SONM

nomadichedgehog

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.

nomadichedgehog

Any deal can die at the 11th hour, i'm not going to sit here and say there isn't a chance we get nothing on Monday. I was 90% confident earlier this week, I'm now around 75%. If there isn't a PIPE by 5.30 pm EST on Monday the risk goes up exponentially. That said, I'm going to hold this through to the end. The SONM shell is too valuable, and Chardan have completed over 700 of these transactions. If Qumulus pussy out at the 11th hour there will be a long list of companies ready to go who will want the shell, but the stock may suffer for a while until that happens. It's no one's interests at this point to walk away from the deal. Qumulus will need another year to find a public vehicle and won't be able to execute their 23k GPU roadmap and will be a laughing stock at GTC if they don't have the cash to support their business plan. Chardan are getting paid in Qumulus shares which will be worth nothing if Qumulus walk away. And SONM will become a shell and will become regulatory purgatory. Everyone loses. But stranger things have happened

nomadichedgehog

No it hasn’t. They’ve just updated the incorporation name and they are a month late. Tap on your position and you’ll see SONM is still the ticker name at the top.

nomadichedgehog

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.

nomadichedgehog

Nothing in life is certain, and this is not financial advice, but I would put the chances of a PIPE between Qumulus AI and the legacy SONM vehicle at over 90% at this point. As I can see you are new to the trade the best thing you can do at this point to get a clear picture of the story is read this [substack write-up](https://thealphacompass.substack.com/p/the-ai-infrastructure-company-hiding).

nomadichedgehog

The PIPE will be next week due to timings around DNA X audited financials, which are due 2nd March. They'll need to file a super-8k within 4 days of the PIPE and before 2nd March to avoid becoming a shell. This, combined with some reverse engineering of GPU deployment timelines and cash required via accessing the SONM shelf, as well as making the $600 million volume clawback option is not exercise by DNA Holdings, has led me to believe the deal must absolutely close next week. The ramp up in PRs is also noticeable. I've also re-evaluated my PT for 2026 to around $250 to $500, depending on whether or not the software layer is separated into a separate vehicle or not.

nomadichedgehog

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

nomadichedgehog

No one has been swindled. SONM management have spent an entire year putting out fires to get to this point. DNA X is a temporary placeholder. The PIPE will come in February. You don’t put a $1 million in revenue/day put option target into the new line of business unless you are expecting a huge transformation. See here: https://open.substack.com/pub/thealphacompass/p/the-ai-infrastructure-company-hiding?r=1grlxq&utm_medium=ios&shareImageVariant=overlay

cameronhak1

If anything, it means that the company operating under the SONM ticker is now fully and solely tied to the DNA X platform business, and will soon be changing the ticker as a result (as indicated in the recent 8-K). As of now we're officially a DeFi business, and even with the pump today I would venture to say that this isn't the full market reaction; once the ticker flips I would think more will jump in. Even if not though, it doesn't matter. This isn't the big news, it's just another domino being set up for the real thesis underlying

nomadichedgehog

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.

nomadichedgehog

Good question, and the answer is what looks like convergence and co-ordination between all 5 parties involved - SONM, Qumulus AI, Permian Labs, Chardan & DNA. * SONM filing 8k confirming asset sale (and probably QAI PIPE) * Likely PYUSD deployment by Permian Labs * [QAI attending PTC](https://www.linkedin.com/posts/qumulusai_ptc-ptc26-aiinfrastructure-activity-7417247833814179840-iVDw?utm_source=share&utm_medium=member_desktop&rcm=ACoAAEWkMOQBN3ZVHz6_kZYHlsRsRAkC-zQzcNQ) in Hawaii with focus on edge AI/telecom and capital markets guy is on their team at the event. 4,000 companies are attending. * Mike Maniscalco on a hyperscaler panel on Tuesday at above event * [DNA X & Chardan co-sponsoring an event ](https://puertorico.srax.com/)on Tuesday/Wednesday/Thursday in Puerto RIco where the main panel is investing in decentralised AI infrastructure. The main guests are family offices and equity groups. * Leasing accountant expert from Atlanta, Georgia (QAI HQ) presenting at DNA X event

