UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2025~~2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission File Number: 001-38907

~~Sonim~~DNA ~~Technologies~~X, Inc.

(Exact name of registrant as specified in its charter)

Delaware

94-3336783

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

4445 Eastgate Mall, Suite 200

San Diego, CA 92121

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (~~650~~661) ~~378~~618-~~8100~~7580

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock par value $0.001 per share		SONM		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On ~~October~~May 2814, ~~2025~~2026, there were 1,~~028~~488,~~693~~ 268 shares of the registrant’s common stock, par value $0.001, outstanding. ~~The~~223,201 ~~foregoing reflects the reverse stock split~~ of ~~the~~such ~~registrant’s~~shares ~~common~~are ~~stock that became effective and began trading on a post-split adjusted basis on October 27, 2025~~redeemable.

Table of Contents

		Page
	Cautionary Note about Forward-Looking Statements	ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Stockholders’ Deficit	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2226
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3631
Item 3.	Defaults Upon Senior Securities	3631
Item 4.	Mine Safety Disclosures	3631
Item 5.	Other Information	3631
Item 6.	Exhibits	3732
Signatures		3934

~~Cautionary~~CAUTIONARY ~~Note~~NOTE ~~about~~ABOUT ~~Forward~~FORWARD-~~Looking~~LOOKING ~~Statements~~STATEMENTS

This Quarterly Report on Form 10-Q contains statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act as well as protections afforded by other federal securities laws. Generally, words such as “achieve,” “aim,” “ambitions,” “anticipate,” “believe,” “committed,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “future,” “goals,” “grow,” “guidance,” “intend,” “likely,” “may,” “milestone,” “objective,” “on track,” “opportunity,” “outlook,” “pending,” “plan,” “position,” “possible,” “potential,” “predict,” “progress,” “roadmap,” “seek,” “should,” “strive,” “targets,” “to be,” “upcoming,” “will,” “would,” and variations of such words and similar expressions identify forward-looking statements, which are not historical in nature. ~~Forward~~The forward-looking statements may appear throughout this ~~Quarterly~~report ~~Report~~ and other documents we file with the Securities ~~and~~ and Exchange Commission (or the “SEC”), including without limitation, the following sections:

(i) Note 89 “- Commitments and Contingencies” to ~~our~~these ~~Condensed~~ Consolidated Financial Statements regarding the possible outcome of, and future effect on our financial condition and results of operations of, certain litigations and other proceedings to which we are a party; (ii) Part I, Item 2,. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including the statements with regard to the future changes to our business and our expectations regarding our strategy, ~~our strategic alternatives search process~~ and ~~vision~~new oflines ~~the future~~ of ~~the company~~products, future cash requirements, assessment of our liquidity, the availability, uses, sufficiency, and cost of capital resources, and sources of funding, and future products, services, and technologies; and (iii) Part I, Item 4. “Controls and Procedures,” including the description of limitations on effectiveness of controls and procedures.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

● ~~our~~the ~~ability~~availability toof ~~meet~~cash ~~expectations~~on ~~regarding~~hand ~~the timing~~ and ~~completion~~other sources of ~~the~~liquidity ~~declared~~to ~~strategic~~fund ~~initiatives~~our tooperations ~~return~~and ~~value~~grow toour ~~stockholders~~business; ● our ability to ~~complete~~compete ~~the~~effectively ~~asset~~depends ~~purchase~~on ~~agreement~~multiple factors and ~~the~~we ~~consequences~~may ifnot webe ~~fail~~able to docontinue soto develop solutions to address user needs effectively; ● ~~our~~we ~~ability~~may tonot ~~consummate~~be aable ~~strategic~~to ~~transaction~~continue ~~complementary~~to develop solutions to ~~the~~address ~~asset~~user ~~purchase~~needs ~~agreement~~effectively, ~~and~~including ~~ensure~~features ~~the~~for ~~continuation~~traders ofon our ~~business~~cryptocurrency ~~following~~trading ~~the~~platform; ~~disposition~~● ofcryptocurrency ~~the~~values ~~legacy~~have ~~business~~been volatile and may cause a decrease in trading activity on our cryptocurrency trading platform; ● the ~~availability~~financial ofand ~~cash~~operational onprojections ~~hand~~that ~~and~~we ~~other~~may ~~sources~~provide offrom ~~liquidity~~time to ~~fund~~time are subject to inherent risks; ● our ~~operations~~ability ~~and~~to ~~grow~~incorporate emerging technologies into our ~~business~~trading software given the lengthy development cycle; ● our ability to ~~compete~~adapt ~~effectively~~to ~~depends~~new onrequirements ~~multiple~~from ~~factors,~~customer ~~and~~in weour ~~may~~evolving ~~not~~industry; be● ~~able~~our ability to ~~continue~~remain in compliance with the listing requirements of the Nasdaq Capital Market; ● our quarterly results may vary significantly from period to ~~develop~~period; ~~solutions~~● we rely primarily on third-party contractors to ~~address~~maintain ~~user~~and ~~needs~~develop ~~effectively~~our trading platform; ● ~~risks~~if ~~associated~~our ~~with~~software ~~potential~~contains ~~hostile~~defects ~~takeover~~or ~~attempts~~errors, orwe ~~shareholder~~could ~~activism~~incur significant unexpected expenses, ~~which~~experience ~~may~~downtime ~~divert~~on ~~management’s~~our ~~attention,~~online ~~jeopardize~~trading ~~strategic~~platform ~~initiatives~~with a loss of commission revenue, and ~~require~~be ~~significant~~subject ~~resources~~to liability for claims; ● we ~~may~~are bedependent ~~negatively~~on ~~impacted~~the bycontinued ~~changes~~services inand ~~U.S.~~performance ~~trade~~of ~~policy,~~a ~~including~~concentrated ~~the~~and ~~imposition~~limited group of ~~tariffs~~senior management; ● we ~~may~~face ~~not~~risks berelated ~~able~~ to ~~continue~~the toimpact ~~develop~~of ~~solutions~~various toeconomic, ~~address~~political, ~~user~~environmental, ~~needs effectively~~social, ~~including~~and ~~our~~market ~~next-generation~~events ~~products,~~beyond ~~which~~our ~~could~~control ~~materially~~that ~~adversely~~can ~~affect~~impact our ~~liquidity~~business and ~~our~~results ~~ability~~of ~~to continue~~ operations; and ● other risks and uncertainties described in this quarterly report in the “Risk Factors” section, as such descriptions may be updated or amended in any future reports we file with the SEC.

We urge investors to consider all of the risks, uncertainties, and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this report. We cannot assure you that the results or developments anticipated by us and reflected or implied by any forward-looking statement contained in this report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized, or other factors, the actual results relating to the subject matter of any forward-looking statement in this report may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this report are made only as of the date of this report, and we undertake no obligation to update any such statements to reflect subsequent events or circumstances.

As used herein, “DNA X,” the “Company,” “we,” “us,” “our,” and similar terms include DNA X, Inc. and its subsidiaries, unless the context indicates otherwise.

●PARI I a– ~~small~~FINANCIAL number of customers account for a significant portion of our revenue; ● failure to meet the Nasdaq’s continued listing requirements and other Nasdaq rules could adversely affect the price of our common stock and make it more difficult for us to sell securities in a future financing or for you to sell our common stock; ● the financial and operational projections that we may provide from time to time are subject to inherent risks; ● our ability to incorporate emerging technologies into our new consumer products given the lengthy development cycle; ● our ability to adapt to shortened customer lead times and tightened inventory controls from our key customers; ● we are materially dependent on some customer relationships that are characterized by product award letters, and the loss of such relationships could harm our business and operating results; ● our quarterly results may vary significantly from period to period; ● we rely primarily on third-party contract manufacturers and partners; ● if our products contain defects or errors, we could incur significant unexpected expenses, experience product returns and lost sales, experience product recalls, suffer damage to our brand and reputation, and be subject to product liability or other claims; ● we are required to undergo a lengthy customization and certification process for each wireless carrier customer; ● we are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel; ● we face risks related to the impact of various economic, political, environmental, social, and market events beyond our control that can impact our business and results of operations; and ● other risks and uncertainties described in this Quarterly Report, our most recent Annual Report on Form 10-K, and our other filings with the SEC.INFORMATION

~~We urge~~Item ~~investors to consider all of the risks, uncertainties, and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report~~1. ~~We cannot assure you that the results or developments anticipated by us~~Financial and reflected or implied by any forward-looking statement contained in this Quarterly Report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expectedStatements. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized, or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report, and we undertake no obligation to update any such statements to reflect subsequent events or circumstances.

AsDNA ~~used herein~~X, ~~“Sonim,” the “Company,” “we,” “us,” “our,” and similar terms include Sonim Technologies, Inc~~INC. ~~and its subsidiaries, unless the context indicates otherwise.~~

~~iii~~CONSOLIDATED BALANCE SHEETS

~~SONIM~~(IN ~~TECHNOLOGIES,~~THOUSANDS ~~INC.~~EXCEPT SHARE AND PER SHARE AMOUNTS)

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2026			December 31, 2025
	(Unaudited)
Assets
Cash and cash equivalents	$	1,195		$	1,303
Receivable for cash held back from the asset sale		1,500			—
Prepaid expenses and other current assets		608			676
Current assets held for sale		—			26,930
Total Current assets		3,303			28,909
Investment in DNA X LLC under equity method		1,290			1,242
Deferred tax assets		—			1,441
Other assets		245			274
Non-current assets held for sale		—			12,032
Total assets	$	4,838		$	43,898
Liabilities and stockholders’ deficit
Accounts payable		719			4,030
Accrued liabilities		1,576			704
Promissory note, net from related party		1,072			1,035
Promissory notes, net		—			4,030
Promissory notes, net		—			4,030
Derivative liability		398			171
Income tax payable		556			2,598
Current liabilities held for sale		—			38,057
Total current liabilities		4,321			50,625
Deferred tax liability		600			—
Total liabilities		4,921			50,625
Commitments and contingencies (Note 9)		—			—

Redeemable common stock; $0.001 par value; 223,201 shares issued and outstanding; redemption value $900 at March 31, 2026 and $1,228 as of December 31, 2025 (Note 6)		900			1,228

Stockholders’ deficit
Common stock, $0.001 par value per share; 1,000,000,000 shares authorized: and 1,265,067 shares issued and outstanding at both March 31, 2026 and December 31, 2025*		1			1
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized: and no shares issued and outstanding at March 31, 2026 and December 31, 2025		—			—
Additional paid-in capital*		296,613			296,309
Accumulated deficit		(297,597	)		(304,265	)
Total stockholders’ deficit		(983	)		(7,955	)
Total liabilities, redeemable common stock, and stockholders’ deficit	$	4,838		$	43,898

~~(IN THOUSANDS~~* ~~EXCEPT~~Adjusted ~~SHARE~~retroactively ~~AND~~to reflect the 1-for-18 reverse stock split that became effective on October 28, 2025, see Note 1.

~~PER~~The ~~SHARE~~accompanying ~~AMOUNTS)~~notes are an integral part of these unaudited condensed consolidated financial statements

	September 30, 2025			December 31, 2024
	(Unaudited)
Assets
Cash and cash equivalents	$	2,137		$	5,343
Accounts receivable, net		3,498			4,339
Non-trade receivable		9,841			7,119
Related party receivable		—			181
Inventory		10,986			10,621
Prepaid expenses and other current assets		3,839			4,562
Total current assets		30,301			32,165
Property and equipment, net		140			227
Contract fulfillment assets		9,053			6,399
Other assets		725			948
Total assets	$	40,219		$	39,739
Liabilities and stockholders’ equity (deficit)
Accounts payable	$	20,408		$	22,848
Accrued liabilities		13,631			20,892
Promissory notes, net, current portion		4,817			—
Total current liabilities		38,856			43,740
Promissory notes, net		250			—
Income tax payable		1,814			1,699
Total liabilities		40,920			45,439
Commitments and contingencies (Note 8)		-			-
Stockholders’ equity (deficit)
Common stock, $0.001 par value per share; 100,000,000 shares authorized; and 1,015,652 and 276,881 shares issued and outstanding at September 30, 2025, and December 31, 2024, respectively(*)		1			—
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, and no shares issued and outstanding at September 30, 2025, and December 31, 2024, respectively		—			—
Additional paid-in capital(*)		294,676			277,908
Accumulated deficit		(295,378	)		(283,608	)
Total stockholders’ equity (deficit)		(701	)		(5,700	)
Total liabilities and stockholders’ equity (deficit)	$	40,219		$	39,739

(*) Adjusted retroactively to reflect the 1-for-18 reverse stock split that became effective on October 27, 2025, see Note 1.

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~SONIM~~DNA ~~TECHNOLOGIES~~X, INC.

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

(UNAUDITED)

	2025			2024			2025			2024
	2026			2025
	Three Months Ended						Nine Months Ended
	Three Months Ended March 31,
	September 30,						September 30,
	2026			2025
	2025			2024			2025			2024
Continuing operations:
Net revenues	$	~~16,214~~—		$	~~15,022~~—		$	~~44,125~~		$	~~35,656~~
Related party net revenues		—			—			—			7,658
Operating expenses
Total net revenues		16,214			15,022			44,125			43,314
General and administrative		3,618			870
Cost of revenues		14,398			10,790			33,108			33,211
Total operating expenses		3,618			870
Gross profit		1,816			4,232			11,017			10,103
Net loss from operations		(3,618	)		(870	)
Operating expenses
Interest expense, net		(131	)		(91	)
Research and development		181			715			2,723			1,728
Loss on remeasurement of derivative liability		(227	)		—
Sales and marketing		2,452			3,045			9,136			8,756
Equity income from DNA X LLC		48			—
General and administrative		3,163			2,848			9,225			7,937
Net loss from continuing operations before income taxes		(3,928	)		(961	)
Impairment of contract fulfillment assets		—			—			—			3,217
Income tax expense from continuing operations		—			—
Total operating expenses		5,796			6,608			21,084			21,638
Net loss from continuing operations		(3,928	)		(961	)
Income (loss) from operations		(3,980	)		(2,376	)		(10,067	)		(11,535	)
Discontinued Operations:
Interest expense, net		(522	)		—			(1,002	)		(17	)
Income from discontinued operations, net of tax		10,268			1,419
Other expense, net		(161	)		(19	)		(340	)		(203	)
Net income	$	6,340		$	458
Income (loss) before income taxes		(4,663	)		(2,395	)		(11,409	)		(11,755	)
Net earnings (loss) per share basic and diluted:
Income tax expense		(90	)		(117	)		(361	)		(279	)
Continuing operations*		(3.11	)		(2.96	)
Net income (loss)	$	(4,753	)	$	(2,512	)	$	(11,770	)	$	(12,034	)
Discontinued operations*		8.12			4.37
Net income (loss) per share (*):
Net income*	$	5.01		$	1.41
Basic (*)	$	(4.83	)	$	(9.32	)	$	(19.14	)	$	(46.50	)
Weighted-average shares used in computing net loss per share:
Diluted (*)	$	(4.83	)	$	(9.32	)	$	(19.14	)	$	(46.50	)
Basic and diluted*		1,265,067			324,431
Weighted-average shares used in computing net income (loss) per share (*):
Basic (*)		984,927			269,388			614,985			258,788
Diluted (*)		984,927			269,388			614,985			258,788

(*) Adjusted retroactively to reflect the 1-for-18 reverse stock split that became effective on October 2728, 2025, see Note 1.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~SONIM~~DNA ~~TECHNOLOGIES~~X, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ ~~EQUITY~~DEFICIT

(IN THOUSANDS EXCEPT SHARE AMOUNTS)

(UNAUDITED)

For the Three Months Ended September 30, 2024	Shares (*)		Amount*		Additional Paid-in Capital*		Accumulated Deficit			Stockholders’ Equity
	Common stock				Additional Paid-in		Accumulated			Stockholders’
For the Three Months Ended September 30, 2024	Shares (*)		Amount (*)		Capital (*)		Deficit			Equity
For the Three Months Ended March 31, 2025	Shares (*)		Amount (*)		Capital (*)		Deficit			Deficit
Balance at July 1, 2024		268,182	$	—	$	276,956	$	(259,482	)	$	17,474
Balance at January 1, 2025		276,881	$	—	$	277,908	$	(283,608	)	$	(5,700	)
Issuance of common stock upon exercise of stock options and settlement of restricted stock units, net of taxes withheld		~~522~~117		—		—		—			—
Issuance of common stock, net of issuance costs		174,~~953~~859		—1		143,536		—			143,537
Stock-based compensation		—		—		~~373~~626		—			~~373~~626
Net loss		—		—		—		(2,512	)		(2,512	)
Net income		—		—		—		458			458
Balance at September 30, 2024		270,657	$	—	$	277,343	$	(261,994	)	$	15,349
Balance at March 31, 2025		351,857	$	1	$	282,070	$	(283,150	)	$	(1,079	)

For the Three Months Ended September 30, 2025	Shares		Amount*			Additional Paid-in Capital*		Accumulated Deficit			(Deficit)
	Common stock					Additional Paid-in		Accumulated			Stockholders’
	Common stock					Additional Paid-in		Accumulated			Stockholders’ Equity
For the Three Months Ended March 31, 2026	Shares (*)		Amount (*)			Capital (*)		Deficit			Deficit
For the Three Months Ended September 30, 2025	Shares (*)		Amount (*)			Capital (*)		Deficit			(Deficit)
Balance at January 1, 2026		1,265,067	$	1		$	296,309	$	(304,265	)	$	(7,955	)
Balance at July 1, 2025		574,353	$	1		$	289,290	$	(290,625	)	$	(1,334	)
Remeasurement of redemption value of redeemable common stock		—		—			—		328			328
Issuance of common stock, net of issuance costs		411,111		7			4,838		—			4,845
Stock-based compensation		—		—			304		—			304
Promissory note payments settled in equity		30,188		1			374		—			375
Net income		—		—			—		6,340			6,340
Stock-based compensation		—		—			166		—			166
Balance at March 31, 2026		1,265,067	$	1		$	296,613	$	(297,597	)	$	(983	)
Impact of retroactively adjusted reverse stock splits		—		(8	)		8		—			—
Net loss		—		—			—		(4,753	)		(4,753	)
Balance at September 30, 2025		1,015,652	$	1		$	294,676	$	(295,378	)	$	(701	)

For the Nine Months Ended September 30, 2024	Shares (*)		Amount*			Capital*			Deficit			Equity
	Common stock					Additional Paid-in			Accumulated			Stockholders’
For the Nine Months Ended September 30, 2024	Shares (*)		Amount (*)			Capital (*)			Deficit			Equity
Balance at January 1, 2024		245,952	$	4		$	272,324		$	(249,960	)	$	22,368
Issuance of common stock upon exercise of stock options and settlement of restricted stock units, net of taxes withheld		3,308		1			52			—			53
Taxes withheld on net settled restricted stock units		—		—			(5	)		—			(5	)
Issuance of common stock, net of issuance costs		21,397		4			3,794			—			3,798
Stock-based compensation		—		—			1,169			—			1,169
Impact of retroactively adjusted reverse stock splits		—		(9	)		9			—			—
Net loss		—		—			—			(12,034	)		(12,034	)
Balance at September 30, 2024		270,657	$	—		$	277,343		$	(261,994	)	$	15,349

(*)	Adjusted retroactively to reflect the 1-for-18 reverse stock split that became effective on October 27, 2025, see Note 1.

For the Six Months Ended September 30, 2025	Shares		Amount*			Capital*		Deficit			(Deficit)
	Common stock					Additional Paid-in		Accumulated			Stockholders’ Equity
For the Nine Months Ended September 30, 2025	Shares (*)		Amount (*)			Capital (*)		Deficit			(Deficit)
Balance at January 1, 2025		276,881	$	—		$	277,908	$	(283,608	)	$	(5,700	)
Balance		276,881	$	—		$	277,908	$	(283,608	)	$	(5,700	)
Issuance of common stock upon settlement of restricted stock units		42,956		—			—		—			—
Issuance of common stock, net of issuance costs		665,627		12			13,785		—			13,797
Stock-based compensation related to 2024 bonus accrual		—		—			1,215		—			1,215
Promissory note payments settled in equity		30,188		1			374		—			375
Stock-based compensation		—		—			1,382		—			1,382
Impact of retroactively adjusted reverse stock splits		—		(12	)		12		—			—
Net loss		—		—			—		(11,770	)		(11,770	)
Balance at September 30, 2025		1,015,652	$	1		$	294,676	$	(295,378	)	$	(701	)
Balance		1,015,652	$	1		$	294,676	$	(295,378	)	$	(701	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(*) Adjusted retroactively to reflect the 1-for-10 reverse stock split that became effective on July 17, 2024 and the 1-for-18 reverse stock split that became effective on October 27, 2025, see Note 1.

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~SONIM~~DNA ~~TECHNOLOGIES~~X, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	2025			2024
	2026			2025
	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2025			2024
	2026			2025
Cash flows from combined continuing and discontinued operations:
Cash flows from operating activities:
Net loss	$	~~(11~~6,~~770~~340	)	$	~~(12,034~~458	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,804			2,643
Gain on sale of assets, net assets transferred		(15,563	)		—
Stock-based compensation		1,382			1,169
Depreciation and amortization		—			1,055
Release of customer allowance liability		(5,429	)		—
Amortization of debt discount and issuance costs		43			41
Inventory write-downs		—			1,013
Stock-based compensation ($211 from continuing and $93 from discontinued operations for 2026 and all from discontinued operations for 2025-see Note 7)		304			290
Impairment of contract fulfillment assets		1,084			3,217
Loss on remeasurement of derivative liability		227			—
Other		115			287
Release of customer allowance liability		—			(5,271	)
Investment income from DNA X LLC under the equity method		(48	)		—
Other		—			(97	)
Changes in operating assets and liabilities:
Accounts receivable		~~702~~250			~~8,579~~(649	)
Non-trade receivable		~~(2,722~~—	)		~~(3,361~~667	)
Related party receivable		181			(644	)
Inventory		5,490			2,255
Inventory		18			(6,870	)
Prepaid expenses and other current assets		1,663			(127	)
Prepaid expenses and other current assets		811			(639	)
Contract fulfilment assets		129			(2,548	)
Contract fulfillment assets		(6,330	)		(8,643	)
Other assets		(103	)		(3	)
Other assets		(17	)		(125	)
Accounts payable		(2,653	)		(5,554	)
Accounts payable		(2,440	)		517
Accrued liabilities		(1,288	)		(218	)
Accrued liabilities		(26	)		10,828
Deferred tax assets		1,364			—
Income tax payable		115			86
Deferred tax liabilities		600			—
Net cash used in operating activities		(21,522	)		(3,977	)
Income tax payable		(221	)		95
Net cash used in operating activities		(3,466	)		(9,606	)
Cash flows from investing activities:
Purchase of property and equipment		—			(206	)
Net cash received from sale of assets		3,358			—
Net cash used in investing activities		—			(206	)
Net cash provided by investing activities		3,358			—
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		~~13,797~~—			3,~~798~~537
Proceeds from promissory note, net of issuance costs		~~5,110~~—			—2,790
Repayments of short-term borrowings		(591	)		—
Proceeds from short-term borrowings		—			51
Proceeds from stock option exercises, net of taxes paid on vested restricted stock units		—			48
Net cash provided by financing activities		—			6,378
Net cash provided by financing activities		18,316			3,846
Net decrease in cash and cash equivalents		(108	)		(3,228	)
Net decrease in cash and cash equivalents		(3,206	)		(337	)
Cash and cash equivalents at beginning of period		1,303			5,343
Cash and cash equivalents at beginning of period		5,343			9,397
Cash and cash equivalents at end of period	$	1,195		$	2,115
Cash and cash equivalents at end of period	$	2,137		$	9,060
Supplemental disclosure of cash flow information:
Cash paid for interest	$	~~241~~257		$	1720
Cash paid for income taxes	$	~~122~~—		$	12
Non-cash activities:
Supplemental disclosure of non-cash activities:
Receivables transferred to satisfy payables (Note 3)	$	—		$	11,308
Repayment of notes payable from proceeds of asset sale	$	5,476		$	—
Accrued bonus settled in equity	$	1,215		$	—
Receivable for cash held back from asset sale	$	1,500		$	—
Promissory note payments settled in equity	$	375		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~SONIM~~DNA ~~TECHNOLOGIES~~X, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(UNAUDITED)~~

(~~In Thousands, except Share and Per Share Amounts~~UNAUDITED)

NOTE 1 — The Company and Its Significant Accounting Policies

Description of Business—DNA X, Inc. (“the Company”) was incorporated in the state of Delaware on August 5, 1999 under the name Sonim Technologies Inc., and is headquartered in San Diego, California. Effective January 23, 2026, the Company changed its name to DNA X, Inc. The Company operates an AI and crypto trading platform that operates on the internet and is designed to harness advanced AI and machine learning technologies to automate intelligent trading strategies, enabling clients to capitalize on data-driven insights and dynamic opportunities. See https://dnax.us for more information on the services offered. Until January 23, 2026, the Company operated a cell phone and mobile hotspot manufacturing business. The assets of the phone and mobile hotspot business were sold to Pace Car Acquisition LLC on January 23, 2026.

