaser recognizes that investing in the Company involves substantial risks, and has taken full cognizance of and understands all of the corporate lawrisk factors related to the acquisition of the state or foreign jurisdiction in whichPurchased Shares. The Purchaser is able to bear the Company oreconomic risk of holding the Affiliate is domiciled or incorporated, as the case may be. Furthermore, to the extent the Company is not the employerPurchased Shares for an indefinite period (including total loss of a Participant, the grant of an Award will be not establish an employment or other service relationship between the Companyits investment), and the Participant.

(e)Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without

limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (x) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

(f)Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds U.S. $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(g)Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’ssufficient knowledge and experience in financial and business matters and/so as to be capable of evaluating the merits and risk of its investment. The Purchaser has carefully considered and has, to the extent it believes such discussion necessary, discussed with the Purchaser’s professional legal, tax and financial advisers the suitability of an investment in the Company, and the Purchaser has determined that the acquisition of the Purchased Shares is a suitable investment for the Purchaser. The Purchaser acknowledges and affirms that, with the assistance of its advisors, it has conducted and completed its own investigation, analysis and evaluation related to the investment in the Purchased Shares and that it has not relied on the Company for any tax or legal advice in connection with the purchase of the Purchased Shares. In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representations or other information (other than the representations and warranties of the Company set forth in Article II).

Section 3.6 No Prior Ownership. Prior to employthe First Closing, the Purchaser does not have record or beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of any shares of the Company’s Common Stock.

Section 3.7 No Brokers or Finders. No Person has or will have, as a purchaser representative reasonably satisfactoryresult of the Contemplated Transactions, any right, interest or claim against or upon the Company, any of its Subsidiaries or any Purchaser for any commission, fee or other compensation as a finder or broker because of any act by the Purchaser.

Section 3.8 ERISA. The Purchaser does not hold, and no part of the funds used by the Purchaser to acquire any Purchased Shares constitutes, “plan assets” (within the meaning of the ERISA Regulations). The Purchaser is not (a) an “employee benefit plan” that is subject to Part 4 of Title I of ERISA, (b) a “plan” to which Section 4975 of the Code applies or (c) an entity whose underlying assets could be deemed to include “plan assets” by reason of an employee benefit plan’s or a plan’s investment in such entity.

Section 3.9 Foreign Control. The Purchaser is wholly-owned and controlled by U.S. citizens and is not a “foreign person” as that term is defined in the DPA. For the avoidance of doubt, the Purchaser is neither a “foreign national,” “foreign government” or “foreign entity,” nor an entity over which “control” is exercised or exercisable, directly or indirectly, by any “foreign national,” “foreign government” or “foreign entity,” as those terms are defined in the DPA. The Purchaser has not entered into any agreement or arrangement, formal or informal, directly or indirectly, with any “foreign person” pursuant to which the “foreign person” could acquire “control” of the Purchaser, as those terms are defined in the DPA.

Section 3.10 No Additional Representations. The Purchaser acknowledges and agrees, on behalf of itself and its Affiliates, that, except for the representations and warranties contained in Article II, neither the Company nor any other Person, makes any express or implied representation or warranty with respect to the Company, who is knowledgeableits Subsidiaries or their respective businesses, operations, assets, liabilities, employees, employee benefit plans,

conditions or prospects, and experienced inthe Purchaser, on behalf of itself and its Affiliates, hereby disclaims reliance upon any such other representations or warranties. In particular, without limiting the foregoing disclaimer, the Purchaser acknowledges and agrees, on behalf of itself and its Affiliates, that neither the Company nor any other Person, makes or has made any representation or warranty with respect to, and the Purchaser, on behalf of itself and its Affiliates, hereby disclaims reliance upon (a) any financial and business matters and that such Participant is capable of evaluating, aloneprojection, forecast, estimate, budget or together with the purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances satisfactoryprospect information relating to the Company, statingits Subsidiaries or their respective business, or (b) without limiting the representations and warranties made by the Company in Article II, any information presented to the Purchaser or any of its Affiliates or representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the Contemplated Transactions. The Purchaser acknowledges and agrees with the representations and warranties set forth in Section 2.24. To the fullest extent permitted by applicable Law, without limiting the representations and warranties contained in Article II, neither the Company nor any of its Subsidiaries shall have any liability to any Purchaser or its Affiliates or representatives on any basis (including in contract or tort, under federal or state securities laws or otherwise) based upon any other representation or warranty, either express or implied, included in any information or statements (or any omissions therefrom) provided or made available by the Company or its Subsidiaries to Purchaser or its Affiliates or representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the Contemplated Transactions.

ARTICLE IV

COVENANTS OF THE COMPANY

Section 4.1 Acquisition Proposals.

(a) Subject to Section 4.1(b), Section 4.1(c), Section 4.1(d), Section 4.1(e) and Section 4.1(f), from and after the date of this Agreement until the earlier of the First Closing or the termination of this Agreement in accordance with its terms, (i) neither the Company nor any of its Subsidiaries shall, nor shall the Company or any of its Subsidiaries authorize or knowingly permit any of the directors of the Company, the officers or employees of the Company, or any investment bankers, attorneys, accountants or other advisors or other Representatives retained by the Company or its Subsidiaries (collectively, “Company Representatives”) to, directly or indirectly, (A) solicit, initiate or knowingly facilitate or encourage the submission of any inquiry, proposal or offer which constitutes, or would reasonably be expect to result in, an Acquisition Proposal, (B) enter into, continue or participate in any discussions or negotiations with, or furnish any non-public information relating to the Company or any of its Subsidiaries to, any Third Party in connection with an Acquisition Proposal, (C) approve, recommend, publicly declare advisable or enter into any agreement in principle, letter of intent, merger agreement, acquisition agreement, joint venture agreement or other similar agreement relating to an Acquisition Proposal (other than any Acceptable Confidentiality Agreement entered into in accordance with this Section 4.1), or (D) agree to or propose publicly to do any of the foregoing, and (ii) the Board of Directors shall not (x) fail to make, withdraw or modify in a manner adverse to the Purchaser (or publicly propose to withdraw, modify or qualify in any manner adverse to the Purchaser) the Company Board Recommendation, (y) adopt, approve, or publicly recommend, endorse or otherwise declare advisable the adoption of, an Acquisition Proposal, or (z) fail to include in the Proxy Statement the Company Board Recommendation (any of the foregoing in this clause (ii), an “Adverse Recommendation Change;” provided, that, for the avoidance of doubt, but subject to compliance by the Company with the terms of this Section 4.1, none of (1) the determination by the Board of Directors in accordance with Section 4.1(f) that an Acquisition Proposal constitutes a Superior Proposal, (2) the disclosure by the Company of such determination in accordance with Section 4.1(f), or (3) the delivery by the Company of the notice required by Section 4.1(e) shall constitute an Adverse Recommendation Change).

(b) Notwithstanding anything contained in this Agreement to the contrary, if at any time after the date of this Agreement and prior to obtaining the Company Stockholder Approval, the Company, any Subsidiary of the Company or any of the Company Representatives receives a written Acquisition Proposal from any Third Party that did not result from a breach of Section 4.1(a) and that the ParticipantBoard of Directors determines in good faith

(I) to be bona fide, (II) after consultation with its financial advisor and outside legal counsel, constitutes, or would reasonably be expected to result in, a Superior Proposal or (III) after consultation with its outside legal counsel, that the failure to take such action would reasonably be expected to result in a breach of the fiduciary duties of the Company’s directors under applicable Law, then the Company, directly or indirectly through the Company Representatives, may (i) engage in negotiations or discussions with such Third Party and its Representatives and actual or potential sources of financing (including, as a part thereof, making any counterproposal), and (ii) furnish to such Third Party or its Representatives and actual or potential sources of financing non-public information relating to the Company or any of its Subsidiaries pursuant to an Acceptable Confidentiality Agreement; provided, that, prior to or substantially concurrently with the time it is acquiring Common Stockmade available to such Third Party, the Company shall make available to the Purchaser any non-public information relating to the Company or its Subsidiaries that is made available to such Third Party and that was not previously made available to the Purchaser.

(c) Notwithstanding anything contained in this Agreement to the contrary at any time prior to obtaining the Company Stockholder Approval, if (A) an Intervening Event has occurred, and (B) the Board of Directors determines in good faith and after taking into account any revisions to the terms of this Agreement that may be offered in writing by Purchaser in accordance with this Section 4.1(c), after consultation with outside legal counsel and its financial advisors, that the failure to make an Adverse Recommendation Change would reasonably be expected to result in a breach of its fiduciary duties under applicable Law, then the Board of Directors may make an Adverse Recommendation Change; provided, that, if the Company is making an Adverse Recommendation Change in response to any Intervening Event (other than an Acquisition Proposal, which shall be governed by Section 4.1(f)), then the Board of Directors of the Company shall not make such Adverse Recommendation Change unless the Company has (i) provided to the Purchaser at least three (3) Business Days’ prior written notice (it being understood and agreed that any material change in facts or circumstances relating to an Intervening Event shall require a new notice and a new three (3) Business Day period) that it intends to take such action and specifying in reasonable detail the facts underlying the decision by the Board of Directors to take such action and (ii) during such three (3) Business Day period, if requested by the Purchaser, engaged in good faith negotiations with the Purchaser to amend this Agreement in such a manner that obviates the need for such Adverse Recommendation Change.

(d) In addition, nothing contained herein shall prevent the Board of Directors from (i) complying with Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act with regard to an Acquisition Proposal; provided, that any such action taken or statement made that relates to an Acquisition Proposal shall not be deemed to be an Adverse Recommendation Change if the Board of Directors reaffirms the Company Board Recommendation in such statement or in connection with such action or (ii) making any disclosure to the stockholders of the Company if the Board of Directors determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to result in a breach of its fiduciary duties under applicable Law; provided further that in no event shall the Board of Directors be permitted to make any Adverse Recommendation Change except in accordance with Section 4.1(c) or Section 4.1(f) hereunder, as applicable.

(e) The Company shall notify the Purchaser orally and in writing promptly (but in no event later than 24 hours) after receipt by the Company of any Acquisition Proposal, any proposals or inquiries that would reasonably be expected to lead to an Acquisition Proposal, or any inquiry or request for nonpublic information relating to the Company or any of its Subsidiaries by any Person who has made, or has expressly indicated that such Person is contemplating making, any Acquisition Proposal. Any such notice shall identify the Third Party making, and the material terms and conditions of (or the nature of), any such Acquisition Proposal, inquiry, or request and shall attach a copy of any written Acquisition Proposal (or summary of the terms of any oral Acquisition Proposal) and a copy of all written materials provided by such Person with respect to such Acquisition Proposal. The Company shall keep the Purchaser reasonably informed promptly (but in no event later than 24 hours) after any material changes in status or material terms of any Acquisition Proposal and shall provide to the Purchaser promptly (but in no event later than 24 hours) after receipt thereof of copies of proposed

transaction agreements or proposal letters sent or provided to the Company or any of its Subsidiaries that describe any material terms or conditions of any Acquisition Proposal, and keep the Purchaser reasonably informed as to the nature of any information requested of the Company with respect thereto. Upon request of the Purchaser, the Company shall apprise the Purchaser of the status of any such Acquisition Proposal, inquiry, or request. If an Acquisition Proposal shall have been publicly announced (other than by the Purchaser, its Subsidiaries, or any of their respective Affiliates or Representatives), the Company shall publicly reaffirm the Company Board Recommendation within ten (10) Business Days after receipt of a written request by the Purchaser to provide such reaffirmation, unless an Adverse Recommendation Change is permitted by Section 4.1(b); provided, however, that in no event shall the Company be obligated to publicly reaffirm the Company Board Recommendation on more than one occasion with respect to each such publicly announced Acquisition Proposal by any Third Party or on more than one occasion with respect to each publicly announced material modification thereto.

(f) Notwithstanding anything in this Agreement to the contrary, the Board of Directors may make an Adverse Recommendation Change in response to an Acquisition Proposal (or terminate this Agreement pursuant to Section 8.1(d)(i)), only so long as (i) such Acquisition Proposal was not the result of a breach of this Section 4.1(a) and such Acquisition Proposal is not withdrawn, (ii) the Board of Directors has determined in good faith, after consultation with its financial advisor and outside legal counsel and after taking into account any revisions to the terms of this Agreement that may be offered in writing by the Purchaser in accordance with this Section 4.1(f), (A) that such Acquisition Proposal constitutes a Superior Proposal, and (B) that the failure to take make an Adverse Recommendation Change would reasonably be expected to result in a breach of its fiduciary duties under applicable Law, (iii) the Company (A) notifies the Purchaser in writing (a “Change Notice”) at least three (3) Business Days before the making of any Adverse Recommendation Change of the determination of the Board of Directors of the Company that such Acquisition Proposal constitutes a Superior Proposal and of its intention to take such action, attaching the most current version of all proposed agreements under which such Superior Proposal is proposed to be consummated and all other material terms and conditions in respect of such Acquisition Proposal and the identity of the Third Party making such Superior Proposal, (B) during the three (3) Business Day period beginning on the date of receipt (or deemed receipt in accordance with Section 9.6) of the Change Notice by the Purchaser, is available to negotiate in good faith with the Purchaser (if requested by the Purchaser) any proposal by the Purchaser to amend the terms and conditions of this Agreement such that such Acquisition Proposal would no longer constitute a Superior Proposal (provided that any amendment, supplement or modification to any Acquisition Proposal shall require the Company to deliver to the Purchaser a new Change Notice and a new negotiation period, except that the new negotiation period under this Section 4.1(f) with respect to any revised Acquisition Proposal shall be two (2) Business Days, instead of three (3) Business Days), and (iv) the Board of Directors (A) shall have considered in good faith any revisions to the terms of this Agreement offered in writing by the Purchaser pursuant to this Section 4.1(f), and (B) shall have determined in good faith, after consultation with its financial advisor and outside legal counsel, that such Acquisition Proposal remains a Superior Proposal.