nomadichedgehog

Why is SONM, under its new brand name DNA X, the Title sponsor of an event (along with Chardan) where the main panel topic is investing in decentralised AI, and the attendees are family offices and equity funds, on the day the SONM asset sale 8k has to be filed, while Qumulus AI are also attending a parallel event in edge AI attended by 4,000 companies? I've been arguing for the last month that QAI will be leasing their GPUs from SONM by separating the hardware/software layer. So it's also interesting that George Azih is also one of the main speakers at the DNA X event, who is from Atlanta (where QAI HQ is), and is an expert in lease accounting. There is no stretch here. Tuesday is a co-ordinated announcement.

nomadichedgehog

I believe the 30 day period is a Nasdaq requirement. SONM will be subject to a separate legal requirement because they will no longer own the brand name, unless they obtain permission from social mobile to continue using it but I doubt it. Important to remember that DNA X is co sponsoring an event with Chardan on Tuesday in Puerto Rico and the main panel topic is investing in decentralized AI with family offices and funds attending. DNA will want the spotlight and will almost certainly demand the ticker name changes immediately.

nomadichedgehog

SONM will be DNA X as of Tuesday. I expect Mike Mulica to be in Puerto Rico.

Top-Assistant-1255

The "coincidences" during this whole sequence of events are mind boggling. Although I'd feel more confident if one of the SONM board were also involved at one or both of those events.

Top-Assistant-1255

I think you're on to something there - my original post above was already downvoted...must be a few butthurt SONM investors...can't say I blame them. It's been rough since the reverse split. The run we've been on the past couple weeks feels alot more like momentum than coincidence. I'm with you hoping there's some news or catalyst after hours to match and keep it going.

Top-Assistant-1255

My mind is blown that there isn't more recent activity or discussion on this thread outside of a couple of OP's recent posts - SONM is riding a consistent uptrend since the new year and vote. Do we think the market is *finally* waking up??

nomadichedgehog

Another note to say that asset sale deadline is end of today. It's possible both parties could extend if they they need more time, but I'm hopeful this won't be the case given the put options in the DNA X filing suggest SONM needs to start executing its new line of business ASAP. Once the asset sale completes, SONM will have UP to 5 days to file an 8k confirming the transaction. I would expect a PIPE announcement to go hand-in-hand with the asset sale transaction or to follow shortly thereafter. Given that we did not get news yesterday or before markets opened today, it is highly unlikely they will drop good news mid-week. I would therefore expect the asset sale filing to drop AH this Friday with PIPE announcement on Tuesday before markets open, as Monday is a bank holiday.

nomadichedgehog

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

nomadichedgehog

DNA holdings got 200k shares in exchange for giving SONM the DNA X platform and a 1.2 million bridge loan. This deal was done to help SONM keep the lights on, clear toxic debt and prevent SONM being designated as a shell by the SEC, which would have been disastrous. In exchange, DNA Holdings got 200k shares in a company that is about to re-rate as an AI infrastructure company. 200k shares in a company that might re-rate soon to $100 = $20 million. If that isn't profit for brokering a deal I don't know what is. The DNA X platform itself is irrelevant - it's just a temporary placeholder to "prove" to the SEC that there is a line of business in between the asset sale vote happening and the asset sale closing.

