Item 1.01 Entry into a Material Definitive Agreement.
On June 1, 2020, Sonim Technologies, Inc. (the "Company") entered into a Note
Amendment and Debt Cancellation Agreement with B. Riley Principal Investments,
LLC ("BRPI") which amends the subordinated secured convertible promissory note
dated October 23, 2017, as amended on March 20, 2018 (the "B. Riley Convertible
Note"), issued by the Company to BRPI (the "Note Amendment"). BRPI is an
affiliate of B. Riley Financial, Inc., a holder of more than 5% of the Company's
capital stock, and Kenny Young, a member of the Company's board of directors, is
the President of B. Riley Financial, Inc. and Chief Executive Officer of BRPI.
Pursuant to the Note Amendment, the Company and BRPI have agreed, contingent
upon the closing of the underwritten public offering (the "Offering") pursuant
to a registration statement Form S-1 (File No. 333-238869) (the "Form S-1"),
that the Company shall repay $4 million of the outstanding indebtedness to BRPI
in cash (the "B. Riley Repayment"), and the remaining principal amount, accrued
interest and other amounts outstanding under the B. Riley Convertible Note,
after giving effect to the B. Riley Repayment, shall convert into shares of
common stock to be issued to BRPI or its affiliates at the public offering price
of shares of the Company's Common Stock in the Offering, which conversion will
occur immediately following the closing of the Offering and the B. Riley
Repayment. In addition, the Company shall agree to file a registration statement
following the closing of the Offering covering the resale of the shares of
common stock issued in the B. Riley Conversion to BRPI and its affiliates.
The foregoing descriptions of the B. Riley Convertible Note and the Note
Amendment do not purport to be complete and are subject to, and qualified in
their entirety by, the full text of the B. Riley Convertible Note, which was
filed as Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year
ended December 31, 2019, and the Note Amendment, which was filed as Exhibit
10.19 to the Form S-1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events.
On May 31, 2020, the Company's board of directors approved an increase in the
number of shares of common stock reserved for future issuance under the
Company's 2019 Equity Incentive Plan by 3,000,000 shares, subject to the closing
of the Offering and approval by the Company's stockholders (the "Plan
Increase"). Other than the Plan Increase, the terms of the Company's 2019 Equity
Incentive Plan, which have been previously publicly disclosed, remain
unmodified. In addition, on May 31, 2020, the Company's board of directors
approved the grant of 2,440,500 restricted stock units pursuant to the 2019
Equity Incentive Plan, as amended by the Plan Increase, all of which are subject
to the closing of the Offering and 425,000 of which remain subject to approval
by the Company's stockholders. Thomas W. Wilkinson, the Company's Chief
Executive Officer, will receive 525,000 restricted stock units in the grant, all
of which are subject to the closing of the Offering and 200,000 of which are
also subject to approval by the Company's stockholders as described above.
Robert Tirva, the Company's Chief Financial Officer, will receive 558,000
restricted stock units in the grant, all of which are subject to the closing of
the Offering and 100,000 of which are also subject to approval by the Company's
stockholders as described above. If the Plan Increase is not approved by the
Company's stockholders before May 31, 2021, then the Plan Increase shall
terminate and any awards granted out of the Plan Increase, including the
foregoing restricted stock units that are subject to approval by the Company's
stockholders, shall be terminated.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses