Things are looking somewhat grim at Sonim
Sonim Technologies announced that it’s open to “strategic alternatives,” corporate jargon that typically precedes a sale or other major transaction.
In the company’s earnings release, Sonim painted a relatively dire picture of its financial footing: “Sonim’s liquidity has been negatively impacted by a decline in sales of legacy products while next generation products are still under development. … As a result, substantial doubt exists regarding Sonim’s ability to continue as a going concern. Sonim plans to explore raising additional capital from the sale of equity securities or the incurrence of indebtedness to allow it to continue operations.”
Sonim builds “ultra-rugged” mobile phones and other devices for workers in austere environments such as construction sites, and sells its wares through wireless network operators,including AT&T, T-Mobile and Verizon, as well as others.
In its latest financial filing, Sonim reported cash of $13.9 million in the first quarter, which includes the $25 million it raised last year from its public offering. However, in the first quarter, the company lost $9.3 million “and it is likely that we will continue to experience operating losses into the future because we have not yet generated sufficient revenue levels needed to ensure profitability,” Sonim said. The $2.4 million the company recorded in legal expenses in the first quarter, likely related to an ongoing SEC investigation into the company’s finances, probably didn’t help.
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