nomadichedgehog

There's a few things you're misunderstanding/conflating. The PIPE isn't happening via the Chardan shelf. The Chardan shelf is there to raise money by re-selling SONM shares on the market and to institutions. QMLS are a going concern and have no money to buy shares even if they wanted to buy them. The PIPE will therefore happen separately as an asset swap i.e. GPUs (financed by the Permian Labs protocol & Chardan shelf) in exchange for shares. However, the Chardan shelf is informative as to the number of shares QAI will receive as part of the asset swap. As you can see from the shelf, Chardan has the right to re-sell up to 19.44 million shares (as you correctly pointed out, this would be over time). Chardan are therefore permitted to create and re-sell a number of shares that mirrors the existing number of shares at the time the PIPE happens so that QAI doesn't become a minority shareholder. In other words: SONM shareholders currently = 1.4 million Expected QAI shareholding = 18 million 18/19.4 = 92.7%. This percentage is very close to what Party 2 were asking in the proxy statement. As for your concern about there not being enough funds, the funds will be there without any worry. The 5,800 B200s and B300s they have planned will cost roughly 290 million. If SONM need to raise $87 million (30% of 290), that would take them 87 trading days (they are capped at $1 million/day). Assuming the PIPE happens concurrently with the asset sale, that brings us to May 22. But to secure the allocation from NVIDIA and put down the deposit will not take that long at all - perhaps 1-2 months at most. Assuming a conservative, average trading price of say $20 following the PIPE re-rate, that translates to a dilution of 4.3 million shares, bringing the total number outstanding to around 23.7 million. Let's round it up to 25 million to be even more conservative. Based on the projected revenue of what 7,000 GPUs can bring in (around $200 million ARR), that still translates to a share price of somewhere between $80 and $140.

kuracoin

Given that it seems SONM/QMLS can only sell a certain amount of shares to Chardan over a certain period of time through the PIPE, how could there be enough funds for the GPUs (going with the thesis) in a timely manner? It would take forever to have the funds needed for the quick execution it seems QMLS are going for?

nomadichedgehog

RTO isn't happening, as per the title of this post. DNA X can't hit the 600 million volume/1 million revenue/day without the 30% deposit Permian Labs needs to give Qumulus AI the 70% leverage. They cannot wait until SEC approval that would take 3-6 months. Add another 3 months to raise the capital for the B300s and another 3 months for them to deliver and suddenly B300s are irrelevant with NVIDIA rubins delivering in H2 2026. Qumulus AI need to raise cash via the markets immediately - they are running out of time. The only vehicle that is ready to do that is SONM. Predictive Oncology have a lot of Aethir on their books but their filings say don't intend on converting that to any other stablecoins (which would have to happen to buy USDC to then convert and stake USD.AI.)

nomadichedgehog

I'm aware. They did a PIPE into Predictive Oncology which is becoming an Aethir treasury. Interestingly, the Aethir team collabed earlier in the year with Metastreet (Permian Labs) on another project. Both teams are looking at bridging crypto with AI in similar ways. But effectively this creates an indirect link between all parties. SONM <----> DNA X DNA X <----> Aethir Aethir <----> Permian Labs Permian Labs <-----> Qumulus AI

nomadichedgehog

They won't have 15 million after asset sale - only 6 million after they've paid off their debts and paid off the departing execs, with another possible $5 billion in June depending on the performance of SONM products until then. But that's still 6-11 million plus a clean public vehicle that is worth $20 million just for its ticker value. The trading price is incredibly cheap but not surprising at all. Algos have caused a huge sell off but algos only look at keywords, they don't read entire filings and sleuth linkedin accounts. People who bought a rugged phone company are selling up because they didn't sign up for some crypto-looking thing, and people looking to buy into some crypto-looking thing are waiting to see what the actual business. No one is seeing the AI branch at all.