Section 4.2 Access to Information.

(a) From the date hereof until the earlier of the First Closing and the termination of this Agreement in accordance with its terms and subject to applicable Law and the Award forConfidentiality Agreement, the Participant’s own accountCompany shall, and shall cause each of its Subsidiaries to, (i) give to the Purchaser, its counsel, financial advisors, auditors and other authorized representatives reasonable access during normal business hours to the employees, offices, properties, books and records of such party, (ii) furnish reasonably promptly to the Purchaser, its counsel, financial advisors, auditors, and other authorized representatives all information (financial or otherwise) as such Persons may reasonably request concerning the Company’s and its Subsidiaries’ business, properties and personnel, and (iii) instruct its employees, counsel, financial advisors, auditors, and other authorized representatives to reasonably cooperate with the Purchaser in its investigation. Any investigation pursuant to this Section 4.2 shall be conducted under supervision of appropriate personnel of the Company and in such manner as

not to unreasonably interfere with the conduct of the business of the Company, and shall not include the collection or analysis of any present intentionenvironmental samples.

(b) The Purchaser will hold, and will cause its Representatives and affiliates to hold, any nonpublic information, including any information exchanged pursuant to this Section 4.2 and Section 6.1, in confidence to the extent required by and in accordance with, and will otherwise comply with, the terms of sellingthe Confidentiality Agreement.

Section 4.3 Restrictive Legends.

(a) Each certificate representing the Purchased Shares (unless otherwise permitted by the provisions of Section 4.3(b)) shall be stamped or otherwise distributingimprinted with a legend in substantially the Common Stock. The foregoing requirements, andfollowing form (in addition to any assurances given pursuantlegend required under applicable state securities laws):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND SUCH SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT; OR (B) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT.

AS LONG AS THE HOLDER OF THESE SECURITIES IS AN AFFILIATE OF THE ISSUER, THESE SECURITIES MAY NOT BE SOLD, OR OFFERED FOR SALE, IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SALE OF THESE SECURITIES UNDER THE SECURITIES ACT, OR THE SALE OTHERWISE BEING EXEMPT FROM REGISTRATION UNDER SUCH ACT. THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.”

(b) Prior to such requirements, will be inoperative if (A) the issuanceany proposed Transfer of the shares upon the exercise or acquisition of Common Stock under the Award has been registered underany Purchased Shares, unless there is in effect a then currently effective registration statement under the Securities Act covering the proposed Transfer, the Purchaser shall give written notice to the Company of the Purchaser’s intention to effect such Transfer. Each such notice shall describe the manner and circumstances of the proposed Transfer in sufficient detail, and shall be accompanied by either (i) an opinion of legal counsel reasonably satisfactory to the Company to the effect that the proposed Transfer of the Purchased Shares may be effected without registration under the Securities Act, or (ii) any other evidence reasonably satisfactory to counsel to the Company. Upon delivery thereof that is reasonably satisfactory to the Company, the Purchaser shall be entitled to Transfer such Purchased Shares in accordance with the terms of the notice delivered by the Purchaser to the Company. Notwithstanding the foregoing, in the event the Purchaser shall give the Company a representation letter containing such representations as the Company shall reasonably request, the Company will not require such legal opinion or such other evidence in any transaction in which the Purchaser distributes the Purchased Shares solely to its majority owned subsidiaries or Affiliates for no consideration.

Section 4.4 Conduct of Business Covenant. Except for matters set forth in Section 4.4 of the Disclosure Letter, as expressly permitted or required by this Agreement including Section 7.2 of this Agreement, as required by applicable Law or Governmental Authority or with the prior written consent (which may include an electronic transmission) of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), from and after the date hereof and prior to the earlier of the First Closing or the termination of this Agreement in accordance with its terms, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in

the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present directors, officers, and Key Employees, and (iii) preserve its relationships with its material customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters set forth in Section 4.4 of the Disclosure Letter, as expressly permitted or required by this Agreement, as required by applicable Law or with the prior written consent (which may include an electronic transmission) of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), between the date hereof and the earlier of the Second Closing or the termination of this Agreement in accordance with its terms, as applicable, the Company shall not, nor shall it permit any of its Subsidiaries to:

(a) (i) amend the certificate of incorporation or bylaws of the Company or (ii) amend, other than immaterial changes in respect of wholly-owned Subsidiaries, the comparable organizational documents of any Subsidiary of the Company;

(b) (i) split, combine or reclassify any shares of its capital stock, (ii) authorize, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities, other than (A) the acquisition or withholding by the Company of shares of Common Stock in connection with the surrender of shares of Common Stock by holders of Company Stock Options in order to pay the exercise price thereof, (B) the acquisition or withholding of shares of Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Stock Plans, (C) the acquisition by the Company of any restricted shares in connection with the forfeiture of such awards and (D) as required by any Stock Plan as in effect on the date of this Agreement;

(c) (i) issue, deliver, sell, grant, pledge, transfer, subject to any particular requirement,Lien or otherwise encumber or dispose of, any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of Common Stock upon the exercise of Company Stock Options or any options or purchase rights under the Company ESPP or settlement of Company RSUs, in each case, that are outstanding on the date of this Agreement and in each case in accordance with their terms on the date of this Agreement, (B) awards of Company RSUs to consultants under the Stock Plans and awards of Company RSUs under the Stock Plans to any newly hired or promoted employees or to employees for retention purposes, in each case, in the ordinary course of business consistent with past practice or (C) any Company Subsidiary Securities to the Company or any other wholly-owned Subsidiary of the Company; or (ii) amend any term of any Company Security or any Company Subsidiary Security;

(d) adopt a determinationplan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, each with respect to the Company or any of its Subsidiaries (other than the dissolution of any inactive Subsidiary of the Company and reorganizations solely among Subsidiaries of the Company) or consummate any of the foregoing;

(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any equity interest or securities in, or any material amount of other assets, properties, interests or businesses of, any Person, or enter into any new line of business that is madematerial to the Company and its Subsidiaries, taken as a whole;

(f) sell, lease, exclusively license, exchange, swap, abandon, allow to lapse or cancel any Intellectual Property owned by the Company (other than the natural expiration thereof or, with respect to allowing Intellectual Property owned by the Company to become abandoned, lapsed, or cancelled, in connection with the Company’s exercise of its reasonable business judgment); or sell, lease, exchange, swap, or otherwise transfer or dispose of any of the Company’s or its Subsidiaries’ material assets, securities, properties, interests or businesses,

other than (i) pursuant to existing Contract in effect prior to the date of this Agreement, or (ii) sales of Company products and services, inventory or used equipment in the ordinary course of business consistent with past practice;

(g) (i) repurchase, prepay, redeem, defease, assume, endorse, guarantee, incur or otherwise become liable for or modify the terms of any indebtedness for borrowed money or sell or issue any debt securities or other rights to acquire any debt securities (directly, contingently or otherwise), or (ii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to the Company or any of its wholly-owned Subsidiaries in the ordinary course of business and advances of expenses to employees in the ordinary course of business);

(h) except as required by the terms of any Company Employee Plan as in effect on the date of this Agreement: (i) grant any severance, retention or termination pay to, or enter into or amend any employment, severance, retention, termination, change in control or severance agreement with, any current or former Key Employee, (ii) hire any new employee who would constitute a Key Employee, other than in the ordinary course of business consistent with past practice in order to replace a Key Employee whose employment terminates (so long as the applicable replacement Key Employee receives compensation and benefit terms that are no more favorable to the new Key Employee than compensation and benefits held by the Key Employee that is being replaced), (iii) grant to any current or former director or Key Employee of the Company or any of its Subsidiaries any material increase in compensation, target bonus or benefits, in addition to those pursuant to arrangements in effect on the date hereof, other than in the ordinary course of business, (iv) establish, adopt, enter into or materially amend or modify any Company Employee Plan (other than entering into offer letters that contemplate “at will” employment that is terminable without payment or notice or, where required by applicable Law, employment agreements consistent with the Company’s practices in the applicable jurisdiction, or cash bonus or cash incentive plans for performance periods not exceeding one (1) year in the ordinary course of business consistent with past practice to replace such plans covering performance periods that end prior to the Second Closing), (v) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors employees or other service providers, other than in the ordinary course of business consistent with past practice, (vi) establish, enter into, adopt or amend any works council, collective bargaining or similar labor-related agreement, except as required by applicable Law, (vii) announce, implement or effect any material reduction in labor force, lay-off, early retirement program or other effort concerning termination of employment of employees of the Company or any of its Subsidiaries (other than routine employee terminations in the ordinary course of business), or (viii) terminate any Key Employee other than for cause;

(i) make any change in any financial accounting principles, methods or practices (including any Tax accounting policies or procedures) or any of its methods of reporting income, deductions or other material items for financial or Tax accounting purposes, in each case except for any such change required by GAAP or applicable Law, including Regulation S-X under the Exchange Act;

(j) make, change or revoke any material Tax election (other than in the ordinary course of business consistent with past practice), change any annual Tax accounting period, adopt or change any method of material Tax accounting, amend, refile or otherwise revise any previously filed Tax Returns, enter into any closing agreement, settle or compromise any Tax claim or assessment, consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, enter into any Tax indemnity or similar agreements or arrangements (other than customary commercial agreements not primarily related to Taxes), undertake any restructuring or engage in any transaction that may transfer the ownership of any Intellectual Property;

(k) discharge, pay, settle or offer or propose to settle, (i) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries, (ii) any shareholder litigation or dispute against the Company or any of its officers or directors, or (iii) any litigation, arbitration, proceeding or dispute that relates to the Contemplated Transactions;

(l) enter into, as a tenant or subtenant, any lease of real property, under which the rent to be charged exceeds two hundred fifty thousand ($250,000) for any twelve (12)-month period, other than ordinary course of business extensions and renewals of leases existing as of the date hereof with a term of no more than one (1) calendar year;

(m) except in the ordinary course of business consistent with the past practice and except as provided in an annual operating plan as approved by the Board of Directors of the Company, make any new capital expenditure or expenditures, or commit to do so;

(n) terminate, cancel, amend or modify any insurance coverage policy maintained by the Company or any of its Subsidiaries that is not concurrently replaced by a comparable amount of insurance coverage, other than renewals in the ordinary course of business;

(o) except in the ordinary course of business consistent with past practice, (i) enter into any Contract that would, if entered into prior to the date hereof, be a material Contract that was required to be filed or furnished by the Company as exhibits to the SEC Documents to which the Company is a party or the property or assets of the Company is subject (collectively, the “Material Contracts”, (ii) materially modify, materially amend or terminate any Material Contract or (iii) waive, release, terminate, amend, renew or assign any material rights or claims of the Company or any of its Subsidiaries under any Material Contract;

(p) enter into or adopt any “poison pill” or similar stockholder rights plan that would prevent or preclude the Contemplated Transactions;

(q) agree, authorize or commit to do any of the foregoing

Section 4.5 Proxy Statement.

(a) As soon as reasonably practicable (and in no event later than forty (40) days after the date hereof), the Company shall prepare and file the Proxy Statement in preliminary form with the SEC; provided that the Company shall provide the Purchaser and its counsel a reasonable opportunity to review the Company’s proposed preliminary Proxy Statement in advance of filing and consider in good faith any comments reasonably proposed by Purchaser and its counsel. Subject to Section 4.1, the Proxy Statement shall include (and shall not subsequently withdraw or modify) the Company Board Recommendation. The Company shall use its reasonable best efforts to cause the Proxy Statement to be mailed to its stockholders as promptly as practicable following clearance of the Proxy Statement by the SEC. The Purchaser shall furnish to the Company all information concerning the Purchaser as may be reasonably required by the Company in connection with the Proxy Statement. Each of the Company and the Purchaser shall promptly correct any information provided by it for use in the Proxy Statement if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary to amend or supplement the Proxy Statement and to cause the Proxy Statement, as so amended or supplemented, to be filed with SEC and mailed to its stockholders, in each case as and to the extent required by applicable Law. The Company shall (i) as promptly as practicable after receipt thereof, provide the Purchaser and its counsel with copies of any written comments, and advise the Purchaser and its counsel of any oral comments, with respect to the Proxy Statement (or any amendment or supplement thereto) received from the SEC or its staff, (ii) provide the Purchaser and its counsel a reasonable opportunity to review the Company’s proposed response to such comments and (iii) consider in good faith any comments reasonably proposed by the Purchaser and its counsel.

(b) In addition to the proposals required to effect the Contemplated Transactions, the Proxy Statement shall include (i) a proposal to approve a reverse stock split of the issued and outstanding shares of Common Stock of the Company (the “Reverse Stock Split Proposal”), such split to combine a number of outstanding shares of Common Stock at a ratio of between 1-for-2 and 1-for-15, such number consisting of only whole shares, into one (1) share of Common Stock, provided that such reverse stock split, if approved by the

stockholders of the Company (such approval, the “Reverse Stock Split Approval”), shall be subject to the discretion of the Board of Directors and may be effected within one (1) year of obtaining such Reverse Stock Split Approval and would require an amendment to the Certificate of Incorporation in the form attached hereto as Exhibit C; and (ii) a proposal to approve an amendment to the Certificate of Incorporation in the form attached hereto as Exhibit D (such approval, the “Charter Amendment Approval”). Neither the Reverse Stock Split Approval nor the Charter Amendment Approval shall be deemed as a condition to any obligation of the Purchaser under this Agreement.

Section 4.6 Company Stockholder Meeting. The Company shall cause a meeting of its stockholders (the “Company Stockholder Meeting”) to be duly called and held as soon as reasonably practicable following clearance of the Proxy Statement by the SEC for the purpose of obtaining the Company Stockholder Approval. As soon as reasonably practicable following the establishment of the record date for the Company Stockholder Meeting and clearance of the Proxy Statement by the SEC, the Company shall cause the definitive Proxy Statement to be mailed to the stockholders of Company entitled to vote at the Company Stockholder Meeting. Notwithstanding the first sentence of this Section 4.6, the Company may adjourn or postpone the Company Stockholder Meeting (i) after consultation with the Purchaser, to the extent necessary to ensure that such requirement need not be metany required supplement or amendment to the Proxy Statement is provided to the Company’s stockholders within a reasonable amount of time in advance of the Company Stockholder Meeting, (ii) as otherwise required by applicable Law or (iii) if as of the time for which the Company Stockholder Meeting is scheduled as set forth in the circumstances underProxy Statement, there are insufficient shares of Common Stock represented (in person or by proxy) to constitute a quorum necessary to conduct the thenbusiness of the Company Stockholder Meeting or there are insufficient shares of Common Stock voting in favor to obtain Company Stockholder Approval. The Board of Directors of the Company shall (A) subject to Section 4.1, include the Company Board Recommendation in the Proxy Statement, (B) subject to Section 4.1, use its reasonable best efforts to obtain the Company Stockholder Approval, and (C) otherwise comply with all legal requirements applicable securities laws.to such meeting.

Section 4.7 Use of Proceeds. The Company may, upon advice of counsel toshall use the Company, place legends on stock certificates issued undernet proceeds from the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws,Purchase and Sale for working capital, capital expenditure and other general corporate purposes, including but not limited to, legends restricting the transferimplementation of the Common Stock.Integration Plans.

(h)Withholding Obligations. Unless prohibitedARTICLE V

COVENANTS OF THE PURCHASER

Section 5.1 Conduct of the Purchaser. From and after the date hereof and prior to the earlier of the Second Closing or the termination of this Agreement in accordance with its terms, the Purchaser shall use its commercially reasonable efforts not to, and shall use its commercially reasonable efforts to cause each of its Subsidiaries not to, take or omit to take any action that impedes, interferes with, hinders or delays in any material respect, or would reasonably be expected to prevent or materially impede, interfere with, hinder or delay in any material respect, the consummation by the Purchaser of the Contemplated Transactions on a timely basis.

ARTICLE VI

COVENANTS OF THE PARTIES

Section 6.1 Reasonable Best Efforts. Subject to the terms and conditions of an Awardthis Agreement, the Company may,and the Purchaser shall cooperate with each other and use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate the Contemplated Transactions as promptly as practicable, including (i) preparing and filing as promptly as practicable after the date hereof with any Governmental Authority all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, financial statements, records, applications and other documents, in its sole discretion, satisfy any U.S. and non-U.S. federal, state or local tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuableeach case, to the Participant in connection with the Stock Award; provided, however, that (A) no shares of Common Stock are withheld with a value exceeding the maximum amount of tax that may be required to be withheld by law (or such other amount as may be permitted while still avoiding classification of the Stock Award as a liability for financial accounting purposes) ),extent applicable, (ii) obtaining and (B) with respect to a Stock Award held by any Participant who is subject to the filing requirements of Section 16 of the Exchange Act, any such share withholding must be specifically approved by the Compensation Committee as the applicable method that must be used to satisfy the tax withholding obligation or such share withholding procedure must otherwise satisfy the requirements for an exempt transaction under Section 16(b) of the Exchange Act; (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board, or (vi) by such other method as may be set forth in the Award Agreement.

(i)Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).maintaining

(j)Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferredapprovals, consents, registrations, Permits, authorizations, licenses, waivers and may establish programs and procedures for deferral electionsother confirmations required to be made by Participants. Deferrals by Participants will be madeobtained from any Governmental Authority that are necessary to consummate the Contemplated Transactions and (iii) executing and delivering any additional instruments necessary to consummate the Contemplated Transactions.

Section 6.2 Public Announcements. From and after the date of this Agreement, until such time as this Agreement has been terminated in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is stillits terms, or an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan andAdverse Recommendation Change has occurred in accordance with applicable law.

(k)Compliance with Section 409A of 4.1, the Code. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the PlanPurchaser and the Awards granted hereunder exempt from Section 409A ofCompany shall consult with each other before issuing any press release, having any communication with the Code,press (whether or not for attribution), making any other public statement or scheduling any press conference or conference call with investors or analysts with respect to this Agreement or the Contemplated Transactions and, to the extent not so exempt,except in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or paymentrespect of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) willsuch press release, communication, other public statement, press conference or conference call as may be issuedrequired by applicable Law or paid before the date that is six months following the date of such Participant’s “separation from service”any listing agreement with or if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.

(l)Exchange Program. Without prior stockholder approval, the Board may engage in an Exchange Program.

(m)Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standardsrule of any national securities exchange or association (in which case each party hereto shall endeavor, on whicha basis reasonable under the circumstances, to provide a reasonable opportunity to the other party to review and comment on such press release, communication, other public statement or matters to be covered on such conference call in advance and shall consider in good faith all reasonable comments of such other party), shall not issue any such press release, have any such communication, make any such other public statement or schedule any such press conference or conference call prior to such consultation. Notwithstanding the foregoing, this Section 6.2 shall not apply to any press release or other public statement made by the Company or the Purchaser (a) that is consistent with prior disclosure and does not contain any information relating to the Contemplated Transaction that has not been previously announced or made public in accordance with the terms of this Agreement or (b) is made to its auditors, attorneys, accountants, financial advisors or limited partners.

Section 6.3 Further Assurances. At and after the First Closing, each of the Purchaser and the Company shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the Contemplated Transactions.

Section 6.4 Notices of Certain Events. Each of the Company and the Purchaser shall promptly notify the other of:

(a) any notice or other communication from any Person alleging that the consent of such Person is required in connection with the Contemplated Transactions;

(b) any notice or other communication from any Governmental Authority in connection with Contemplated Transactions;

(c) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against the Company or any of its Subsidiaries or the Purchaser and any of its Subsidiaries, as the case may be, that relate to the consummation of the Contemplated Transactions; and

(d) any representation or warranty made in this Agreement becoming untrue or inaccurate such that the conditions set forth in Article VII would not be satisfied or of any failure to comply with any covenant to be complied with under this Agreement such that the conditions in Article VII would not be satisfied.

The failure to deliver any such notice shall not affect any of the conditions set forth in Article VII or give rise to any right to terminate under Article VII.

Section 6.5 Cooperation Covenant. Prior to the First Closing, the Company shall use commercially reasonable efforts to provide to the Purchaser, and shall cause each of its Subsidiaries to use its commercially

reasonable efforts to provide, and shall use its reasonable best efforts to cause its Representatives to provide all cooperation reasonably requested by the Purchaser to assist and cooperate with the Purchaser in connection with the Integration Plans. The Purchaser shall indemnify and hold harmless the Company and its Subsidiaries and their respective Representatives from and against any and all liabilities, losses, damages, claims, costs, expenses (including attorneys’ fees), interest, awards, judgments and penalties suffered or incurred in connection with this Section 6.5 to the extent arising or resulting from the Appointed Chief Executive Officer’s or Purchaser’s gross negligence or willful misconduct. During the period from the date of this Agreement until the earlier of (x) the First Closing, (y) the termination of this Agreement in accordance with its terms or (z) such time, if any, as the Company reasonably determines that any such meetings would have a detrimental effect on the Company’s securities are listedbusiness, the Company shall use commercially reasonable efforts to assist the Purchaser, upon the reasonable request of the Purchaser, in arranging meetings and facilitating access for Purchaser and its Representatives with customers and suppliers of the Company and its Subsidiaries; provided that the Company shall be present at all times during any such meetings or conversations.

Section 6.6 Indemnification and Insurance. From and following the First Closing, the Purchaser shall cause the Company, and the Company hereby agrees, to do the following:

(a) All rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the First Closing and rights to advancement of expenses relating thereto now existing in favor of any Person who is or prior to the First Closing becomes, or has been at any time prior to the date of this Agreement, a present or former director, officer, employee or agent (including as isa fiduciary with respect to an employee benefit plan) of the Company, any of its Subsidiaries or any of their respective predecessors (each, an “Indemnified Person”) as provided in the Certificate of Incorporation, the Bylaws, the organizational documents of any Subsidiary of the Company or any indemnification agreement, or other agreements containing any indemnification provisions, including any employment agreements, between such Indemnified Person and the Company or any of its Subsidiaries shall survive the First Closing and the Company shall not take any actions to amend, repeal or otherwise modify them in any manner that would adversely affect any right thereunder of any such Indemnified Person, unless otherwise required by Law. For six (6) years after the U.S. Dodd-Frank Wall Street ReformFirst Closing, the Company and Consumer Protection Act or othereach of its Subsidiaries shall, and the Purchaser shall, if applicable, law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquiredvote its shares of Common Stock to cause the Company and each of its Subsidiaries to, cause to be maintained in effect provisions in the Certificate of Incorporation and Bylaws and the governing documents of each of its Subsidiaries (or in such documents of any successor to the business of the Company or other cash or property uponany of its Subsidiaries) regarding elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses that are no less advantageous to the occurrenceintended beneficiaries than the corresponding provisions in the Certificate of an event constituting Cause. No recoveryIncorporation and Bylaws and the governing documents of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) undereach of its Subsidiaries in existence on the date of this Agreement. From and after the First Closing, any agreement of any Indemnified Person with the Company or an Affiliate.any of its Subsidiaries regarding elimination of liability, indemnification or advancement of expenses shall continue in full force and effect in accordance with its terms.

9.    ADJUSTMENTSUPON CHANGESIN COMMON STOCK; OTHER CORPORATE EVENTS.

(a)Capitalization Adjustments. In(b) For six (6) years after the eventFirst Closing, the Company shall, and the Purchaser shall, if applicable, vote its shares of a Capitalization Adjustment,Common Stock to cause the Board will appropriatelyCompany to, indemnify and proportionately adjust: (i) the class(es) and maximum number of securities subjecthold harmless all Indemnified Persons to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), and (iii) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b)Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement,fullest extent permitted by Delaware Law in the event of a dissolutionany threatened or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture conditionactual claim, suit, action, proceeding or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolutioninvestigation (a “Claim”), whether civil, criminal or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

(c)Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the Stock Award Agreement or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:

(i)    arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);

(ii)    arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii)    accelerate the vesting,administrative, based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that the Indemnified Person is or was a director (including in a capacity as a member of any board committee), officer, employee or agent of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a dateCompany, any of its Subsidiaries or any of their respective predecessors prior to the effective timeFirst Closing, or (ii) this Agreement or any of the Contemplated Transactions, whether in any case such Corporate Transaction asClaim is made before, on or after the Board determines (or, ifFirst Closing, against any losses, claims, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and expenses in advance of the Board does not determine such a date,final disposition of any claim, suit, proceeding or investigation to each Indemnified Person to the date that is five daysfullest extent permitted by applicable Law upon receipt of any undertaking required by applicable Law and an undertaking from such Person prior to the effective dateadvancement of any such amounts that such Indemnified Person shall reimburse the Company any funds to which a court of competent jurisdiction has determined, by a

final, nonappealable order or judgment, such Indemnified Person is not entitled), judgments, fines and amounts paid in settlement of or in connection with any such threatened or actual Claim.The Company shall not settle, compromise or consent to the entry of any judgment in any threatened or actual Claim for which indemnification could be sought by an Indemnified Person hereunder, unless such settlement, compromise or consent includes an unconditional release of such Indemnified Person from all liability arising out of such Claim or such Indemnified Person otherwise consents in writing to such settlement, compromise or consent. The Company shall reasonably cooperate with an Indemnified Person in the defense of any matter for which such Indemnified Person could seek indemnification hereunder.

(c) Prior to the First Closing, the Company shall obtain and fully pay the premiums for the non-cancellable extension of the Corporate Transaction)directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability insurance policies (collectively, “D&O Insurance”), which exercise is contingent uponin each case for a claims reporting or discovery period of at least six (6) years from and after the effectivenessFirst Closing with respect to any claim related to any period of such Corporate Transaction with such Stock Award terminating if not exercised (if applicable)time at or prior to the effective timeFirst Closing (including claims with respect to this Agreement and the Contemplated Transactions and other actions contemplated hereby) from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to D&O Insurance with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Company’s existing policies with respect to any actual or alleged error, misstatement, misleading statement, act, omission, neglect, breach of duty or any matter claimed against a director or officer of the Corporate Transaction; Company or any of its Subsidiaries by reason of him or her serving in such capacity that existed or occurred at or prior to the First Closing; provided however, that in no event shall the Company be required to pay aggregate premiums for D&O Insurance under this Section 6.6(c) in excess of $1,100,000, it being understood that if the aggregate premiums of such insurance coverage exceed such amount, the Company shall be entitled to provide as much coverage as may be obtained for such $1,100,000 amount.

(d) If the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its property and assets to any Person, then, and in each such case, proper provision shall be made so that the Boardapplicable successor, assign or transferee shall assume the obligations set forth in this Section 6.6 (including this Section 6.6(d)).