~~Sonim~~The ~~Technologies,~~Company ~~Inc.~~generates ~~was~~revenue ~~incorporated~~from intrading ~~the~~commissions ~~state~~that ofare ~~Delaware~~based on ~~August~~the 5,value ~~1999,~~of ~~and~~the istrades ~~headquartered~~that incustomers ~~San~~execute ~~Diego,~~on ~~California.~~the ~~The~~ Company’s ~~offers~~DNA aX ~~robust~~trading ~~portfolio~~website. ~~that~~Customers ~~includes~~are ~~rugged~~individual ~~handsets,~~investors ~~smartphones,~~from ~~wireless~~around ~~internet~~the ~~devices,~~world. ~~software,~~DNA ~~services,~~X ~~and~~has ~~accessories.~~positioned itself as a low price trading platform ~~These~~that ~~products~~allows ~~are~~traders ~~engineered~~to implement strategies to ~~deliver~~take ~~reliable~~advantage ~~communication~~of fluctuations in ~~challenging~~relative ~~and~~values ~~unpredictable~~of ~~environments,~~cryptocurrency ~~serving~~pairs. ~~sectors~~The ~~such as~~platform ~~critical~~allows ~~communications,~~investors ~~first~~to ~~responders,~~set ~~government,~~up ~~industrial,~~automated ~~construction~~trading strategies, ~~hospitality~~to monitor other trader’s trading strategies in real time, and ~~logistics.~~to ~~The~~simulate trades ~~Company~~without ~~distributes its~~any ~~products~~cost. ~~primarily~~DNA ~~through~~X ~~major~~has ~~wireless~~been ~~carriers.~~operating ~~The~~since ~~Company~~November ~~currently~~and has ~~products~~grown ~~available~~through atword-of-mouth ~~all~~and ~~three~~social Umedia.S. ~~Tier-one~~The ~~carriers~~Company is –currently ~~AT&T,~~building ~~T-Mobile~~enhanced ~~and~~features ~~Verizon~~for astraders ~~well~~that aswill ~~the~~be ~~three~~implemented ~~primary~~in ~~carriers~~2026 inand ~~Canada~~are –expected ~~Bell,~~to ~~Telus~~drive ~~and~~more ~~Rogers,~~customers ~~Telstra~~to inDNA ~~Australia,~~X. ~~and~~The ~~multiple~~Company ~~carriers~~is ~~throughout~~also ~~Europe.~~working ~~These~~on ~~carriers~~expanding ~~resell~~ the ~~Company’s~~number ~~products,~~of ~~along~~cryptocurrencies ~~with~~that ~~network~~will ~~services,~~be available to ~~end~~trade ~~customers focusing~~which onis ~~two~~expected ~~primary~~to ~~end~~increase trading ~~markets:~~volume ~~industrial enterprise~~ and ~~the~~commission ~~public sector~~revenue.

~~The~~Liquidity ~~Company~~and isAbility ~~executing~~to Continue as a ~~strategic~~Going ~~expansion~~Concern—The ~~initiative,~~Company’s ~~focusing~~consolidated onfinancial ~~broadening~~statements account for the continuation of its ~~market~~business ~~reach~~as ~~with~~a ~~new~~going ~~products,~~concern. ~~geographical~~The ~~footprint,~~Company is subject to the risks and uncertainties associated with operating an AI and ~~customer~~crypto ~~segments~~trading platform including ~~enterprise,~~the ~~small~~ability to attract new customers and ~~medium~~to keep existing customers from moving their business, ~~and~~to ~~prosumers~~other competitors. ~~This~~On ~~strategy~~May is20, ~~underpinned~~2026, byhe Company entered into a ~~strong~~securities ~~emphasis~~Purchase Agreement with DNA Holdings pursuant onto ~~execution.~~which ~~The~~the Company ~~has~~sold ~~introduced~~and ~~new~~issued ~~product~~to ~~categories:~~DNA ~~Connected~~Holdings ~~Solutions~~a ~~featuring~~convertible ~~wireless~~promissory ~~internet~~note ~~products,~~with a ~~next-generation rugged~~principal ~~smartphone~~balance of $3,053. ~~and~~The apurchase price ~~new~~of ~~range~~the note consisted of ~~mid~~$1,800 ~~and~~in ~~low-tier~~cash ~~professional~~to ~~rugged~~the ~~phones~~Company, ~~all~~and ~~boasting~~the IPsurrender ~~ratings~~of the convertible promissory note dated December 15, ~~MIL-STD-810H~~2025, ~~standards~~in the principal amount of $1,200 including $53 of accrued unpaid interest. The Company will receive $1.8 in cash proceeds and the cash is expected to allow the Company to operate the DNA X AI and crypto platform through December 31, 2026, which is the ~~elements~~maturity date of ~~Sonim~~the note. See Note 12. If the note is not converted into the Company’s ~~Rugged~~equity, ~~Performance~~then ~~Standards~~the ~~(“RPS”)~~Company will need to raise additional capital before December 31, ~~highlighting~~2026. Due to the uncertainty of whether the note will be converted or of the Company obtaining additional financing, there is substantial doubt regarding the Company’s ~~value~~ability ~~proposition~~ to ~~target~~continue as a going concern as ~~markets~~of the date of the filing of this 10-Q.

~~During~~Reverse Stock Split—On October 28, 2025, the ~~second~~Company ~~half~~effected a 1-for-18 reverse stock split of ~~2024~~its issued and ~~through~~outstanding common stock (the ~~filing~~“Reverse ~~date~~Stock Split”). The Company’s common stock began trading on the Nasdaq Capital Market on a post-split basis on October 29, 2025. As a result of ~~this~~the ~~report~~Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 18, 2025, was automatically converted into one-eight-tenth (1/18) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s ~~launched~~equity, except to the ~~following~~extent ~~products:~~that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share, instead cash was paid to stockholders for the value of the fractional share.

●The Reverse ~~Sonim~~Stock ~~H500-series~~Split ofdid 5Gnot ~~mobile~~change ~~hotspots available at Verizon and Verizon Frontline Verified, UScellular, and Bell in North America, as well as at select carriers and through~~ the ~~Company’s~~par ~~distribution~~value ~~partners~~of ~~in Europe; ● Sonim MegaConnect,~~ the ~~world’s~~common ~~first~~stock 5Gor ~~High Powered User Equipment (HPUE) rugged mobile hotspot, available at AT&T Business and FirstNet® in~~ the ~~United~~authorized ~~States,~~number ~~and~~of isshares ~~also~~of ~~FirstNet~~common ~~Trusted;~~stock. ●All ~~Sonim~~outstanding stock H100 4G mobile hotspot available through Telia Finland and distribution partners in Europe; ● XP100 4G and XP400 5G professional rugged phones available through Deutsche Telekom in Germany and distribution partners in Europe and South Africa; ● XP Pro 5G rugged smartphone available through Verizon and Verizon Frontline Verifiedoptions, ~~AT&T~~restricted ~~and~~stock ~~FirstNet Ready~~units, and ~~T-Mobile~~warrants ~~and~~entitling ~~certified~~their ~~for~~holders ~~T-Priority~~to inpurchase ~~the~~or ~~United~~obtain ~~States,~~or ~~Bell,~~convert ~~Telus,~~into ~~Rogers,~~shares ~~and~~of ~~SaskTel~~our incommon stock ~~Canada,~~were ~~and through select distributors in Europe the Middle East~~adjusted, ~~and~~as ~~Africa;~~required ●by ~~XP Pro Thermal 5G rugged smartphone available in Europe,~~ the ~~Middle~~terms ~~East,~~of ~~and~~these ~~Africa through select distributors; and ● XP3plus 5G rugged flip phone available through T-Mobile and certified for T-Priority~~securities.

The Company’s stockholders’ equity, in the aggregate, remained unchanged following the Reverse Stock Split. Net income (loss) per share increased because there were fewer shares of common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the Reverse Stock Split.

All common share and per-share amounts in this Form 10-Q have been retroactively restated to reflect the effect of the Reverse Stock Split.

~~Most~~Financial Statement Presentation—The unaudited condensed consolidated financial statements include the accounts of ~~these~~DNA ~~products~~X, Inc. ~~are~~and ~~supported~~its bywholly owned subsidiaries (collectively “DNA X” or the ~~SonimWare™~~“Company”). ~~platform~~Intercompany accounts and transactions ~~enterprise~~have ~~services~~been eliminated. In ~~2025,~~the ~~all~~opinion of the Company’s ~~new~~management, ~~products~~the unaudited condensed consolidated financial ~~that~~statements ~~launched~~reflect ~~with~~all ~~tier-one~~adjustments, ~~carriers~~which are normal and recurring in ~~the~~nature, ~~United~~necessary ~~States~~for ~~included~~fair afinancial ~~certification~~statement ~~associated~~presentation. The ~~with~~preparation ~~carrier~~of ~~first~~these ~~responder~~unaudited ~~initiatives,~~condensed consolidated financial statements and accompanying notes in conformity with U.S. ~~including~~generally ~~FirstNet~~accepted ~~Ready,~~accounting ~~FirstNet~~principles ~~Trusted,~~(“GAAP”) ~~Verizon~~requires ~~Frontline~~management ~~Certified,~~to make estimates and ~~T-Mobile~~assumptions ~~certified~~that ~~for~~affect ~~T-Priority~~the amounts reported. ~~During~~Actual ~~2025~~results could differ materially from those estimates. Certain prior period amounts in the ~~Company~~unaudited ~~launched~~condensed ~~the~~consolidated XPfinancial ~~Pro~~statements ~~Thermal~~and 5Gaccompanying ~~smartphone~~notes ~~for~~have ~~Europe~~been ~~which~~reclassified ~~includes~~to anconform ~~SDK-enabled~~to ~~Sonim~~the ~~IRIS~~current ~~software~~period’s presentation. ~~for~~These ~~custom~~unaudited ~~application~~condensed ~~development~~ consolidated financial statements and anaccompanying ~~integrated~~notes ~~thermal~~should ~~camera~~be byread ~~FLIR®~~in ~~that~~conjunction ~~benefits~~with the aCompany’s ~~number~~annual ofconsolidated ~~vertical~~financial ~~trades~~statements ~~such~~and asaccompanying ~~electricians,~~notes ~~plumbers,~~included ~~public~~in ~~safety,~~its Annual Report on Form 10-K for ~~construction,~~the ~~agriculture,~~year ~~amongst~~ended ~~others~~December 31, 2025.

APrinciples ~~significant~~of ~~revenue~~Consolidation—The ~~driver~~accompanying inconsolidated ~~the~~financial ~~first~~statements ~~quarter~~through ofJanuary ~~2024~~23, ~~was~~2026 ainclude ~~range~~the accounts of ~~low-priced~~DNA ~~products~~X, Inc. ~~developed~~and ~~under~~its wholly owned foreign subsidiaries, Sonim’s ~~original~~Technologies ~~design~~(India) Private Limited, Sonim Technologies (Shenzhen) Limited, Sonim ~~manufacturer~~Technologies Inc. Shenzhen Limited Beijing Branch, Sonim Technologies (~~“ODM”~~Hong Kong) ~~model~~Limited, ~~emphasizing~~Sonim ~~high-volume~~Technologies Germany GmbH and ~~low-margin~~Sonim Technologies ~~production~~Communications ~~tailored~~India toPrivate aLimited ~~specific~~(collectively, ~~customer~~the “Company”). After the Company’s ~~needs.~~subsidiaries in ~~These~~Shenzhen, ~~sales~~Beijing, ~~concluded~~Hong inKong, ~~the~~and ~~first~~Germany ~~quarter~~were ofsold ~~2024~~on ~~due~~January to23, ~~its~~2026, ~~life~~only ~~cycle~~the ~~end~~Indian subsidiary is consolidated after January 23, 2026. ~~The~~All ~~ODM~~significant ~~model~~intercompany ~~does~~transactions ~~not~~and ~~represent~~balances ~~the~~have ~~Company’s~~been ~~core business~~eliminated ~~strategy~~in consolidation.

~~Proposed~~Reclassifications—Prior ~~Transaction~~period ~~with~~amounts ~~Social~~were ~~Mobile~~reclassified to conform to the current period presentation including the separation of amortization of debt discounts and issuance costs on the statement of cash flow.

~~On July~~Assets ~~17,~~Held ~~2025,~~For ~~the~~Sale—The Company ~~entered~~generally ~~into~~considers anassets ~~asset~~to ~~purchase~~be ~~agreement~~held (for sale when the ~~“Asset~~following ~~Purchase~~criteria ~~Agreement”~~are met: (i) bymanagement ~~and~~commits to ~~among~~a plan to sell the ~~Company~~ property, as(ii) ~~seller,~~the ~~Pace~~property ~~Car~~is ~~Acquisition~~available ~~LLC~~for sale immediately, as(iii) management has initiated an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group, (iv) the ~~“Buyer”)~~sale of the property within one year is considered probable, (v) the ~~Seller~~property ~~Representative~~is ~~named~~actively being marketed for sale at a price that is reasonable in relation to its current fair value and (vi) significant changes to the ~~Asset~~plan to sell are not expected. Property classified as held for sale is no ~~Purchase~~longer ~~Agreement,~~depreciated and, ~~Social~~is ~~Mobile~~reported ~~Technology~~at ~~Holdings~~the ~~LLC~~lower (of its carrying value or its estimated fair value less estimated costs to sell. During the ~~“Parent”)~~fourth quarter ended December 31, ~~solely~~2025, ~~for~~the Company deemed that its phone and hotspot operations met the ~~purpose~~held offor ~~guaranteeing~~sale criteria and ~~complete~~was ~~payment~~classified as such on the audited condensed consolidated balance sheet for the December 31, 2025 balance sheet and ~~performance~~the ~~obligations~~prior ofperiod that was presented. The six criteria were met on December 30, 2025 when the ~~Buyer~~stockholders ~~contained~~approve inthe asset sale and the ~~Asset~~asset ~~Purchase~~sale ~~Agreement~~became probable.

~~Pursuant~~ Discontinued Operations—The Company deems it appropriate to classify a business as a discontinued operation if the ~~Purchase~~related ~~Agreement,~~disposal group meets all the ~~Buyer~~following ~~agreed~~criteria: to(i) ~~acquire~~the ~~substantially~~disposal ~~all~~group ~~assets~~is a component of the Company, (ii) the component meets the held-for-sale criteria, and ~~its~~(iii) ~~subsidiaries~~the ~~related~~disposal toof the component represents a strategic shift that has a major effect on the Company’s operations and financial ~~enterprise~~results. 5GDuring ~~solutions~~the ~~business,~~fiscal ~~including~~quarter ~~rugged~~ended ~~handsets~~December 31, ~~smartphones~~2025, ~~wireless~~the ~~internet~~Company ~~devices,~~deemed ~~software,~~its ~~services,~~phone and ~~accessories (collectively,~~hotspot ~~the~~operations ~~“Business”)~~to ~~for~~be adiscontinued ~~purchase~~operations due ~~price~~to ofthe ~~$15,000~~disposal ingroup ~~cash,~~meeting ~~subject~~all tothree ~~(i)~~criteria. As ~~customary~~such, ~~working~~the ~~capital,~~results ~~indebtedness~~ of the phone and ~~transaction~~hotspot ~~expense~~operations ~~adjustments~~are ~~(referred~~presented toas discontinued operations in the ~~Asset~~unaudited ~~Purchase~~condensed ~~Agreement~~consolidated asstatements ~~the~~of ~~“Adjustment~~operations ~~Amount,”~~for ~~which~~the ~~may~~three ~~be a~~months ~~positive~~ended orMarch a31, ~~negative~~2026 ~~number)~~ and ~~(ii)~~March up31, ~~to $5~~2025,~~000~~ and inhave ~~the~~been ~~form~~excluded offrom anboth ~~earn-out~~continuing ~~payment~~operations ~~(the~~and ~~“Earn-Out~~segment ~~Payment”),~~results iffor ~~earned~~all periods presented.

~~Earn~~Related Party Transactions— On October 1, 2024, the Company signed an agreement with a then-~~Out~~related party, in which a family member of the Company’s then-director, Jeffrey Wang, holds an indirect interest of approximately 40%, to purchase parts and components to be used in the manufacturing of the company’s products for the aggregate amount of approximately $1,000. The agreement was executed in the ordinary course of business. The Company did not purchase any raw materials under this agreement in 2026. As of July 18, 2025, Jeffrey Wang is no longer a director of the Company.

The ~~Earn-Out~~Company’s ~~Payment~~director, ifScott ~~any~~Walker, ~~will~~has bean ~~determined~~ownership ~~based~~interest onof ~~the~~approximately ~~performance~~50% ofin ~~the~~DNA ~~Business~~Holdings, ~~during~~ the ~~twelve-month~~entity ~~period~~that ~~beginning~~sold ~~July~~the 1,DNA ~~2025,~~X ~~and~~LLC ~~ending~~cryptocurrency ~~June~~trading ~~30,~~platform ~~2026~~to the Company. ~~If,~~The ~~during~~entity ~~such~~received ~~period,~~19.99% of the ~~Business~~pre-transaction ~~generates~~shares ~~Net~~of ~~Revenue~~the ~~(as~~Company ~~defined~~ in ~~the~~redeemable ~~Asset~~shares ~~Purchase~~of ~~Agreement) in excess~~common stock of ~~$70,000,~~ the Company ~~will~~on beDecember ~~entitled~~15, to2025. ~~receive~~As ~~an amount equal to 50%~~ of ~~the~~March ~~Net~~31, ~~Revenue~~2026, ~~above~~these ~~such~~redeemable ~~threshold,~~shares ~~calculated~~now inrepresent ~~accordance~~approximately ~~with~~15% ~~the terms~~ of the ~~Asset~~Company’s ~~Purchase~~outstanding ~~Agreement,~~stock. ~~provided~~After ~~that~~June ~~the~~15, ~~Earn-Out~~2026, ~~Payment~~DNA Holdings will ~~not~~have ~~exceed~~the ~~$5,000.~~right ~~For purposes~~to ofconvert ~~the~~a ~~Asset~~note ~~Purchase~~that ~~Agreement,~~will ~~“Net~~result ~~Revenue”~~in ~~generally~~the ~~means~~entity ~~the~~owning ~~gross~~up ~~revenue~~to 28% of the ~~Business~~outstanding ~~determined~~shares inof ~~accordance with~~the UCompany.S. ~~generally~~Conversion ~~accepted~~of ~~accounting~~shares ~~principles~~from the ~~(“GAAP”)~~note ~~minus~~is ~~(a)~~subject ~~customary~~to ~~trade,~~shareholders’ ~~quantity~~approval. ~~and~~The ~~cash~~total ~~discounts~~consideration ~~actually taken;~~paid ~~(b)~~by ~~credits,~~the ~~allowances,~~Company ~~rebates~~to ~~and~~DNA ~~chargebacks~~Holdings for ~~returns,~~the ~~rejections,~~acquisition ~~damaged~~of ~~goods~~the ~~and~~trading ~~billing~~platform ~~errors;~~was ~~(c)~~$1,228 ~~outbound~~which ~~freight,~~was ~~insurance,~~the ~~customs~~fair ~~duties~~value ~~and~~based ~~other~~on ~~transportation~~the ~~charges~~stock ~~directly~~price ~~related~~of tothe ~~such~~Company ~~sales;~~on ~~(d)~~December ~~sales~~15, ~~value-added,~~2025 ~~use~~ and ~~similar~~$1,200 ~~taxes (other~~in ~~than~~proceeds ~~income~~were ~~taxes)~~received ~~collected~~by ~~from customers and remitted to~~ the ~~appropriate~~Company ~~taxing~~on ~~authority; and (e) any other items that, in~~December ~~accordance with GAAP~~15, ~~are~~2025 ~~specifically and solely deductible~~ from ~~gross~~the ~~revenue~~sale toof ~~arrive~~the atconvertible ~~net revenue~~note.

NoThere is a put option that expires on June 30, 2026 that allows DNA Holdings to ~~Solicitation~~take back the DNA X LLC investment by returning the Company’s stock. The board of directors of the Company determined that the consideration paid for the DNA X trading platform was fair by reviewing information provided by the seller, attending presentations by the seller, and ~~Change~~comparing the offer to available alternatives. The nomination committee of ~~Recommendation~~the board of directors determined that Scott Walker became a related party when he became a board member on January 30, 2026.

~~The Asset~~Redeemable ~~Purchase~~Common ~~Agreement~~Stock—Stock that ~~includes~~was ~~covenants~~issued ~~requiring~~for the ~~Company~~DNA ~~not~~X ~~to,~~LLC ~~directly~~business orhas ~~indirectly~~been ~~(i)~~classified ~~solicit,~~as ~~initiate,~~redeemable ~~knowingly~~common ~~encourage, or~~stock ~~knowingly induce any Alternative Transaction (as defined~~ in the ~~Asset~~temporary ~~Purchase~~equity ~~Agreement),~~section ~~(ii)~~of ~~engage~~the ~~in discussions or negotiations~~balance ~~regarding~~sheet. ~~any~~This ~~Alternative~~is ~~Transaction,~~because orthere ~~(iii)~~is ~~enter~~a ~~into~~Put ~~any~~Option ~~letter~~that ofallows ~~intent,~~the ~~term~~Seller ~~sheet, memorandum of understanding, or other agreement relating~~ to ~~any~~give ~~Alternative~~back ~~Transaction.~~the ~~However,~~stock ~~prior~~and to ~~the~~take ~~obtaining~~back of the ~~stockholder~~business. ~~approval~~Once of the ~~Asset Purchase Agreement~~Put ~~(the~~Option ~~“Stockholder~~is ~~Approval”),~~terminated aor ~~customary~~expires ~~“fiduciary~~on ~~out”~~June ~~provision allows the Company~~30, ~~under certain specified circumstances~~2026, tothe ~~provide~~redeemable ~~information~~common ~~to,~~stock ~~and~~will ~~participate~~be inreclassified ~~discussions and engage in discussions or negotiations with, third parties with respect~~ to anpermanent ~~acquisition~~equity. ~~proposal~~At if the ~~Company~~end ~~complied~~of each ~~with~~reporting ~~certain~~period ~~notice~~we ~~and~~remeasure ~~other requirements and~~ the ~~board~~value of ~~directors of~~ the ~~Company~~redeemable ~~(or~~common ~~the~~stock ~~Special~~using ~~Committee,~~the asclosing ~~applicable)~~stock ~~determines~~price inon ~~good~~the ~~faith~~day ~~(in~~that ~~each~~the ~~case after consultation with its outside legal~~period ~~counsel~~ends. ~~and~~We ~~financial~~will ~~advisors),~~mark ~~taking into account~~ the ~~legal,~~value ~~financial, regulatory and other aspects~~ of ~~such~~the ~~proposal,~~redeemable ~~that~~common ~~such~~stock ~~proposal would be more favorable~~ to the ~~Company’s~~remeasured ~~stockholders~~value ~~from~~and athe ~~financial~~offset ~~point~~will ofbe ~~view~~to ~~than~~retained ~~the~~deficit. ~~consummation of the Asset Purchase~~Earnings ~~Agreement~~Per ~~and~~Share iswill ~~reasonably~~not ~~capable~~be ofadjusted ~~being~~for ~~consummated~~this (aadjustment ~~“Superior Proposal”). Negotiations related~~ to ~~a reverse merger not involving~~ the ~~Business~~value ~~are~~of ~~expressly excluded from~~ the ~~no-solicitation~~redeemable ~~covenant~~common stock.

~~Closing~~Estimates—The ~~Conditions~~preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates include, but are not limited to, estimates related to revenue recognition; valuation assumptions regarding the determination of the fair value of common stock, as well as stock options; the useful lives of the Company’s long-lived assets; product warranties; loss contingencies; the recognition and measurement of income tax assets and liabilities, including uncertain tax positions; the net realizable value of inventory; allowances for credit losses; and estimation of assets and liabilities for operating entities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or revise the carrying value of its assets or liabilities.

The completion of the Asset Purchase Agreement is subject to the satisfaction of certain closing conditions, including (i) the Stockholder Approval, (ii) accuracy of the representations and warranties of the parties, (iii) the absence of any order, injunction or law prohibiting consummation of the Asset Purchase Agreement and (iv) receipt by the Company of certain third-party consents. The consummation of the Asset Purchase Agreement is not subject to any financing condition.

Termination; Termination Fee

The Asset Purchase Agreement may be terminated in certain circumstances, including:

(i) by mutual written agreement of the parties; (ii) by either party if there is a non-appealable order of court or a governmental authority prohibiting, enjoining, restricting, or making illegal the transactions contemplated by the Asset Purchase Agreement or, if the consummation of the Asset Purchase Agreement is otherwise illegal or prohibited by any applicable law (the “Illegality”); (iii) by either party if the Stockholder Approval is not obtained; (iv) by either party if the Asset Purchase Agreement is not consummated within 180 calendar days after the date of the execution of the Asset Purchase Agreement, i.e., January‎ ‎13‎, ‎2026 (the “Outside Date”); (v) by either party in the event of the other party’s material breach or non-performance of certain representations, warranties, and covenants of the Asset Purchase Agreement (a “Material Breach”);

~~(vi)~~Concentrations of byCredit ~~Buyer~~Risk—The ~~in the event the~~ Company’s ~~board~~commission ~~elects~~revenue ~~not~~is toconcentrated ~~recommend~~in ~~that~~ the ~~Company’s~~cryptocurrency ~~stockholders~~trading ~~approve~~industry, ~~and~~which ~~adopt~~is ~~the~~highly competitive ~~Asset~~and ~~Purchase~~rapidly ~~Agreement~~changing. orSignificant ~~the~~technological ~~Company~~changes ~~breaches~~in ~~its~~the ~~non-solicitation~~industry ~~obligations;~~or ~~and~~customer ~~(vii) by the Company~~requirements, ifor ~~prior to obtaining~~ the ~~Stockholder~~emergence ~~Approval, its board~~ of ~~directors~~competitive products ~~elects to proceed~~ with annew ~~Alternative~~capabilities ~~Transaction~~or astechnologies, acould ~~result~~adversely ofaffect athe ~~Superior~~Company’s ~~Proposal~~consolidated ~~(together~~operating ~~with item (vi) above, the “Adverse Recommendation”)~~results.

~~The~~Financial ~~Company~~instruments ~~will~~that bepotentially ~~obligated~~subject tothe ~~pay~~Company to ~~the~~credit ~~Buyer~~risk anconsist ~~amount~~primarily ~~equal~~of tocash ~~the~~and ~~transaction~~cash ~~expenses~~equivalents ~~reasonably~~and ~~incurred~~accounts byreceivable. Cash ~~the~~and ~~Buyer~~cash ~~and~~equivalents ~~its~~are ~~affiliates~~deposited with high-quality, ~~plus~~ afederally ~~termination~~insured ~~fee~~commercial ~~equal~~banks toin ~~$1,000~~the ~~within~~United ~~three~~States ~~business~~and ~~days~~cash ~~following~~balances are ~~the~~in ~~termination~~excess of ~~the~~federal ~~Asset~~insurance ~~Purchase~~limits ~~Agreement~~as of March 31, if2026 and the ~~latter is~~year ~~terminated~~ended ~~because of:~~2025.

