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Mentioning a potential transaction or imminent transaction isn't a valid reason for filing late. The only leg they have to stand on is the DNAX acquisition, even though it's a total smokescreen. We're in the last chance saloon. April 15th or bust.
Shares in qumulus. They don't need to exercise the put option even if somehow they hit the targets. The option is just there so that DNA get their crypto platform back if the reverse merger falls through. Scott Walker is already on record in an interview on youtube saying that Bancor is worthless (DNAX platform is built on Carbon DeFi, which is owned by Bancor).
After some thoughtful pushback from others in this trade, it looks like a super 8-k might not be needed this week after all. Under SEC Rules, shell status requires both no assets *AND* no operations. While the 8K-A filed on Monday shows us having "insignificant" assets, it does not mean we have no operations. This means we can continue to operate as an early-stage development company until a material filing proves otherwise. The 8K-A filed on Monday does not constitute any declaration regarding the actual operations of the company. DNAX is a real platform with a real codebase, even if it appears to have no users. All this to say, I'm no longer holding out for a super 8-k this week, as much as I would have liked to have seen one. I believe the deal is alive, and I'm holding until proven otherwise.
You don't need to fill a form declaring yourself as a shell (e.g. ticking the box on the 10-k) to become a shell. You just need to provide evidence to the SEC that you have no assets, which is exactly what they did yesterday in regard to the DNA transaction. For the SEC now not to flag them, they will need to file a super 8-k proving that they had other assets already on the books (e.g. Qumulus GPUs) before they filed yesterday's 8k-a. That means a deal would've had to have been signed at the latest just before the 8k-a dropped yesterday. If the SEC relied on periodic forms like a 10Q or 10K to declare companies a shell it would mean companies could go 90 days at a time living as a shell and SONM wouldn't have ever needed the DNAX acquisition in the first place (which gave them a 71 day grace period).
Self-reporting no assets for DNAX as expected. Press release on merger should be imminent.
There have been many false dawns since this journey started back in September, but I truly believe this will be my last update on this thread. For those unaware, SONM must file the audited financial statements for the DNAX acquisition (19th December) by Monday 2nd March. But it is now clear to me that SONM never intended to file these statements. The DNAX platform has zero traffic, no privacy policy page, and no terms & conditions when you try to connect your wallet. It is a complete smokescreen, and a very bad one at that. The entire purpose of the DNA acquisition was to buy a 71-day grace period with the SEC where SONM did not have to declare itself as a shell, provided it could close another IPO disclosure-level transaction in that period e.g. a super 8-k which contains full audited accounts for 2-3 years & a 200-page prospectus. The question is now whether that grace period was enough time for SONM and the theorised counter-party to close the deal. It is in this context that I have also realised that the QMLS direct listing was never about separating the hardware and software layers. They may still indeed do that down the line, but the more likely answer is that by filing to direct list, Qumulus was able to derisk its own audited financial statements and prospectus by getting the SEC to pre-review it. Now that the SEC has done that, Qumulus can roll these statements into the SONM PIPE super 8-k, effectively rendering the DNAX acquisition statements meaningless. They will effectively weaponise the regulators' approval to prevent them from shutting down the deal. A super 8-k completely derisks the merger from a Qumulus point of view. Whereas an RTO via an S-4 (as originally planned back in June) would've taken months of SEC comments and a shareholder vote to close the transaction, a super-8k closes the transaction entirely and doesn't need shareholder approval, as the PIPE investors (qumulus) will be issued with series A preferred convertible shares - this is how Chardan always do it. What gives me confidence for Monday is that if SONM didn't have a deal ready to go and were forced to file the bullshit DNAX statements, they would've filed them last night after hours in the hope that the market would forget about it over the weekend. You do not file statements that out yourself as a shell to the market and regulators on a Monday - that would be corporate suicide. This has been a crazy investigation and I never planned on going down such a rabbit hole when SONM first came on to my radar. While there is a non-zero chance this could prove to be a wild goose chase, I somehow really doubt it. Thinking about this from a pure self-interest point of view, every party would lose if this deal doesn't close: 1. SONM would become regulatory purgatory and no one would acquire them for 12 months 2. Chardan, who are not taking a fee and are getting paid in shares, will be stuck with privately valued shares that are pennies in comparison to what they usually get paid for such a deal 3. Qumulus would be unable to execute their 23k roadmap, would complete destroy their "hyperspeed" branding, and would be stuck looking for another public vehicle for another year, or IPO and give up equity they have been hell bent on not giving up. I want to thank everyone for their contributions. I've had a lot of DMs about this trade since I first wrote the proxy statement thesis and have made some real friends along the way. If this does print, you can head over to the new subreddit I made where we can discuss valuations and next steps on the QumulusAI sub (I'm not allowed to link to it here). If it doesn't, let's pretend this all never happened and never speak again. See you all on the other side.
I think Monday premarket is ideal at this point anyway. Would be a waste for the filing to happen tomorrow and all the hype to die out over the weekend. I've been enjoying the journey brought to us by OP and Detectivedoot. Can't believe that on Monday we will either be lifelong DNAX community members or early Qumulus AI investors. Excited either way!