(e) The rights of each Indemnified Person under this Section 6.6 shall be in addition to any rights such Person may require Participantshave under the certificate of incorporation and bylaws of the Company or any of its Subsidiaries, under the DGCL or any other applicable Law, under any agreement of any Indemnified Person with the Company or any of its Subsidiaries or otherwise. These rights shall survive consummation of the Contemplated Transactions and are intended to completebenefit, and delivershall be enforceable by, each Indemnified Person. The obligations of the Purchaser and the Company under this Section 6.6 shall not be terminated or modified in such a manner as to adversely affect the rights of any Indemnified Person without the consent of such Indemnified Person.

(f) The Company shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Person in enforcing the indemnity and other obligations provided in this Section 6.6; provided that each Indemnified Person shall, prior to the advancement of any such expenses, be required to provide a written undertaking to the Company that such Indemnified Person shall reimburse the Company any funds to which a noticecourt of exercise beforecompetent jurisdiction has determined by a final, nonappealable order or judgment such Indemnified Person is not entitled hereunder.

(g) The Company shall pay on an as-incurred basis the effective datefees and expenses of a Corporate Transaction

(iv)    arrange forsuch Indemnified Person (including the lapse,reasonable fees and expenses of counsel) in whole or in part,advance of the final disposition of any reacquisitionaction, suit, proceeding or repurchase rights held byinvestigation that is the Company with respect to the Stock Award;

(v)    cancel or arrange for the cancellationsubject of the Stock Award,right to the extent not vested or not exercisedindemnification, provided that such Person shall, prior to the effective timereceipt of any such advancements, undertake to reimburse the Corporate Transaction, in exchangeCompany for all amounts so advanced if a court of competent jurisdiction determines, by a final, nonappealable order or judgment, that such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and

(vi)    make a payment, in such form as may be determined by the Board equalPerson is not entitled to the excess, if any, of (A) the per share amount (or value of property per share) payable to holders of Common Stock in connection with the Corporate Transaction, over (B) the per share exercise price under the applicable Stock Award, multiplied by the number of shares subject to the Stock Award. For clarity, this payment may be zero (U.S. $0) if the amount per share (or value of property per share) payable to the holders of the Common Stock is equal to or less than the exercise price of the Stock Award. In addition, any escrow, holdback, earnout or similar provisions in the definitive agreement for the Corporate Transaction may apply to such payment to the holder of the Stock Award to the same extent and in the same manner as such provisions apply to the holders of Common Stock.indemnification.

The Board need not takeSection 6.7 No Control of Other Party’s Business. Nothing contained in this Agreement shall give the same actionPurchaser, directly or actions with respectindirectly, the right to all Stock Awardscontrol or portions thereofdirect the Company’s or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of a Stock Award.

(d)Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

10.    TERMINATIONOR SUSPENSIONOFTHE PLAN.

The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of (i) the Adoption Date, or (ii) the date the Plan is approved by the stockholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

11.    EXISTENCEOFTHE PLAN; TIMINGOF FIRST GRANTOR EXERCISE.

The Plan will come into existence on the Adoption Date; provided, however, no Stock Award may be grantedits Subsidiaries’ operations prior to the IPO Date (that is,First Closing. Prior to the Effective Date). In addition, no Stock Award will be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or Other Stock Award, will be granted) and no Performance Cash Award will be settled unless and until the Plan has been approved by the stockholders ofFirst Closing, the Company which approval will be within 12 months after the Adoption Date.

12.    CHOICEOF LAW.

The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

13.DEFINITIONS. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a)    “Adoption Date” means the date the Plan is adopted by the Board.

(b)    “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

(c)    “Award” means a Stock Award or a Performance Cash Award.

(d)    “Award Agreement” means a written agreement between the Company and a Participant evidencingshall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.

Section 6.8 Registration Rights Agreement. At or prior to the First Closing, each of the Purchaser and the Company shall execute and deliver to the other party the Registration Rights Agreement.

Section 6.9 SEC Matter Issuances. From the First Closing until the Director End Time, in the event that during a fiscal quarter the Company incurs reasonable and documented out-of-pocket expenses related to the SEC Matter that are not reimbursable under the Company’s insurance policy or otherwise excluded from such insurance policy covering the Company and its Subsidiaries in connection with the SEC Matter (the “SEC Quarterly Expenses”), then the Purchaser shall be entitled to receive the number of shares of Common Stock (the “SEC Contingency Compensation”) equal to a quotient (A) the numerator of which is equal to the SEC Quarterly Expenses, and (B) the denominator of which is equal to the volume-weighted average price of one (1) share of Common Stock for the trading period during the fiscal quarter for which the SEC Quarterly Expenses are payable. No fractional shares shall be issued by the Company as the number of shares of the SEC Contingency Compensation shall be rounded down to the nearest whole number. The SEC Contingency Compensation shall be issued no later than the due date of the Company’s periodic report for the fiscal quarter for which such SEC Quarterly Expenses are payable.

ARTICLE VII

CONDITIONS TO THE PARTIES’ OBLIGATIONS

Section 7.1 Conditions to the Obligations of Each Party. The respective obligations of each party to consummate the Contemplated Transactions to be consummated at the First Closing are subject to the satisfaction, on or prior to the First Closing Date, of each of the following conditions precedent:

(a) Company Stockholder Approval. The Company Stockholder Approval shall have been obtained in accordance with Nasdaq Listing Rule 5635(b).

(b) No Restraints. No temporary restraining order, decree, ruling, injunction or judgment, preliminary or permanent injunction or other judgment issued by any Governmental Authority of competent jurisdiction shall be in effect enjoining, restraining, or otherwise prohibiting the consummation of the Purchase and Sale and no Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or declared applicable to the consummation of the Purchase and Sale any applicable Law that is in effect, which has the effect of enjoining, restraining or otherwise prohibiting the consummation of the Contemplated Transactions (collectively, “Restraints”).

Section 7.2 Conditions to the Obligations of the Purchaser. The obligations of the Purchaser to consummate the Contemplated Transactions to be consummated at the First Closing are subject to the satisfaction, on or prior to the First Closing Date, of each of the following conditions precedent:

(a) Performance. The Company shall have performed and complied in all material respects with all of its obligations under this Agreement required to be performed by it or complied with at or prior to the First Closing (or any such failure to perform or comply shall have been cured).

(b) Representations and Warranties.

(i) The representations and warranties of the Company contained in Section 2.1, Section 2.2 and Section 2.17 (disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be

true in all material respects as of the date of this Agreement and at and as of the First Closing, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time);

(ii) the representations and warranties of the Company set forth in Section 2.4(a) (disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true and correct in all but de minimis respects as of the date of this Agreement and as of the First Closing, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time); and

(iii) the other representations and warranties of the Company contained in Article II (disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true and correct as of the date of this Agreement and at and as of the First Closing, as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time), with, in the case of this clause (iii) only, only such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect.

(c) Covenants. The Company shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by it at or prior to the First Closing.

(d) Resignation of Directors. At or prior to the First Closing, Company shall have obtained the resignation of all current directors; provided, however, that in no event shall the Continuing Directors be required to resign; provided, further, that nothing in this Agreement shall prevent the resignation of all of the current directors, other than the Continuing Directors.

(e) Voting Agreement. Each officer and director of the Company shall have executed and delivered to the Company an Award.Insiders Voting Agreement, in the form attached hereto as Exhibit E (the “Insiders Voting Agreement”) and voted his or her shares for each of the proposals of the Proxy Statement.

(e)Section 7.3 Conditions to the Obligations of the Company. The obligations of the Company to consummate the Contemplated Transactions are subject to the satisfaction, on or prior to the First Closing Date, of each of the following conditions precedent:

(a) Representations and Warranties.

(i) The representations and warranties of the Purchaser contained in Section 3.1,Section 3.2 and Section 3.4 shall be true in all material respects at and as of the date of this Agreement and at and as of the First Closing, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time);

(ii) The representations and warranties of the Purchaser contained in Section 3.9 shall be true in all respects at and as of the date of this Agreement and at and as of the First Closing, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time); and

(iii) the other representations and warranties of the Purchaser contained in Article III (disregarding all materiality and material adverse effect qualifications contained therein) shall be true at and as of the date of this Agreement and at and as of the First Closing, as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time), with, in the case of this clause (ii) only, only such exceptions as would not have, individually or in the aggregate, a material adverse effect.

(b) Covenants. The Purchaser shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Purchaser at or prior to the First Closing.

(c) Consideration for the Initial Shares. The Purchaser shall have paid the First Purchase Price for the Initial Shares in full at the First Closing by wire transfer of immediately available funds to an account designated in writing by the Company, provided that the Purchaser may cause to have paid up to $800,000 at the First Closing.

(d) Voting Agreement. The Purchaser shall have executed and delivered to the Company a Voting Agreement, in the form attached hereto as Exhibit F (theBoardPurchaser Voting Agreement means), and the Purchaser Voting Agreement shall be in full force and effect as of the First Closing.

ARTICLE VIII

TERMINATION

Section 8.1 Termination. This Agreement may be terminated and the Purchase and Sale may be abandoned at any time prior to the First Closing (notwithstanding any Company Stockholder Approval):

(a) by mutual written agreement of the Company and the Purchaser;

(b) by either the Company or the Purchaser, if:

(i) the First Closing has not been consummated on or before the date that is six (6) months after the date hereof (as such date may be extended pursuant to Section 9.12, the “End Date”); provided, that the right to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not be available to any party whose breach of any provision of this Agreement in any material respect is the primary cause of the failure of the First Closing to be consummated by the End Date;

(ii) if any Restraint shall be in effect permanently restraining, enjoining or otherwise permanently prohibiting the consummation of the Purchase and Sale on substantially the terms contemplated by this Agreement, and such Restraint shall have become final and nonappealable; provided that the right to terminate this Agreement pursuant to this Section 8.1(b)(ii) shall not be available to any party whose breach of any provision of this Agreement in any material respect is the primary cause of such Restraint;

(iii) at the Company Stockholder Meeting (including any adjournment or postponement thereof), the Company Stockholder Approval shall not have been obtained; or

(c) by the Purchaser:

(i) prior to obtaining the Company Stockholder Approval, if (A) the Board of Directors of the Company.Company or any duly authorized committee thereof shall have effected an Adverse Recommendation Change or (B) the Company or the Company Representatives willfully and materially violated Section 4.1(a) of this Agreement; or

(f)    “Capital Stockmeans each and every class(ii) if there is any inaccuracy of common stockany representation or warranty made by the Company in this Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Company regardlessset forth in this Agreement, which inaccuracy, breach, violation or failure, either individually or in the aggregate, if continuing at the First Closing (A) would cause the condition set forth in Section 7.2(a) or Section 7.2(b) not to be satisfied, and (B) is incapable of being cured by the number of votes per share.

(g)End Date (aCapitalization AdjustmentCompany Terminating Breach means any change); provided that is made in, or other events that occur with respectthe right to terminate this Agreement pursuant to this Section 8.1(c)(ii) shall not be available to the Common Stock subjectPurchaser if a Purchaser Terminating Breach shall have occurred and be continuing at the time the Purchaser delivers notice of its election to the Planterminate this Agreement pursuant to this Section 8.1(c)(ii); or subject to any Stock Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock

split, reverse stock split, liquidating dividend, combination(d) by the Company, if:

(i) the Board of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securitiesDirectors of the Company willauthorizes the Company, pursuant to, and in compliance with, Section 4.1(f), to enter into a definitive agreement concerning a Superior Proposal; provided that the Company pays the Company Termination Fee and the Reimbursement Obligations payable pursuant to Section 8.2(b)(ii); or

(ii) there is any inaccuracy of any representation or warranty made by the Purchaser in this Agreement or any breach, violation or failure to perform any covenant or agreement on the part of the Purchaser set forth in this Agreement which inaccuracy, breach, violation or failure, either individually or in the aggregate, if continuing at the First Closing (A) would cause the conditions set forth in Section 7.3(a) or Section 7.3(b) not to be satisfied, and (B) is incapable of being cured by the End Date (a “Purchaser Terminating Breach”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d)(ii) shall not be treatedavailable to the Company if a Company Terminating Breach shall have occurred and be continuing at the time the Company delivers notice of its election to terminate this Agreement pursuant to this Section 8.1(d)(ii).

The party desiring to terminate this Agreement pursuant to this Section 8.1 (other than pursuant to Section 8.1(a)) shall give written notice of such termination to the other party.

Section 8.2 Effect of Termination.

(a) If this Agreement is terminated pursuant to Section 8.1, this Agreement shall become void and of no effect without liability of any party (or any stockholder, director, officer, employee, agent, consultant or Representative of such party) to the other party hereto; provided that (i) the provisions of Section 6.5 as they relate to the Purchaser’s indemnification, hold harmless and reimbursement obligations, this Section 8.2, Article IX and the Confidentiality Agreement shall survive any termination hereof pursuant to Section 8.1 and (ii) neither the Company nor the Purchaser shall be relieved or released from any liabilities or damages arising out of fraud or its willful and material breach of any provision of this Agreement.

(b) Company Termination Fee and Expense Reimbursement.

(i) If this Agreement is terminated by the Purchaser pursuant to Section 8.1(c)(i), then the Company shall pay amounts equal to (A) seven hundred fifty thousand dollars ($750,000) (the “Company Termination Fee”) and (B) up to three hundred fifty thousand dollars ($350,000) as reimbursement of reasonable, documented and out-of-pocket expenses incurred by the Purchaser in connection with this Agreement, including but not limited to reasonable, documented and out-of-pocket legal and advisory fees paid in connection therewith (the “Reimbursement Obligations”) to the Purchaser in immediately available funds within two (2) Business Days after such termination.