~~(i)~~Segment Information—The ~~the~~Company ~~Asset~~managed ~~Purchase~~the ~~Agreement~~DNA isX ~~not~~LLC ~~consummated~~business onin or2026. ~~before~~Because the ~~Outside~~Company does ~~Date;~~not ~~(ii)~~have full control of the business, the Company’s ~~Material~~does ~~Breach;~~not ~~(iii)~~consider ~~the~~it ~~Illegality;~~a ~~(iv)~~reporting ~~the~~segment ~~Stockholder~~Operating ~~Approval~~segments are defined as components of an enterprise about which separate financial information is ~~not~~evaluated ~~obtained;~~regularly orby ~~(v)~~the chief operating decision maker, who is the ~~Adverse~~chief executive ~~Recommendation~~officer, in deciding how to allocate resources and assessing performance.

~~Other~~Cash ~~Terms~~and Cash Equivalents—The Company considers all highly liquid investments with an original maturity from the date of purchase of 90 days or less to be cash equivalents. As of March 31, 2026 and 2025, cash and cash equivalents consist of cash deposited with banks and money market funds. Included in the Company’s cash and cash equivalents are amounts held by foreign subsidiaries. After the sale of all of the Company’s foreign subsidiaries except for Inda, the Company has less than $250 in foreign bank accounts.

~~The Asset~~Receivable ~~Purchase~~for ~~Agreement~~Cash ~~contains~~Held ~~customary~~Back ~~representations~~from ~~and warranties of~~ the ~~parties.~~Asset ~~Additionally,~~Sale—All customer ~~the~~accounts ~~Company~~receivable ~~has~~were ~~agreed~~sold toon ~~certain covenants,~~January ~~including~~23, ~~among~~2026 ~~others,~~with ~~(i) covenants relating to~~ the ~~conduct~~asset ofsale. ~~its~~The ~~business~~only ~~during~~remaining ~~the~~non-trade ~~interim~~receivable ~~period~~is ~~between~~from the ~~execution~~Buyer of the ~~Asset~~Company’s ~~Purchase~~assets ~~Agreement~~ and ~~its~~is ~~consummation~~due ~~and~~on ~~(ii)~~October ~~not~~28, to2026. ~~engage~~The inoriginal ~~specified~~amount ~~types~~held ofback ~~transactions~~was or$1,500 ~~take~~and ~~specified~~payment ~~actions during~~is ~~such~~subject ~~period unless agreed~~ to inindemnity ~~writing~~claims by the Buyer.

~~Because~~Receivables Financing ~~the~~Agreement—On ~~transaction~~August ~~contemplates~~7, ~~the sale of substantially all of the Company’s assets~~2025, the Company ~~is pursuing~~entered ~~alternative~~into ~~strategies,~~a innon-recourse ~~addition~~factoring toagreement ~~completing the asset sale,~~ with ~~the~~Tradewind ~~objective~~GmbH ~~of maximizing stockholder value~~(the “Factor”). ~~There~~This ~~can be~~agreement nowas ~~assurance~~terminated ~~that~~in ~~the~~January ~~Asset Purchase Agreement or any additional transaction will ultimately be consummated timely or at all~~2026.

~~Reverse~~Inventory—The ~~Stock~~Company ~~Split~~sold all of its inventory on or before January 23, 2026.

~~All~~Property ~~common share~~ and ~~per-share~~Equipment—The ~~amounts~~Company insold ~~this~~all ~~Form~~of ~~10-Q~~its ~~have~~property ~~been~~and ~~retroactively~~equipment ~~restated~~on toJanuary ~~reflect~~23, ~~the~~2026. ~~effect~~Prior ofto the ~~Reverse~~sale, ~~Stock~~most ~~Splits,~~property and asequipment ~~defined~~consisted ~~below~~of personal computers and related equipment.

~~2024~~Variable ~~Reverse~~Interest ~~Stock~~Entities—The ~~Split~~Company evaluates its interests in legal entities to determine whether the entity is a variable interest entity (“VIE”) and whether the Company is the primary beneficiary of the VIE in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation.

OnA ~~July~~VIE ~~17,~~is ~~2024,~~an ~~the~~entity ~~Company~~that ~~effected~~either a(i) ~~1-for-10~~lacks ~~reverse~~sufficient ~~stock~~equity ~~split~~to offinance its ~~issued~~activities ~~and~~without ~~outstanding~~additional ~~common~~subordinated ~~stock~~financial support or (ii) has equity holders that lack the ~~“2024~~characteristics ~~Reverse Stock~~of ~~Split”)~~a controlling financial interest. The Company’s ~~common~~is ~~stock~~considered ~~began~~the ~~trading~~primary onbeneficiary of ~~the~~a ~~Nasdaq~~VIE ~~Capital~~when ~~Market~~it onhas aboth ~~post-split~~(i) ~~basis~~the onpower ~~July~~to ~~18,~~direct ~~2024. As~~the aactivities ~~result~~ of the ~~2024~~VIE ~~Reverse~~that ~~Stock~~most ~~Split,~~significantly ~~each~~impact ~~share~~the ofVIE’s ~~common~~economic ~~stock issued~~ performance and ~~outstanding~~(ii) ~~immediately~~the ~~prior~~obligation to ~~July~~absorb ~~17,~~losses ~~2024,~~or ~~was automatically~~the ~~converted~~right ~~into~~to ~~one-tenth~~receive ~~(1/10)~~benefits ofthat acould ~~share~~potentially ofbe ~~common~~significant ~~stock~~to the VIE. ~~The~~If ~~2024~~the ~~Reverse~~Company is ~~Stock~~the ~~Split~~primary ~~affected~~beneficiary, ~~all~~the ~~common~~VIE ~~stockholders uniformly~~is consolidated and ~~did~~all ~~not~~intercompany ~~alter~~balances ~~any~~and ~~stockholder’s~~transactions ~~percentage~~are ~~interest~~eliminated. For VIEs in which the Company’s ~~equity,~~is ~~except~~not to the ~~extent~~primary ~~that~~beneficiary, the ~~2024~~ ~~Reverse~~Company ~~Stock~~accounts ~~Split~~for ~~would~~its ~~result~~interest inunder athe ~~stockholder~~equity ~~owning~~method aof ~~fractional~~accounting ~~share~~or other applicable guidance. NoThe ~~fractional~~Company ~~shares~~presents, ~~were~~on ~~issued~~a inseparate ~~connection~~line ~~with~~ within the ~~2024~~consolidated ~~Reverse~~balance ~~Stock~~sheets, ~~Split.~~the ~~Stockholders~~assets ~~who~~of ~~otherwise~~consolidated ~~would~~VIEs that can only be ~~entitled~~used to ~~receive~~settle athe ~~fractional~~obligations ~~share~~of ~~instead~~the ~~were~~VIE ~~entitled~~and tothe ~~receive one~~liabilities ~~whole~~of ~~share~~consolidated inVIEs ~~lieu~~for ofwhich ~~such~~creditors ~~fractional~~do ~~share~~not have recourse to the general credit of the Company.

The ~~2024~~Company’s ~~Reverse~~maximum ~~Stock~~exposure ~~Split~~to ~~did~~loss ~~not~~as ~~change~~a ~~the~~result ~~par value~~ of ~~the~~its ~~common~~involvement ~~stock~~with orunconsolidated ~~the~~VIEs ~~authorized~~is ~~number~~limited ofto ~~shares~~the ofcarrying ~~common~~value ~~stock. All outstanding~~of ~~stock~~its ~~options,~~investments ~~restricted stock units,~~ and ~~warrants~~any ~~entitling~~unfunded ~~their~~commitments. ~~holders~~The toCompany ~~purchase~~reassesses orits ~~obtain~~involvement orwith ~~convert~~VIEs ~~into~~on ~~shares~~an ofongoing ~~our common stock were adjusted, as required by the terms of these securities~~basis.

The Company’s stockholders’ equity, in the aggregate, remained unchanged following the 2024 Reverse Stock Split. Net income (loss) per share increased because there were fewer shares of common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the 2024 Reverse Stock Split.

2025 Reverse Stock Split

On October 27, 2025, subsequent to the balance sheet date, the Company effected a 1-for-18 reverse stock split of its issued and outstanding common stock (the “2025 Reverse Stock Split,” and, together with the 2024 Reverse Stock Split, the “Reverse Stock Splits”). The Company’s common stock began trading on the Nasdaq Capital Market on a post-split basis on October 27, 2025. As a result of the 2025 Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 27, 2025, was automatically converted into one-eighteenth (1/18) of a share of common stock. The 2025 Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the 2025 Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the 2025 Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead received a cash payment equal to the fraction of which a stockholder would otherwise be entitled multiplied by $16.8678, which is the closing price per share of common stock on October 20, 2025 (as reported by the Nasdaq Capital Market), as adjusted to give effect to the 2025 Reverse Stock Split.

The 2025 Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.

The Company’s stockholders’ equity, in the aggregate, remained unchanged following the 2025 Reverse Stock Split. Net income (loss) per share increased because there were fewer shares of common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the 2025 Reverse Stock Split.

Liquidity and Ability to Continue as a Going Concern

The Company’s condensed consolidated financial statements account for the continuation of its business as a going concern. The Company anticipates closing the Asset Purchase Agreement in late 2025 or early 2026. Once the Asset Purchase Agreement closes, there will be no more revenue from the Company’s existing business. The Asset Purchase Agreement raises uncertainty with respect to the Company’s ability to forecast beyond the asset sale date, and our ability to determine if we can meet our obligations within one year after the date that the financial statements are issued. There is substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued.

~~Basis~~Equity Method Investments—The Company accounts for investments in entities over which it has the ability to exercise significant influence, but not control, using the equity method of ~~presentation~~accounting in accordance with ASC Topic 323, Investments—Equity Method and ~~preparation~~Joint Ventures. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the voting interests of an entity; however, the Company also considers qualitative factors such as representation on the board of directors, participation in policy-making decisions, and material intercompany transactions. Under the equity method, investments are initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss and distributions received. The Company’s share of earnings or losses is recorded as a separate line item within the consolidated statements of operations.

The ~~condensed~~Company ~~consolidated~~evaluates ~~financial~~its ~~statements~~equity ~~include~~method ~~the~~investments ~~accounts~~for ofimpairment ~~Sonim~~whenever ~~Technologies,~~events ~~Inc.~~or ~~and~~changes ~~its~~in ~~wholly~~circumstances ~~owned~~indicate ~~subsidiaries~~that ~~(collectively~~the carrying ~~“Sonim”~~amount orof the ~~“Company”).~~investment ~~Intercompany~~may ~~accounts~~not ~~and~~be ~~transactions have been eliminated~~recoverable. InIf the ~~opinion of the~~ Company’s ~~management,~~determines ~~the~~that ~~condensed~~a ~~consolidated~~decline ~~financial~~in ~~statements~~fair ~~reflect~~value ~~all~~is ~~adjustments~~other-than-temporary, ~~which~~the investment ~~are~~is ~~normal~~written ~~and~~down ~~recurring~~to ~~in nature,~~its ~~necessary~~estimated ~~for~~ fair ~~financial~~value. ~~statement~~Distributions ~~presentation.~~received ~~The~~from ~~preparation~~equity ofmethod ~~these~~investees ~~condensed~~are ~~consolidated~~accounted ~~financial~~for ~~statements~~as ~~and~~reductions ~~accompanying~~of ~~notes~~the incarrying ~~conformity~~amount ~~with~~of ~~U.S.~~the ~~generally~~investment ~~accepted~~unless ~~accounting~~the ~~principles~~distributions ~~(“GAAP”)~~represent ~~requires~~a ~~management~~return toon ~~make estimates~~investment. ~~and~~The ~~assumptions~~Company ~~that~~discontinues ~~affect~~ applying the ~~amounts~~equity ~~reported.~~method ~~Actual~~when ~~results~~its ~~could~~investment ~~differ~~balance ~~materially~~is ~~from~~reduced ~~those~~to ~~estimates.~~zero ~~Certain~~and ~~prior period~~resumes ~~amounts~~recognizing inits ~~the~~share ~~condensed~~of ~~consolidated~~earnings ~~financial~~only ~~statements~~after ~~and~~its ~~accompanying~~share ~~notes~~of cumulative ~~have~~earnings ~~been~~exceeds ~~reclassified~~previously tounrecognized ~~conform~~losses. toThe ~~the~~Company ~~current period’s~~recognized ~~presentation.~~$48 ~~These~~in ~~condensed~~net ~~consolidated~~income ~~financial~~from ~~statements~~its ~~and~~investment ~~accompanying~~in ~~notes~~DNA ~~should~~X beLLC ~~read~~for ~~in conjunction with~~ the ~~Company’s~~three ~~annual~~months ~~consolidated~~ended ~~financial~~March ~~statements~~31, ~~and~~2026. The ~~accompanying~~Company ~~notes~~recorded ~~included~~this in$48 ~~its~~as ~~Annual~~other ~~Report~~income on ~~Form~~its ~~10-K~~unaudited ~~for~~condensed ~~the year~~consolidated ~~ended~~statement ~~December~~of ~~31, 2024~~operations.

AsLeases—The ~~discussed~~Company ~~above,~~accounts ~~all~~for ~~per~~its ~~share~~leases ~~amounts~~under ~~and~~ASC ~~common~~842, ~~shares amounts have been adjusted on a retroactive basis to reflect the effect of the Reverse Stock Split~~Leases. ~~Proportionate~~Under ~~adjustments~~this ~~were~~guidance, ~~made~~arrangements tomeeting the ~~per~~definition ~~share exercise price and number~~ of ~~shares~~a oflease ~~common~~are ~~stock issuable~~classified ~~under~~as ~~all~~operating ~~outstanding~~or ~~stock~~finance ~~options~~leases and, ~~restricted~~if ~~stock units~~significant, ~~and~~are ~~warrants.~~recorded Inon ~~addition,~~the ~~proportionate~~Consolidated ~~adjustments~~Balance ~~have~~Sheets ~~been~~as ~~made~~both toa ~~the number~~right of ~~shares~~use ofasset ~~common~~and a ~~stock~~lease ~~reserved~~liability. ~~for~~There ~~the~~were ~~Company’s~~no ~~equity~~such ~~incentive~~leases ~~awards~~in 2026.

~~Promissory~~Non-recurring ~~Notes~~Engineering (“NRE”) Tooling and Purchased Software Licenses—For the discontinued operations, third-party design services relating to the design of tooling materials and purchased software licenses used in the manufacturing process are capitalized and included in other assets that are part of assets held for sale.

~~The~~Long-lived Assets—The Company ~~accounts~~reviews ~~for~~long-lived ~~promissory~~assets ~~notes~~for inimpairment ~~accordance~~whenever ~~with~~events ~~ASC~~or ~~470,~~changes ~~Debt.~~in ~~Promissory~~circumstances ~~notes~~indicate ~~are~~that ~~initially recorded at~~ the ~~amount~~carrying ofamount ~~cash proceeds received, net~~ of ~~any~~an ~~original~~asset ~~issue~~may ~~discount~~not ~~and~~be ~~direct issuance costs~~recoverable. Debt discounts and issuance costs are amortized to interest expense over the term of the note using the straight-line method, which approximates the effective interest method. Interest is accrued based on the stated interest rate.

~~Prior~~Revenue ~~period~~Recognition—The ~~reclassifications~~Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.

~~Certain~~Revenue ~~amounts~~related to the phone and hotspot business is included in ~~prior~~discontinued operations for all periods ~~have~~presented. ~~been~~The ~~reclassified~~DNA toX ~~conform~~trading platform ~~with~~is ~~current~~accounted ~~period~~for ~~presentation.~~as ~~These~~an ~~reclassifications~~equity ~~had~~investment noand ~~effect~~revenue on from the ~~reported~~trading ~~results~~platform is recorded net of the trading platform expenses as net investment income which is included in other income in the statement of operations.

~~Related~~Revenue ~~Party~~recognition ~~Transactions~~for discontinued operations was reduced for discounts, price protection and customer incentives.

~~Effective~~Cost ~~December 15, 2023, in the ordinary course~~ of ~~business,~~Revenues—Cost ~~the Company entered into an agreement pursuant to which the Company would execute various statements~~ of ~~work~~revenue ~~and~~is ~~sell white label phones under the ODM model arrangement with a then-~~related ~~party, in which a family member of the Company’s then-director, Jeffrey Wang, holds indirect interest of approximately 40% (the “ODM Arrangement”). Pursuant~~ to the ~~ODM~~phone ~~Arrangement,~~and ~~the~~hotspot ~~Company consummated various transactions during the first quarter of 2024~~business.

OnAdvertising—The ~~April~~Company 1,expenses ~~2025,~~ the ~~Company~~costs ~~signed an agreement with a then-related party, in which a family member~~ of ~~the Company’s then-director~~advertising, ~~Jeffrey~~ ~~Wang,~~including ~~holds~~promotional ~~an indirect interest of approximately 40%~~expenses, toas ~~purchase parts and components to be used in the manufacturing of the company’s products for the aggregate amount of approximately $1,000~~incurred. ~~The~~For ~~agreement was executed in~~ the ~~ordinary~~three ~~course of business. During the nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company ~~purchased~~had ~~approximately~~no ~~$496~~advertising ~~in raw materials under this agreement~~expenses.

AsResearch ofand ~~July~~Development—Research ~~18,~~and ~~2025,~~development ~~Jeffrey~~expenses ~~Wang~~consist isof nocompensation ~~longer~~costs aand ~~director~~development offees ~~the~~paid to third parties. The Company expenses research and development costs as incurred.

~~New accounting pronouncements~~8

Stock-Based Compensation—The Company measures equity classified stock-based awards granted to employees, nonemployee directors, and consultants based on the estimated fair value on the date of grant and recognizes compensation expense of those awards, net of actual forfeitures, on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. For awards subject to performance conditions, the Company evaluates the probability of achieving each performance condition at each reporting date and begins to recognize expense over the requisite service period when it is deemed probable that a performance condition will be met using the accelerated attribution method. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of each restricted stock award is measured as the fair value per share of the Company’s common stock on the date of grant.

Comprehensive Income or Loss—The Company had no items of comprehensive income or loss other than net loss for the three month ended March 31, 2026 and the year ended December 31, 2025. Therefore, a separate statement of comprehensive loss has not been included in the accompanying consolidated financial statements.

Income taxes—The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Compliance with income tax regulations requires the Company to make decisions relating to the transfer pricing of revenue and expenses between each of its legal entities that are located in several countries. The Company’s determinations include many decisions based on management’s knowledge of the underlying assets of the business, the legal ownership of these assets, and the ultimate transactions conducted with customers and other third parties. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple tax jurisdictions. The Company may be periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when it is more likely than not that an uncertain tax position will not be sustained upon examination by a taxing authority. Such estimates are subject to change. See Note 8.

Net Earnings (Loss) per Share—Net earnings (loss) per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. For the three months ended March 31, 2026 and 2025, for purposes of the calculation of diluted net loss per share, warrants to purchase stock, unvested restricted stock units and stock options to purchase common stock are considered potentially dilutive securities. Because we had a net loss in continuing operations, we did not present fully diluted earnings per share for the first quarter of 2026 or 2025.

Promissory Notes—The Company accounts for promissory notes in accordance with ASC 470, Debt. Promissory notes are initially recorded at the amount of cash proceeds received, net of any original issue discount and direct issuance costs. Debt discounts and issuance costs are amortized to interest expense over the term of the note using the straight-line method, which approximates the effective interest method. Interest is accrued based on the stated interest rate. For convertible notes we analyze the note’s terms and determine if the conversion feature needs to be bifurcated from the debt portion. For the DNA Note (see note 5) we determined that it needed to be bifurcated between the debt portion and a derivative liability for the conversion feature.

Derivative Liability—The Company evaluates financial instruments containing characteristics of both liabilities and equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. Derivative liabilities are revalued at fair value at each reporting period, with changes in fair value recognized in the results of operations as a gain or loss on derivative remeasurement. The Company uses a Binomial option pricing model to determine the fair value of these instruments. Derivative liabilities are revalued at fair value at each reporting period, with changes in fair value recognized in the results of operations as a gain or loss on derivative remeasurement. The Company uses a Binomial option pricing model to determine the fair value of these instruments.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Pronouncements adopted in 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures This guidance requires expanded annual income tax disclosures, including (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. This guidance was adopted by the Company effective for the annual period ending December 31, 2025. The adoption affected the footnote disclosures and did not have a material impact on the unaudited condensed consolidated financial statements.

Pronouncements adopted in 2026

None.

Pronouncements not yet adopted

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic ~~740~~220): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses. This guidance requires ~~expanded~~additional ~~annual~~disclosure ~~income~~of ~~tax~~certain ~~disclosures,~~amounts included ~~including~~in ~~(1)~~the ~~consistent~~expense ~~categories~~captions ~~and~~presented ~~greater~~on ~~disaggregation~~the Statement of ~~information~~Operations inas ~~the rate~~well ~~reconciliation,~~as ~~and~~disclosures ~~(2)~~about ~~income~~selling ~~taxes~~expenses. ~~paid~~The ~~disaggregated~~ASU byis ~~jurisdiction.~~effective on ~~This~~a ~~guidance~~prospective isbasis, ~~effective~~with the option for ~~public~~retrospective ~~entities~~application, for annual periods beginning after December 15, ~~2024.~~2026, ~~Early~~and ~~adoption~~interim reporting isperiods ~~permitted.~~beginning ~~ASU~~after ~~2023-09~~December ~~will~~15, be2027. ~~effective~~Early ~~for~~adoption ~~the~~is ~~Company for the annual period ending December 31, 2025~~permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its ~~condensed~~ consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. This guidance requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.

NOTE 2 — Revenue Recognition

The Company ~~recognizes~~recognized revenue ~~primarily~~ from ~~the~~discontinued ~~sale~~operations. ofThe ~~products, including mobile phones, connected devices, and accessories, and the majority of the~~ Company’s contracts for its products include only one performance obligation, namely the delivery of the product. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition under ASC 606. The Company also recognizes revenue from other contracts that may include a combination of products and NRE services or from the provision of solely NRE services. Where there is a combination of products and NRE services, the Company accounts for the promises as individual performance obligations if they are concluded as distinct. Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. During the three and nine months ended September 30, 2025, and 2024, the Company did not have any contracts in which the products and NRE services were concluded to be a single performance obligation. In certain cases, the Company may offer tiered pricing based on volumes purchased for specific model phones. To date, all tiered pricing provisions have fallen into observable ranges of pricing to existing customers, thus, not resulting in any material right which could be concluded as its own performance obligation. In addition, the Company does not offer material post-contract support services to its customers.

~~Net~~Disaggregation ~~revenue~~of for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the goods and/or services. The transaction price for product sales is calculated as the product selling price net of variable consideration which may include estimates for marketing development funds, sales incentives, and price protection and stock rotation rights. The Company generally does not offer a right of return to its customers, except for certain distributors where the company estimates future returns and reduces revenue on sales subject to return and maintains a reserve for returns allowance. Typically, variable consideration does not need to be constrained as estimates are based on specific contract terms. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. The standalone selling price of the professional services are mostly based on time and materials. The Company determines its estimates of variable consideration based on historical collection experience with similar payor classes, aged accounts receivable by payor class, terms of payment agreements, correspondence from payors related to revenue audits or reviews, its historical settlement activity of audited and reviewed claims and current economic conditions using the portfolio approach. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods.revenues

~~Revenue~~The is then recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware is recognized at the time control of the product transfers to the customer. Control is generally transferred when the Company ~~has~~did anot ~~present right~~have ~~to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company’s~~ revenue ~~attributable~~from tocontinuing ~~hardware, control transfers when products are shipped~~operations. ~~Revenue attributable to professional services is recognized as the Company performs the professional services for the customer.~~

~~The~~NOTE ~~Company~~3—Fair ~~maintains~~value agreements with certain customers that include provisions for product allowances under specific conditions. Accruals for these agreements are based on available customer-specific data or, when such data is not available, relevant historical trends. These costs are recognized as a reduction to revenue. Based on the terms of these agreements, any unused accruals are released and recognized as revenue. For the nine months ended September 30, 2025, the Company finalized agreements which resulted in the reduction of accruals by approximately $5,429, which was recognized as revenue.measurement

~~Disaggregation~~The fair value measurements standard establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of ~~revenue~~the fair value hierarchy under the standard are described below:

~~The~~Level ~~following~~1—Inputs ~~table~~to ~~presents~~the ~~total~~valuation ~~net~~methodology ~~revenues~~are ~~disaggregated~~unadjusted byquoted ~~product~~prices ~~category:~~for identical assets or liabilities in active markets that the Company has the ability to access.

~~Schedule~~Level 2—Inputs ofto ~~Net~~the ~~Revenue~~valuation ~~Disaggregate~~methodology ~~by Product Category~~include:

	2025		2024		2025		2024
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Smartphones	$	8,108	$	7,957	$	23,976	$	19,910
Feature Phones		3,801		6,780		12,447		14,839
Connected Solutions		4,000		49		6,937		330
White Label Products (ODM Model) (Related Party)		—		—		—		7,658
Accessories and Other		305		236		765		577
Total net revenues	$	16,214	$	15,022	$	44,125	$	43,314

●

Quoted market prices for similar assets or liabilities in active markets;

Shipping and handling costs

The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.

Contract costs

Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing expenses.

The non-recurring costs associated with design and development of new products for technical approval represent costs to fulfill a contract pursuant to ASC 340-40, Other Assets and Deferred Costs. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs over the estimated period of time they are expected to be recovered, which is typically three to four years, the estimated life of a particular product model. As of September 30, 2025, and December 31, 2024, the net contract fulfillment assets were $9,053 and $6,399, respectively.

If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the nine months ended September 30, 2024, the Company recorded an impairment of contract fulfillment assets of $3,217 due to a decrease in projected profit of one of its hotspots and the cancellation of a consumer durable product. During the nine months ended September 30, 2025, the Company recorded an impairment of contract fulfillment assets of $1,084 due to the end of life of a legacy smartphone, which is included in cost of revenues in the Condensed Consolidated Statements of Operations.