nomadichedgehog

Just wanted to update everyone given the QMLS direct listing news. Yes QMLS are doing a direct listing. No, that doesn't mean the thesis is dead. If anything, it is bullish and completes the final piece of the puzzle. Why? QMLS finances are dogshit. I read the 290 page s1 filing. They are burning through cash, they are not generating enough revenue to cover their debt and their auditors have them as a going concern - they will be almost bankrupt by the time the SEC approves their listing. To make this situation even more absurd, QMLS are direct listing as opposed to doing an IPO. In case you don't understand what that means, QMLS **cannot** raise ANY cash through public markets for at least 12 months after they list and they will have no underwriter. So how the hell do they plan on scaling their fleet of 5,800 GPUs they plan on deploying in 2026 (as per the filing) without cash? The answer can be found straight out of the APLD/Coreweave playbook. Just this week, [APLD announced a PIPE into EKSO](https://finance.yahoo.com/news/applied-digital-spinning-cloud-business-161728999.html), where they'll be spinning off the cloud layer of the business into EKSO while retaining the GPUs in APLD. EKSO will then lease the GPUs from APLD. Similarly, Coreweave have an SPV where all their GPUs are financed by blackstone. They lease these GPUs in the event they go under blackstone can seize them. So it's fairly obvious to me what's happening here. QMLS will split its cloud layer from the GPUs, becoming effectively a software company. It will do a PIPE into SONM (as I've expected all along) and put the GPUs onto SONM's books. SONM can then tap into the existing Chardan shelf to build out the GPU fleet, supplemented by the Permian Labs protocol. Qumulus will then lease the GPUs from SONM as and when they have customers. As mentioned, they plan on deploying 5,800 B200-B300s in 2026 in addition to the 1,100 they already have. 7k GPUs puts them effectively at around $200 ARR, putting them at a 2 to 3.5 billion dollar valuation.

nomadichedgehog

Already aware of this and already read the 290 page s1 filing. They're splitting the assets/GPUs from the cloud like APLD just did this week and like Coreweave already do with their SPV. If you read carefully they are doing a direct listing without an underwriter, despite the fact their auditors have them listed as a going concern and will go bankrupt in less than a year. Which begs the question: how the hell are they going to raise cash? Through SONM's chardan s1 shelf. They'll do a PIPE into SONM and put the GPUs onto our books. They will then lease them from us.

Jolly-Professional57

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

nomadichedgehog

The S1 shelf filed end of September (amended via an S1-A to account for the reverse split) allows SONM to issue 19.4 million shares. Chardan is the underwriter for that facility. The 19.4 million number is not random - it's to mirror the expected cap table i.e. you authorise an amount to dilute that is equal to what already exists. In reality, they won't dilute anywhere near that amount because they are capped at $1 million/day. I expect 6 million shares to be added, max.

nomadichedgehog

It was never a pivot. It was a necessity to get the deal done. It just so happens the DNA X platform will be a useful tool in the tokenization aspect of the GPU fund-raising when it comes to converting stablecoins and wiring those stablecoins. The strategy isn't software only. $SONM will become an AI infrastructure company. The DNA X platform while serving a purpose isn't the end game, it just a means to an end.

nomadichedgehog

To avoid confusion, all my references to the public vehicle/ticker will be $BAGS because the SONM/DNA X references are confusing. No, DNA holdings will not hold 20% of $BAGS because Qumulus AI will be issued with 19.4 million convertible preferred shares in $BAGS in return for QAI assets (GPUs new and old and their power portfolio), diluting DNA Holdings down to 0.9%. Yes they will appoint QAI board members to $BAGS. No they won't rebrand to QAI or similar because Qumulus will do a separate IPO WITHOUT AN UNDERWRITER in 6 months or so where that ticker is asset/debt free and will just have their cloud service collecting revenue on top of the GPU rental fees - just like Applied Digital did this week with EKSO. $BAGS will own the power/hardware. Qumulus will lease GPUs from SONM and wire them 1 million/day in revenue (eventually). In addition to keeping the lights on/avoiding shell status, DNA X platform is needed for the GPU-backed tokenization involving Permian Labs facility and possibly to avoid slippage while converting stable coins. If you need a better idea of what this tokenization process will look like and how it works practically with the GPUs, I recommend watching some interviews on YouTube with Conor Moore (permian labs co-founder).

nomadichedgehog

DNA founder was a long-time investor into SRAX. Once SRAX was failed and on the brink they stepped in to try and save it. It's irrelevant to this transaction. DNA X have exchanged their platform in return for shares in SONM with a put option. SONM mgmt would not have agreed to that put option unless they had good reason to believe they're going to hit the 600 million in transactions and/or 1 million/day in revenue

kuracoin

This is a slightly different topic, so I’m starting a new comment thread. I’m not sure if this could be relevant, but take a look some previous deals between DNA Holdings and SRAX: a purchase agreement in Feb 2023, and a merger agreement in May 2024. The purchase agreement at least, shows some similarities with this most recent acquisition by SONM.