(ii) If this Agreement is terminated by the Company pursuant to Section 8.1(d)(i), then the Company shall pay the Company Termination Fee and the Reimbursement Obligations to the Purchaser in immediately available funds substantially concurrently with (and as a Capitalization Adjustment.condition to) such termination.

(h)    “Causewill have(iii) If this Agreement is terminated by either party pursuant to Section 8.1(b)(iii) of this Agreement, then the meaning ascribedCompany shall pay the Reimbursement Obligations to the Purchaser in immediately available funds within two (2) Business Days after such termtermination.

(iv) In no event shall the Company be required to pay the Company Termination Fee or the Reimbursement Obligations on more than one occasion. The Purchaser agrees that, upon any termination of this Agreement under circumstances where the Company Termination Fee or the Reimbursement Obligations are payable by the Company pursuant to this Section 8.2(b) and such fees or reimbursement obligations are paid in full, except in the case of fraud or a willful and material breach of the Company’s representations, warranties,

covenants or agreements set forth in this Agreement prior to termination of this Agreement, the Purchaser shall be precluded from any written agreement betweenother remedy against the ParticipantCompany, at law or in equity or otherwise, and the Purchaser shall seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence ofor any of the following events: (i)Company’s Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders or Affiliates or their respective Representatives in connection with this Agreement or the Contemplated Transactions.

(v) Each of the Company and the Purchaser acknowledges that the agreements contained in this Section 8.2(b) are an integral part of the Contemplated Transactions and that, without these agreements, the other party would not enter into this Agreement.

ARTICLE IX

MISCELLANEOUS

Section 9.1 No Survival. The representations, warranties, covenants and agreements of the Company contained in this Agreement shall not survive, and shall terminate automatically as of, the First Closing, and there shall be no liability in respect thereof, whether such Participant’s commissionliability has accrued prior to or after the First Closing, on the part of the Company or any of its Representatives; provided that this Section 9.1 shall not limit any covenant or agreement by the Company that by its terms contemplates performance after the First Closing, including the Company’s obligations to consummate the Second Closing in accordance with this Agreement.

Section 9.2 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and will become effective when one or more counterparts have been signed by a party and delivered to the other parties. Copies of executed counterparts of signature pages to this Agreement may be transmitted by PDF (portable document format), e-mail, facsimile, or other means of electronic transmission and such means of electronic transmission will be deemed as sufficient as if actual signature pages had been delivered.

Section 9.3 Governing Law.

(a) This Agreement shall be governed by, and construed in accordance with, the laws of the state of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the state of Delaware or any other jurisdiction) that would cause the application of the laws of any felonyjurisdiction other than the state of Delaware.

(b) Any dispute relating hereto shall be heard first in the Delaware Court of Chancery, and, if applicable, in any state or any crime involving fraud, dishonesty or moral turpitudefederal court located in of Delaware in which appeal from the Court of Chancery may validly be taken under the laws of the State of Delaware (each a “Chosen Court” and collectively, the “Chosen Courts”), and the parties agree to the exclusive jurisdiction and venue of the Chosen Courts. Such Persons further agree that any proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Contemplated Transactions or by any matters related to the foregoing (the “Applicable Matters”) shall be brought exclusively in a Chosen Court, and that any proceeding arising out of this Agreement or any other Applicable Matter shall be deemed to have arisen from a transaction of business in the state of Delaware, and each of the foregoing Persons hereby irrevocably consents to the jurisdiction of such Chosen Courts in any such proceeding and irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that such Person may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such Chosen Court or that any such proceeding brought in any such Chosen Court has been brought in an inconvenient forum.

(c) Such Persons further covenant not to bring a proceeding with respect to the Applicable Matters (or that could affect any Applicable Matter) other than in such Chosen Court and not to challenge or enforce in another jurisdiction a judgment of such Chosen Court.

(d) Process in any such proceeding may be served on any Person with respect to such Applicable Matters anywhere in the world, whether within or without the jurisdiction of any such Chosen Court. Without limiting the foregoing, each such Person agrees that service of process on such party as provided in Section 9.6 shall be deemed effective service of process on such Person.

(e) Waiver of Jury Trial. EACH PARTY HERETO, FOR ITSELF AND ITS AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES PURSUANT TO THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

Section 9.4 Entire Agreement; No Third Party Beneficiary. This Agreement, the Purchaser Voting Agreement, the Insiders Voting Agreement and the Registration Rights Agreement contain the entire agreement by and among the parties with respect to the subject matter hereof and all prior negotiations, writings and understandings relating to the subject matter of this Agreement. Except for the rights of an Indemnified Person under Section 6.6 and for the Continuing Directors under this Agreement, this Agreement is not intended to confer upon any Person not a party hereto (or their successors and permitted assigns) any rights or remedies hereunder.

Section 9.5 Expenses. Except as otherwise expressly provided by this Agreement, all fees, costs and expenses incurred in connection with this Agreement and the Contemplated Transactions, including accounting and legal fees shall be paid by the party incurring such expenses.

Section 9.6 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given or made as follows: (a) if sent by registered or certified mail in the United States return receipt requested, upon receipt; (b) if sent by nationally recognized overnight air courier, one (1) Business Day after mailing; (c) if sent by e-mail transmission, when properly transmitted; and (d) if otherwise actually personally delivered, when delivered, provided, that such notices, requests, demands and other communications are delivered to the address set forth below, or to such other address as any stateparty shall provide by like notice to the other parties to this Agreement:

If to the Company prior to the First Closing, to:

Sonim Technologies, Inc.

6500 River Place Boulevard, Bldg. 7, S#250

Austin, TX, 78730

Attention: Mr. Robert Tirva

E-mail:b.tirva@sonimtech.com

with a copy (which shall not constitute notice) to:

O’Melveny & Myers LLP

Two Embarcadero Center, 28th Floor

San Francisco, CA 94111

Attention: Brophy Christensen; Noah Kornblith

E-mail:bchristensen@omm.com; nkornblith@omm.com

If to the Purchaser or the Company following the First Closing, to:

AJP Holding Company, LLC

[********]

[********]

Attention: [********]

E-mail: [********]

with a copy (which shall not constitute notice) to:

Venable LLP

Rockefeller Center, 1270 Avenue of the Americas, 25th Floor

New York, NY 10020

Attention: William N. Haddad, Kirill Y. Nikonov, Arif Soto

E-mail:wnhaddad@venable.com, kynikonov@venable.com, asoto@venable.com

Section 9.7 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No assignment of this Agreement or of any rights or obligations hereunder may be made by any party hereto without the prior written consent of the other parties hereto. Any purported assignment or delegation in violation of this Agreement shall be null and void ab initio.

Section 9.8 Headings. The Section, Article, and other headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement.

Section 9.9 Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by each party hereto. Any party hereto may, only by an instrument in writing, waive compliance by any other party or parties hereto with any term or provision hereof on the part of such other party or parties hereto to be performed or complied with. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor will any single or partial exercise of any right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any applicable foreign jurisdiction; (ii) such Participant’s attempted commissionother right or power. The waiver by any party hereto of a breach of any term or participationprovision hereof shall not be construed as a waiver of any subsequent breach. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder. Notwithstanding anything in a fraud or actthis Agreement to the contrary, from and after the First Closing, the approval of dishonesty againstthe Continuing Directors shall be required for the Company to (a) amend, modify or terminate this Agreement or the Voting Agreement, (ii) exercise or waive any Affiliate;right of the Company under this Agreement or the Voting Agreement, or (iii) such Participant’s intentional, material violationextend the time for performance of any contractobligation of the Purchaser under this Agreement or agreement between the ParticipantVoting Agreement. This Agreement may not be modified or amended from and after the Second Closing and the Company cannot waive any provision in this Agreement from and after the Second Closing.

Section 9.10 Interpretation; Absence of Presumption.

(a) For the purposes hereof: (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires; (ii) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits) and not to any particular provision of this Agreement, and Article, Section, paragraph, Exhibit and Schedule references are to the Articles, Sections, paragraphs, Exhibits, and Schedules to this Agreement unless otherwise specified; (iii) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified; and (iv) the word “or” shall not be exclusive.

(b) With regard to each and every term and condition of this Agreement and any and all agreements and instruments subject to the terms hereof, the parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and if at any time the parties hereto desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration will be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.

Section 9.11 Severability. Any provision hereof that is held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, shall be ineffective only to the extent of such invalidity, illegality or

unenforceability, without affecting in any way the remaining provisions hereof, provided, however, that the parties will attempt in good faith to reform this Agreement in a manner consistent with the intent of any such ineffective provision for the purpose of carrying out such intent.

Section 9.12 Specific Performance. The parties hereto agree that irreparable damage could occur and that a party will not have any adequate remedy at law in the event that any of the provisions of this Agreement are not performed in accordance with their terms or were otherwise breached. Accordingly, each party shall without the necessity of proving the inadequacy of money damages or posting a bond be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms, provisions and covenants contained therein, this being in addition to any other remedy to which they are entitled at law or in equity. If, prior to the End Date, any party brings any suit, action or proceeding, in each case in accordance with Section 9.3(b), to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, the End Date shall automatically be extended by (A) the amount of time during which such suit, action or proceeding is pending, plus twenty (20) Business Days or (B) such other time period established by the court presiding over such suit, action or proceeding, as the case may be.

Section 9.13 Non-Recourse. Unless expressly agreed to otherwise by the parties to this Agreement, in writing, this Agreement may only be enforced against, and any Proceeding in connection with, arising out of or otherwise resulting from this Agreement, or any instrument or other document delivered pursuant to this Agreement or the Contemplated Transactions, may only be brought against the Persons expressly named as parties of this Agreement (or any of their respective successors, legal representatives and permitted assigns) and then only with respect to the specific obligations set forth herein with respect to such party. No (i) past, present or future director, employee (including any officer), incorporator, manager, member, partner, stockholder, other equity holder or persons in a similar capacity, controlling person, Affiliate or other Representative of any statutory duty owedparty or any of their respective successors and permitted assigns or (ii) past, present or future director, employee (including any officer), incorporator, manager, member, partner, stockholder, other equity holder or persons in a similar capacity, controlling person, Affiliate or other Representative of any of the Persons set forth in the foregoing clause (i) or any of their respective successors and permitted assigns (unless, for the avoidance of doubt, such Person is a party), shall have any liability or other obligation for any obligation of any party under this Agreement or for any Proceeding in connection with, arising out of or otherwise resulting from this Agreement, or any instrument or other document delivered pursuant to this Agreement or the Contemplated Transactions; provided, however, that nothing in this Section 9.13 shall limit any liability or other obligation of the parties for breaches of the terms and conditions of this Agreement.

(The next page is the signature page)

The parties have caused this Subscription Agreement to be executed as of the date first written above.

SONIM TECHNOLOGIES, INC.

By:

/s/ Robert Tirva

Name: Robert Tirva

Title: President, Chief Financial Officer and Chief Operating Officer

AJP Holding Company, LLC

By:

/s/ Jeffrey Wang

Name: Jeffrey Wang

Title: Managing Member

EXHIBIT A

DEFINED TERMS

The following capitalized terms have the meanings indicated:

Appointed Chief Executive Officer” means Peter Liu or, if he ceases to be the Chief Executive Officer (including by reason of death or disability), the person subsequently designated by the Purchaser (and reasonably acceptable to the Company).

Acceptable Confidentiality Agreement” means a confidentiality agreement that contains provisions that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement; provided that such confidentiality agreement may contain a less restrictive or any Affiliate; (iv) such Participant’s unauthorized use or disclosure ofno standstill restriction, in which case the Company’s or any Affiliate’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without CauseConfidentiality Agreement shall be made by the Company in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated by reason of dismissal without Cause for the purposes of outstanding Stock Awards held by such Participant shall have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

(i)    “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i)    any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on accountbe amended to contain only such less restrictive provision, or to omit such provision, as applicable.

Acquisition Proposal” means, other than the Contemplated Transactions, any written or oral offer, or proposal of any Third Party or “group” (as such term is defined in Rule 13d-3 promulgated under the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities inAct) relating to a transaction or series of related transactions involving: (i) any acquisition or purchase (including through any lease, exchange, exclusive license, transfer or disposition, in each case, other than in the primary purposeordinary course of which isbusiness), direct or indirect, of assets equal to obtain financing for20% or more of the consolidated assets or businesses of the Company throughand its Subsidiaries, taken as a whole, or to which 20% or more of the issuanceconsolidated revenues or earnings of the Company and its Subsidiaries, taken as a whole, are attributable, or 20% or more of any class of equity securities, (C) on account of the acquisition ofor voting securities of the Company, by(ii) any individual who is, on the IPO Date, either an executive officertender offer or a Director (either, an “IPO Investor”) and/exchange offer that, if consummated, would result in such Third Party or any entity in which an IPO Investor has a directgroup beneficially owning 20% or indirect interest (whether in the form of voting rights or participation in profits or capital contributions) of more than 50% (collectively, the “IPO Entities”) or on account of the IPO Entities continuing to hold shares that come to represent more than 50% of the combined voting power of the Company’s then outstanding securities as a result of the conversion of any class of the Company’sequity or voting securities into another class of the Company’s securities havingCompany, or (iii) a different numbermerger, consolidation, business combination, sale of votes per share pursuant toall or substantially all of the conversion provisions set forthassets, liquidation, dissolution or other similar extraordinary transaction (A) involving the Company or any of its Subsidiaries whose assets, individually or in the Company’s Amended and Restated Certificate of Incorporation;aggregate, constitute 20% or (D) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage thresholdmore of the outstanding voting securities as a resultconsolidated assets of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a resultor to which 20% or more of the acquisitionconsolidated revenues or earnings of voting securities by the Company and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchaseits Subsidiaries, taken as a whole, are attributable or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed(B) pursuant to occur;

(ii)    there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction,which the stockholders of the Company immediately prior thereto do not Own,to the consummation of such transaction would, as a result of such transaction, hold less than 80% of the equity interests in the surviving entity of such transaction.