NOTE 3 — Significant Balance Sheet Components

The following table presents the components of the Company’s accounts receivable, net:

Schedule of Accounts Receivable

	September 30, 2025			December 31, 2024
Trade receivables	$	6,204		$	6,906
Allowance for credit losses		(2,706	)		(2,567	)
Total accounts receivable	$	3,498		$	4,339

As of January 1, 2024, accounts receivable, net, was $25,304 and non-trade receivables was $961.

The Company has non-trade receivables from manufacturing vendors resulting from the sale of components to the vendors who manufacture and assemble final products for the Company.

The Company determines the probability of default for each pool of receivables with similar risk characteristics. The probability of loss is applied to the value of the receivables and an allowance for potential credit losses is recorded with the offset to credit loss expense.

Five customers account for 15%, 15%, 13%, 13% and 11% of accounts receivable, net, at September 30, 2025. Three customers account for 33%, 24%, and 12% of accounts receivable, net, at December 31, 2024.

In October 2023, the Company stopped sales of the white label products to its customer as the product reached the end of its life cycle. In February 2024, an agreement was executed that transferred $11,308 of the receivables to the manufacturer of the white label products in exchange for relieving the Company of a $11,308 accounts payable liability.

~~The following~~● ~~table~~Quoted ~~presents~~prices ~~the~~for ~~components~~identical ofor similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the ~~Company’s~~asset ~~inventory:~~or liability; ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

~~Schedule~~If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of ~~Inventory~~the asset or liability.

	September 30, 2025		December 31, 2024
Devices – for resale	$	2,194	$	4,633
Raw materials		8,080		5,598
Accessories		712		390
Inventory, net	$	10,986	$	10,621

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

~~For~~The ~~certain~~asset’s ~~new~~or ~~products,~~liability’s ~~the~~fair ~~Company~~value ~~began~~measurement ~~purchasing~~level ~~raw~~within ~~materials~~the infair ~~2024~~value ~~that~~hierarchy ~~will~~is bebased ~~used~~on by the ~~third-party~~lowest ~~manufacturers~~level toof ~~build~~any input ~~the~~that ~~products.~~is ~~These~~significant ~~purchased~~to ~~parts~~the ~~represent~~fair ~~most~~value ofmeasurement. ~~the~~Valuation ~~raw~~techniques ~~materials~~used inneed ~~inventory~~to atmaximize ~~September~~the ~~30,~~use ~~2025~~of observable inputs and ~~December~~minimize the ~~31,~~use ~~2024~~of unobservable inputs.

The following ~~table~~is ~~presents~~a description of the ~~components~~valuation ofmethodologies used for assets and liabilities measured at fair value. There have been no changes in the ~~Company’s~~methodologies ~~prepaid~~used ~~expenses~~for the period ended March 31, 2026 and ~~other~~December ~~current~~31, ~~assets:~~2025.

~~Schedule~~Money market funds are classified within level 1 of ~~Prepaid~~the ~~Expenses~~fair ~~and~~value ~~Other~~hierarchy ~~Current~~because ~~Assets~~they are valued using quoted market prices.

	September 30, 2025		December 31, 2024
Deposits for inventory	$	2,186	$	2,697
Other		1,653		1,865
Prepaid expenses and other current assets	$	3,839	$	4,562

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following ~~table~~tables ~~presents~~sets forth by level, within the ~~components~~fair ofvalue hierarchy, the Company’s ~~accrued~~assets and liabilities at fair value (in thousands of dollars):

Schedule of ~~Accrued~~Fair ~~Expenses~~Value Assets

	September 30, 2025		December 31, 2024
	Level 1		Level 2		Level 3		Total
Customer allowances	$	4,171	$	11,421
	March 31, 2026
Contract fulfillment liabilities		2,070		2,939
	Level 1		Level 2		Level 3		Total
Inventory received, not billed		3,019		1,563
Assets:
Employee-related liabilities		859		2,247
Money market funds *	$	1	$	—	$	—	$	1
Other		3,512		2,722
Liabilities:
Accrued liabilities	$	13,631	$	20,892
Derivative liability – conversion feature on note	$	—	$	—	$	398		398

LS Receivables Financing Agreement

	Level 1		Level 2		Level 3		Total
	December 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds *	$	1	$	—	$	—	$	1

Liabilities:
Derivative liability – conversion feature on note	$	—	$	—	$	171		171

~~On September~~* ~~23,~~Included ~~2024,~~in ~~the~~cash Company entered into an invoice purchase agreement (the “LS Receivables Financing Agreement”) with LS DE LLC (“LS”), pursuant to which LS will provide receivables factoring to the Company. Pursuant to the terms of the LS Receivables Financing Agreement, LS will advance 80% of the face value of the receivables being sold by the Company, up to a maximum of $2,500 of eligible customer invoices from the Company. In consideration of the advances, LS is entitled to receive (i) an invoice purchase fee equal to 0.20% of the face amount of each purchased invoice payable at the time of the purchase and ~~(ii)~~cash aequivalents ~~daily funds usage fee equal to 0.0388%, payable monthly in arrears~~ on the ~~last~~consolidated ~~day~~balance ~~of each month~~sheets. Under the agreement, the Company must repurchase any invoices that LS deems to be uncollectible or no longer qualify as an Eligible Account, as defined in the LS Receivables Financing Agreement. The Company is accounting for this transaction as a secured borrowing and recognizes a factoring liability for any advances until the accounts receivables are collected. As of December 31, 2024, there was $591 outstanding under the LS Receivables Financing Agreement, which is included in accrued liabilities in the Condensed Consolidated Balance Sheets. As of September 30, 2025, the LS Receivables Financing Agreement is terminated.

Receivables Financing Agreement

On August 7, 2025, the Company entered into a non-recourse factoring agreement with Tradewind GmbH (the “Factor”). Under the terms of the agreement, the Company has committed to sell eligible accounts receivable from designated international customers to the Factor on a continuing basis, subject to individual credit limits and other conditions specified in the agreement.

The factoring arrangement provides for a maximum facility of €3,000, with a financing rate of 85% of the face value of qualified receivables. The Company is able to receive an advance on such receivables, less applicable fees and reserves. Factoring fees vary based on the payment terms of the underlying receivables and range from 0.55% to 1.65% of the invoice amount, with an additional late fee assessed on unpaid balances after 95 days. Interest is equal to the greater of 4.00% or EURIBOR + 3.50%. The Factor assumes the credit risk of purchased receivables, subject to specified exclusions and conditions. The agreement has an initial 12-month term and automatically renews unless terminated in accordance with its terms. As of September 30, 2025, there were no borrowings under the Receivables Financing Agreement.

NOTE 4 —Closing ~~Promissory~~of ~~Notes~~the Asset Sale

On January 23, 2026 (the “Closing Date”) the Company (“the “Seller”) completed its previously announced sale (the “Asset Sale”) of substantially all of its assets and liabilities related to the enterprise 5G solutions business, including rugged handsets, smartphones, wireless internet device, software, services, and accessories to Pace Car Acquisition LLC, (the “Buyer”). Excluded assets include the DNA X LLC cryptocurrency trading business, cash, and the Company’s Indian subsidiary. Excluded liabilities include compensation for employees that did not transfer to the Buyer, certain excluded corporate liabilities, and certain excluded contracts.

The purchase price of $15,000 less a working capital adjustment of $1,550 was paid in cash and for the settlement of certain liabilities of the Company, except for $1,500 that was held back by the Buyer and is due to be paid to the Seller on October 28, 2026, less any agreed upon claims. As part of the consideration, the Buyer paid Company’s existing debt of $5,476 with Streeterville Capital, LLC and $2,928 of liabilities of the Company. The Company received $3,546 in cash on the Closing Date.

The Company changed its name to DNA X, Inc. in connection with the Asset Sale. Following the closing, the Company has focused on the development and commercialization of the DNA X trading platform that uses on-chain trading protocol designed to enable users to automate certain decentralized exchange trading strategies.

The transaction resulted in a $15,563 pre-tax gain for Company and related tax expense of $2,538 for a post tax gain of $13,025. The transaction is included in income from discontinued operations for the first quarter of 2026. For all periods presented, the assets and liabilities sold or assumed were segregated as a disposal group. The sale of the assets represents a strategic shift away from manufacturing hardware because of the high cost of developing new products, higher costs of manufacturing products outside of China, and competition from larger competitors with more resources. As of December 31, 2025, the phone and hotspot business met the criteria for “Held for Sale” classification. Results of the phone and hotspot business have been retrospectively reclassified as discontinued operations for all periods presented. No impairment was recognized as the fair value less costs to sell was not lower than the carrying amount. Discontinued operations represent 100% of the revenue in 2025 and the first quarter of 2026, and approximately 89% of the Company’s assets as of December 31, 2025.

On December 30, 2025, a special stockholders’ meeting was held and stockholders voted the majority of the outstanding shares in favor of approving the asset sale. This approval made it probable that the assets sale would be completed and was the final criteria that was necessary to record the assets as held for sale. On December 31, 2025 the assets and liabilities of the phone and hotspot disposal group were classified as held for sale. The disposal group was also classified as discontinued operations as of December 31, 2025 and for the three months ended March 31, 2026.

The following schedules present the carrying amounts of major classes of assets and liabilities associated with the disposal group as of December 31, 2025, the statement of operations for the disposal group, and cash flow for the disposal group. All assets and liabilities that were held for sale on December 31, 2025, were sold or disposed of as of March 31, 2026:

DISCONTINUED OPERATIONS

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025

(IN THOUSANDS)

Schedule Of Discontinued Operations

	December 31, 2025
Assets held for sale
Accounts receivable, net	$	4,720
Non-trade receivables		13,410
Inventory		6,911
Prepaid expenses and other current assets		1,889
Total current assets held for sale		26,930
Property and equipment, net		105
Contract fulfilment assets		11,605
Other assets		322
Total non-current assets held for sale		12,032
Total assets held for sale	$	38,962
Liabilities held for sale
Accounts payable		28,349
Accrued liabilities		9,708
Total liabilities held for sale	$	38,057

Non-trade receivables are from the Company’s manufactures who buy parts from the Company. The receivable is paid by the manufacturer after Company pays the related accounts payable for the inventory.

Discontinued operations activity for the first quarter of 2026 covers the period January 1, 2026 through January 23, 2026. Discontinued operations activity for the first quarter of 2025 covers the entire quarter.

DISCONTINUED OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2026 and 2025

(IN THOUSANDS)

	2026			2025
Net revenues	$	3,805		$	16,721
Cost of revenues		4,122			8,365
Gross profit (loss)		(317	)		8,356
Operating expenses
Research and development		913			1,633
Sales and marketing		1,123			3,239
General and administrative		453			1,969
Total operating expenses		2,489			6,841
Net income (loss) from operations		(2,806	)		1,551
Gain on sale of assets		15,563			—
Other income		49			—
Income before income tax expense		12,806			1,551
Income tax expense		(2,538	)		(132	)
Net income from discontinued operations	$	10,268		$	1,419

The following cash flows are for discontinued operations only and are supplemental to the Statement of Cash Flows that includes both continuing operations and discontinued operations. (In thousands of dollars).

DISCONTINUED OPERATIONS

CONSOLIDATED STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2026 and 2025

(IN THOUSANDS)

	2026			2025
Cash flows from operating activities for discontinued operations:
Net income	$	10,268		$	1,419
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		—			1,055
Stock-based compensation		93			290
Release of customer allowance liability		—			(5,271	)
Gain on sale of assets, net assets transferred		(15,563	)		—
Other		—			(56	)
Changes in operating assets and liabilities:
Accounts receivable		250			(649	)
Non-trade receivable		—			667
Inventory		5,490			2,255
Prepaid expenses and other current assets		1,663			(110	)
Contract fulfillment assets		129			(2,548	)
Other assets		(103	)		—
Accounts payable		(1,934	)		(5,554	)
Accrued liabilities		—			(280	)
Net cash provided by (used in) operating activities from discontinued operations		293			(8,782	)
Cash flows from investing activities
Net cash received from asset sale		3,358			—
Net cash provided by investing activities from discontinued operations		3,358			—

The Company ceased depreciation and amortization of property, plant, and equipment and intangible assets included in the Disposal Group starting on December 31, 2025.

NOTE 5 — Promissory Notes

Convertible Promissory Note from DNA Holdings Venture Inc., a Related Party

On December 15, 2025, the Company issued a note (the “DNA Note”) to DNA Holdings Ventures Inc. (“DNA Holdings”) in exchange for proceeds of $1,200 in cash. The DNA Note is an unsecured obligation of the Company and matures on December 15, 2026. The DNA Note bears interest at a rate of 10% per annum, payable in cash on the earlier of (i) the Maturity Date and (ii) the date of any mandatory redemption of the DNA Note as described below. Upon the occurrence and during the continuance of an event of default under the DNA Note, the interest rate increases to 20% per annum. On January 30, 2026, when an owner of DNA Holdings became a member of the Company’s board of directors, the note became a related party note.

The following table presents the components of the net carrying amount of the DNA Note that is from a related party. This is the only note outstanding as of March 31, 2026 (in thousands of dollars):


Principal	$	1,200
Less: unamortized debt discount		(128	)
Long term debt	$	1,072
Current portion	$	1,072

Conversion

Beginning on the six-month anniversary of the original issue date of the DNA Note, the outstanding principal amount of, and accrued but unpaid interest on, the DNA Note will be convertible, in whole or in part, at the option of the holder, into shares of the Company’s common stock, at an initial conversion price of $5.50 per share (the “Minimum Price” as defined in Nasdaq Listing Rule 5635(d)), subject to adjustment as described below.

The DNA Note provides for customary anti-dilution and other adjustments to the conversion price, including in connection with stock dividends, stock splits, reverse stock splits, reclassifications and similar transactions, as well as a “full ratchet” price-protection adjustment in the event that the Company issues or is deemed to issue common stock or common stock equivalents at an effective price per share lower than the then-current conversion price (subject to customary exceptions for “Exempt Issuances” such as equity incentive awards and the exercise or conversion of outstanding securities). In such a case, the conversion price will be reduced to the lower price. The DNA Note also entitles the holder to participate, on a pro rata “as converted” basis, in certain rights offerings and distributions to holders of common stock. However, the conversion price cannot be reduced below $1.10, and no adjustment to the conversion price may be made under the “full-ratchet” adjustment or the anti-dilution adjustment, unless and until the Company has received approval from the Company’s stockholders in accordance with the Nasdaq Listing Rules.

At any time after (i) the termination of the Asset Purchase Agreement or (ii) during the continuance of any event of default under the DNA Note, the conversion price will equal the “Alternate Conversion Price,” which is defined as 80% of the closing price of the Company’s common stock on the Company’s principal trading market on the date of conversion (subject to the same adjustment provisions described above). In addition, if at any time the Depository Trust Company imposes a “chill” on the Company’s shares, the holder may convert the DNA Note at the Alternate Conversion Price while such “chill” is in effect. Condition (i) above is not possible as the Asset Purchase Agreement closed on January 23, 2026.

Because the note has an alternate conversion price, the exercise price is not fixed, and we are required to separate the debt portion from the conversion feature portion. We calculated the present value of the debt using the effective interest rate of our most recent loan which was at 28.4% per annum. The remaining value of $171 is recorded as a derivative liability that represents the value of the conversion feature. We determined the fair value of the derivative liability at March 31, 2026 and recorded a $227 loss on the revaluation of the derivative liability. A loan discount on the debt portion was recorded on the date of issuance and will be amortized to interest expense on a straight line basis over the life of the note.

The schedule below shows the change in the fair value of the derivative liability (in thousands of dollars):

	2026		2025
Beginning balance (January 1)	$	171	$	—
Fair value adjustment		227		—
Ending value (March 31)	$	398	$	—

The Company used a binomial tree option calculation to determine the fair value of the conversion feature using the following inputs: strike price $5.50, stock price on 3/31/26 $4.03, days to expiration 259, volatility 165.6%, and risk-free interest rate of 3.7%.

Redemption

Upon the occurrence of a “Change of Control Transaction” (as defined in the DNA Note), the Company is required to redeem the outstanding principal amount of the DNA Note for cash at a price equal to 110% of the then outstanding principal amount, plus accrued but unpaid interest and any other amounts then due under the DNA Note (the “Redemption Amount”), at the closing of such transaction. Notwithstanding the foregoing, the transactions contemplated by the Asset Purchase Agreement do not constitute a Change of Control Transaction under the DNA Note. In lieu of receiving the Redemption Amount, and subject to any required stockholder approval under the rules of the Company’s principal trading market, the holder may elect to convert the DNA Note, in whole or in part, upon a Change of Control Transaction at a price per share equal to the lower of (i) the closing price of common stock on the original issue date of the DNA Note and (ii) the closing price of common stock on the date of consummation of such Change of Control Transaction.

Events of Default

The DNA Note contains customary events of default, including, among others: (i) failure to pay principal, interest or other amounts when due; (ii) breaches of covenants or other agreements in the DNA Note or other transaction documents; (iii) certain cross-defaults to other material indebtedness; (iv) certain bankruptcy or insolvency events; (v) certain judgments in excess of specified thresholds; and (vi) certain Change of Control Transactions or dispositions of substantially all of the Company’s assets (other than the transactions contemplated by the Asset Purchase Agreement). Upon an event of default, the holder may declare all outstanding obligations under the DNA Note immediately due and payable, in which case the Company is required to pay a “Mandatory Default Amount” equal to 100% of the then outstanding principal amount of the DNA Note plus accrued and unpaid interest and all other amounts due under the DNA Note, and interest accrues at the default rate described above.

Covenants

The DNA Note also includes negative covenants that, for so long as any portion of the DNA Note remains outstanding (unless waived by the holder), restrict the Company and its subsidiaries from, among other things: (i) incurring additional indebtedness, other than “Permitted Indebtedness” as defined in the DNA Note and the Purchase Agreement; (ii) granting liens, other than “Permitted Liens”; (iii) amending the Company’s organizational documents in a manner that adversely affects the rights of the holder; (iv) repaying, repurchasing or otherwise acquiring shares of its Common Stock or Common Stock equivalents (other than in limited circumstances); (v) repaying other indebtedness, subject to limited exceptions; and (vi) paying cash dividends or distributions on the Company’s equity securities.

The closing of the note transaction was done contemporaneously with the purchase of the DNA X LLC business. See Note 6.

Streeterville Capital LLC Notes

Both of the promissory notes with Streeterville Capital LLC (the “Lender”) described below were paid off on January 23, 2026 from proceeds of the Asset Purchase Agreement. The total payoff for bother notes was $5,467. See note 3.

February Purchase Agreement

On February 21, 2025, the Company entered into a note purchase agreement (the “February Purchase Agreement”) with Streeterville Capital, LLC (the “Lender”) pursuant to which the Company issued and sold to the Lender a promissory note in the original principal amount of $3,300 (the “February Note”).

The February Purchase Agreement

Pursuant to the terms of the February Purchase Agreement, until all of the Company’s obligations under the February Note and all other transaction documents are paid and performed in full, the Company agreed to comply with certain covenants, including but not limited to the following: (i) compliance with its filing requirements under the Securities Exchange Act of 1934, as amended, (ii) maintaining the Company’s listing on a national securities exchange, and (iii) refraining from making any Restricted Issuances (as defined in the Purchase Agreement and described below) without the Lender’s prior written consent, which consent may be granted or withheld in the Lender’s sole discretion.

Subject to certain customary exceptions set forth in the February Purchase Agreement, Restricted Issuances include the incurrence or guaranty of any debt obligations other than trade payables in the ordinary course of business, the issuance of any convertible securities in which the number of shares that may be issued pursuant to a conversion right, or the conversion price, varies with the market price of the Company’s common stock, the issuance of any securities with reset provisions and the issuance of any securities in connection with Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. Restricted Issuances do not include ATM facilities, commercial bank loans or lines of credit, leases, grants pursuant to the Company’s incentive plans, and change-in-control transactions that result in full repayment of the Note upon consummation.

The February Purchase Agreement also contains a “most favored nation” clause. Under this provision, for as long as the Note remains outstanding, if the Company issues any debt security with more favorable economic terms or conditions not similarly provided to the Lender, the Company must notify the Lender. At the Lender’s option, such favorable terms will become part of the Note and related transaction documents.

The February Note

The February Note carries an original issue discount of $270, and the Company agreed to pay $30 to the Lender to cover its legal fees, accounting costs, due diligence, monitoring, and other transaction costs, each of which was deducted from the proceeds of the February Note received by the Company resulting in a purchase price of $3,000 received by the Company. The Company incurred additional issuance costs of approximately $210, which consisted of legal costs and placement fees.

Since the February Note remained outstanding on the 90-day anniversary of the issuance, the Company incurred a one-time monitoring fee of approximately ~~$595 during the nine months ended September 30, 2025, which is included~~ in ~~other expense, net, in the Condensed Consolidated Statements of Operations and accrued liabilities in the Condensed Consolidated Balance Sheets~~2025.

Interest under the February Note accrues at a rate of 9% per annum. The unpaid amount of the February Note, any interest, fees, charges, and late fees are due 18 months following the date of issuance. The Company may prepay all or any portion of the outstanding balance of the February Note. If the Company elects to prepay the February Note in part, it will be required to pay to the Lender an amount in cash equal to 110% of the portion of the outstanding balance the Company elects to prepay.

Commencing six months after the date of issuance of the February Note and at any time thereafter until the February Note is paid in full, the Lender will have the right to redeem up to $330 under the February Note per calendar month. The Company must pay the redeemed amount in cash within three trading days of receiving a redemption notice. On three separate occasions and not more than once every 90 calendar days, the Company may defer any redemptions the Lender could otherwise make during a calendar month, provided, however, that each deferral increases the outstanding balance of the February Note by 1%. During the three months ended September 30, 2025, the Company and the Lender entered into certain exchange agreements whereby the Company issued 30,188 shares, as adjusted for the Reverse Stock Splits, in exchange for payment-in-full of $375 in principal balance of the February Note, which resulted in the accelerated amortization of $58 in debt discount and debt issuance costs.

At any time following the occurrence of a Major Trigger Event or Minor Trigger Event (each as defined in the February Note), the Lender may increase the outstanding balance of the February Note by 15% for each occurrence of any Major Trigger Event and 5% for each occurrence of any Minor Trigger Event (the “Trigger Effect”), provided that the Trigger Effect may only be applied three times with respect to Major Trigger Events and three times with respect to Minor Trigger Events.

Subject to certain exceptions described below, if the Company fails to cure a Trigger Event within five trading days following the date of transmission of written demand notice by the Lender, the Trigger Event will automatically become an Event of Default (as defined in the February Note). Following the occurrence of any Event of Default, the Lender may, upon written notice to the Company, (i) accelerate the Note, with the outstanding balance of the February Note following application of the Trigger Effect (the “Mandatory Default Amount”) becoming immediately due and payable in cash, and (ii) cause interest on the outstanding balance of the February Note beginning on the date the applicable Event of Default occurred to accrue at an interest rate equal to the lesser of 22% per annum or the maximum rate permitted under applicable law. However, certain Trigger Events, such as bankruptcy or insolvency, automatically result in an Event of Default, making the outstanding balance immediately payable at the Mandatory Default Amount without notice.

July Purchase Agreement

On July 11, 2025, the Company entered into a note purchase agreement (the “July Purchase Agreement”) with the Lender pursuant to which the Company issued and sold to the Lender a promissory note in the original principal amount of $2,755 (the “July Note,” and together with the February Note, the “Notes”).

July Purchase Agreement

Pursuant to the terms of the July Purchase Agreement, until all of the Company’s obligations under the July Note and all other transaction documents are paid and performed in full, the Company agreed to comply with certain covenants, including but not limited to the following: (i) compliance with its filing requirements under the Securities Exchange Act of 1934, as amended, (ii) maintaining the Company’s listing on a national securities exchange, and (iii) refraining from making any Restricted Issuances (as defined in the July Purchase Agreement and described below) without the Lender’s prior written consent, which consent may be granted or withheld in the Lender’s sole discretion.

Subject to certain customary exceptions set forth in the Purchase Agreement, Restricted Issuances include the incurrence or guaranty of any debt obligations other than trade payables in the ordinary course of business, the issuance of any convertible securities in which the number of shares that may be issued pursuant to a conversion right, or the conversion price, varies with the market price of the Company’s common stock, the issuance of any securities with reset provisions and the issuance of any securities in connection with Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. Restricted Issuances do not include ATM facilities, commercial bank loans or lines of credit, leases, grants pursuant to the Company’s incentive plans, and change-in-control transactions that result in full repayment of the July Note upon consummation.

The July Purchase Agreement also contains a “most favored nation” clause. Under this provision, for as long as the July Note remains outstanding, if the Company issues any debt security with more favorable economic terms or conditions not similarly provided to the Lender, the Company must notify the Lender. At the Lender’s option, such favorable terms will become part of the Note and related transaction documents.

July Note

The July Note carries an original issue discount of $225, and the Company agreed to pay $30 to the Lender to cover its legal fees, accounting costs, due diligence, monitoring, and other transaction costs, each of which was deducted from the proceeds of the July Note received by the Company resulting in a purchase price of $2,500 received by the Company. The Company incurred additional issuance costs of approximately $210, which consists of legal costs and placement fees.

Additionally, if the July Note remains outstanding on the 90-day anniversary of the issuance, the Company will incur a one-time monitoring fee equal to the difference between (i) the outstanding balance of the Note divided by 0.85 (as minuend), and (ii) the outstanding balance of the Note (as subtrahend).

Interest under the July Note accrues at a rate of 9% per annum. The unpaid amount of the July Note, any interest, fees, charges, and late fees are due 18 months following the date of issuance. The Company may prepay all or any portion of the outstanding balance of the July Note. If the Company elects to prepay the July Note in part, it will be required to pay to the Lender an amount in cash equal to 110% of the portion of the outstanding balance the Company elects to prepay. In addition, any time the Company receives any money in connection with any fundraising or financing transaction (including, but not limited to, any warrant exercises, “at the market” financing, equity line of credit or debt financing), it must immediately make a mandatory prepayment to the Lender in an amount equal to the lesser of (a) 33% of the amount raised in such transaction, and (b) the total outstanding balance due under the July Note as of the closing date of such financing, payable within two trading days of receiving such amount.