kuracoin

Apologies in advance if this isn't too organized. Is this comment you wrote still going with the idea of the synthetic RTO? This is assuming they have clients lined up to be able to make use of all of those GPUs at max capacity, right? If only for a single day? What about the time to set up/build out the infra for the GPUs itself, not including the time required for the ordering, shipment, etc? Is the DEX just an excuse for SONM to have a business then, in your thesis? If this is the case, how is DNA X going to be the beneficiary of that revenue (to fulfill one of the two milestone requirements per the acquisition terms) coming from the GPUs if Qumulus is the one getting that revenue? Would the DEX play a part at all here? After having written all of this out, I'm guessing you're anticipating Qumulus coming in to still use this new DNA X company to go public, but changing the name and ticker to something of their own? But then what about the DEX, the terms of the acquisition with its one of two conditions? I guess my questions about clients, max capacity, ordering, shipment and build out still stand. I feel like if you're going for the synth RTO, it doesn't really matter whether the DNA X DEX business is given back to DNA Holdings or not. Why does Qumulus need DNA X (the business) anything to perform their transactions? I feel like the only way the RTO thesis makes sense is if this most recent deal for the DEX is really just for a placeholder for SONM. But if that's the case, then the $600m volume/$1m revenue a day thing doesn't matter?

nomadichedgehog

Couldn't sleep so got up so I could reply to you. Looks like you're new to this entire play which is extremely long and complicated (has been dragging out for 6 months) but can see you have an interest in crypto so I'm guessing this came on to your radar today. SONM is a dead phone company as explained in the post. Qumulus AI is a rumoured target some of us suspect they want to merge with to monetise the ticker. QAI sells compute as a service. If you look at the SONM proxy filing from November, it states that the LOI signed with Party X suggested combining a crypto treasury strategy with the company's AI expertise. DNA X is that crypto treasury and it serves 3 important functions. Firstly, it buys time for SONM to complete the asset sale ($1.2 million bridge loan). Secondly, it provides a small but real operating business to avoid shell status from the SEC. And finally, it provides the RWA origination platform that Qumulus AI will be using for their GPUs. If you haven't looked into it already, Qumulus AI have a 70% loan-to-value $500 million facility with Permian Labs where they effectively borrow stablecoins and use their GPUs as collateral by tokenizing them. The other 30% will presumably come from the SONM public vehicle. The overall flow will look something like this: * DNA X orders $600M worth of GPUs from Nvidia * DNA X sends the invoice + serial numbers from Nvidia to Permian. * Permian's smart contract mints the GPUs and keeps the NFTs as collateral * Once the NFT is minted and locked, Permian releases the stablecoins (loan) back to Qumulus/Sonim/DNA X (whatever the public vehicle is called). * Paypal (see reply to other comment) converts those stablecoins into fiat/US dollars without slippage * DNA X pays NVIDIA As for the numbers, the DNA filing says they have to do $600 million in volume OR 1 million/day in revenue (just once) by end of June 2026. If you think about these numbers in terms of GPUs, thinks align quite nicely. NVIDIA's latest blackwell 300s, which everyone wants/is switching to are worth $50,000 each, so if you have $600 million worth of B300s then you have 12,000 B300s. Qumulus AI are on public record that they charge $3.50/hour for a B300. Well..... 12,000 x $3.50 x 24 = $1 million revenue/day. On the nose. These figures line up way too neatly, and Qumulus have the MW portfolio to support this amount of GPUs. In terms of valuation, that translates to a company worth 3 to 10 billion by June 2026.