Affiliate” of any Person means any Person, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the

Controlling, Controlled by or under common Control with such Person.

surviving Entity in such merger, consolidationLaw” means any federal, state, local or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; provided, howeverforeign statute, law (including common law), that a merger, consolidation or similar transaction will not constitute a Change in Control under this prong of the definition if the outstanding voting securities representing more than 50% of the combined voting power of the surviving Entity or its parent are owned by the IPO Entities;

(iii)    there is consummated a sale, lease, exclusive licenseordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other dispositionsimilar requirement enacted, adopted, promulgated or applied by a Governmental Authority.

Board of all or substantially allDirectors” means the Company’s board of the consolidated assets of the Company and its Subsidiaries,directors.

Business Day” means any day other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; provided, however, thatSaturday, a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries will not constitute a Change in Control under this prong of the definition if the outstanding voting securities representing more than 50% of the combined voting power of the acquiring Entity or its parent are owned by the IPO Entities; or

(iv)    individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoingSunday or any other provisionday on which the Federal Reserve Bank of the Plan, the term Change in Control will not include a sale of assets, mergerNew York is authorized or other transaction effected exclusively for the purpose of changing the domicile of the Company and the definition of Change in Control (or any analogous term) in an individual written agreement between the Companyrequired by law or any Affiliate and the Participant will supersede the foregoing definition with respectexecutive order to Awards subject to such agreement; provided, however, that if no definition of Change in Controlclose or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply. To the extent required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.closed.

(j)Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.amended.

(k)CommitteeBylaws” means a committee of one or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

(l)    “Common Stock” means, as of the IPO Date, the common stockBylaws of the Company, having one vote per share.amended and restated, on May 20, 2009, as the same may be further amended, supplemented or restated.

(m)CompanyCertificate of Incorporation” means the Company’s Amended and Restated Certificate of Incorporation, as the same may be further amended, supplemented or restated.

Company 2019 Incentive Plan” means the Sonim Technologies, Inc., a Delaware corporation. 2019 Equity Incentive Plan, as amended.

(n)ConsultantCompany ESPP” means the Sonim Technologies, Inc. 2019 Employee Stock Purchase Plan, as amended.

Company Employee Plan” means each “employee benefit plan,” as defined in Section 3(3) of ERISA (whether or not such plan is subject to ERISA) and each other employment, severance or similar Contract, plan, practice, arrangement or policy providing for compensation, bonuses, profit-sharing, stock option or other stock-related rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any person, including an advisor, whoself-insured arrangements), health, medical or welfare benefits, perquisites, employee assistance program, disability or sick leave benefits, or post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which is (i) engagedmaintained, administered or contributed to by the Company or an Affiliateany of its Subsidiaries or with respect to render consultingwhich the Company or advisory servicesany of its Subsidiaries has any actual or contingent liability, other than any plan, policy, program or arrangement (i) mandated by applicable Law and is compensated for such services,maintained solely by a Governmental Authority or (ii) servingsponsored or maintained by a professional employer organization.

Company Stock Plans” means the Company 2019 Incentive Plan and the Company ESPP.

Confidentiality Agreement” means the One-Way Non-Disclosure Agreement between Teleepoch LLC and the Company, dated November 1, 2021.

Contract” means any legally binding contract, agreement, note, bond, indenture, lease, license, or other legally binding agreement, commitment or undertaking, in each case, whether written or oral.

Control” (including its correlative meanings “under common Control with” and “Controlled by”) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership or other interests, by contract or otherwise.

Director End Time” means final resolution or settlement of the SEC Matter.

DGCL” means the General Corporation Law of the State of Delaware (as amended from time to time).

DPA” means Section 721 of the Defense Production Act, as aamended, 50 U.S.C. § 4565, and all interim or final rules and regulations issued and effective thereunder.

Environmental Permit” means any permit, license, approval or other authorization under any applicable Law, rule or regulations of the United States or of any state, municipality or other subdivision thereof relating to pollution or protection of health or the environment, including laws, regulations or other requirements relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or Hazardous Substances or toxic materials or wastes into ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, recycling, presence, use, treatment, storage, disposal, transport, or handling of, wastes, pollutants, contaminants or Hazardous Substances.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

ERISA Documents” means all material “employment benefit plans” as defined in Section 3(3) of ERISA that are maintained or sponsored by the Company or its Subsidiaries for the benefit of their respective current or former employees and with respect to which the Company or its Subsidiaries have any liability.

ERISA Regulations” means the regulations promulgated by the Department of Labor in 29 C.F.R. § 2510.3-101, and any amendments or successor regulations thereto, as modified by Section 3(42) of ERISA.

memberExchange Act” means the Securities Exchange Act of 1934, as amended.

GAAP” means generally accepted accounting principles as in effect in the United States.

Governmental Authority” means any supranational, national, state, municipal, local or foreign government, any court, tribunal, arbitrator, administrative agency, commission or other governmental official, authority or instrumentality.

Government Official” means any officer or employee of a foreign governmental authority or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such foreign governmental authority or department, agency, or instrumentality, or for or on behalf of any such public international organization, or any political party, party official, or candidate thereof, excluding officials of the boardgovernments of directorsthe United States, the several states thereof, any local subdivision of any of them or any agency, department or unit of any of the foregoing.

Hazardous Substance” means any waste, substance, product or material defined or regulated as “hazardous” or “toxic” by any applicable Law, rule, regulation or order described in the definition of “Requirements of Environmental Law,” including petroleum and any fraction thereof, and any radioactive materials and waste.

Intellectual Property” means any or all of the following and all rights in: (i) all United States, international and foreign patents and applications therefor and all reissues, divisions, divisionals, renewals, extensions, provisionals, continuations and continuations-in-part thereof; (ii) all inventions (whether or not patentable), trade secrets, know-how, databases, business methods, processes, designs, schematics, drawings, formulae, technical data, specifications, research and development information, technology, business plans and customer lists and other proprietary information; (iii) all copyrights, whether registered or unregistered, and registrations and applications for registration thereof, including in computer software, throughout the world, mask works, whether registered or unregistered, and any registrations and applications for registration thereof; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all trade names, trade dress, brand names, corporation names, logos, common law trademarks and service marks, domain names, URLs, and trademark and service mark, whether registered or unregistered, and the goodwill associated therewith, together with any registrations and applications therefor throughout the world; and (vi) and any governmental grant for the protection of inventions or industrial designs.

Intervening Event” means a material fact, event, circumstance, development or change that occurs, arises or comes to the attention of the Board of Directors after the date of this Agreement that (w) affects the business, assets or operations of Company and its Subsidiaries, (x) was not known by, or if known, the effect of which was not reasonably foreseeable by, the Board of Directors (assuming consultations with appropriate officers and Representatives of the Company) on the date of this Agreement, (y) becomes known to the Board of Directors prior to receipt of the Company Stockholder Approval, and (z) did not result from or arise out of the announcement or pendency of, or any actions required to be taken (or refrained from taken) pursuant to this Agreement; provided, however, that in no event shall any of the following, alone or in combination, constitute an Intervening Event: (1) the receipt, existence of or terms of an Affiliate and is compensated for such services. However, service solely as a Director,Acquisition Proposal, (2) changes in the trading price or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposestrading volume of the Plan.NotwithstandingCompany Common Stock, in and of itself (it being understood that the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement underfacts or occurrences giving rise or contributing to such changes may be taken into account the Securities Act is available to register eitherextent otherwise permitted by the offerdefinition of “Intervening Event”); or the sale(3) meeting or exceeding any published analyst estimates or expectations of the Company’s securitiesrevenue, earnings or other financial performance or results of operations for any period, in and of itself, or exceeding the Company’s internal or external budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to the Company meeting or exceeding such person.estimates, projections, budgets, plans or forecasts may be taken into account to the extent otherwise permitted by the definition of “Intervening Event”).

(o)

Continuous ServiceInvestment Company Act” mean the Investment Company Act of 1940, as amended.

Key Employee” means that the Participant’s service withan employee of the Company or an Affiliate, whether as an Employee, Directorany of its Subsidiaries whose annual base compensation is $200,000 or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however,that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).more.

(p)Corporate TransactionMaterial Adverse Effect” means a material adverse effect upon the consummation, in a single transactionfinancial condition, assets, liabilities or in a seriesresults of related transactions, of any one or more of the following events:

(i)    a saleor other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated assetsoperations of the Company and its Subsidiaries;

(ii)Subsidiaries, taken as a salewhole; provided, however, that any such effect resulting or arising from or relating to any of the following matters shall not be considered when determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur: (a) any change, development, occurrence or event affecting the industry in which the Company and its Subsidiaries operate; (b) any conditions affecting the United States general economy or the general economy in any geographic area in which the Company or its Subsidiaries operate or developments or changes therein or the financial and securities markets and credit markets in the United States or elsewhere in the world; (c) political conditions, including the continuation, occurrence, escalation, outbreak or worsening of any hostilities, war, political action, acts of terrorism, sabotage or military conflicts, whether or not pursuant to the declaration of an emergency or war; (d) any conditions resulting from the existence, occurrence or continuation of any force majeure events, including any earthquakes, floods, hurricanes, tropical storms, fires or other disposition of more than 50%natural or manmade disasters, any epidemic, pandemic (including COVID-19) or other similar outbreak (including any non-human epidemic, pandemic or other similar outbreak) or any other national, international or regional calamity; (e) changes in any law, rule, regulation or GAAP; (f) any action taken or omitted to be taken by or at the written request or with the written consent of the outstandingPurchaser; (g) any announcement of this Agreement or the Contemplated Transactions; (h) changes in the market price or trading volume of Common Stock or any other equity, equity-related or debt securities of the Company;

(iii)Company or its Affiliates (it being understood that the underlying circumstances, events or reasons giving rise to any such change can be taken into account in determining whether a merger, consolidationMaterial Adverse Effect has occurred or similar transaction followingwould reasonably be expected to occur); (i) any failure to meet any internal or public projections, forecasts, estimates or guidance for any period (it being understood that the underlying circumstances, events or reasons giving rise to any such failure can be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); or (j) any effect arising out of or resulting from any claims or proceedings made by any of the Company’s stockholders arising out of or related to this Agreement; provided, that any of the matters described in clauses (a), (b) or (c), will be taken into account for purposes of determining whether or not a Material Adverse Effect has occurred to the extent that such matter disproportionately and adversely affects the Company and its Subsidiaries, taken as a whole, as compared with other companies operating in the industry in which the Company is not the surviving corporation; orand its Subsidiaries operate.

(iv)    a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

If required for compliance with Section 409A of the Code, in no event will a Corporate Transaction be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

(q)DirectorPerson” means a member of the Board.

(r)    “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be

expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(s)    “Effective Date” means the IPO Date.

(t)    “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

(u)    “Entity” means aindividual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization or a government or agency or political subdivision thereof.

Proceeding” means any action, cause of action, claim, demand, litigation, suit, investigation, grievance, citation, summons, subpoena, inquiry, audit, hearing, originating application to a tribunal, arbitration or other entity.similar proceeding of any nature, civil, criminal, regulatory, administrative or otherwise, whether in equity or at law, in contract, in tort or otherwise.

(v)Exchange ActRegistration Rights Agreement” means the U.S.Registration Rights Agreement between the Company and the Purchaser in the form attached hereto as Exhibit G.

Representatives” means a Persons’ Affiliates, employees, agents, consultants, accountants, attorneys or financial advisors and direct or indirect members or partners or Affiliates of the foregoing.

Requirements of Environmental Law” means all requirements imposed by any law (including the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Clean Air Act, and any state analogues of any of the foregoing), rule, regulation, or

order of any governmental authority which relate to (a) pollution, protection or clean-up of the air, surface water, ground water or land; (b) solid, gaseous or liquid waste or Hazardous Substance generation, recycling, reclamation, release, threatened release, treatment, storage, disposal or transportation; (c) exposure of Persons or property to Hazardous Substances; or (d) the manufacture, presence, processing, distribution in commerce, use, discharge, releases, threatened releases, emissions or storage of Hazardous Substances into the environment.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

SEC” means the United States Securities and Exchange Commission.

SEC Documents” means all reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed with or furnished to the SEC pursuant to the Securities Act or the Exchange Act by the Company since January 1, 2019 (collectively, together with any exhibits and schedules thereto and other information incorporated therein.

SEC Matter” means the formal investigation relating to the Company by the SEC of 1934,which the Company was notified of such formal investigation in August 2020, and all other matters, investigations, claims, actions, proceedings, circumstances, effects and actions relating or ancillary thereto, arising therefrom or in connection therewith.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(w)Exchange Act PersonSubsidiarymeans, when used with reference to a party, any natural person, Entitycorporation or “group” (within the meaningother organization, whether incorporated or unincorporated, of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Companywhich such party or any other Subsidiary of the Company, (ii) any employee benefit plan of the Companysuch party is a general partner or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.

(x)    “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

(i)    If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reportedserves in a source the Board deems reliable.

(ii)    Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

(iii)    In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

(y)    “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

(z)    “IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering.