Commencing six months after the date of issuance of the July Note and at any time thereafter until the July Note is paid in full, the Lender will have the right to redeem up to $275 under the July Note per calendar month. The Company must pay the redeemed amount in cash within three trading days of receiving a redemption notice. On three separate occasions and not more than once every 90 calendar days, the Company may defer any redemptions the Lender could otherwise make during a calendar month, provided, however, that each deferral increases the outstanding balance of the July Note by 1%.

At any time following the occurrence of a Major Trigger Event or Minor Trigger Event (each as defined in the July Note), the Lender may increase the outstanding balance of the July Note by 15% for each occurrence of any Major Trigger Event and 5% for each occurrence of any Minor Trigger Event (the “Trigger Effect”), provided that the Trigger Effect may only be applied three times with respect to Major Trigger Events and three times with respect to Minor Trigger Events.

Subject to certain exceptions described below, if the Company fails to cure a Trigger Event within five (5) trading days following the date of transmission of written demand notice by the Lender, the Trigger Event will automatically become an Event of Default (as defined in the July Note). Following the occurrence of any Event of Default, the Lender may, upon written notice to the Company, (i) accelerate the July Note, with the outstanding balance of the Note following application of the Trigger Effect (the “Mandatory Default Amount”) becoming immediately due and payable in cash, and (ii) cause interest on the outstanding balance of the July Note beginning on the date the applicable Event of Default occurred to accrue at an interest rate equal to the lesser of 22% per annum or the maximum rate permitted under applicable law. However, certain Trigger Events, such as bankruptcy or insolvency, automatically result in an Event of Default, making the outstanding balance immediately payable at the Mandatory Default Amount without notice.

Security Agreements

The Company’s obligations under the July Note are secured by all of the Company’s assets, including its intellectual property, pursuant to a security agreement and intellectual property security agreement entered into by the Company in favor of the Lender on July 11, 2025. Pursuant to these agreements, the Company granted to the Lender a first-position security interest in all right, title, interest, claims and demands of the Company in and to certain property including, but not limited to: all equity in all wholly-owned or partially owned subsidiaries, all goods and equipment and all inventory, and certain patents, trademarks, and other intellectual property, as more fully detailed therein.

The ~~following~~effective ~~table~~interest ~~presents~~rate on the ~~components~~February ofNote, July Note, and DNA Note are approximately 28.4%, 23.0%, and 10.0% respectively, for the period ~~net~~from ~~carrying~~the ~~amount~~date of issuance through the date they were paid in full or March 31, 2026. The following table sets forth total interest expense recognized related to the Notes asfor ofthe ~~September~~three 30months ended March 31,(in ~~2025~~thousands of dollars):

Schedule of Components of Net Carrying Amount

Principal	$	5,680
Less: unamortized debt discount and debt issuance costs		(613	)
Long term debt	$	5,067
Current portion	$	4,817
Long-term portion	$	250

The effective interest rate on the February Note and July Note was approximately 27.8% and 22.7%, respectively, for the period from the date of issuance through September 30, 2025. The following table sets forth total interest expense recognized related to the Notes:

Schedule of Interest Expense

	Three Months Ended September 30, 2025		Nine Months Ended September 30, 2025
	2026		2025
Contractual interest expense	$	~~133~~88	$	~~239~~30
Amortization of debt discount		~~108~~43		~~172~~19
Amortization of debt issuance costs		98—		~~160~~22
Interest expense	$	~~339~~131	$	~~571~~71

~~NOTE~~For the three months ended March 31, 52026, —$256 was ~~Stockholders’~~paid ~~Equity~~for interest that represents $199 in accrued interest that was paid when the two Streeterville notes were paid on January 23, 2026, and $57 in accounts receivable discounts that were deducted by customers from payments. All interest expense is included in continuing operations.

NOTE 6 — Stockholders’ Deficit

On October November 2, 2018, the Company amended and restated its previous certificate of incorporation and adjusted its authorized capital stock (par value of $0.001) to consist of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. On October 16, 2025, at a special meeting of stockholders, our stockholders approved an amendment to our amended and restated certificate of incorporation increasing the authorized shares of our common stock from 100,000,000 to 1,000,000,000. Each outstanding share of common stock entitles the holder to one vote on each matter properly submitted to the stockholders of the Company for vote. As of March 31, 2026, no shares of preferred stock have been issued.

Purchase of DNA X LLC Membership Units with Issuance of Redeemable Common Stock

On December 15, 2025, the Company entered into a membership interest purchase agreement with DNA Holdings pursuant to which the Company purchased 100% of the membership interests in DNA X LLC, a Delaware limited liability company, for an aggregate purchase price of 223,201 redeemable shares of the Company’s common stock that had a fair value of $1,228 on the December 15, 2025 closing date, representing 19.99% of the outstanding shares of the Company’s common stock prior to the issuance. As of March 31, 2026, the value was $900 based on the closing stock price on March 31, 2026.

DNA X LLC is engaged in the business of DNAX DeFi, an advanced on-chain trading protocol that lets users automate their decentralized exchange trading — things like limit orders, grid / range orders, and recurring trades. DNA X LLC operates a crypto trading platform (www.dnax.us) that allows customers to buy and sell cryptocurrencies, and to implement strategies to buy and sell cryptocurrency pairs to take advantage of fluctuations of market prices between cryptocurrency pairs. The platform allows investors to efficiently implement trading strategies, to track historical results, and to monitor other traders’ strategies. The Company purchased this business because of the growth potential of commission revenue that will be generated as more customers join the platform and as trading volume increases as additional cryptocurrencies are added. The purchase allows the Company to diversify away from the capital intensive device hardware business that has little growth potential, into an industry with huge growth potential and requires lass ongoing capital investments.

The transaction closed contemporaneously with the sale of a note for $1,200 to DNA Holdings. See Note 5.

Under the Membership Interest Purchase Agreement, DNA Holdings also agreed to vote all shares of the Company’s common stock beneficially owned by DNA Holdings in favor of the asset purchase agreement, dated July 17, 2025, as subsequently amended and as amended from time to time, by and among the Company and Pace Car Acquisition LLC. This asset purchase agreement was approved by the Company’s stockholders on December 30, 2025.

Pursuant to the Membership Interest Purchase Agreement, so long as DNA Holdings, directly or indirectly, beneficially owns at least 5% of the Company’s outstanding common stock, DNA Holdings will have the right under the Membership Interest Purchase Agreement to designate one officer and one nominee for election to the Company’s board of directors, and the Company will be required to take reasonably necessary corporate action to appoint such designees, subject to the oversight of the Company’s nominating and governance committee. DNA Holdings designated Scott Walker for appointment to the Company’s Board of Directors and on January 30, 2026 the Board of Directors appointed Scott Walker to service on the Board as a director.

The Membership Interest Purchase Agreement also grants DNA Holdings a put option (the “Put Option”). If at any time prior to June 30, 2026 (the “Put Period”) DNA X does not realize either (i) aggregate trading volume of at least $600,000,000 or (ii) aggregate revenues of at least $1,000,000 per day, DNA Holdings will have the right, during the Put Period, to exchange the shares of common stock issued to DNA Holdings under the Membership Interest Purchase Agreement for the Purchased Interests then held by the Company. To the extent not exercised during the Put Period, the Put Option will terminate upon the expiration of the Put Period.

The Company evaluated its interests in DNA X LLC and concluded that they are not the primary beneficiary, as they do not have the power to direct the activities that most significantly impact DNA X LLC’s economic performance. The Company’s assessment considered DNA X LLC’s governance structure and contractual arrangements established in connection with the acquisition of its interest, including the Put Option held by the Seller. The Put Option provides the Seller with substantive kick-out rights, through the Put Period ending on June 30, 2026, including the ability to remove the Company from its decision-making role over DNA X LLC’s significant activities. As a result, the Company considered DNA X LLC as a variable interest entity (“VIE”), however, the Company is not the primary beneficiary and does not control DNA X LLC. Accordingly, the Company does not consolidate DNA X LLC in its financial statements.

The Company determined that it has significant influence over DNA X LLC because until the Put Option is exercised, it controls the governance structure and directs the activities that most significantly impact DNA X LLC’s economic performance. This significant influence requires the Company to account for the investment in DNA X LLC under the equity method of accounting. The carrying amount of the Company’s investment in DNA X LLC is $1,290 as of March 31, 2026, and is included as an equity method investment in the consolidated balance sheets. The Company’s share of earnings from DNA X LLC is included in other income from continuing operations in the consolidated statements of operations and was $48 for the three months ended March 31, 2026.

The Company’s maximum exposure to loss as a result of its involvement with the DNA X LLC is $1,290 as of March 31, 2026, which represents the carrying value of its investment and any unfunded commitments. The Company has not provided, and is not contractually required to provide, additional financial support to DNA X LLC.

The Company reassesses whether it is the primary beneficiary of the VIE on an ongoing basis as facts and circumstances change.

Because the stock issued may be returned to the Company if the Seller exercises their Put Option, the Company classified the stock issued to the Seller as redeemable common stock on the consolidated balance sheets. The Company considers this to be temporary equity and is not included with other permanent equity on the consolidated balance sheets. When the Put Option expires on June 30, 2026, then the redeemable common stock will be reclassified as permanent equity. The redemption value at March 31, 2026 is calculated as $900 using the $4.03 closing stock price on March 31, 2026. The change in the redemption value of $328 is charged to retained deficit. When the put option is terminated or expires on June 30, 2026, the redeemable equity will be reclassified to permanent equity.

Securities Purchase Agreement

The Purchase Agreement contains customary representations and warranties of the Company and DNA Holdings. Additionally, pursuant to the Purchase Agreement, the Company made certain covenants including, but not limited to: (i) timely filing of its reports with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, (ii) restrictions on the adoption of stockholder rights plans, poison pills, or similar anti-takeover measures, (iii) limitations on the use of proceeds from the Offering to the ordinary course of business of the Company, and (vi) for so long as the DNA Note remains outstanding, a covenant not to effect or enter into any variable rate transaction (as defined in the Purchase Agreement).

Additionally, under the Purchase Agreement, DNA Holdings has agreed to a Voting Arrangement that is substantially identical to the Voting Arrangement described above under “Membership Interest Purchase Agreement.”

See Note 5 for information on the convertible promissory note that was with the same counterparty.

ChEF Purchase Agreement

On September 29, 2025, the Company entered into a ChEF purchase agreement (the “ChEF Agreement”) and registration rights agreement (the “Registration Rights Agreement”), each with Chardan Capital Markets LLC (“Chardan”) related to a “ChEF,” Chardan’s committed equity facility.

Pursuant to the ChEF Agreement, the Company has the right from time to time at its option to sell to Chardan up to the lesser of (i) $500~~,000~~ million in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) the Exchange Cap (as defined in the ChEF Agreement), subject to certain conditions and limitations set forth in the Purchase Agreement and applicable Nasdaq listing rules. The Company is under no obligation to sell any securities to Chardan under the ChEF Agreement.

While there are distinct differences, the facility pursuant to the ChEF Agreement is structured similarly to a traditional “at-the-market” equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis. The net proceeds from any sales under the ChEF Purchase Agreement will depend on the frequency ~~with,~~of and the prices ~~at,~~for which the shares of our common stock are sold to Chardan. The registration statement in connection with the facility became effective on October 29, 2025.

~~Use of Proceeds~~20

~~The~~In ~~Company~~November ~~expects to use a minimum of 33% of proceeds from any sales under the ChEF Agreement for pre-payment of the promissory note in the original principal amount of $2~~2025,~~755~~ ~~issued by~~ the Company tosold ~~Streeterville Capital~~12,300 ~~LLC~~shares onof ~~July~~stock ~~11,~~through ~~2025, pursuant to~~ the ~~July~~ChEF ~~Purchase Agreement, until~~ and ~~unless~~received ~~such~~$79 ~~note is repaid~~ in ~~full~~net proceeds. The ~~Company~~net ~~intends to use any remaining~~ proceeds ~~for~~were ~~operations, to support~~used ~~the overall business strategy,~~ for ~~working capital, and~~ general corporate purposes.

Registered Public Offering

On July 2, 2025, the Company consummated a best-efforts public offering (the “Offering”) of 411,111 shares of its common stock, as adjusted for the Reverse Stock Splits, at a public offering price of $13.50 per share, as adjusted for the Reverse Stock Splits. In connection with the Offering, the Company entered into a securities purchase agreement with certain investor signatories thereto for the purchase of shares of common stock described above.

Roth Capital Partners, LLC (“Roth”), (the “Placement Agent”) served as the exclusive placement agent in connection with the Offering. The Company paid the Placement Agent a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the Offering, and reimbursement of certain expenses and legal fees in the amount of $100. The Company also issued to designees of the Placement Agent warrants to purchase up to an aggregate of 11,604 shares of Common Stock, as adjusted for the Reverse Stock Splits (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $13.50 per share, as adjusted for the Reverse Stock Splits, are not exercisable until January 2, 2026, and expire on July 2, 2030. The exercise prices of the Placement Agent Warrants are subject to appropriate adjustment in the event of stock dividends, stock splits, stock combinations, reorganizations or similar events affecting the Common Stock. Subject to limited exceptions, a holder of Placement Agent Warrants will not have the right to exercise any portion of its Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% (or, upon election by a holder prior to the issuance of any Warrants, 9.99%) of the shares of common stock then outstanding. At the holder’s option, upon notice to the Company, the holder may increase or decrease this beneficial ownership limitation not to exceed 9.99% of the shares of Common Stock then outstanding. The Purchase Agreement contains customary representations, warranties, and covenants by the Company. It also provides for customary indemnification for losses or damages arising out of or in connection with the Offering, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.

The shares of common stock and the Placement Agent Warrants described above and the underlying shares of common stock were offered pursuant to a Registration Statement on Form S-1, as amended (File No. 333-288221), which was declared effective by the SEC on June 30, 2025.

The net proceeds of the Offering are approximately $4,800, after deducting the Placement Agent fees and expenses and other estimated offering expenses payable by the Company. The Company used the net proceeds of the Offering for overall business strategy, for working capital purposes and for general corporate purposes.

Equity Financing

On April 29, 2024, the Company closed on a capital investment of 19,444 shares of common stock and warrants, as adjusted for the Reverse Stock Splits, with a single investor for an aggregate purchase price of $3,850. In connection with the closing, the Company incurred approximately $66 in issuance costs, which was offset against the proceeds.

Each warrant has an exercise price of $198.00 per share, as adjusted for the Reverse Stock Splits, is immediately exercisable, will expire in five years from the date of issuance, and is subject to customary adjustments for certain transactions affecting the Company’s capitalization. The warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the investor subsequent to the exercise exceeds the specified beneficial ownership limitation provided therein (which is currently 9.99% and may be adjusted upon advance notice). On August 7, 2025, the Company and the investor entered into an amendment to reduce the exercise price of the warrants to $13.50 per share.

On May 12, 2025, the Company closed on a capital investment of 61,111 shares of common stock, as adjusted for the Reverse Stock Splits, and 30,555 warrants, as adjusted for the Reverse Stock Splits, with two investors for an aggregate purchase price of $1,375. In connection with the closing, the Company incurred approximately $169 in issuance costs, which was offset against the proceeds.

Each warrant has an exercise price of $24.9552 per share, as adjusted for the Reverse Stock Splits, is immediately exercisable, will expire in five years from the date of issuance, and is subject to customary adjustments for certain transactions affecting the Company’s capitalization. The warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the investor subsequent to the exercise exceeds the specified beneficial ownership limitation provided therein (which is currently 9.99% and 4.99% and may be adjusted upon advance notice). On August 7, 2025, the Company and the investors entered into an amendment to reduce the exercise price of the warrants to $13.50 per share, as adjusted for the Reverse Stock Splits.

In connection with the close of the capital investment on May 12, 2025, the Company issued 1,375 warrants, as adjusted for the Reverse Stock Splits, to Roth on July 2, 2025. Each warrant has an exercise price of $24.912 per share, as adjusted for the Reverse Stock Splits, is immediately exercisable, will expire in five years from the date of issuance, and is subject to customary adjustments for certain transactions affecting the Company’s capitalization. The warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the investor subsequent to the exercise exceeds the specified beneficial ownership limitation provided therein (which is currently 4.99% and may be adjusted upon advance notice).

1621

ATM Offering

On August 6, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with Roth ~~Capital Partners, LLC (“Roth”)~~. Pursuant to the Sales Agreement, the Company may sell, at its option, shares of common stock through Roth, as sales agent. Sales of shares of the Company’s common stock made pursuant to the Sales Agreement are being made under the Registration Statement on Form S-3 filed on April 9, 2024 (File No. 333-278577), which was declared effective by the SEC on May 3, 2024. Subject to the terms and conditions of the Sales Agreement, Roth may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act. Roth will be entitled to compensation at a commission rate of 3% of the gross sales price per share sold through it under the Sales Agreement. The Company agreed to provide Roth with customary indemnification and contribution rights, including for liabilities under the Securities Act. In addition, the Company is required to reimburse Roth for certain specified expenses in connection with entering into the Sales Agreement.

During the ~~nine~~twelve months ended ~~September~~December 3031, 2025, a total of 193,405 shares of common stock, as adjusted for the Reverse Stock Splits, were ~~sold~~ sold under the Sales Agreement for net proceeds of $8,229, after payment of commission fees and other related expenses of $258. In the ~~second~~ second quarter of 2025, the Company completed its sales of shares of common stock under the Sales Agreement and the ATM program was terminated.

Shareholder Rights Plan

On April 21, 2025, the Board declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of common stock, par value $0.001 per share, of the Company, and adopted a stockholder rights plan, as set forth in the Rights Agreement, dated as of April 21, 2025 (the “Rights Agreement”), by and between the Company and Equiniti Trust Company, LLC, a New York limited liability company, as rights agent. The dividend is payable to stockholders of record of the Company as of the close of business on May 2, 2025.

Each Right will allow its holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock (the “Preferred Shares”), par value $0.001 per share, for $4.00 (the “Purchase Price”), once the Rights become exercisable. The Purchase Price payable, and the number of Preferred Shares or other securities or other property issuable upon exercise of the Rights will be subject to adjustment from time to time to prevent dilution in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Shares. The Rights are exercisable only if a person or group acquires 15.5% or more of the Company’s outstanding common stock (an amount of “less than 20%” in the case of a passive institutional investor as described in the Rights Plan), commences tender or exchange offer, or a similar event, as described in detail in the Purchase Agreement.

NOTE 67 — Stock-Based Compensation

Stock-based compensation expense is as follows (in thousands of dollars):

	2025		2024		2025		2024
	For the Three Months Ended
	Three Months Ended				Nine Months Ended
	March 31,
	September 30,				September 30,
	2026		2025
	2025		2024		2025		2024
Cost of revenues	$	13	$	2
Cost of revenues	$	12	$	15	$	27	$	42
Research and development		20		2
Research and development		9		15		23		35
Sales and marketing		60		65
Sales and marketing		38		99		432		289
General and administrative		211		221
General and administrative		107		244		900		803
Stock-based compensation expenses	$	304	$	290
Stock-based compensation expenses	$	166	$	373	$	1,382	$	1,169

In 2026, continuing operations includes the stock-based compensation of $211 for general and administrative. In 2025 the general and administrative stock-based compensation is included in discontinued operations. For both years the other stock-based compensation is all included in discontinued operations.

Stock-based compensation in Cost of Revenues relates to employees who focus on supply chain management.

Stock Options

Stock option activity, as adjusted for the Reverse Stock ~~Splits~~Split, for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, is ~~set forth~~ in the table below (price per share is in dollars):

Schedule of Stock Option Activity

	Options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)		Aggregate Intrinsic Value*
Outstanding at January 1, 2025		41,874		$	112.14
Outstanding at January 1, 2026		34,883		$	110.67
Granted		—			—
Exercised		—			—
Forfeited		(7,361	)		99.84
Forfeited and Expired		(5,514	)		116.18
Expired		(749	)		225.30
Outstanding at September 30, 2025		36,360		$	111.53		7.38	$	—
Outstanding at March 31, 2026		26,773		$	110.44		6.94	$	—
Vested and Expected to Vest at September 30, 2025		36,360		$	111.53		7.38	$	—
Vested and Expected to Vest at March 31, 2026		26,773		$	110.44		6.94	$	—
Exercisable at September 30, 2025		26,171		$	117.37		7.12	$	—
Exercisable at March 31, 2026		26,077		$	110.44		6.91	$	—

*	The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the balance sheet date.

As of ~~September~~March 3031, ~~2025~~2026, there was approximately $~~692~~541 of unamortized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.2512 years.

Restricted Stock Units

Restricted Stock Unit (“RSU”) activity, as adjusted for the Reverse Stock Splits, for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, is ~~set forth~~as ~~in the table below~~follows:

	RSUs
Outstanding at January 1, 2025		3,769
Outstanding at January 1, 2026		—
Granted		3985,~~187~~000
Released		~~(42,956~~—	)
Forfeited		—
Outstanding at September 30, 2025		—
Outstanding at March 31, 2026		85,000

~~NOTE~~Warrants 7activity, —as ~~Income~~adjusted ~~Taxes~~for the Reverse Stock Split, for the three months ended March 31, 2026, is as follows:

~~For~~ Schedule ~~the three months ended September 30, 2025, and 2024, the Company recorded provisions for income taxes~~ of ~~$90~~Warrant and $117, respectively. For the nine months ended September 30, 2025, and 2024, the Company recorded provisions for income taxes of $361 and $279, respectively. The Company’s effective income tax rate is negative 3.2% for the nine months ended September 30, 2025, compared to negative 2.5% for the nine months ended September 30, 2024. The effective tax rate is higher than the U.S. federal statutory tax rate primarily as a result of the Company’s full valuation allowance in the United States and foreign income taxes paid in China and India.Activity

The Company’s material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2017 and forward for federal and 2015 and forward for California purposes. The China and India tax years are open under the statute of limitations from 2014 and 2020, respectively, and forward.

	Number of warrants		Weighted average exercise price per share
Outstanding at January 1, 2026		62,979	$	13.75
Granted		—		—
Forfeited		—		—
Expired		—		—
Outstanding at March 31, 2026		62,979	$	13.75
Exercisable at March 31, 2026		62,979	$	13.75

~~The~~NOTE ~~Company~~8 is— ~~subject~~Income to ongoing tax examinations of its tax returns by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of September 30, 2025, the gross amount of unrecognized tax benefits was approximately $1,507. If the Company’s estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period in which we determine the liabilities are no longer necessary. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.Taxes

OnWe ~~July~~recognized 4,income ~~2025,~~tax ~~the~~expense ~~One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. With the passing~~ of ~~this tax legislation~~$2,538 ~~the~~for ~~most notable corporate tax issue that impacts~~ the ~~Company~~three ismonths ~~the~~ended ~~change~~March ~~to IRC §174. Since 2022~~31, the Company has been required to capitalize U.S. and foreign research and development expenditures in accordance with IRC §174 and amortize those costs over 5 years for U.S. costs and 15 years for foreign costs. The new legislation will no longer require U.S. research and development costs to be capitalized; however2026, ~~foreign~~which ~~costs~~includes ~~will continue to be capitalized and amortized over 15 years. U.S. costs that were capitalized in tax years 2022 through 2024 can be expensed in 2025 or over a two-year period~~$2, ~~2025 and 2026. The Company continues to evaluate various~~499 ~~elections~~of ~~available~~discrete totax ~~the~~expense ~~Company under OBBBA~~ related to ~~IRC~~the ~~Section~~sale ~~174 capitalized R&D costs. Because~~ of the Company’s ~~loss and~~legacy ~~full~~business ~~valuation~~assets. ~~allowance,~~We werecognized ~~expect~~income notax ~~impact~~expense onof $132 for the ~~Company’s~~three ~~2025~~months ~~financial~~ended ~~statements~~March ~~regardless~~31, of2025 ~~the~~which ~~elections~~includes ~~that the~~$9 ~~Company~~of ~~makes~~discrete ~~related~~tax ~~to IRC Section 174 capitalized R&D costs for the 2025 year~~expense.

~~NOTE~~Our tax expense for discontinued operations for the three months ended March 31, 2026 is higher than our tax expense 8for —the ~~Commitments~~same period last year due to the sale of the Company’s phone and ~~Contingencies~~hotspot assets on January 23, 2026. Tax expenses for the first quarter of 2026 are included in discontinued operations because they primarily relate to the sale of the assets and the gain on the sale of the assets is included in discontinued operations.

Our effective tax rate is 64.61% for the three months ended March 31, 2026, compared to 13.74% in the same period last year. This effective tax rate is calculated by dividing total tax expense for the Company by the loss from continuing operations. Our effective rate is higher than the U.S federal statutory tax rate primarily due to us not matching the taxes on the asset sale with the income from the asset sale in the calculation.

The Company’s material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2023 and forward for federal and California purposes. The China and India tax years are open under the statute of limitations from 2013 and forward.

It is projected that the Company will utilize $8 million of U.S. federal net operating loss carryovers in 2026 to partially offset the projected 2026 U.S. federal taxable income resulting from the Company’s Q1 2026 asset sale. It is projected that the Company will have $5.2 million of U.S. federal net operating loss carryovers at the end of 2026. As of March 31, 2026, the Company has a full valuation allowance on all of its U.S. federal and state deferred tax assets.

The Company’s material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2023 and forward for federal and California purposes. The China and India tax years are open under the statute of limitations from 2013 and forward.

The Company is subject to ongoing tax examinations of its tax returns by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of March 31, 2026, the gross amount of unrecognized tax benefits was approximately zero. If the Company’s estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period in which we determine the liabilities are no longer necessary. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.

All of the tax expense for the three months ended March 31, 2026 and March 31, 2025 are included in discontinued operations.

NOTE 9 — Commitments and Contingencies

Purchase Commitments

~~The~~There ~~aggregate~~are ~~amount~~no of noncancelable purchase orders as of ~~September~~March 3031, ~~2025,~~2026 ~~and~~or December 31, ~~2024,~~2025 ~~was~~for ~~approximately~~continuing ~~$14,278~~operations. ~~and~~The ~~$15,753, respectively,~~company ~~and~~stopped ~~were~~issuing purchase ~~related~~commitments toin ~~the~~2025 ~~purchase~~in anticipation of ~~inventory~~the ~~and~~closing ~~components~~of ~~for~~ the ~~Company’s~~asset ~~devices, and certification services~~sale.