kuracoin

I looked a bit more into DNA X and what I found just on the surface is super strange to me. This isn't an attempt to make any definitive judgment, I'm just laying out the findings and my first impressions. This platform has supposedly only been running for a month, there's been a tiny fanfare with an announcement on their main X account and the dedicated X account of the exchange itself. Why would ownership of the platform suddenly be transferred to a no-name company like SONM? At first glance, the exchange isn't anything special. It's mostly just a white label re-skin of an existing DEX (decentralized exchange), carbondefi.xyz. But there is already 5m of liquidity locked, which is kind of impressive, I guess, for something that is super obscure. But still, it's...nothing really all that special? Also, there is no information on what exactly was transferred over. Is there a dev team? Who's overseeing the development of the platform? I don't imagine any of the existing board members on SONM are qualified to manage this new acquisition. It would have to be that single person who may be appointed by DNA at some point. As for the thesis that's been leaned into up until this point with Qumulus, that makes things even more confusing, if it's still something being considered. At face value, this is simply a tiny white label DEX (started by an arguably large, reputable organization in the crypto space) that has been handed to a random public company that pretty much has no business running one. All of that is to say, all of this makes no sense to me and either this is one of the weirdest big brain plays of all time, or a total dud. Kind of concerning if I'm being honest but too curious to see how it plays out to sit this one out.

nomadichedgehog

Not sure how any of that is relevant to my comment, which was explaining to the other commenter why SONM have to change the name of the ticker immediately regardless of what's happening with QAI. And as explained in the original body of the post, an S4 merger would take too long for QAI to benefit from the public vehicle. Even if it didn't, I'm not even sure QAI will have audits ready in time. So a traditional merger is not on the cards. The "merger" will be in the form of a PIPE with an asset swap. But it looks like DNA X might be some weird in-between solution that has yet to be made clear.

nomadichedgehog

The ticker had to change because Social Mobile are acquiring the SONM brand/trademark. They wouldn't be legally allowed to use it. So I wouldn't read anything into the actual ticker change to DNA X - they had to pick something so it may as well have been $BAGS (to represent their current legacy shareholders). There's also a Nasdaq listing rule that requires a company's symbol and name accurately reflect its business to prevent investor confusion. So this is all above board and to be expected. What is more confusing is the press release today saying they planned on focusing on DNA X "exclusively". I'm hoping that's just smoke and mirrors.

nomadichedgehog

I suspect when the asset sale closes (around 13th Jan) we will get some kind of PR with Qumulus. What that PR is exactly is anyone's guess at this point as this crypto treasury strategy is still a bit unclear. It could be: a) Asset swap - QAI gets SONM shares in return for putting GPU assets on the books (PIPE) b) Qumulus agrees to route all its GPU-tokenization flow through the DNA X exchange c) Some kind of fuckery where the GPUs are not on SONM's books but QAI's revenue from the GPUs is (doubtful) d) DNA X is a glorified payment processor and QAI doesn't do a PIPE e) something I haven't thought of I need a bit more time to figure out exactly what the play is here. I was a bit surprised by the press release today stating they're focusing on DNA X exclusively, which seems to completely contradict the proxy statement which says the crypto-treasury will be combined with "AI expertise".

icecream_sandwich10

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.

wowthatisOP

I agree with your notion that it seems like the right time to load up the boats. The way things are at currently, it almost feels like a done deal. (Same sentiment in the last paragraph of another comment in this thread: https://www.reddit.com/r/smallstreetbets/s/LAGCosHpyG ) But yeah I added some more shares yesterday & today but im basically out of powder now as well. Ive got some other positions i could trim to add more, but I’m not sure if im that confident. And i’d be overextending this position based on what I had planned for originally so im still considering. Shares below $3 are hard to pass though… if it keeps going down the next couple days, I probably will trim others to add more SONM

nomadichedgehog

Awesome stuff. I was just looking more into DNA. They are most definitely the crypto treasury arm of the collaborative strategy mentioned with the AI expertise (Qumulus ai) in the proxy. If you look at this tweet you’ll see they are hyping up decentralized financing/tokenization as the next big thing for AI and capital markets: https://x.com/ThisIsDNA/status/2003535536074424525?s=20 And yes, they prevent SONM from becoming a shell and effectively guarantee tomorrow’s vote.