It's not going to switch over to DNAX at all. I've come to the conclusion that the hardware/software layer separation isn't happening, and they're going to roll the entire company into SONM. The new ticker will be QMLS. The direct listing was a bait and switch for Qumulus to prepare the super-8k for the SONM PIPE and have it effectively pre-approved by the SEC and weaponise their own approval against them. Chardan are geniuses and deserve their pay day.
Looks like compliance has been officially acknowledged (no indicator on their ticker), hence the slight bump today. Expecting ticker switch to follow shortly as I believe they're required to (per the asset sale / DNAX purchase conditions) some time this week or so. Things are lining up, albeit slowly.
How certain are we there will be a PIPE with DNAX?
Thanks for sharing this, glad to know more people are following. I completely agree with you. I'm also very confident we get news in next 2 weeks because the company is clearly holding back from changing the ticker until it legally has to (22nd February, which falls on a Sunday, so technically 20 February). Reasons: 1) Sonm board narrative control - will want the optics of saving the company (hence being "SONM" and not "DNAX" when pipe news is announced) 2) Qumulus AI might have their own ticker in mind - no one wants the ballache/procedures/paperwork of changing the name twice in the space of days/weeks, nevermind the unnecessary confusion this would cause to the market 3) In reference to ticker name change, there has been a change in language from "within 30 days" of asset sale consumation (december press release) to "in the near future"(asset sale press release) - implies softening/something forthcoming 4) NASDAQ only needs 2 days' notice to change ticker - why drag out a formality? 5) Ticker change causes temporary broker glitches, chaos and liquidity issues - not something you want if you have a PIPE coming 6) SONM end of January press release stating more information will be shared in coming weeks
Correct, with a small correction: Qumulus will lease DNAX's GPU fleet.
This has been the biggest misunderstanding since day 1. The asset sale is for the legacy business, not the ticker - read the definitive agreement. SONM as a brand name cannot possibly be a publically traded company anymore because it no longer owns the IP. That’s why the ticker will soon change to DNAX. Nexa are also on record that they don’t want to go public.
Still no “news” that I can find…maybe I’m just missing it? Crazy the momentum this ticker has with no formal news yet. My hope is that the “market” is seeing real value in DNAX, and that a true QumulusAI connection will thrust this into multibagger territory.
Bro - I’m very much invested in this and REALLY hope you’re right. And completely agree it seems likely…but we’ve also been here before expecting a catalyst where there was none, and then the Nov/Dec post reverse split pre-asset sale vote bloodbath happened. So I’m just managing my own expectations. It could be possible that QAI and DNAX are attending two independent events in two separate regions at the same time and Chardan is involved in one of them…and it’s just a coincidence Again…I really REALLY hope you’re right.
The market reaction will depend on the PRs we get and how long they take to drop. If we get a PR along the lines of "SONM/DNAX secures allocation for 5,800 GPUs" then you can expect this to start pumping quite high. That PR though might take a couple of months after the PIPE occurs. The PIPE PR itself might be something along the lines of an asset swap: "SONM/DNAX pivots to HPC and secures 1,100 enterprise GPUs in asset swap with Qumulus" or something similar
I think the biggest things are 1. In proxys they say other deals are in play. 2. Litigation was over the asset sale likely because of shell. In a comment I had earlier I said I felt a lot better in things when I saw this short term company announced. Dnax basically is a shell holder that can convert back or convert into shares. 3. Asset sale cures the outstanding debt to make it clean. I suspect asset sale happens at some point this month, barring injunction from lawsuits. I believe dna x moots the law suits as there is a plan. I don’t see nexim pulling out if not done exactly on the 13th. They are at the finish line and want this stuff. Proxy read in connection with 8k is needed, as 8k has to be more exact proxy can have forward looking. My guess asset sale maybe goes through mid month, may need a bit more time depending on if any emergency injunctions. Once that is through funds clear to accounts debts are paid, and confirmed to be paid. They do a final round of due diligence. Then the rto pipe goes down If you read the streetville stuff in the 19th filing it says materials made privy to them is why they did the swap. If there is an asset sale to pay off debts. Why would you convert to shares of a failing company, which obviously dilutes and leads to a decrease but for you know there’s more afoot. I don’t see any weird BAGS shell being used and two tickers. I think it’s more they knew they couldn’t get the PIPE done by the 13th. They needed accounts to settle. SONM can’t go shell so they set up a placeholder business that is in reality 1.2 mill in shares to keep the lights on. Basically DNA Venture DNAX so that they could keep Bags from a shell, and to make sure they do the i’s and t’s right so no regulatory issues. Keeps them from a tight turn around window, and to stay comfy If you read th dnax portion it has one dilution exemption which is a transaction/takeover that they are privy too or something like that. Basically there’s one loop hole and its qumulus or whatever big dog is prepping to rear its head. With qumulus reverse split and bags both in October I think odds are it’s probably qumulus
I don't really understand the reason for rebranding as DNAX though if the goal was to RTO Qumulus. Could it be that the asset sale also prevents them from operating as SONM and so they need something for the interim? Feels like that would've been mentioned if it were the case.
I think this all but confirms that qumulusAI is off the table and that this DNAX venture is the new business. Question now is how to evaluate DNAX?
I wish that DNAX would get its head out of its arse