Royalty payments

~~The~~For its discontinue operations, the Company is required to pay per unit royalties to wireless essential patent holders ~~and other providers of integrated technologies on mobile devices delivered, which, in aggregate, amount to less than 5% of net revenues associated with each unit and expire between 2025 and 2033~~. ~~Royalty~~During ~~expense for~~ the three months ended ~~September~~March 3031, ~~2025~~2026, ~~and~~we ~~2024~~made ~~was~~a ~~$304~~total ~~and~~of $~~336,~~696 ~~respectively.~~in ~~Royalty~~payments ~~expense~~ for ~~the~~ ~~nine months ended September 30, 2025, and 2024 was $738 and $818, respectively. Royalty expense is included in Cost of Revenues. The Company may be required to pay additional~~ royalties ~~to additional patent holders and technology providers on future products~~.

General litigation

The Company is involved in various legal proceedings arising in the normal course of business. The Company does not believe that the ultimate resolution of these other matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

As of September 30, 2025, the Company was not subject to any currently pending legal matters or claims that would be expected to have a material adverse effect on its financial position, results of operations, or cash flows should such litigation be resolved unfavorably. Information on legal proceedings and material developments in connection therewith for the six months ended June 30, 2025, is included in the Company’s quarterly report for that period, filed with the SEC on August 8, 2025, and is incorporated herein by reference.

Indemnification

Under the terms of ~~its~~the ~~agreements~~asset ~~with~~purchase ~~wireless carriers and other partners~~agreement, the Company has ~~agreed to provide~~ indemnification obligations for ~~intellectual property~~representations ~~infringement~~and ~~claims~~warranties ~~related~~made toby the Company’s. ~~products~~The ~~sold~~$1,500 byreceivable ~~them~~for tocash ~~their~~held ~~end~~back ~~customers.~~on ~~From time to time,~~ the ~~Company receives~~balance ~~notices~~sheet ~~from~~can ~~these~~be ~~wireless~~used ~~carriers~~to ~~and~~cover ~~other~~indemnification ~~partners~~obligations. ofThere ais ~~claim~~no ~~for~~maximum ~~infringement~~indemnification ofexposure. ~~intellectual~~The ~~property rights potentially~~Company ~~related~~is tocurrently ~~their~~negotiating ~~products.~~certain ~~These~~indemnification claims ~~infringement~~with ~~claims~~the ~~have~~Buyer ~~been~~and ~~settled,~~the ~~dismissed,~~exposure ~~have~~is not ~~been~~determinable ~~further~~as ~~pursued~~of byMarch ~~the customers~~31, ~~or are pending further action by the Company~~2026.

~~NOTE~~For 9discontinued —operations, ~~Net~~under ~~Income~~the ~~(Loss)~~terms ~~Per~~of ~~Share~~its agreements with wireless carriers and other partners, the Company has agreed to provide indemnification for intellectual property infringement claims related to the Company’s products sold by them to their end customers. From time to time, the Company receives notices from these wireless carriers and other partners of a claim for infringement of intellectual property rights potentially related to their products. These infringement claims have been settled, dismissed, or have not been further pursued by the customers.

The following table sets forth the computation of the Company’s basic and diluted net loss per share. Share and per share amounts for the periods ended September 30, 2024, have been adjusted retrospectively for the Reverse Stock Splits.24

NOTE 10 — Net Income (Loss) Per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share. Share and per share amounts for the periods ended March 31, 2026 and 2025, have been adjusted retrospectively for the Reverse Stock Split. The numerator amounts are in thousands of dollars.

	2025			2024			2025			2024
	2026			2025
	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2025			2024			2025			2024
	2026			2025
Numerator:
Net loss	$	(4,753	)	$	(2,512	)	$	(11,770	)	$	(12,034	)
Loss from continuing operations	$	(3,928	)	$	(961	)
Denominator:
Net income from discontinued operations		10,268			1,419
Weighted-average shares used in computing net loss per share, basic		984,927			269,388			614,985			258,788
Net income	$	6,340		$	458
Net loss per share, basic	$	(4.83	)	$	(9.32	)	$	(19.14	)	$	(46.50	)
Denominator:
Weighted-average shares used in computing net loss per share, diluted		984,927			269,388			614,985			258,788
Weighted-average shares used in computing net loss per share, basic and diluted		1,265,067			324,431
Net loss per share, diluted	$	(4.83	)	$	(9.32	)	$	(19.14	)	$	(46.50	)
Earnings (loss) per share – basic and diluted
Continuing operations	$	(3.11	)	$	(2.96	)
Discontinued operations		8.12			4.37
Net earnings per share, basic and diluted	$	5.01		$	1.41

19Because we had a net loss from continuing operations, we did not disclose diluted earnings per share amounts for discontinued operations or for overall net income.

~~The potentially~~Redeemable ~~dilutive common~~ shares are ~~that were~~ excluded from the ~~calculation~~earnings ~~of diluted net~~ (loss) per share ~~because their effect would have been antidilutive are as follows~~calculation. ~~Share amounts for the periods ended September 30, 2025 and 2024, have been adjusted retroactively for the applicable Reverse Stock Splits.~~

The potentially dilutive common shares that were excluded from the calculation of diluted net income per share because their effect would have been antidilutive are as follows. Share amounts for the periods ended March 31, 2026 and 2025, have been adjusted retroactively for the applicable Reverse Stock Split.

	2025		2024		2025		2024
	2026		2025
	Three Months Ended				~~Nine Months Ended~~
	September 30,				September 30,
	March 31,
	2025		2024		2025		2024
	2026		2025
Shares subject to options to purchase common stock		3626,~~360~~077		4140,~~186~~010		~~36,360~~		~~41,186~~
Unvested restricted stock units		—		2,868		—		2,868
Unvested and unissued restricted stock units		85,000		—
Shares subject to warrants to purchase common stock		62,~~978~~979		19,444		~~62,978~~		~~19,444~~
Total		99174,~~338~~056		6359,~~498~~454		~~99,338~~		~~63,498~~

NOTE 1011 — Entity Level Information

Segment Information—The Company did not have a reporting segment for continuing operations for the three months ended March 31, 2026.

~~The~~NOTE ~~Company~~12 ~~operates~~— inSubsequent ~~one reporting segment.~~Events

The ~~Company’s~~ ~~Chief Executive Officer is the~~ Company’s ~~chief~~management ~~operating~~reviewed ~~decision~~all ~~maker (“CODM”). The Company’s~~material ~~CODM~~events ~~primarily~~that ~~uses~~have ~~consolidated~~occurred ~~net~~after ~~income~~the ~~(loss)~~balance tosheet ~~allocate~~date ~~resources~~through ~~and~~the ~~assess~~date ~~Company~~when ~~performance,~~the ~~primarily~~financial ~~through~~statements ~~periodic~~were ~~budgeting and Company performance reviews~~issued. ~~The~~Based ~~CODM~~on ~~utilizes~~the ~~discrete~~review, except ~~financial~~as ~~information~~disclosed atbelow, the ~~consolidated~~Company ~~level,~~did ~~including~~not ~~profit~~identify ~~and~~any ~~loss statements,~~subsequent ~~cash~~events ~~flow~~that ~~and~~would ~~revenue~~require ~~forecasts,~~adjustment ~~inventory~~or ~~reports,~~disclosure ~~and~~in ~~vendor~~the ~~payment plans~~financial statements.

~~The~~On ~~following~~May ~~table~~20, ~~details~~2026, the ~~revenues,~~Company ~~significant~~entered ~~expenses~~into ~~and~~a ~~other~~Securities ~~segment~~Purchase ~~items~~Agreement ~~regularly~~(the ~~provided~~“Purchase Agreement”) with DNA Holdings Venture, Inc. (the “Purchaser”) pursuant to which the Company sold and ~~reviewed~~issued byto the ~~CODM:~~Purchaser a convertible promissory note (the “Note”) in the principal amount of $3,052 for an aggregate purchase price in the same amount.

~~Schedule~~The aggregate purchase price for the Note consisted of ~~Revenue~~$1,800 ~~Significant~~in ~~Expenses~~cash and ~~Other~~the ~~Segment~~surrender ~~Items~~of the convertible promissory note, dated December 15, 2025, in the principal amount of $1,200 issued by the Company to the Purchaser, including $53 of accrued unpaid interest on such principal amount.

	2025			2024			2025			2024
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues	$	16,214		$	15,022		$	44,125		$	43,314
Less:
Cost of sales		11,857			9,101			26,341			28,402
Amortization of contract fulfillment assets		908			896			2,592			2,595
Other cost of sales		1,633			793			4,175			2,214
Research and development		181			715			2,723			1,728
Sales and marketing		2,452			3,045			9,136			8,756
General and administrative, excluding legal fees		2,712			2,415			7,649			6,799
Legal fees		451			433			1,576			1,138
Impairment of contract fulfillment assets		—			—			—			3,217
Interest expense, net		522			—			1,002			17
Other (income) expense, net		161			19			340			203
Income tax expense		90			117			361			279
Consolidated segment net income (loss)	$	(4,753	)	$	(2,512	)	$	(11,770	)	$	(12,034	)

The Purchase Agreement contains customary representations, warranties and covenants by the Company and customary closing conditions. The SPA requires the proceeds from the sale of the Note to be used for working capital purposes, but not for the satisfaction of any Company debt (other than the payment of trade payables in the ordinary course of business), the redemption of common stock or common stock equivalents, the settlement of any litigation, or in violation of certain antibribery and anticorruption laws specified in the Purchase Agreement.

20The Note matures on December 31, 2026, accrues interest at a rate of 10% per annum, and, subject to the prior approval of the conversion of the Note by the Company’s stockholders (the “Stockholder Approval”), is convertible into shares of the Company’s common stock at the election of the holder at an initial conversion price of $6.00 per share, subject to adjustment as provided in the Note, provided, that (i) during the continuance of any Event of Default (as defined in the Note), the conversion price will be equal to 80% of the closing price of the common stock on the principal trading market on the date of conversion and (ii) upon the occurrence of a Change of Control Transaction (as defined in the Note), and subject to the prior obtainment of the Stockholder Approval, the conversion price will be equal to the lower of the closing price of the common stock on (x) the original issue date of the Note or (y) the date that the Change of Control Transaction is consummated.

The ~~following~~Company’s ~~table~~obligations ~~summarizes~~under ~~total~~the ~~net~~Note ~~revenues~~are secured by ~~region~~a ~~based~~first onpriority ~~ship-~~lien and security interest in and to ~~destinations~~the following collateral (collectively, the “Pledged Collateral”): (i) the limited liability company membership interests owned by the Company in its wholly owned subsidiary DNA X, LLC, a Delaware limited liability company, and all dividends, cash, instruments, and other property from time to time received or distributed in respect thereof and all proceeds of any of the foregoing in whatever form. The security interest in the Pledged Collateral is continuing and shall remain in full force and effect until the indefeasible payment in full of the Note, upon which the security interest shall terminate and all rights to the Pledged Collateral shall revert to the Company.

~~Schedule~~ Amendment of ~~Revenue~~Membership byInterest ~~Region~~Purchase Agreement

	2025		2024		2025		2024
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
United States	$	11,762	$	11,667	$	34,215	$	27,999
Asia Pacific		10		98		581		7,831
Canada		2,618		3,180		5,453		7,364
Europe and Middle East		1,824		77		3,876		120
Total net revenues	$	16,214	$	15,022	$	44,125	$	43,314

Concurrently with the closing, and as a condition and inducement to the Company’s willingness to enter into the Purchase Agreement, the Company and the Purchaser entered into an Amendment No. 1 to the Membership Interest Purchase Agreement (the “Purchase Agreement Amendment”) pursuant to which the Company and the Purchaser agreed to terminate the “Put Option” described therein, effective as of the execution of the Purchase Agreement.

Long-lived assets, substantially comprised of contract fulfillment assets, located in the United States and Asia Pacific region were $9,756 and $162 as of September 30, 2025, respectively, and $7,384 and $187 as of December 31, 2024, respectively.25

Inventory located in the United States and Asia Pacific region was $2,083 and $8,903 as of September 30, 2025, respectively, and $3,383 and $7,238 as of December 31, 2024, respectively.

Concentrations of Revenue Risk

Revenue from customers with concentration greater than 10% accounted for approximately the following percentage of net revenues:

Schedule of Concentrations of Risk

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Customer A		31	%		37	%		45	%		40	%
Customer B		20	%		16	%		16	%		12	%
Customer C (related party)		-*			-*			-*			18	%
Customer D		-*			11	%		-*			-*

* Customer revenue did not exceed 10% in the respective period.

NOTE 11 — Subsequent Event

On October 27, 2025, the Company effected a 1-for-18 reverse stock split of its issued and outstanding common stock. The Company’s common stock began trading on the Nasdaq Capital Market on a post-split basis on October 27, 2025. See Note 1, The Company and Its Significant Accounting Policies, under the title “Reverse Stock Split—2025 Reverse Stock Split” for additional details.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations together with “Cautionary Note About Forward-Looking Statements” and our unaudited condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report on Form 10-Q as well as our most recent Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 as amended, including Part 1, Item 1A “Risk Factors.”

Company Overview

~~Sonim~~We ~~Technologies,~~are ~~based in the United States, is~~ a ~~leading~~ provider of ~~enterprise~~crypto 5Gtrading ~~solutions,~~services ~~offering~~to athe ~~robust~~public. ~~portfolio~~Our ~~that~~services ~~includes rugged~~are ~~handsets,~~available ~~smartphones,~~over ~~wireless~~the internet ~~devices,~~at ~~software,~~https://dnax.us. ~~services,~~We ~~and~~serve individual ~~accessories~~cryptocurrency traders. ~~These~~Our products ~~are~~allow ~~engineered~~users ~~for~~to ~~reliable communication~~efficiently inbuy ~~challenging~~ and ~~unpredictable~~sell ~~environments,~~cryptocurrencies ~~serving~~with ~~sectors~~cash ~~such~~or ascash ~~critical communications~~equivalents, or ~~first~~to ~~responders,~~exchange ~~government, industrial,~~one ~~construction,~~cryptocurrency ~~hospitality,~~for ~~and~~another ~~logistics~~cryptocurrency. WeOur ~~currently~~platform ~~have~~allows ~~products~~users ~~available~~to atexecute ~~all~~strategies ~~three~~between ~~U.S.~~pairs ~~Tier-one~~of ~~carriers –~~cryptocurrencies ~~AT&T,~~that ~~T-Mobile~~allow ~~and~~them ~~Verizon~~to asswap ~~well~~between as the ~~three~~currencies ~~primary~~as ~~carriers~~the inprices ~~Canada~~diverge –or ~~Bell,~~converge. ~~Telus~~This ~~and~~allows ~~Rogers,~~users ~~and~~to ~~Telstra~~automate instrategies ~~Australia.~~without the ~~These~~need ~~carriers~~to ~~then~~continuously ~~resell~~monitor ~~our~~the ~~products,~~market. ~~along~~We ~~with~~are ~~network~~developing ~~services,~~products to ~~end~~increase ~~customers~~the ~~focusing~~number onof ~~two~~cryptocurrencies ~~primary~~that ~~end~~are ~~markets:~~available ~~industrial~~for ~~enterprise~~trading ~~and~~on ~~public~~our ~~sector.~~platform Weand ~~also~~products ~~sell~~the ~~our~~Company ~~products~~expects ~~through~~to ~~distributors~~bring ~~and~~in ~~resellers~~additional incustomers ~~various~~and ~~markets,~~drive ~~including~~additional ~~Europe~~revenue ~~and~~from ~~South~~commissions ~~Africa~~and fees.

InWe ~~2023,~~are ~~Sonim~~currently ~~announced~~operating on a ~~strategic~~limited ~~expansion~~basis ~~initiative,~~to ~~focusing~~monitor onthe ~~broadening~~platform ~~its~~and ~~market~~address ~~reach~~any ~~with~~bugs ~~new~~or ~~products,~~performance ~~geographical~~issues. ~~markets, and~~We ~~customer~~plan ~~segments~~to ~~including~~add ~~enterprise,~~additional features ~~small~~ and ~~medium~~products ~~business,~~to ~~and~~the ~~prosumers.~~platform ~~This~~throughout ~~strategy~~2026 isas ~~underpinned~~we byexecute aour ~~strong~~growth ~~emphasis on execution~~strategy. We ~~have~~will ~~introduced~~continue ~~new~~to ~~product~~monitor ~~categories:~~the ~~Connected~~platform ~~Solutions~~to ensure ~~featuring~~that ~~wireless~~it ~~internet~~can ~~products,~~handle athe ~~next-generation rugged~~anticipated ~~smartphone,~~increase ~~and~~in atrading ~~new~~volume. ~~range~~We ofmay ~~mid~~use social media and ~~low-tier~~traditional ~~professional~~media ~~rugged~~to ~~phones,~~market ~~all~~our ~~boasting~~platform to IPpotential ~~ratings,~~customers. ~~MIL-STD-810H~~We ~~standards,~~may ~~and elements~~expand ofour ~~Sonim’s~~marketing ~~RPS,~~efforts ~~highlighting~~as ~~our~~new ~~value~~products ~~proposition~~become available to ~~target markets~~customers.

~~During~~Prior to December 2025, when we acquired our platform, we operated under the ~~second~~name ~~half~~Sonim ofTechnologies, ~~2024~~Inc. and ~~through~~were ~~the~~primarily ~~filing~~focused ~~date~~on ofdesigning and ~~this~~manufacturing ~~report,~~cell ~~the~~phones ~~Company~~and ~~launched~~mobile hotspots. We developed the ~~following~~software that ran on our products:. We completed the disposition of substantially all assets of our phone and hotspot business on January 23, 2026.

● Sonim H500-series of 5G mobile hotspots available at Verizon and Verizon Frontline Verified, UScellular, and Bell in North America, as well as at select carriers and through our distribution partners in Europe; ● Sonim MegaConnect, the world’s first 5G High Powered User Equipment (HPUE) rugged mobile hotspot, available at AT&T Business and FirstNet® in the United States, and is also FirstNet Trusted; ● Sonim H100 4G mobile hotspot available through Telia Finland and distribution partners in Europe; ● XP100 4G and XP400 5G professional rugged phones available through Deutsche Telekom in Germany and distribution partners in Europe and South Africa; ● XP Pro 5G rugged smartphone available through Verizon and Verizon Frontline Verified, AT&T and FirstNet Ready, and T-Mobile and certified for T-Priority in the United States, Bell, Telus, Rogers, and SaskTel in Canada, and through select distributors in Europe, the Middle East, and Africa; ● XP Pro Thermal 5G rugged smartphone available in Europe, the Middle East, and Africa through select distributors; and ● XP3plus 5G rugged flip phone available through T-Mobile and certified for T-Priority.Our Products

~~Most~~Trading ~~of these products are supported by the SonimWare™ platform~~ and ~~enterprise~~Swapping services. In 2025, all of our new products that launched with tier-one carriers in the United States included a certification associated with carrier first responder initiatives, including FirstNet Ready, FirstNet Trusted, Verizon Frontline Certified, and T-Mobile certified for T-Priority. In 2025, we launched the XP Pro Thermal 5G smartphone for Europe which includes an SDK-enabled Sonim IRIS software for custom application development and an integrated thermal camera by FLIR® that benefits a number of vertical trades such as electricians, plumbers, public safety, construction, agriculture, amongst others.Cryptocurrencies

~~Geographic~~Our ~~market~~https://dnax.us ~~expansion~~website ~~continues~~allows ~~with~~users ~~agreements~~to ~~and~~trade ~~product~~or ~~availability~~swap ~~through~~certain ~~new~~cryptocurrencies ~~distribution~~for ~~partners~~other incryptocurrencies ~~Europe~~or ~~and~~for ~~South~~cash ~~Africa, catering~~equivalent tocurrencies. ~~carrier,~~New ~~reseller,~~customers ~~and~~can ~~enterprise~~set ~~sales~~up ~~channels~~an account on our website that will allow them to trade cryptocurrencies. ~~Partners~~The ~~include~~customer ~~Brodos,~~owns ~~Modino,~~the assets ~~Ingram~~before ~~Micro,~~and after the trade and ~~Cernotech,~~commissions ~~which~~are ~~bolster~~automatically ~~our presence~~deducted infrom ~~these~~the ~~regions~~trade. ~~This~~We ~~strategic~~do ~~alignment~~not ~~supports~~take custody of any of our ~~commitment~~customers’ crypto assets. We employ various security measures in an effort to ~~offering~~protect ~~reliable~~our ~~solutions~~customers and ~~expanding~~ourselves ~~our~~from ~~customer~~cyber threats. The trades ~~base~~on our platform are generally completed immediately and there is no delay in settling the transactions.

22Our platform allows anyone to set up an automated trading strategy and to buy one currency when the price ratio with another currency is reached in one direction, and to sell the currency when the ratio is reached in the other direction. This allows users to automatically trade and capture profits as cryptocurrencies trade within certain ranges. These strategies can be viewed by all users and can be duplicated. Our platform maintains histories of the strategies that can be analyzed to develop new strategies. We generate commission revenue from our users’ trading activity on our platform.

~~With~~We ~~the~~are ~~primary~~developing ~~sales~~new ~~channels~~enhancements in the U.S. and Canada consisting of large wireless carriers, the Company’s customer base is highly concentrated. For the nine months ended September 30, 2025, wireless carriers contributed 83% of our total net revenues, 12% of which related to ~~the expiration of customer allowance agreements as three of~~ our ~~legacy~~trading ~~phones~~platform ~~approach~~that ~~end-of-life,~~when ~~with our top three carrier customers accounting for 69% of our total net revenues~~implemented, ~~11%~~are ofexpected ~~which related~~ to ~~the~~increase ~~expiration~~trading ~~of customer allowance agreements~~volume. Our rugged smartphones represented 54% of our total net revenues, 12% of which related to the expiration of customer allowance agreements, while feature phones were 28% of our total net revenues, and connected solutions were 16% of our total net revenues. For the three months ended September 30, 2025, wireless carriers contributed 78% of our total net revenues, with our top three carrier customers accounting for 59% of our total net revenues. Our rugged smartphones represented 50% of our total net revenues, while feature phones were 23% of our total net revenues, and connected solutions were 25% of our total net revenues.

In alignment with Sonim Technologies’ commitment to quality, reliability, and regulatory compliance, we have prioritized our Trade Agreements Act (“TAA”) initiatives. TAA compliance is crucial in enhancing our market strategy, particularly in expanding opportunities within government and enterprise markets, which demand stringent adherence to regulatory standards. By ensuring our products meet TAA requirements, we reinforce our position as a trusted provider of enterprise 5G solutions.

This initiative underscores our dedication to delivering products that not only meet industry-leading standards but also comply with U.S. federal procurement regulations, thereby enhancing our competitiveness in securing government contracts.

Looking ahead, Sonim is focused on bringing our new products and solutions offering to our expanded portfolio throughout 2025.

Pending Asset Purchase Agreement with Social Mobile and Company’s Strategic Initiatives

On July 17, 2025, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) by and among the Company, as seller, Pace Car Acquisition LLC, as buyer, (the “Buyer”), the Seller Representative named in the Asset Purchase Agreement, and, Social Mobile Technology Holdings LLC (the “Parent”), solely for the purpose of guaranteeing complete payment and performance obligations of the Buyer contained in the Asset Purchase Agreement.

Pursuant to the Asset Purchase Agreement, the Buyer agreed to acquire substantially all assets of the Company and its subsidiaries related to the Company’s enterprise 5G solutions business, including rugged handsets, smartphones, wireless internet devices, software, services, and accessories (collectively, the “Business”) for a purchase price of $15.0 million in cash, subject to (i) customary working capital, indebtedness and transaction expense adjustments (referred to in the Asset Purchase Agreement as the “Adjustment Amount,” which may be a positive or a negative number) and (ii) up to $5.0 million in the form of an earn-out payment, if earned.

Because the transaction contemplates the sale of substantially all of the Company’s assets, the Company is pursuing alternative strategies, in addition to completing the asset sale, with the objective of maximizing stockholder value. There can be no assurance that the Asset Purchase Agreement or any additional transaction will ultimately be consummated timely or at all.

Recent Developments

Recent Product Awards

The first step in selling our products through wireless telecommunications carriers is to receive a product award from the carrier. The award documents the intent of the carrier to carry the proposed product and offer it to customers through their stores or online. The carrier and Sonim agree to a launch date that is generally nine months or longer from the date of the product award. After the product award, the Company and its partners complete the design that includes the unique specifications from the carrier, test the device, obtain certification from the carrier to sell the device, and begin full scale manufacturing of the product based on purchase orders issued by the carrier.

As of the filing date of this report, Sonim is completing the development, testing and certification of an updated 5G version of the Company’s XP5plus.

2025 Reverse Stock Split

On October 27, 2025, the Company effected a 1-for-18 reverse stock split of its issued and outstanding common stock (the “2025 Reverse Stock Split”). On the same date, our common stock began trading on the Nasdaq Capital Market on a post-split basis. As a result of the 2025 Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 27, 2025, was automatically converted into one-eighteenth (1/18) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead received a cash payment equal to the fraction of which a stockholder would otherwise be entitled multiplied by $16.8678, which is the closing price per share of common stock on October 20, 2025 (as reported by the Nasdaq Capital Market), as adjusted to give effect to the reverse stock split.

The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.

All common share and per-share amounts in this Form 10-Q have been retroactively restated to reflect the effect of the 2025 Reverse Stock Split.

Capital Structure

We prioritized adjustments to the Company’s capital structure to better align with our long-term strategy. On October 16, 2025, at a special meeting of stockholders, our stockholders approved an amendment to our amended and restated certificate of incorporation increasing the authorized shares of our common stock from 100,000,000 to 1,000,000,000. The amendment was filed with the Secretary of State of the State of Delaware on October 16, 2025. Our board believes it is in the best interests of the Company and its stockholders to have additional authorized shares available. The primary purpose of the amendment is to provide greater flexibility in managing our common stock for general corporate purposes that our board may, from time to time, deem advisable, which could include, without limitation: (i) financing activities, including the ChEF facility; (ii) stock dividends or splits; (iii) conversions of convertible securities; (iv) issuances of stock options and other equity awards under our incentive plans; and (v) establishing strategic relationships. Having an increased number of authorized but unissued shares allows the Company to act promptly on corporate opportunities without the delay and expense of convening a special meeting of stockholders to approve a further increase in capitalization.

