Sonim Technologies (J6P) Risk Analysis

Though we currently neither anticipate becoming a "controlled company," nor taking advantage of any "controlled company" exemptions even if deemed to be a "controlled company," if we were to be deemed to be a "controlled company" and were to elect to be exempt from some or all of these corporate governance requirements, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

We are required to meet the continued listing requirements of the Nasdaq and other Nasdaq rules, including those regarding director independence and independent committee requirements, minimum stockholders' equity, minimum share price and certain other corporate governance requirements. In particular, we are required to maintain a minimum bid price for our listed common stock of $1.00 per share, which we previously failed to meet resulting in three reverse stock splits in a five-year period in order to regain compliance. Additionally, on August 22, 2025, we received a notice from the staff of the Listing Qualifications Department, or the Staff, of Nasdaq that we had failed to meet a required minimum of $2.5 million in stockholders' equity for continued listing, as required by Nasdaq Listing Rule 5550(b)(1), or the Stockholders' Equity Rule. On February 20, 2026, we received a letter from the Staff informing us that we had regained compliance with the Stockholders' Equity Rule following the completion of our disposition of substantially all of the assets relating to our legacy phone and hotspot business in January 2026. If we do not meet these continued listing requirements, our common stock could be delisted. If Nasdaq delists our common stock from trading on its exchange and we are not able to list our common stock on another national securities exchange, we expect our common stock could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: - a limited availability of market quotations for our common stock;         - reduced liquidity for our common stock;         - a determination that our common stock is a "penny stock" which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;         - negative publicity;         - a limited amount of news and analyst coverage;         - loss of eligibility to register the sale or resale of our securities on Form S-3; and         - a decreased ability to issue additional securities or obtain additional financing in the future.

Stockholder activism-ranging from proxy contests and hostile bids to public campaigns and litigation-has become increasingly prevalent. Declines in our stock price may heighten our vulnerability to unsolicited approaches, potentially disrupting our business strategy and operations. The presence of an activist stockholder or the perception of a potential hostile takeover may create uncertainty regarding our future direction, strain relationships with business partners, and impact our ability to attract and retain key personnel.

As discussed in Note 6-Stockholders' Equity to the consolidated financial statements included in this Form 10-K, our membership interests in DNA X LLC, our wholly owned subsidiary through which we operate the our DNA X cryptocurrency trading platform, are subject to a put option pursuant to which the party from whom we acquired such membership interests, or DNA Holdings, in connection with our acquisition of our platform may elect to reacquire such membership interests in exchange for shares of our common stock, or the Put Option. The Put Option is exercisable at any time until June 30, 2026 unless we realize at least $600 million in aggregate trading volume or aggregate revenues of at least $1.0 million per day, or the Milestones. If we are unable to achieve the Milestones and DNA Holdings elects to exercise the Put Option and the transactions contemplated by the exercise of the Put Option are consummated, we would lose our ownership interest in DNA X LLC and, by extension, our rights to continue operating the DNA X platform. The loss of our rights to our platform could have a material adverse effect on our ability to generate revenue and cover our operating expenses and require us to scale back operations. The loss of our platform could also affect our ability to meet the requirements for continued listing on Nasdaq. Any of the foregoing could a material adverse effect on the trading price of our common stock and cause you to lose some or all of your investment.

The market price of our common stock could be subject to wide fluctuations in response to, among other things, the factors described in this "Risk Factors" section or otherwise, and other factors beyond our control, such as fluctuations in the valuations of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market fluctuations, as well as general economic, systemic, political, and market conditions, such as recessions, interest rate changes, or international currency fluctuations, may negatively affect the market price of our common stock. The trading price of our common stock is likely to be volatile and subject to wide price fluctuations in response to various factors, including: - market conditions in the broader stock market in general, or in our industry in particular;         - actual or anticipated fluctuations in our quarterly financial and operating results;         - introduction of new products and services by us or our competitors;         - sales, or anticipated sales, of large blocks of our stock;         - issuance of new or changed securities analysts' reports or recommendations;         - failure of industry or securities analysts to maintain coverage of our company, changes in financial estimates by any industry or securities analysts that follow our company, or our failure to meet such estimates;         - additions or departures of key personnel;         - regulatory or political developments;         - changes in accounting principles or methodologies;         - acquisitions by us or by our competitors;         - litigation and governmental investigations; and         - economic, political, and geopolitical conditions or events. These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have often instituted securities class action litigation against the company that issued the stock.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees, agents or trustees to us or our stockholders, (iii) any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws or (iv) any action asserting a claim against us or any director or officer or other employee of ours that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Our certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder; accordingly, we cannot be certain that a court would enforce such provision. Our certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above; however, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. The forum selection provisions in our certificate of incorporation may have the effect of discouraging lawsuits against us or our directors and officers and may limit our shareholders' ability to obtain a favorable judicial forum for disputes with us. If the enforceability of our forum selection provision were to be challenged, we may incur additional costs associated with resolving such a challenge. While we currently have no basis to expect any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results of operations and result in a diversion of the time and resources of our employees, management and the board of directors.

Our certificate of incorporation and bylaws provide for, among other things: - the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;         - advance notice requirements for stockholder proposals; and         - certain limitations on convening special stockholder meetings. These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions than you desire. Additionally, we are subject to the provisions of Section 203 of the General Corporation Law of the State of Delaware ("DGCL"), which prohibit a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. These provisions of DGCL may have the effect of delaying, deferring or preventing a change in control, and may discourage bids for our common stock at a premium over its market price.