(aa)    “Non-Employee Directormeans a Director who either (i) is not a current employeesimilar capacity, or, officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the

Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

(bb)    “Nonstatutory Stock Option” means any Option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.

(cc)    “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

(dd)    “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

(ee)    “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

(ff)    “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(gg)    “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).

(hh)    “Other Stock Award Agreementmeans a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

(ii)     “Own,Owned,Owner,Ownershipmeans a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

(jj)    “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if eachor other organization, at least a majority of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

(kk)“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(ll)    “Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6(c)(ii).

(mm)    “Performance Criteria” means the one or more criteria that the Board or Committee (as applicable) will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board or Committee (as applicable): (1) earnings (including earnings per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation and amortization; (4) total stockholder return; (5) return on equity or average stockholder’s equity; (6) return on assets, investment, or capital employed; (7) stock price; (8) margin (including gross margin);

(9) income (before or after taxes); (10) operating income; (11) operating income after taxes; (12) pre-tax profit; (13) operating cash flow; (14) sales or revenue targets; (15) increases in revenue or product revenue; (16) expenses and cost reduction goals; (17) improvement in or attainment of working capital levels; (18) economic value added (or an equivalent metric); (19) market share; (20) cash flow; (21) cash flow per share; (22) share price performance; (23) debt reduction; (24) implementation or completion of projects or processes; (25) subscriber satisfaction; (26) stockholders’ equity; (27) capital expenditures; (28) debt levels; (29) operating profit or net operating profit; (30) workforce diversity; (31) growth of net income or operating income; (32) billings; (33) the number of subscribers, including but not limited to unique subscribers; (34) employee retention; and (35) other measures of performance selected by the Board.

(nn)    “Performance Goals” means, for a Performance Period, the one or more goals established by the Board or Committee (as applicable) for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board or Committee (as applicable) (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board or Committee (as applicable) will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/securities or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divestedinterests having by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, the Board or Committee (as applicable) retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the writtentheir terms of a Performance Cash Award.

(oo)    “Performance Period” means the period of time selected by the Board or Committee (as applicable) over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board or Committee (as applicable).

(pp)    “Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i).

(qq)    “Plan” means this Sonim Technologies, Inc. 2019 Equity Incentive Plan, as it may be amended from time to time.

(rr)    “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(ss)    “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

(tt)    “Restricted Stock Unit Awardmeans a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(uu)    “Restricted Stock Unit Award Agreementmeans a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

(vv)    “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

(ww)    “Securities Act” means the Securities Act of 1933, as amended.

(xx)    “Stock Appreciation Right” or “SARmeans a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

(yy)    “Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

(zz)    “Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.

(aaa)    “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

(bbb)    “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency)others performing similar functions is at the time, directly or indirectly Ownedowned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries.

Superior Proposal” means a bona fide, written Acquisition Proposal (with all percentages included in the definition of “Acquisition Proposal” changed to 50%) made after the date of this Agreement that the Board of Directors determines in good faith, after consultation with its financial advisor and outside legal counsel, and taking into account all relevant terms and conditions of such Acquisition Proposal (including any termination or break-up fees and conditions to consummation), the Person making such Acquisition Proposal, the likelihood and timing of consummation of such Acquisition Proposal and all financial, legal, regulatory, and other aspects of such Acquisition Proposal, is more favorable to the Company or to the Company’s stockholders than the Contemplated Transactions.

Taxand (ii) any partnership, limited liability companyTaxes” means all federal, state, local and foreign taxes (including, without limitation, income, franchise, property, sales, withholding, payroll and employment taxes), assessments, fees or other entitycharges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Tax Return” means any return, report or similar filing (including the attached schedules) filed or required to be filed with respect to Taxes (and any amendments thereto), including any information return, claim for refund or declaration of estimated Taxes.

Third Party” means any Person, including as defined in whichSection 13(d) of the Company has aExchange Act, other than the Purchaser or any of its Affiliates.

Transfer” means any direct or indirect interest (whether in the form of voting(a) sale, transfer, hypothecation, assignment, gift, bequest or participation in profitsdisposition by any other means, whether for value or capital contribution) of more than 50%.

(ccc)    “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Companyno value and whether voluntary or any Affiliate.involuntary (including,

Appendixwithout limitation, by realization upon any lien or by operation of law or by judgment, levy, attachment, garnishment, bankruptcy or other legal or equitable proceedings) or (b) grant of any option, warrant or other right to purchase or the entry into any hedge, swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of Common Stock. The term “Transferred” shall have a correlative meaning.

Terms not otherwise defined in this Exhibit A, but defined elsewhere in the Agreement, shall have the meaning set forth where defined in the Agreement.

EXHIBIT B

COMPANY DISCLOSURE LETTER

(See attached).

EXHIBIT C

FORM OF REVERSE STOCK SPLIT APPROVAL

CERTIFICATE OF AMENDMENT TO THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF SONIM TECHNOLOGIES, INC.

SONIM TECHNOLOGIES, INC. (The undersigned, Robert Tirva, hereby certifies that:

1. He is the President, Chief Financial Officer and Chief Operating Officer of Sonim Technologies, Inc. (theCompanyCorporation”), a Delaware corporation, organized and existing under andis duly authorized by virtueresolution of the General Corporation LawBoard of Directors of the State of Delaware, does hereby certify:Corporation to execute this instrument.

FIRST:2. The present name of the CompanyCorporation is Sonim“Sonim Technologies, Inc.

SECOND: The original name of this corporation was NaviSpin, Inc.,Corporation filed its Amended and the date of filing the originalRestated Certificate of Incorporation of this corporation with the Secretary of State of the State of Delaware on May 14, 2019.

3. This Certificate of Amendment to the Amended and Restated Certificate of Incorporation was August 5, 1999.

THIRD: The boardduly approved by the Corporation’s Board of directorsDirectors and duly adopted by the stockholders of the Company, actingCorporation at a special meeting of the Corporation duly called and held upon notice in accordance with the applicable provisions of Sections 141222 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions amending Delaware.

4. Article IV, ParagraphSection A of itsthe Amended and Restated Certificate of Incorporation asof the Corporation is hereby amended to read in its entirety as follows:

A. This Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of all classes of capital stock which the Company is authorizedCorporation shall have authority to issue is 105,000,000 shares.105,000,000. 100,000,000 shares shall be Common Stock having aof the par value of $0.001 per share of $0.001 and 5,000,000 shares shall be Preferred Stock having aof the par value of $0.001 per share of $0.001.

Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware (the Effective Time“Effective Time”), each [two, three, four, five, six, seven, eight, nine, ten, eleven, or twelve*][___] shares of the Company Common Stock, par value $0.001 per share, issued and outstanding prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock, par value $0.001 per share, of the Company. No fractional shares shall be issued and, in lieu thereof, any holder of less than one (1) share of Common Stock shall, upon surrender after the Effective Time of a certificate, which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, be entitled to receive cash for such holder’s fractional share based upon the closing sales price of the Company’s Common Stock as reported on theThe Nasdaq GlobalStock Market LLC on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company is filed with the Secretary of State of the State of Delaware.”

****

FOURTH:IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be executed this                  day of                 , 2022.

SONIM TECHNOLOGIES, INC.

By:

Name:

Robert Tirva

Title:

President, Chief Financial Officer and Chief Operating Officer

EXHIBIT D

FORM OF CHARTER AMENDMENT APPROVAL

CERTIFICATE OF AMENDMENT TO THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF SONIM TECHNOLOGIES, INC.

The undersigned, Robert Tirva, hereby certifies that:

1. He is the President, Chief Financial Officer and Chief Operating Officer of Sonim Technologies, Inc. (the “Corporation”), a Delaware corporation, and is duly authorized by resolution of the Board of Directors of the Corporation to execute this instrument.

2. The present name of the Corporation is “Sonim Technologies, Inc.” The Corporation filed its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on May 14, 2019.

3. This Certificate of Amendment to the Amended and Restated Certificate of Incorporation was submitted toduly approved by the Corporation’s Board of Directors and duly adopted by the stockholders of the CompanyCorporation at a special meeting of the Corporation duly called and was duly adopted and approvedheld upon notice in accordance with the applicable provisions of SectionSections 222 and 242 of the General CorporateCorporation Law of the State of Delaware at the annual meetingDelaware.

4. Article IV of the stockholdersAmended and Restated Certificate of Incorporation of the Company.Corporation is hereby amended to include an additional section identified as Article IV, Section D which shall read as follows:

D. Any transaction entered into with AJP Holding Company, LLC (“AJP”) or an affiliate of AJP that would result in the Common Stock of the Corporation no longer being listed on a nationally recognized securities exchange shall require the approval by a majority of the holders of Common Stock of the Corporation that are unaffiliated with AJP prior to the closing of such transaction.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be executed this                  day of                 , 2022.

 

*

SONIM TECHNOLOGIES, INC.

By:

The board of directors (the “Board”) adopted a resolution approving [eleven] separate amendments to the Amended

Name:

Robert Tirva

Title:

President, Chief Financial Officer and Restated Certificate of Incorporation, as amended, of the Company. These amendments approve the combination of any whole number of shares of Common Stock between and including two (2) and twelve (12) into one (1) share of Common Stock. By approving Proposal No. 3, you are approving each of the [eleven] amendments proposed by the Board. The Certificate of Amendment filed with the Secretary of State of the State of Delaware will include only that amendment determined by the Board to be in the best interests of the Company and its stockholders. The other [ten] proposed amendments will be abandoned pursuant to Section 242(c) of the Delaware General Corporation Law. The Board may also elect not to do any reverse split in which all [eleven] proposed amendments will be abandoned. In accordance with these resolutions, the Board will not implement any amendment providing for a different split ratio.Chief Operating Officer

LOGOEXHIBIT E

FORM OF INSIDERS VOTING AGREEMENT

(See attached).

EXHIBIT F

FORM OF PURCHASER VOTING AGREEMENT

(See attached).

EXHIBIT G

FORM OF REGISTRATION RIGHTS AGREEMENT

(See attached).

ANNEX B

[LETTERHEAD OF B. RILEY SECURITIES, INC.]

April 13, 2022

Sonim Technologies, Inc.

6836 Bee Cave Road

Building 1, Suite 279

Austin, TX 78746

Attention: Board of Directors

Dear Members of the Board of Directors:

We understand that Sonim Technologies, Inc. (the “Company”) plans to enter into a Subscription Agreement (the “Agreement”) by and between the Company and AJP Holding Company, LLC (the “Purchaser”), pursuant to which, among other things, the Company will issue and sell to the Purchaser in two closings (together, the “Transaction”) 20,833,333 shares in the aggregate (the “Purchased Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in exchange for aggregate consideration of $17,500,000 in cash (the “Aggregate Consideration”). The terms and conditions of the Transaction are more fully set forth in the Agreement.

You have requested our opinion (this “Opinion”) with respect to the fairness, from a financial point of view, to the Company of the Aggregate Consideration to be received by the Company in exchange for the Purchased Shares in the Transaction pursuant to the Agreement. For purposes of this Opinion, you have advised us and directed us to assume (i) the Company’s consolidated financial statements as of and for the year ended December 31, 2021, were prepared on the assumption that the Company would continue as a going concern, (ii) the Company is experiencing significant liquidity issues, (iii) the Company has not obtained, and does not expect to obtain, alternative financing on terms more favorable to the Company from a financial point of view, and (iv) in the absence of the Transaction or alternative financing for which the Company has not arranged and does not believe it could arrange to obtain on terms more favorable to the Company at this time, the Company’s ability to function as a going-concern will likely be severely impaired.

In arriving at this Opinion, we have, among other things:

 

Reviewed the financial terms of a draft, dated April 13, 2022, of the Agreement;

Reviewed certain publicly available business and financial information related to the Company;

Reviewed certain other information relating to the Company concerning its business, financial condition and operations made available to us by the Company, including (a) forecasts with respect to the future financial performance of the Company prepared by the management of the Company relating to the Company in the absence of the Transaction (the “Status Quo Projections”) and (b) solely for informational purposes, forecasts with respect to the future financial performance of the Company prepared by the management of the Purchaser relating to the Company giving effect to the Transaction and the business strategy contemplated thereby (the “Financing Plan Projections”);

Held discussions with members of senior management of the Company and the Purchaser concerning the Transaction and the business, financial condition, and strategic objectives of the Company;

Reviewed certain publicly available financial data, stock market performance data and trading multiples of companies which we deemed relevant;

Reviewed the publicly available financial terms of certain business combinations that we deemed relevant; and

Performed such other financial studies, analyses and investigations, and considered such other matters, as we deemed necessary or appropriate for purposes of rendering this Opinion.

In preparing this Opinion, at your direction, we have relied, without assuming responsibility or liability for independent verification, upon the accuracy and completeness of all financial and other information available from public sources and all other information provided to us or otherwise discussed with or reviewed by us. Company management has advised us and, at your direction, we have assumed that the Status Quo Projections have been reasonably prepared in good faith and represent Company management’s best currently available estimates and judgments with respect to the future financial performance of the Company in the absence of the Transaction. In addition, at your direction, we have assumed that the Financing Plan Projections have been reasonably prepared in good faith and represent Purchaser management’s best currently available estimates and judgments with respect to the future financial performance of the Company giving effect to the Transaction and the business strategy contemplated thereby. We have assumed no responsibility for and express no view or opinion as to the Status Quo Projections, the Financing Plan Projections or the respective assumptions on which they are based. At your direction, we have used and relied upon the Status Quo Projections for purposes of our analyses and this Opinion and assumed that the Status Quo Projections provide a reasonable basis upon which to evaluate the Company and the proposed Transaction. We have also assumed that there have been no changes in the assets, financial condition, results of operations, business or prospects of the Company since the respective dates of the last financial statements and other information, financial or otherwise, made available to us that would be material to our analyses or this Opinion, and that there is no information or any facts or developments that would make any of the information reviewed by us inaccurate, incomplete or misleading.