ChEF Purchase Agreement

Pursuant to the ChEF Agreement, the Company has the right from time to time at its option to sell to Chardan up to the lesser of (i) $500.0 million in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) the Exchange Cap (as defined in the ChEF Agreement), subject to certain conditions and limitations set forth in the Purchase Agreement and applicable Nasdaq listing rules. The Company is under no obligation to sell any securities to Chardan under the ChEF Agreement.

While there are distinct differences, the facility pursuant to the ChEF Agreement is structured similarly to a traditional “at-the-market” equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis. The net proceeds from any sales under the ChEF Purchase Agreement will depend on the frequency with, and prices at, which the shares of our common stock are sold to Chardan. The registration statement in connection with the Facility became effective on October 29, 2025.

For additional information, refer to Note 5, Stockholders’ Equity, to the condensed consolidated financial statements contained within this report under the title “ChEF Purchase Agreement.”

Equity Financings

On May 12, 2025, we consummated a private placement with two investors and sold 61,111 shares of our common stock, as adjusted for the Reverse Stock Splits, and warrants to purchase up to 30,555 shares of our common stock, as adjusted for the Reverse Stock Splits, for an exercise price of $24.9552 per share, as adjusted for the Reverse Stock Splits, for an aggregate purchase price of $1.38 million. We used the net proceeds from the private placement for working capital and general corporate purposes. On August 7, 2025, the Company and the investor entered into an amendment to reduce the exercise price of the warrants to $13.50 per share, as adjusted for the Reverse Stock Splits.

In connection with the close on the capital investment on May 12, 2025, the Company issued warrants to Roth to purchase up to 1,375 shares of our common stock, as adjusted for the Reverse Stock Splits, on July 2, 2025. Each warrant has an exercise price of $24.912 per share, as adjusted for the Reverse Stock Splits.

On April 29, 2024, we consummated a private placement with a single investor and sold 19,444 shares of our common stock, as adjusted for the Reverse Stock Splits, and warrants to purchase up to 19,444 shares of our common stock for an exercise price of $198.00 per share, as adjusted for the Reverse Stock Splits, for an aggregate purchase price of $3.85 million. We used the net proceeds from the private placement for working capital and general corporate purposes. On August 7, 2025, the Company and the investor entered into an amendment to reduce the exercise price of the warrants to $13.50 per share, as adjusted for the Reverse Stock Splits.

ATM Offering

On August 6, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”). Pursuant to the Sales Agreement, the Company could sell up to an aggregate of $8.9 million in shares of common stock through Roth, as sales agent. During the nine months ended September 30, 2025, a total of 193,405 shares of common stock, as adjusted for the Reverse Stock Splits, were sold under the Sales Agreement for net proceeds of $8.2 million after payment of commission fees and other related expenses of $0.3 million. In the second quarter of 2025, the Company completed its sales of shares of common stock under the Sales Agreement and terminated the ATM program.

Sales of shares of our common stock made pursuant to the Sales Agreement were made under the effective Registration Statement on Form S-3. Roth was entitled to compensation at a commission rate of 3% of the gross sales price per share. For additional information, refer to Note 5, Stockholders’ Equity, to the condensed consolidated financial statements contained within this report under the title “ATM Offering.”

Registered Public Offering

Roth served as the exclusive placement agent in connection with the Offering. The Company paid Roth a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the Offering, and reimbursement of certain expenses and legal fees in the amount of $0.1 million. The Company also issued to designees of Roth warrants to purchase up to an aggregate of 11,604 shares of common stock, as adjusted for the Reverse Stock Splits (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $13.50 per share, as adjusted for the Reverse Stock Splits, are not exercisable until January 2, 2026, and expire on July 2, 2030.

The net proceeds of the Offering are approximately $4.8 million, after deducting the Placement Agent fees and expenses and other estimated offering expenses payable by the Company. The Company used the net proceeds of the Offering for overall business strategy, for working capital purposes and for general corporate purposes.

Receivables Financing Agreements

To improve its liquidity, on September 23, 2024, the Company entered into an invoice purchase agreement with LS DE LLC (“LS”), pursuant to which LS will provide receivables factoring to the Company, pursuant to which LS will advance 80% of the face value of the receivables being sold by the Company, up to a maximum of $2.5 million of eligible customer invoices from the Company. As of September 30, 2025, this agreement is terminated.

To improve its liquidity, on August 7, 2025, the Company entered into a factoring agreement (the “Receivables Financing Agreement”) with Tradewind GmbH (“Tradewind”), pursuant to which Tradewind will provide international receivables factoring to the Company, pursuant to which Tradewind will advance 85% of the face value of the receivables being sold by the Company, up to a maximum of €3.0 million of eligible customer invoices from the Company. For additional information, refer to Note 3, Significant Balance Sheet Components, to the condensed consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”

Promissory Notes

On February 21, 2025, the Company entered into the Purchase Agreement with the Lender pursuant to which the Company issued and sold to the Lender the Note. Starting on August 21, 2025, the Lender may exercise its right to redeem up to $330,000 of the Note per calendar month. During the three months ended September 30, 2025, the Company and the Lender entered into certain exchange agreements whereby the Company issued 30,188 shares, as adjusted for the Reverse Stock Splits, in exchange for payment-in-full of $375 in principal balance of the February Note. For additional information, refer to Note 4, Promissory Notes, to the condensed consolidated financial statements contained within this report under the title “February Purchase Agreement.”

On July 11, 2025, the Company entered into an additional note purchase agreement with the Lender pursuant to which the Company issued and sold to the Lender an additional promissory note (the “July Note,” and together with the February Note, the “Notes”). Starting on January 11, 2026, the Lender may exercise its right to redeem up to $275,000 of the July Note per calendar month. Additionally, the July Note was secured by a first-priority interest in all of the Company’s assets. The July Note requires the Company to prepay an amount equal to not less than 33% of the net proceeds received from any equity or debt financing. For additional information, refer to Note 4, Promissory Notes, to the condensed consolidated financial statements contained within this report under the title “July Purchase Agreement.”

The exercise of the Lender’s redemption rights under either note or the Company’s obligation to make prepayments under the July Note may reduce the Company’s liquidity.

Impairment of Contract Fulfillment Assets

The non-recurring costs associated with design and development of new products for technical approval represent costs to fulfill a contract pursuant to ASC 340-40, Other Assets and Deferred Costs. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs over the estimated period of time that the product will be sold, which is typically three to four years. As of September 30, 2025, and December 31, 2024, the net contract fulfillment assets were $9,053 and $6,399, respectively.

If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the nine months ended September 30, 2024, the Company recorded an impairment of contract fulfillment assets of $3.2 million due to a decrease in projected profit of one of its hotspots and the cancellation of a consumer durable product. This product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product. During the nine months ended September 30, 2025, the Company recorded an impairment of contract fulfillment assets of $1.1 million due to the end of life of a legacy smartphone, which is included in cost of revenues in the Condensed Consolidated Statements of Operations.

Macroeconomic Events

Worldwide economic and political uncertainties and negative trends, including tariffs and increasing trade protectionism, inflation, tensions between the U.S. and China, financial and credit market fluctuations, recession risks, labor shortages, supply chain disruptions, political election cycles, changes in laws and interpretations of laws, changes in the volume and relative mix of U.S. government spending, cost-cutting and efficiency initiatives and potential disruptions from international conflicts and acts of terrorism, have impacted and may continue to impact our business and the business of our customers, while also disrupting sales channels and advertising and marketing activities. See “Part II. Item 1A. Risk Factors” in this Form 10-Q for further discussion of the possible impact of these factors and other risks on our business.

We have implemented and continue to implement measures to address those challenges. We also continue to actively manage our inventory and establish a relationship with third-party manufacturers in an effort to minimize supply chain disruptions. Nevertheless, the above-described events had and will continue to impact the global macroeconomic and geopolitical environments, capital and commodity markets, and global supply chains, which may have an adverse impact on our operations and hinder our ability to access capital, if needed. Our cost of revenue may increase if the component prices increase.

Recent Developments

Completion of the Asset Purchase Agreement with Pace Car Acquisition LLC. On January 23, 2026, we completed the sale of substantially all assets and most liabilities related to our legacy phone and mobile hotspot business for a purchase price of $15.0 million in cash, less working capital, indebtedness and transaction expense adjustments for a net sales price of $13.5 million.

Results of Operations

The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 are not necessarily indicative of the operating results to be expected for the full year or in any future period. ~~Historically~~On January 23, 2026, we completed ~~have~~the ~~experienced~~sale ~~higher~~of ~~revenues~~our ~~following~~phone ~~the~~and ~~release~~hotspots assets, and many of our employees transferred to the buyer. The accompanying consolidated ~~new~~financial ~~products~~statements and ~~start~~certain tables below present operations from this legacy business as discontinued operations for all periods presented, and the assets and liabilities of ~~sales~~this ~~with~~legacy ~~additional~~business ~~carriers~~are presented as assets and ~~distributors~~liabilities held for sale for the period ended December 31, 2025. Since that time, we have focused on growing and developing our cryptocurrency trading platform, DNA X. The following table presents key components of the Company’s results of discontinued operations for the three months periods ended March 31, 2026 and 2025:

~~The~~DISCONTINUED ~~following tables present key components of our results of operations (dollars in thousands):~~OPERATIONS

	Three Months Ended September 30,												Nine Months Ended September 30,
	2025			2024			Increase (Decrease)			%			2025			2024			Increase (Decrease)			%
Net revenues	$	16,214		$	15,022		$	1,192			8	%	$	44,125		$	35,656		$	8,469			24	%
Related party net revenues		—			—			—			N/A			—			7,658			(7,658	)		(100	)%
Total net revenues		16,214			15,022			1,192			8	%		44,125			43,314			811			2	%
Cost of revenues		14,398			10,790			3,608			33	%		33,108			33,211			(103	)		—	%
Gross profit		1,816			4,232			(2,416	)		(57	)%		11,017			10,103			914			9	%
Operating expenses
Research and development		181			715			(534	)		(75	)%		2,723			1,728			995			58	%
Sales and marketing		2,452			3,045			(593	)		(19	)%		9,136			8,756			380			4	%
General and administrative		3,163			2,848			315			11	%		9,225			7,937			1,288			16	%
Impairment of contract fulfillment assets		—			—			—			N/A			—			3,217			(3,217	)		(100	)%
Total operating expenses		5,796			6,608			(812	)		(12	)%		21,084			21,638			(554	)		(3	)%
Income (loss) from operations		(3,980	)		(2,376	)		(1,604	)		68	%		(10,067	)		(11,535	)		1,468			(13	)%
Interest expense, net		(522	)		—			(522	)		N/A			(1,002	)		(17	)		(985	)		5,794	%
Other expense, net		(161	)		(19	)		(142	)		747	%		(340	)		(203	)		(137	)		67	%
Income (loss) before income taxes		(4,663	)		(2,395	)		(2,268	)		95	%		(11,409	)		(11,755	)		346			(3	)%
Income tax expense		(90	)		(117	)		27			(23	)%		(361	)		(279	)		(82	)		29	%
Net income (loss)	$	(4,753	)	$	(2,512	)	$	(2,241	)		89	%	$	(11,770	)	$	(12,034	)	$	264			(2	)%

CONSOLIDATED STATEMENTS OF OPERATIONS

~~Total~~PERIODS ~~Net~~ENDED ~~Revenues~~MARCH 31, 2026 and 2025

~~Total~~(IN net revenues for the three months ended September 30, 2025, increased by $1.2 million compared to 2024. This increase reflects $2.4 million in sales of the H500 hotspot that launched in the fourth quarter of 2024 and $1.6 million in sales of the MegaConnect hotspot that was launched in 2025. These increases were partially offset by a net decrease of $3.0 million in sales of our feature phones, due to declining demand for our legacy feature phones.THOUSANDS)

Total net revenues for the fourth quarter of 2025 are expected to decline sequentially from the third quarter due to holiday-related seasonality. We do not expect to generate revenue from the current business following the closing of the Asset Purchase Agreement, which we anticipate occurring in late 2025 or early 2026. If the Asset Purchase Agreement does not close in 2025, we expect a further decline in operating revenue from the current business in 2026, because we anticipate permitting the Buyer to manufacture and sell our products pending the consummation of the Asset Purchase Agreement as one of the contemplated approaches to our transition plan.

	2026			2025
Net revenues	$	3,805		$	16,721
Cost of revenues		4,122			8,365
Gross profit (loss)		(317	)		8,356
Operating expenses
Research and development		913			1,633
Sales and marketing		1,123			3,239
General and administrative		453			1,969
Total operating expenses		2,489			6,841
Net income (loss) from operations		(2,806	)		1,515
Gain on sale of assets		15,563			—
Other income		49			36
Income before income tax expense		12,806			1,551
Income tax expense		(2,538	)		(132	)
Net income from discontinued operations	$	10,268		$	1,419

~~Total net~~Gain ~~revenues~~on ~~for~~sale ~~the nine months ended September 30, 2025, increased by $0.8 million compared to 2024. Hotspot revenue increased $6.5 million with the launch~~ of the H500 and the MegaConnect hotspots. Smartphone revenue also increased by $4.1 million due to the expiration of customer allowance in 2025. The nine months ended September 30, 2024, include $7.7 million in revenue from white label products sold to a related party, and we had no white label revenue in 2025.assets

~~Cost~~Gain on sale of assets of $15.6 million during the three months ended March 31, 2026 is attributable to the disposition of ~~Revenues~~our legacy phone and hotspot business and is calculated as the consideration paid of $15.0 million less a working capital adjustment, less the book value of the assets sold and the liabilities assumed.

~~Cost~~ The consolidated statement of ~~revenues~~operations of discontinued operations for the three months ended ~~September~~March 3031, ~~2025,~~2026 ~~increased~~reflects the by23-day $3period prior to the completion of the asset sale.6 ~~million~~Revenue asfor ~~compared~~the tothree ~~2024~~months ended March 31, 2025 was $12.9 ~~This~~million ~~increase~~higher than ~~reflects~~in the ~~lower~~ ~~margins~~corresponding onperiod ~~the~~in ~~H500~~2026 asbecause ~~compared~~we tooperated ~~phones~~our legacy phone and hotspot business for the ~~lower~~entire ~~margins~~quarter onin ~~the~~2025 XPand because ~~Pro~~there aswas ~~compared~~a toone-time ~~the~~release ~~XP10~~of accrued promotional funds in 2025.

~~Cost~~Gross ofprofit ~~revenues~~was ~~for~~negative ~~the nine months ended September 30, 2025, decreased by $0.1 million as compared to 2024. The nine months ended September 30, 2025, include $5.4 million~~ in ~~revenue~~2026 ~~related~~because towe ~~the~~discontinued ~~expiration~~some ofproducts ~~customer~~and ~~allowance~~wrote ~~agreements,~~down ~~which had no related cost of revenues~~inventory. ~~The nine months ended September 30, 2024, had higher cost of revenues from white label product sales that had a cost of revenues percentage of approximately 94%.~~

~~Gross~~Operating ~~Profit~~expenses ~~and~~were ~~Margin~~lower in 2026 because the period was only for 23 days as compared to an entire quarter in 2025.

~~Gross~~Income ~~profit~~tax ~~for~~expense of $2.5 million is calculated on the ~~three~~gain ~~months~~on ~~ended~~the ~~September~~sale ~~30,~~of ~~2025~~assets plus the operating net loss for the quarter, ~~decreased~~and byan ~~$2.4~~estimate of ~~million~~future ~~compared~~net toincome ~~2024.~~or ~~This~~loss ~~increase~~for ~~reflects~~the three remaining quarters of the ~~lower~~year. ~~margins on~~Because the ~~H500~~Company ashas ~~compared~~net tooperating ~~phones~~loss carryforwards, the ~~and~~actual cash that will be paid in the ~~lower~~United ~~margins~~States onfor income taxes for the XP2026 ~~Pro~~tax asyear ~~compared~~is estimated to be approximately $0.5 million. The estimated taxes are netted with the ~~XP10~~gain on sale of the assets and are included in discontinued operations.

Gross profit for the nine months ended September 30, 2025, increased by $0.9 million compared to 2024 primarily due to the $5.4 million in revenue related to the expiration of customer allowance agreements in 2025. Gross margin for the nine months ended September 30, 2025, was 25%, which reflects the positive impact from the expiration of customer allowance agreements that have no related cost of sales, net of the impact of the decrease in sales of our legacy products, which had higher margins in the aggregate, and the increase in the sales of our new and replacement products, which have lower margins in aggregate, compared to 23% in 2024, which reflects the negative impact of white label products that had a gross margin of approximately 6%.

~~Research~~The ~~and~~following ~~Development~~table presents key components of our results of continuing operations (dollars in thousands):

R&D expenses for the three months ended September 30, 2025, decreased by $0.5 million compared to 2024, primarily due to there being limited R&D projects during the third quarter of 2025 since most our new products launched throughout the first three quarters of 2025.

	Three Months Ended March 31,
	2026			2025
Net revenues	$	—		$	—
Operating expenses
General and administrative		3,618			870
Total operating expenses		3,618			870
Loss from operations		(3,618	)		(870	)
Interest expense, net		(131	)		(91	)
Loss on valuation of derivative liability from convertible note		(227	)		—
Equity income from DNA X LLC		48			—
Loss before income taxes		(3,928	)		(961	)
Income tax expense		—			—
Net loss	$	(3,928	)	$	(961	)

R&D expenses for the nine months ended September 30, 2025, increased by $1.0 million compared to 2024, primarily due to there being limited R&D projects during the first half of 2024. In 2025, R&D expenses were primarily from internal work on the development of new variants of our XP Pro, including a version with a thermal camera, the HPUE hotspot, the XP400 phone for Europe, and the updated 5G version of our XP3plus.

Sales and Marketing

Sales and marketing expenses for the three months ended September 30, 2025, decreased by $0.6 million compared to 2024 primarily due to a shift in executive costs from sales and marketing to general and administrative expenses.

Sales and marketing expenses for the nine months ended September 30, 2025, increased by $0.4 million compared to 2024 primarily due to an increase in marketing spend to support new products in the first half of 2025, and compliance work for Europe.

General and Administrative

General and administrative expenses for the three months ended ~~September~~March 3031, ~~2025~~ 2026, increased by $02.35 million compared to ~~2024~~2025 primarily due to employee severance ($1.1 million) and bonuses ($0.4 million) triggered anby ~~increase~~the completion of the asset sale in ~~legal~~2026. Profession fees for audit and ~~other~~tax ~~expenses~~services ~~related~~increased toby $0.5 million in 2026 because of increased complexity with the ~~hostile~~purchase ~~takeover~~of ~~attempt~~DNA X LLC, and the ~~divestiture~~asset ~~activity~~sale ~~being~~transaction. ~~pursued~~Employee bycompensation after the ~~Company~~asset sale for executives was included in General and Administrative in continuing operations in 2026, but employee compensation for executives in 2025 was allocated to discontinued operations. General and administrative expenses are expected to drop significantly for the remainder of 2026 as one-time costs related to the assets sale will not recur.

~~General~~Other and administrative expenses for the nine months ended September 30, 2025, increased by $1.3 million compared to 2024 primarily due to an increase in legal and other expenses related to the hostile takeover attempt and the divestiture activity being pursued by the Company.Income

~~Impairment~~Other income is net income from our DNA X cryptocurrency trading business for the first quarter of ~~Contract~~2026. ~~Fulfillment~~The ~~Assets~~increase of $0.05 million in comparison to the three months ended March 31, 2025 is due to the fact that we did not own this business in the first quarter of 2025.

~~Impairment~~Going ~~of contract fulfillment assets for the nine months ended September 30~~Concern, ~~2024,~~Liquidity ~~was $3.2 million, resulting from the Company’s determination that it would not recover the contract fulfillment costs capitalized due to a decrease in projected profit for one of its hotspots~~ and ~~the~~ ~~cancellation~~Capital ~~of the consumer durable product.~~Resources

~~Interest~~The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, ~~Expense~~which contemplates the realization of assets and the liquidation of liabilities in the normal course of business for a period of at least one year from the issuance date of the accompanying consolidated financial statements. We had approximately $1.2 million in cash at March 31, 2026. On May 20, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with DNA Holdings Venture, Inc. (the “Purchaser”) pursuant to which the Company sold and issued to the Purchaser a convertible promissory note (the “Note”) in the principal amount of $3,053 for an aggregate purchase price in the same amount. The aggregate purchase price for the Note consisted of $1,800 in cash to the Company and the surrender of the convertible promissory note, dated December 15, 2025, in the principal amount of $1,200 issued by the Company to the Purchaser, including $53 of accrued unpaid interest on such principal amount. These $1,800 in loan proceeds are expected to provide sufficient working capital to pay our obligations through December 31, 2026, when the note matures. If the note is not converted into the Company’s common stock prior to December 31, 2026, then the Company will need to raise additional capital to repay the $3.0 million that will become due on December 31, 2026 from the note. Due to the uncertainty of either the note being converted or of us raising additional capital prior to December 31, 2026 , there is substantial doubt regarding our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Interest expense for the three and nine months ended September 30, 2025, primarily relates to the Notes, which includes contractual interest expense and the amortization of the debt discount and debt issuance costs, and interest related to accounts receivable financing.

Liquidity and Capital Resources

Historically, we have funded operations from a combination of public and private equity financings, and through the issuance of debt. During the nine months ended September 30, 2025 we received net proceeds of $13.8 million from the sale of our common stock, and we received net proceeds of $5.1 million from the issuance of the Notes.

During the nine months ended September 30, 2025, we reported a net loss of $11.8 million and used $21.5 million in operating cash flow. As of September 30, 2025, our principal source of liquidity consisted of cash and cash equivalents totaling $2.1 million. The Company expects to close the Asset Purchase Agreement at the end of 2025 or the beginning of 2026. Once the Asset Purchase Agreement closes, the Company will have no revenue from the existing business. The Company is investigating strategic alternatives for the remaining assets of the Company following the closure of the Asset Purchase Agreement. The uncertainty regarding the Asset Purchase Agreement and the ability of the Company to implement strategic alternatives after the closing of the Asset Purchase Agreement creates uncertainty regarding the Company’s ability to forecast beyond the asset sale date. There is substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued.

Cash Flows

The following table summarizes our sources and uses of cash for the periods presented (in thousands):

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024
	2026			2025
Net cash used in operating activities	$	(213,~~522~~466	)	$	(39,~~977~~606	)
Net cash used in investing activities		—			(206	)
Net cash provided by investing activities		3,358			—
Net cash provided by financing activities		~~18,316~~—			36,~~846~~378
Net decrease in cash and cash equivalents	$	(~~3,206~~108	)	$	(~~337~~3,228	)

~~Cash flows from operating activities~~28

~~For~~Cash ~~the~~flows ~~nine~~from ~~months ended September 30, 2025, cash used in~~ operating activities ~~was~~– ~~$21.5~~combined ~~million,~~continuing ~~primarily attributable to a net loss of $11.7 million~~ and ~~net~~discontinued cash used in a change in net operating assets and liabilities of $9.7 million. The change in net operating assets and liabilities was primarily due to net payments made on accounts payable, an increase in non-trade receivables, and an increase in contract fulfillment assets, which are capitalized costs for product certifications, partially offset by a decrease in accounts receivable and certain prepaid expenses. Non-cash charges primarily consist of $5.4 million related to the expiration of customer allowance agreements, $2.8 million in depreciation and amortization, $1.4 million for stock-based compensation, and $1.1 million for the impairment of contract fulfillment assets related to the end of life of our legacy products.operations

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2026, cash used in operating activities was $43.05 million, primarily attributable to athe ~~net~~sale ~~loss~~ of ~~$12.0~~ ~~million~~phone and ~~net~~hotspot ~~cash~~inventory ~~used~~and inthe asale ~~change~~of inparts ~~net~~inventory ~~operating~~from ~~assets~~the discontinued phone and ~~liabilities~~hotspot business of $~~0.3~~5,5 million, ~~partially~~lower ~~offset~~prepaids ~~by non-cash charges~~ of $81.37 million~~. The change in net operating assets and liabilities was primarily due to a decrease in accounts receivable~~, ~~net,~~offset ~~due to~~by the ~~timing~~paydown of ~~payments~~accounts ~~and~~payable ~~an increase in accrued liabilities, partially offset by an increase in inventory (primarily due to raw~~with ~~materials~~the ~~inventory),~~proceeds ~~non-trade~~from ~~receivables~~the ~~(primarily~~asset ~~purchasing~~sale ~~raw materials for our ODMs), related party receivables, and contract fulfillment assets (capitalized costs for product certifications). Non-cash charges primarily consist~~ of $3.2 ~~million in impairment charges related to contract fulfillment assets, $2~~.67 million ~~in depreciation and amortization, $1~~.~~2 million for stock-based compensation, and $1.0 million in inventory write-downs.~~

~~Cash~~For ~~flows~~the ~~from~~three ~~investing~~months ended March 31, 2025, cash used in operating activities was $9.6 million, primarily attributable to net cash used in a change in net operating assets and liabilities of $6.1 million and net income of $0.5 million, excluding net non-cash operating activity of $4.0 million. The change in net operating assets and liabilities was primarily due to net payments made on accounts payable and an increase in contract fulfillment assets, which are capitalized costs for product certifications, partially offset by a decrease in inventory. Non-cash charges primarily consist of $5.3 million related to the expiration of customer allowance agreements, $1.1 million in depreciation and amortization and $0.3 million for stock-based compensation.

~~For~~Cash ~~the~~flows ~~nine~~from ~~months~~investing ~~ended~~activities ~~September~~– ~~30,~~combined ~~2025,~~continuing and ~~2024,~~discontinued ~~there were no significant investing activities.~~operations

~~Cash~~For the three months ended March 31, 2026, cash provided from investing ~~flows~~activities was $3.4 million in net cash received from ~~financing~~the asset sale. In 2025, there were no significant investing activities.