nomadichedgehog

It's only a loss if you sell. Volatility is the price of admission for a trade with this much upside. I’m not here to trade the daily chart. If the Qumulus/DNA X deal closes as the filings, LinkedIn posts and other anecdotal data suggests, the current price is irrelevant. If I believed the market was efficient, I wouldn't be in this stock. The thesis has only got stronger since I made this post a month ago. Since then: 3rd December - [Qumulus AI on LinkedIn: "Let's go, Mike!"](https://imgur.com/a/lw3oURk) 16th December - [Chardan hires Senior Analyst in AI Infrastructure](https://www.chardan.com/article/chardan-hires-bill-papanastasiou__aUKUGxIAACMAEw7w) 17th December - [SEC issues critical "No-action" statement regarding broker dealer custody of crypto asset securities](https://www.sec.gov/newsroom/speeches-statements/trading-markets-121725-statement-custody-crypto-asset-securities-broker-dealers) 18th December - [SONM filings reveals DNA X acquired by SONM ](https://www.sec.gov/ix?doc=/Archives/edgar/data/1178697/000149315225028292/form8-k.htm) 18th December - [PayPal & Permian Labs introduce PYUSD for AI infrastructure Financing, 1bn incentive programme](https://www.coindesk.com/business/2025/12/18/paypal-s-pyusd-stablecoin-tapped-for-ai-infrastructure-financing) None of these are coincidences. SEC cleared the way for the AI & crypto-treasury. DNA X is the protocol for the newly announced PayPal exchange, which will give Qumulus a credit facility that pays out in USD. Chardan hire is there to initiate coverage on the new company. Mike Mulica is still sharing QAI content and QAI are hyping it up. The deal is not just alive - it's done. The asset sale has to happen. Judging by the latest filings that has to happen by end of January, hopefully by the 13th January as initially anticipated. PIPE will be announced hours later.

favorite_time_of_day

I've got a few shares in SONM, and they're current courting a buyout. I'm wondering what this means for me, functionally. What happens to my stock if they're bought out? Is there anything I need to do? Is there a rule for this, or is it case by case?

nomadichedgehog

DNA X (the crypto-treasury protocol SONM just acquired to process the Qumulus AI GPU purchases) was issued over 200k shares last week, so there has been dilution. Not sure where you're seeing 500k new shares?

nomadichedgehog

While it looks bizarre it was more or less expected. The proxy in November specifically said: " \[Party X\] proposed a ***collaborative*** structure combining its AI expertise **WITH** a crypto treasury strategy" QAI is the AI expertise. DNA ventures is the crypto treasury strategy. In the short term DNA serves 3 important purposes: a) They are an insurance policy for the asset sale vote b) They are an operating business and therefore prevent SONM from becoming a shell c) They are putting up money to keep the lights on It's unclear if DNA's role will be long term, but for now they are the stepping stone to enable QAI to enter the game. There is an argument that DNA's role could be longer term and perhaps SONM ends up being a finance wrapper for QAI GPUs but we will have to wait and see. Either way I don't see how QAI doesn't eventually acquire a significant portion of SONM.

MtGloomy0420

We shall see …. about two of those! ;) $IVP and $SONM come to mind. How about $ICU?

nomadichedgehog

Equity compliance should be satisfied through a combination of asset sale/PIPE cash. But if we have PIPE cash that means we also have PIPE announcement, meaning we can use the ChEF. The proxy also makes reference to Party X "staking income" to keep the lights on. In any case, NASDAQ could grant an extension to equity comlpiance if SONM can prove they are close to another transaction. I can't say I know the S1/ChEF inside out but I'd be very surprised if they can use it before the asset sale closes, as I imagine that could make things legally messy for Social Mobile and with the SEC if new shares are issued. TLDR while I'm not going to pretend I'm a PIPE expert i'm not worried about this.