We have not been asked to undertake, and have not undertaken, an independent verification of any information provided to or reviewed by us, nor have we been furnished with any such verification, and we do not assume any responsibility or liability for the accuracy or completeness thereof. We did not make an independent evaluation or appraisal of the assets or the liabilities (contingent or otherwise) of the Company, nor have we evaluated the solvency of the Company under any state or federal laws. We have undertaken no independent analysis of any pending or threatened litigation, possible unasserted claims or other contingent liabilities to which the Company is a party or may be subject, including, without limitation, the ongoing investigation of the Company by the U.S. Securities and Exchange Commission, and our Opinion makes no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes or damages arising out of any such matters, including, without limitation, the additional shares of Common Stock that may become issuable to Purchaser in connection therewith.

We also have assumed, with your consent, that (i) in the course of obtaining any regulatory or third party consents or approvals in connection with the Transaction, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company or the contemplated benefits of the Transaction, (ii) the representations and warranties made by the parties in the Agreement are accurate and complete in all respects; (iii) each party to the Agreement will perform all of its covenants and obligations thereunder; and (iv) the Transaction will be consummated in accordance with the terms of the Agreement, without waiver, modification or amendment of any term, condition or provision thereof. We have also assumed that the Agreement, when executed by the parties thereto, will conform to the draft reviewed by us in all respects material to our analyses and this Opinion. We are not legal, tax or regulatory advisors and have relied upon, without independent verification, the assessments of the Company and its legal, tax and regulatory advisors with respect to such matters. Without limitation to the foregoing, with your consent, we have not evaluated the impact, if any, of the Transaction on the Company’s ability to utilize its net operating loss carryforwards to reduce future tax liabilities.

This Opinion is limited to the fairness, from a financial point of view, to the Company of the Aggregate Consideration to be received by the Company for the Purchased Shares in the Transaction pursuant to the Agreement, and we express no view or opinion as to the fairness of the Transaction to the holders of any class of securities, creditors or other constituencies of the Company. This Opinion does not address any other aspect or implication of the Transaction, the Agreement, or any other agreement or understanding entered into in connection with the Transaction or otherwise. We also express no view or opinion as to the fairness of the amount or nature of the compensation to any of the Company’s officers, directors or employees, or any class of

such persons, relative to the Aggregate Consideration or otherwise. We express no view or opinion as to the prices or range of prices at which Company Common Stock may trade at any time. Furthermore, we are not expressing any opinion as to the impact of the Transaction on the solvency or viability of the Company or the Purchaser, or the ability of the Company or the Purchaser to pay its obligations when they become due.

This Opinion is necessarily based upon economic, market, monetary, regulatory and other conditions as they exist and can be evaluated, and the information made available to us, as of the date hereof. Although subsequent developments may affect this Opinion, we do not have any obligation to update, revise or reaffirm this Opinion. As you are aware, the credit, financial and stock markets have experienced significant volatility, and we express no view or opinion as to any potential effects of such volatility on the Company or the proposed Transaction.

We have acted as financial advisor to the Board of Directors (the “Board”) of the Company in connection with the Transaction and will receive a fee for such services, a significant portion of which is payable upon the consummation of the Transaction. We will also receive a fee for rendering this Opinion, which is not contingent upon the conclusion set forth in this Opinion or the successful completion of the Transaction. In addition, the Company has agreed to indemnify us and certain related parties for certain liabilities arising out of or related to our engagement and to reimburse us for certain expenses incurred in connection with our engagement.

We are a full-service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, we and our affiliates may acquire, hold or sell, for our and our affiliates’ own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of the Company, the Purchaser and their respective affiliates. During the last two years we held significant positions in equity and debt securities of the Company, until August 2021 and a senior executive of our affiliates B. Riley Financial and B. Riley Principal Investments served as a member of the Board until February 2022. In addition, we and our affiliates have in the past provided, and are currently providing, investment banking and other financial services to the Company and certain of its affiliates, for which we and our affiliates have received, or would expect to receive, compensation, including, during the past two years having acted as the Company’s sales agent in connection with its “at-the-market offering” programs. We and our affiliates may in the future provide investment banking and other financial services to the Company, the Purchaser and their respective affiliates, for which we and our affiliates would expect to receive compensation. We have adopted policies and procedures designed to preserve the independence of our research and credit analysts whose views may differ from those of the members of the team of investment banking professionals that are advising the Company.

This Opinion is for the information of the Board (in its capacity as such) in connection with its consideration of the proposed Transaction. This Opinion does not constitute a recommendation to the Board, the Company, any security holder of the Company or any other person as to how to act or vote on any matter relating to the Transaction or otherwise including, without limitation, whether or not to participate in any offering of securities by the Company. This Opinion does not address the relative merits of the Transaction as compared to alternative transactions or strategies that might be available to the Company or any other party to the Transaction, nor does it address the underlying business decision of the Board, the Company or any other party to effect the Transaction. The issuance of this Opinion was approved by an authorized internal committee of B. Riley Securities, Inc.

Based on and subject to the foregoing, we are of the opinion that, as of the date hereof, the Aggregate Consideration to be received by the Company for the Purchased Shares in the Transaction pursuant to the Agreement is fair to the Company from a financial point of view.

Very truly yours,

/s/ B. Riley Securities, Inc.

B. Riley Securities, Inc.

ANNEX C-1

CERTIFICATE OF AMENDMENT TO THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF SONIM TECHNOLOGIES, INC.

The undersigned, Robert Tirva, hereby certifies that:

1. He is the President, Chief Financial Officer and Chief Operating Officer of Sonim Technologies, Inc. (the “Corporation”), a Delaware corporation, and is duly authorized by resolution of the Board of Directors of the Corporation to execute this instrument.

2. The present name of the Corporation is “Sonim Technologies, Inc.” The Corporation filed its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on May 14, 2019.

3. This Certificate of Amendment to the Amended and Restated Certificate of Incorporation was duly approved by the Corporation’s Board of Directors and duly adopted by the stockholders of the Corporation at a special meeting of the Corporation duly called and held upon notice in accordance with the applicable provisions of Sections 222 and 242 of the General Corporation Law of the State of Delaware.

4. Article IV, Section A of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

A. This Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 105,000,000. 100,000,000 shares shall be Common Stock of the par value of $0.001 per share and 5,000,000 shares shall be Preferred Stock of the par value of $0.001 per share

Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware (the “Effective Time”), each [    ] shares of Common Stock, par value $0.001 per share, issued and outstanding prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock, par value $0.001 per share, of the Company. No fractional shares shall be issued and, in lieu thereof, any holder of less than one (1) share of Common Stock shall, upon surrender after the Effective Time of a certificate, which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, be entitled to receive cash for such holder’s fractional share based upon the closing sales price of the Company’s Common Stock as reported on The Nasdaq Stock Market LLC on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company is filed with the Secretary of State of the State of Delaware.”

****

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be executed this                  day of                 , 2022.

SONIM TECHNOLOGIES, INC.

By:

Name:

Robert Tirva

Title:

President, Chief Financial Officer and Chief Operating Officer

ANNEX C-2

CERTIFICATE OF AMENDMENT TO THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF SONIM TECHNOLOGIES, INC.

The undersigned, Robert Tirva, hereby certifies that:

1. He is the President, Chief Financial Officer and Chief Operating Officer of Sonim Technologies, Inc. (the “Corporation”), a Delaware corporation, and is duly authorized by resolution of the Board of Directors of the Corporation to execute this instrument.

2. The present name of the Corporation is “Sonim Technologies, Inc.” The Corporation filed its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on May 14, 2019.

3. This Certificate of Amendment to the Amended and Restated Certificate of Incorporation was duly approved by the Corporation’s Board of Directors and duly adopted by the stockholders of the Corporation at a special meeting of the Corporation duly called and held upon notice in accordance with the applicable provisions of Sections 222 and 242 of the General Corporation Law of the State of Delaware.

4. Article IV of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended to include an additional section identified as Article IV, Section D which shall read as follows:

D. Any transaction entered into with AJP Holding Company, LLC (“AJP”) or an affiliate of AJP that would result in the Common Stock of the Corporation no longer being listed on a nationally recognized securities exchange shall require the approval by a majority of the holders of Common Stock of the Corporation that are unaffiliated with AJP prior to the closing of such transaction.

****

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be executed this                  day of                 , 2022.

SONIM TECHNOLOGIES, INC.

By:

Name:

Robert Tirva

Title:

President, Chief Financial Officer and Chief Operating Officer

LOGO

PRELIMINARY PROXY - SUBJECT TO COMPLETIONSONIM TECHNOLIGIES, INC 6500 RIVER PLACE BLVD BUILDING 7, SUITE 250 AUSTIN TX 78730 VOTE BY INTERNET - INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.11717    TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D60790-P62159 KEEP THIS PORTION FOR YOUR RECORDS    DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. SONIM TECHNOLOGIES, INC. 6836 BEE CAVE ROAD BUILDING 1, SUITE 279 AUSTIN, TX 78746 D22105-P43547 For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. SONIM TECHNOLOGIES, INC. The Board of Directors recommends a vote “FOR” the nominees for director listed below. ! ! ! 1. To elect the seven nominees for director named below to serve until the next annual meeting and their successors are duly elected and qualified: Nominees: 01) John Kneuer 02) Maurice Hochschild 03) Thomas Wilkinson 04) Jeffrey D. Johnson 05) Susan G. Swenson 06) Kenny Young 07) Alan Howe For Against AbstainTECHNOLIGIES, INC The Board of Directors recommends you vote FOR the following proposals: ! ! !proposal: 1. To approve the transactions contemplated by the Subscription Agreement. For Against Abstain ☐ ☐ ☐    The Board of Directors recommends you vote FOR the following proposal: 2. To approve an amendment toadopt the Company’s 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,000,000 shares (on a pre-reverse stock split basis). ! ! ! 3. To approve an amendmentAmendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock pursuant to which any whole number of outstanding shares between and including 2 and 12 shares would be combined, converted and changed into one share of common stock, with the final exchange ratio to be determined by thestock. For Against Abstain ☐ ☐ ☐ The Board of Directors inrecommends you vote FOR the following proposal: 3. To adopt the Amendment to the Company’s Certificate of Incorporation, as amended, to include a restriction on certain transactions with the Purchaser or its discretion. 4. To ratify the selection by the Audit Committee of theaffiliates. For Against Abstain ☐ ☐ ☐ The Board of Directors of Moss Adams asrecommends you vote FOR the independent registered public accounting firm offollowing proposal: 4. To vote on adjournment if there are insufficient votes at the Company for its fiscal year ending December 31, 2020. ! ! !Special Meeting to approve the Transaction Proposal. NOTE: In theirhis or her discretion, the proxies areproxy is authorized to vote on such other matters as maymany come before the meeting and any adjournment(s) or postponement(s) thereof. NOTE: This proxy should be marked, dated and signed by the stockholders(s)stockholder(s) exactly as his, her or its name appear(s) hereon, and returned in the enclosed envelope. For Against Abstain ☐ ☐ ☐ Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer.    Signature (PLEASE SIGN WITHIN BOX) Date    Signature (Joint Owners) Date


LOGO

LOGO

Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting:The Notice and Proxy Statement Annual Report and Form 10-K are available at www.proxyvote.com. D22106-P43547 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SONIM TECHNOLOGIES, INC. FOR THE ANNUALSPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 29, 2020, 2022 The undersigned stockholder of Sonim Technologies, Inc., a Delaware corporation, hereby acknowledges receipt of the Notice of AnnualSpecial Meeting of StockholdersandStockholders and Proxy Statement, each dated August 25, 2020,, 2022, and hereby appoints Thomas Wilkinson and Robert Tirva and each of them, as proxiesproxy for the undersigned, with full power of substitution and revocation, to represent the undersigned at the 2020 Annual2022 Special Meeting of Stockholders of Sonim Technologies, Inc. to be held at6836 Bee Cave Road, Building 1, Suite 279, Austin, TX 78746at on Tuesday, September 29, 2020,, 2022, at 9:00 a.m. local time,(local time), and at any adjournment(s) or postponement(s) thereof, and to vote all shares of Common Stock that the undersigned would be entitled to vote if then and there personally present, on the matters set forth below on the reverse side, and in accordance with the instructions set forth below on the reverse side, and in their discretion, upon such other matter or matters that may properly come before the meeting and any adjournment(s) or postponement(s) thereof. This proxy, when properly executed and returned, will be voted as directed or, if no contrary direction is indicated, will be voted as follows: • “FOR” the election of seven nominees for director named in the accompanying Proxy Statement to serve until the next annual meeting and their successors are duly elected and qualified; •Proposal 1, “FOR” Proposal 2, to approve an amendment of the Company’s 2019 Equity Incentive Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,000,000 shares (on a pre-reverse stock split basis); • “FOR” Proposal 3 to approve an amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock pursuant to which any whole number of outstanding shares between and including 2 and 12 shares would be combined, converted and changed into one share of common stock, with the final exchange ratio to be determined by the Board of Directors in its discretion; • “FOR” Proposal 4, to ratify the selection by the Audit Committee of the Board of Directors of Moss Adams as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020; and in the discretion of the proxy holders upon any other business as may properly come before the Annual Meeting of Stockholders or any adjournment or postponement thereof.4. Continued and to be signed on reverse side