~~For~~Cash ~~the~~flows ~~nine months ended September 30, 2025, the Company received $13.8 million in cash, net of issuance costs,~~ from ~~sales~~financing ofactivities ~~common~~– ~~stock, as~~combined ~~well~~continuing ~~as $5.1 million in net proceeds from the issuance of the Note~~ and ~~repaid~~discontinued ~~$0.6 million borrowed under the LSQ Receivables Financing Agreement.~~operations

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2026, ~~the~~there ~~Company~~were ~~received~~no ~~$3.8~~financing ~~million in cash, net of issuance costs, from an investor for the purchase of shares and the issuance of warrants, as well as ATM sales~~activities.

For the three months ended March 31, 2025, the Company received $3.5 million in cash, net of issuance costs, from Streeterville for one of the notes.

Material Cash Requirements

There have been no material changes to our material cash requirements from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025.

Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate.

A description of our critical accounting policies that represent the more significant judgments and estimates used in the preparation of our consolidated financial statements was provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. There have been no changes to our critical accounting policies and estimates described in the Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025, that have had a material impact on our unaudited condensed consolidated financial statements and related notes.

Segment Information

We have one business activity and operate in one reportable segment.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, prior to filing this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective for accounting for complicated transactions related to investments and acquisitions.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating disclosure controls and procedures, our management recognizes that any system of controls, however well designed and operated, can provide only reasonable assurance, and not absolute assurance, that the desired control objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals in all future circumstances. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

Material Weakness in Internal Control Over Financial Reporting

The Company identified a material weakness in its internal control over financial reporting related to a lack of personnel with sufficient technical accounting expertise to appropriately analyze and account for complex, non-routine transactions. Specifically, the Company did not maintain adequate resources with the requisite knowledge of U.S. GAAP to properly evaluate the accounting implications of significant transactions, including accounting for business acquisitions.

As a result of this deficiency, the Company failed to appropriately apply relevant accounting guidance, which led to errors in the initial recording of certain transactions and required adjustments during the financial statement close process. Additionally, the review controls designed to detect such errors were not effective due to the same lack of technical expertise.

Management concluded that this control deficiency constitutes a material weakness because there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.

The Company has not resolved this material weakness as of March 31, 2026.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the three months ended ~~September~~March 3031, ~~2025~~2026, that has ~~materially~~ materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For information regarding our material legal proceedings, see “Note 89 — Commitments and Contingencies” in the ~~accompanying~~ accompanying “Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

Item 1A. Risk Factors.

There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2024, except as set forth below~~2025.

The risk factor titled “We may become a ‘controlled company’ within the meaning of the applicable rules of Nasdaq and, as a result, may qualify for exemptions from certain corporate governance requirements. If we rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements” is deleted in its entirety.

The risk factor titled “Changes in U.S. trade policy, including the imposition of tariffs and restrictions and the resulting consequences, may have a material adverse impact on our business, operating results, and financial condition” is amended and restated as follows:

Changes in U.S. trade policy, including the imposition of tariffs and restrictions and the resulting consequences, may have a material adverse impact on our business, operating results, and financial condition.

We cannot predict what changes to trade policy will be made, or the economic impact that changes to trade policy will have, including significant increases in tariffs on goods imported into the United States, particularly tariffs on products manufactured abroad, including China and other countries, and the length of time such tariffs may remain in place, or whether the entry into new bilateral or multilateral trade agreements will occur. The U.S. has imposed tariffs on foreign imports into the United States on 180 countries and territories, which range from 10% to 145%, including, most relevant to us, an additional 145% tariff on all imports from China, provided, that an exemption was granted to smartphones and certain other items. These tariffs may further increase the cost of our products and could negatively impact our results of operations. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, or other trade matters. Although the ultimate scope and timing of any such actions is currently indeterminable, if implemented, they could have a material impact on our financial condition and results of operations. If further tariffs are imposed on a broader range of imports, further retaliatory trade measures are taken by various countries in response to tariffs, or efforts are made to withdraw from or substantially modify such agreements, then we may be required to raise our prices or incur additional expenses.

In addition, the FCC rules prohibit communications equipment deemed to pose an unacceptable risk to national security from obtaining the equipment authorization that allows the products to be imported, marketed, or sold in the U.S. If any of our product components were to be classified under these restrictions, we could face regulatory hurdles, supply chain disruptions, and lost revenue opportunities, which could have a material impact on our operations and financial results. Additionally, evolving national security policies and heightened scrutiny of foreign-manufactured telecommunications equipment may further increase compliance costs and restrict our market access.

The adoption or expansion of trade restrictions, the escalation of a trade war, or other governmental actions related to tariffs, trade agreements, or prohibition of components of communication equipment, could negatively impact demand for our products, increase costs, disrupt our supply chain, and adversely affect our customers and suppliers. Any of these developments could have a material adverse effect on our business, operating results, and financial condition.

The risk factor titled “Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price” is amended and restated as follows:

Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.

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.

Sonim has already been subjected to such activism. In January 2025, Orbic North America, LLC (“Orbic”), an affiliate of a competitor currently engaged in intellectual property litigation against us, commenced its campaign to acquire Sonim. In the course of its campaign, it formed a Section 13 with a major stockholder of Sonim, nominated an alternative slate of director nominees for the 2025 meeting of our stockholders, and purportedly submitted multiple bids to acquire Sonim. While Orbic ultimately failed in all fronts — stockholders elected the Company’s director nominees at the 2025 annual meeting and the Company entered into the Asset Purchase Agreement — we incurred significant expenses in connection with our defense against Orbic’s actions, and there can be no assurance that Orbic would not attempt to disrupt the Company’s initiatives, including the RTO search and the consummation of the Asset Purchase Agreement.

Responding to such actions by activist stockholders can be costly and time-consuming, disrupt our operations, and divert the attention of management and our board of directors. If AJP and Orbic are successful in the litigation and proxy contest, they could gain control of our board of directors, potentially pursuing actions advanced by our competitor that conflict with our long-term strategic objectives. Actions of AJP and Orbic may also discourage or deter a potential acquirer of Sonim from considering Sonim as a desirable acquisition target. 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.

The risk factor titled “We are required to meet the Nasdaq continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock.” is amended and restated as follows:

We are required to meet the Nasdaq continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock.

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 two reverse stock splits in a five-year period in order to regain compliance) and either a minimum stockholders’ equity of $2,500,000, or a minimum market value of our common stock of at least $35,000,000. If we do not meet these continued listing requirements, our common stock could be delisted.

We have a history of receiving deficiency letters from Nasdaq. On August 13, 2025, we received notice that we were not in compliance with the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). On August 22, 2025, we received notice that we were not in compliance with Nasdaq Listing Rule 5550(b)(1) because our stockholders’ equity was below $2.5 million. While we are working to address these deficiencies and have received an extension through December 31, 2025, to regain compliance with Listing Rule 5550(b)(1), there can be no assurance that we will regain compliance with, or continue to satisfy, any applicable Nasdaq requirements within the relevant cure periods, if at all.

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.

The risk factor titled “Some provisions of Delaware law and our certificate of incorporation and bylaws may delay or prevent a change in control and may discourage bids for our common stock at a premium over its market price” is amended and restated as follows:

Some provisions of Delaware law and our certificate of incorporation and bylaws and the adoption of the rights plan may delay or prevent a change in control and may discourage bids for our common stock at a premium over its market price.

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 or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their common stock over then current market prices. 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.

Additionally, in April of 2025, we entered into the Rights Agreement, which was previously approved by our board. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right for each share of the Common Stock of the Company outstanding at the Record Date (individually, a “Right” and collectively, the “Rights”). In general terms, the Rights Agreement imposes a significant penalty upon any person or group that acquires beneficial ownership of 15.5% (or, in the case of passive institutional investors, an amount of “less than 20%”) or more of the outstanding shares of Common Stock without the approval of the Board. The Rights will expire on April 21, 2026

The Rights Agreement could have the effect of discouraging, delaying or preventing a change in management or control over us. While there is no plan to do so at this time, our board may choose to extend the current Rights Agreement or adopt a new rights agreement in the future.

The risk factor titled “We are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel, the loss of any of whom could adversely impact our business” is amended and restated as follows:

We are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel, the loss of any of whom could adversely impact our business.

Our future success depends in large part on the continued contributions of a concentrated and limited group of senior management and other key personnel. Beginning in 2021, we outsourced substantially all of our manufacturing work to third parties. As of December 31, 2024, our worldwide employee headcount was 131 employees.

Due to the small size of our Company and our limited number of employees, each member of our executives, managers and other key personnel serves a critical role to our success. If we are unable to retain sufficiently experienced and capable employees, including those who can help us increase revenues generated from our end market segments, our business and financial results may suffer. The loss of the services of any additional executives, managers or other key personnel could impede the achievement of our strategic objectives, seriously harm our ability to successfully implement our business strategy and adversely impact our operating results. In addition, if additional executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, including due to global pandemics, we may not be able to replace them in a timely manner and we could experience significant declines in productivity and/or errors due to insufficient staffing or managerial oversight. Moreover, experienced and capable employees in the technology industry remain in high demand, and there is continual competition for their talents. Given our size, we may be at a disadvantage relative to our larger competitors in the competition for these personnel.

Moreover, our stockholders did not approve the proposed amendment to the Sonim Technologies, Inc. 2019 Equity Incentive Plan at our 2025 annual meeting, which would have authorized an additional 600,000 shares of common stock for issuance. As a result, no shares remain available for equity awards to our independent directors, officers, or employees. Combined with our limited cash resources, this restriction may limit our ability to offer competitive compensation packages, potentially undermining our efforts to retain and incentivize key talent. The inability to retain or adequately compensate our senior management and other key personnel could materially and adversely affect our business, results of operations, and long-term value.

A group of risk factors titled “Risks Related to the Proposed Asset Purchase Agreement and Announced Strategic Initiatives” shall be added as follows:

The conditions under the Asset Purchase Agreement to our consummation of the proposed transaction may not be satisfied in the anticipated timeframe or at all.

Under the terms of the Asset Purchase Agreement, the consummation of the proposed transaction is subject to customary closing conditions. There is no guarantee that all closing conditions will be satisfied (or waived, if permitted by the Asset Purchase Agreement and applicable law). Many of the conditions to consummation of the Asset Purchase Agreement are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if permitted by the Asset Purchase Agreement and applicable law). Difficulties in otherwise satisfying the conditions may prevent, delay, or otherwise materially adversely affect the consummation of the proposed transaction.

If an event occurs delaying or preventing the proposed transaction, such delay or failure to complete the proposed transaction may create uncertainty or otherwise have negative consequences, including the payment to the Buyer an amount equal to the transaction expenses reasonably incurred by the Buyer and its affiliates, plus a termination fee equal to $1 million, which may materially and adversely affect our sales, financial condition and results of operations, as well as the price per share for our common stock, and could cause us not to realize some or all of the benefits that we expect to achieve if the transactions contemplated by the Asset Purchase Agreement are successfully completed within its expected timeframe.

While the proposed transaction is pending, we are subject to business uncertainties and contractual restrictions that could disrupt our business.

Whether or not the proposed transaction is consummated, the proposed transaction may disrupt our current plans and operations, which could have an adverse effect on our business and financial results. The uncertainties about the effect of the proposed transaction may impact our ability to retain, recruit, and hire employees and key personnel while the transaction is pending or if it fails to close. We may incur unexpected costs, charges or expenses resulting from the proposed transaction. Furthermore, we cannot predict how our current customers, prospective customers and other partners will view or react to the proposed transaction during the pendency or upon consummation of the proposed transaction. If we are unable to reassure our partners to continue their partnerships or affiliations with us, our revenues, financial condition and results of operations may be adversely affected.

Employees and key personnel could experience uncertainty or face significant burdens from their commitment of substantial amounts of time and attention toward the completion of the proposed transaction. If, despite our efforts, key personnel depart because of these uncertainties and burdens, or because they do not wish to transition with the Social Mobile business post-closing, our business and results of operations may be adversely affected. In addition, whether or not the proposed transaction is consummated, while it is pending we will continue to incur costs, fees, expenses and charges related to the proposed transaction, including legal, accounting, financial advisor, filing, printing and mailing fees, which may materially and adversely affect our financial condition and results of operations.

In addition, the Asset Purchase Agreement generally requires the Company to operate its business in the ordinary course of business consistent with past practice, pending consummation of the Asset Purchase Agreement, and also restricts us from taking certain actions with respect to our business and financial affairs without the consent of Social Mobile. Such restrictions will be in place until the Asset Purchase Agreement is either consummated or terminated. Such restrictions could adversely affect our business and results of operations prior to completion of the Asset Purchase Agreement.

We may never consummate a transaction complementary to the Asset Purchase Agreement, and even if we do, we may not be able to complete the transaction timely, which may negatively impact our financial condition, results of operations, and our ability to raise capital.

We publicly announced our intent to pursue two contemporaneous strategic tracks: to enter into and consummate the Asset Purchase Agreement and to identify an RTO target and to consummate an RTO.

Expected disposition of our legacy assets and operations under the Asset Purchase Agreement will render Sonim a “shell company,” unless we either (a) initiate a new line of business that is unrelated to and does not compete with the divested business, or (b) complete an alternative transaction (such as an RTO) before the closing of the Asset Purchase Agreement. Accordingly, identifying a suitable RTO target or investors for an alternative transaction and completing an alternative transaction in a timely manner—or otherwise ensuring the continuation of meaningful business operations—is critical to avoiding shell company status.

If Sonim becomes a shell company, we would be subject to significant regulatory and market disadvantages, including:

● ineligibility to use Form S-3 until 12 full calendar months after filing “Form 10 information” with the SEC; ● holders of our common stock will not be able to sell their restricted shares due to Rule 144(i), until one year after the Form 10 information is filed with the SEC; ● the Company will become an “ineligible issuer for three years following the closing, which will prevent the combined company from (i) incorporating by reference in its Form S-1 filings, (ii) using a free writing prospectus, or (iii) taking advantage of well-known seasoned issuer status despite its public float; ● potential delisting from Nasdaq; and ● market perception risks, including a potential depressive effect on the trading price of our common stock due to our classification as a “former shell company.”

In addition, our stockholders may be less inclined to approve the Asset Purchase Agreement in the absence of a concurrently announced RTO transaction or an alternative transaction creating stockholder value complementary to the Asset Purchase Agreement. Failure to obtain stockholder approval would result in the termination of the Asset Purchase Agreement and would require us to pay the Buyer (i) reimbursement of transaction-related expenses reasonably incurred by the Buyer and its affiliates, and (ii) a termination fee of $1 million. These outcomes could materially and adversely affect our sales, financial condition, and results of operations, as well as the trading price of our common stock. They may also prevent us from realizing some or all of the expected benefits associated with completing the Asset Purchase Agreement and any related strategic transactions within the anticipated timeframe.

Even if we complete an RTO or another alternative transaction, we may be deemed a “former shell company,” which would impose significant regulatory limitations and adversely affect our ability to access capital markets and the liquidity of our common stock.

Even if we identify and consummate an RTO or an alternative transaction intended to avoid shell company status and launch a new line of business, the SEC Staff could nevertheless determine—based on its recent, broadened interpretation in reverse merger contexts—that we may be deemed as a former “shell company.” The uncertainty stemming from a potential post-closing SEC determination could introduce additional execution and timing risk to our financing and strategic plans following any RTO or alternative transaction.

In the event that the proposed transactions are not consummated, the trading price of our common stock and our future business and results of operations may be negatively affected.

The conditions to the consummation of the proposed transactions — either the Asset Purchase Agreement or an alternative transaction, including RTO — may not be satisfied as noted above. If the proposed transactions are not consummated, we would remain liable for significant transaction costs and termination fees, and the focus of our management would have been diverted from seeking other potential strategic opportunities, in each case without realizing any benefits of the proposed transactions.

For these and other reasons, not consummating the proposed transactions could adversely affect our business and results of operations. Furthermore, if we do not consummate the proposed transaction, the price of our common stock may decline significantly from the current market price, and you may not recover your investment. Certain costs associated with the proposed transactions have already been incurred or may be payable even if the proposed transactions are not consummated. Finally, any disruptions to our business resulting from the announcement and pendency of the transaction, including any adverse changes in our relationships with our customers, vendors, and employees or recruiting and retention efforts, could accelerate in the event of or continue following a failed transaction.

The Asset Purchase Agreement contains a termination fee and restrictions on solicitation that limit our ability to pursue alternatives to the Asset Purchase Agreement.

Under the Asset Purchase Agreement, we are restricted from soliciting, initiating, inducing, or knowingly encouraging or knowingly facilitating alternative acquisition proposals from third parties, and/or providing non-public information to third parties relating to any inquiries, proposals or offers that would reasonably be expected to lead to certain transactions involving a third party, including a merger, business combination or similar transaction, subject to specified exceptions, including the solicitation of an RTO transaction that is not impacting the disposition of the legacy business. The Asset Purchase Agreement also contains termination provisions for both us and Buyer, including the right of the Company to terminate the Asset Purchase Agreement to accept a Superior Proposal (as defined in the Asset Purchase Agreement), subject to and in accordance with the terms and conditions of the Asset Purchase Agreement, and provides that, in connection with the termination of the Asset Purchase Agreement by us to enter into an alternative acquisition agreement providing for a Superior Proposal, we will pay the Buyer (i) reimbursement of transaction-related expenses reasonably incurred by the Buyer and its affiliates, and (ii) a termination fee of $1 million. These provisions could discourage a third party that may have an interest in acquiring all or a significant part of our business from considering or proposing that acquisition, even if such third party were prepared to pay consideration with a higher value than the value of the consideration in the Asset Purchase Agreement.

We may face litigation filed against us over the Asset Purchase Agreement, an RTO, or an alternative transaction.

Currently, the Company is not aware of any complaints filed or litigation pending related to the Asset Purchase Agreement. However, litigation is a common occurrence in connection with transactions similar to the proposed transaction, so we face potential for litigation or other disputes that relate to the Asset Purchase Agreement, an RTO, or an alternative transaction, including claims related to our process or disclosures and investigatory demands under Delaware law. We can provide no assurance that such litigation, disputes, or demands will not arise in the future. Any such litigation, disputes, or demands, whether successful or not, could delay the closing of the Asset Purchase Agreement, an RTO, or an alternative transaction, or could have a material adverse effect on our business, results of operations, and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following sets forth information regarding unregistered equity securities sold during the three months ended September 30, 2025, not otherwise disclosed in the Company’s Current Reports on Form 8-K:None

Date of Sale	Description of Securities and Consideration	Exemption from Registration	Underwriters and Other Purchasers
September 3, 2025	2,390 shares of common stock in consideration of the exchange of $25,000 of the original principal amount of the $3,300,000 promissory note issued on February 21, 2025. The exchange was effected at the “Minimum Price” as defined in Nasdaq Listing Rule 5635(d)	Section 3(a)(9) of the Securities Act	Streeterville Capital, LLC
September 17, 2025	12,475 shares of common stock in consideration of the exchange of $150,000 of the original principal amount of the $3,300,000 promissory note issued on February 21, 2025. The exchange was effected at the “Minimum Price” as defined in Nasdaq Listing Rule 5635(d)	Section 3(a)(9) of the Securities Act	Streeterville Capital, LLC
September 22, 2025	15,323 shares of common stock in consideration of the exchange of $200,000 of the original principal amount of the $3,300,000 promissory note issued on February 21, 2025. The exchange was effected at the “Minimum Price” as defined in Nasdaq Listing Rule 5635(d)	Section 3(a)(9) of the Securities Act	Streeterville Capital, LLC

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarterly period covered by this report.

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Item 6. Exhibits.

		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit Number	Filing Date
2.1+#	Asset Purchase Agreement dated as of July 17, 2025	8-K	001-38907	2.1	July 22, 2025
3.1	Amended and Restated Certificate of Incorporation of the Registrant.	8-K	001-38907	3.1	May 17, 2019
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective September 15, 2021 (Reverse Stock Split)	8-K	001-38907	3.1	September 15, 2021
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective July 17, 2024 (Reverse Stock Split)	8-K	001-38907	3.1	July 18, 2024
3.4	Certificate of Designation of Rights, Preferences and Privileges of Series A Junior Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 21, 2025	8-K	001-38907	3.1	April 21, 2025
3.5	Certificate of Amendment to the Amended and Restated Certificate of Incorporation ~~of Sonim Technologies~~, ~~Inc.,~~ effective October 16, 2025 (Increase in authorized shares from 100,000,000 to 1,000,000,000)	8-K	001-38907	3.1	October 20, 2025
3.6	Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective October 27, 2024 (Reverse Stock Split)	8-K	001-38907	3.1	October 24, 2025
3.7	~~Amended~~Certificate ~~and~~of ~~Restated~~Amendment ~~Bylaws~~to ofthe ~~Sonim~~Amended ~~Technologies,~~and ~~Inc.,~~Restated asCertificate ~~amended~~of ~~and~~Incorporation ~~restated~~of asthe ofRegistrant, ~~June~~effective 14January 23, ~~2024~~2026	8-K	001-38907	3.1	~~June~~January 1427, ~~2024~~2026
3.8	Amended and Restated Bylaws of the Registrant, as amended and restated as of June 14, 2024	8-K	001-38907	3.1	June 14, 2024
4.1	Promissory note dated as of February 21, 2025	8-K	001-38907	4.1	February 21, 2025
4.2	Rights Agreement, dated as of April 21, 2025, by and between Sonim Technologies Inc. and Equiniti Trust Company, LLC, which includes the form Certificate of Designation as Exhibit A, the form of Right Certificate as Exhibit B, and the Summary of Rights to Purchase Preferred Shares as Exhibit C	8-K	001-38907	4.1	April 21, 2025
4.3	Form of Common Stock Purchase Warrant, dated as of May 12, 2025, issued by Sonim Technologies, Inc. to the purchasers named therein	8-K	001-38907	4.1	May 16, 2025
4.4	Form of Placement Agent Warrant to Purchase Common Stock, issued on July 2, 2025	8-K	001-38907	4.1	July 2, 2025
4.5	Promissory Note dated as of July 11, 2025	8-K	001-38907	4.1	July 17, 2025
10.1	Form of Securities Purchase Agreement dated as of July 1, 2025	8-K	001-38907	10.1	July 2, 2025
10.2#	Note Purchase Agreement, dated as of July 11, 2025, by and between Sonim Technologies, Inc. and Streeterville Capital, LLC	8-K	001-38907	10.1	July 17, 2025
10.3#	Security Agreement, dated as of July 11, 2025, by and between Sonim Technologies, Inc. and Streeterville Capital, LLC	8-K	001-38907	10.2	July 17, 2025
10.4#	Intellectual Property Security Agreement, dated as of July 11, 2025, by and between Sonim Technologies, Inc. and Streeterville Capital, LLC	8-K	001-38907	10.3	July 17, 2025

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10.5	Factoring Agreement, dated as of August 7, 2025, by and between Sonim Technologies, Inc. and Tradewind GmbH	8-K	001-38907	10.1	August 12, 2025
10.1	Liu Separation and Release Agreement, dated as of January 30, 2026	8-K	001-38907	10.1	February 5, 2026
10.6	Form of Subscription Agreement Amendment, dated as of August 7, 2025, by and between Sonim Technologies, Inc. and the Investors named therein	8-K	001-38907	10.2	August 12, 2025
10.2	Becher Separation and Release Agreement, dated as of February 3, 2026	8-K	001-38907	10.2	February 5, 2026
10.7	Subscription Agreement Amendment, dated as of August 7, 2025, by and between Sonim Technologies, Inc. and the Investor named therein	8-K	001-38907	10.3	August 12, 2025
10.3†#	Employment Agreement, dated as of October 16, 2025, by and between DNA X, Inc. and Michael Mulica.	8-K	001-38907	10.1	October 20, 2025
10.8	ChEF Purchase Agreement, dated as of September 29, 2025, by and between Sonim Technologies, Inc. and Chardan Capital Markets LLC	8-K	001-38907	10.1	September 29, 2025
10.4†	First Amendment to Employment Agreement of Mike Mulica, dated as of February 9, 2026.	8-K	001-38907	10.1	February 10, 2026
10.9	Registration Rights Agreement dated as of September 29, 2025, by and between Sonim Technologies, Inc. and Chardan Capital Markets LLC	8-K	001-38907	10.2	September 29, 2025
10.4†#	Amended and Restated Letter Agreement, dated as of December 8, 2023, by and between DNA X, Inc. and Clay Crolius	8-K	001-38907	10.2	December 11, 2023
10.5†	First Amendment to Employment Agreement, dated as of April 15, 2025, by and between DNA X, Inc. and Clay Crolius	8-K	001-38907	10.1	April 16, 2025
10.6†	Second Amendment to Employment Agreement of Clay Crolius, dated as of February 9, 2026	8-K	001-38907	10.2	February 10, 2026
10.8+#	Asset Purchase Agreement, dated as of July 17, 2025, by and among the Company, Pace Car Acquisition LLC and Clay Crolius	8-K	001-38907	2.1	July 22, 2025
10.9	First Amendment to Asset Purchase Agreement, dated as of November 24, 2025, by and among the Company, Pace Car Acquisition LLC and Clay Crolius	8-K	001-38907	2.1	November 26, 2025
10.10#	Second Amendment to Asset Purchase Agreement, dated as of January 23, 2026	8-K	001-38907	2.1	January 27, 2026
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	The certifications furnished in Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

†	Indicates a management contract or compensatory plan or arrangement

#	Schedules have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish a copy of all omitted schedules to the SEC upon its request.

+	Certain portions of this exhibit (indicated by [***]) have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K because the registrant has determined that such redacted information is not material and is the type that the registrant treats as private or confidential.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SONIM TECHNOLOGIES, INC.
	DNA X, INC.
Date: October 31, 2025	By:	/s/ Hao Liu
Date: May 20, 2026	By:	/s/ Michael Mulica
		Hao (Peter) Liu
		Michael Mulica
		Chief Executive Officer
		Acting Chief Executive Officer
		(Principal Executive Officer)

Date: October 31, 2025	By:	/s/ Clay Crolius
Date: May 20, 2026	By:	/s/ Clay Crolius
		Clay Crolius
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Filing Compare · DNA X, Inc.