nomadichedgehog

Short or long term? The big variable that makes things unpredictable is the small float. Even if the company is priced very conservatively by the market as roughly $750 million (based on 1,100 current GPUs), that would be equivalent to a FAIR share price of roughly $37 if we assume a roughly 5% ownership for SONM shareholders. BUT 19 of the estimated 20 million shares would be locked up for 12 months, creating huge upward/squeeze pressure. In which case we could see prices upwards of $100 in the first days/weeks. The market will have to guess ARR until an official revenue projection is filed, but the market will work out fairly quickly they will have deployed 4,000 or will deploy soon 4,000 GPUs and price that in, putting them at somewhere in the region of 200 million ARR i.e. anywhere from a 2 billion to 6 billion valuation, which is equivalent to $100/share to $300/share, and that's again before accounting for any squeeze dynamics. Personally speaking, I will set my own price targets and adjust them accordingly when we have the first official filings confirming the PIPE and what information they make available. I personally don't see myself taking any profits before $80.

nomadichedgehog

The predictions made both myself and doot were based on the information we had at the time. SONM did not make it public that they had pivoted from an S4 RTO to a synthetic RTO. If you can’t appreciate how that affects the timing of filings and how the transaction unfolds you can’t be helped. The 8k has to be filed within 4 days of the shareholder vote, and the shareholder vote must happen before 13th January.

nomadichedgehog

Just wanted to add some things to the original post after doing more research and re-reading the filing. * Chardan have done this before also with [SONN.](https://www.chardan.com/case-study-sonnet-biotherapeutics) It is the exact same scenario. * Filing says "On May 31, 2025, Venable communicated a revised draft of the letter of intent to Party 2. The revisions removed proposed cash adjustments, changed the suggested combined company’s board composition to include one director designated by the Company in the resulting entity". We know Mike Mulica was appointed to QAI board, so it's an interesting coincidence assuming party X = party 2 * "On August 15, 2025 ... the Company informed Party 8 that it was in the final stages of negotiating a letter of intent with another counterparty \[Party X\]." That's only 7 working days from when reps of Party X first engage SONM to finalising an LOI. Doesn't sound plausible unless some due diligence has already been done * "On or about July 24, 2025, Party 2, through its bank, communicated that it w**ould resort to an alternative strategy** and did not intend to proceed **with the RTO**". The choice of wording here is remarkable, because it specifies that the party is pursuing another strategy, whereas other failed negotiations with other parties in the filing are simply referred to as "decided not to proceed". This is in the context of the board having had a meeting the week before which discussed "uncertainties related to the proposed RTO with Party 2, **which had initially been contemplated to be executed concurrently".** That's an caveat to end the paragraph with. * Now some tin foil shit: Mike Mulica first like of QAI content on LinkedIn is of a [DiRocco interview](https://imgur.com/a/Y6QHbsE) some time 3 months ago. * We know that QAI post the same content on LinkedIn/Twitter on the same day. In this case, 1[9th August](https://imgur.com/a/ciUJFHN). * The LOI with Party X was signed on 19th August - TLDR Mike Mulica first likes QAI content on the day LOI was signed. Having spotted these extra nuggets and had more time to dwell on everything, it would appear to me that the proxy delay meant that SONM and QAI realised they were not going to have enough time to complete a traditional S4 merger. The board acknowledges in the filing the risk of it failing is high and jeopardises the asset sale. It's possible therefore QAI had to go back to the drawing board and find another way i.e. a PIPE.

detectivedoot

I’m still holding and life sucks. The qumulus merger is still def happening IMO. If the acquisition doesn’t happen, at least SONM is a clean shell and will become a btc treasury or some shit and I’ll have an exit.

nomadichedgehog

"Morcos said the plan is to acquire Sonim, a public company, and take it private. " The journalist is paraphrasing here, and clearly has misunderstood the transaction. SONM's press release clearly differentiates with the asset sale and monetizing the ticker. It is no wonder the market is asleep at the wheel. That's promising though that he said weeks, not months

nomadichedgehog

To anyone still following, this is definitely happening. [Q3 results](https://www.newsfilecorp.com/release/272694) from SONM: *"These costs ... position us to complete key* ***transactions*** *and unlock future value. We remain focused on exploring* ***strategic opportunities*** *to monetize our Nasdaq listing and* ***maximizing shareholder value****"* TRANSACTIONS = PLURAL = LEGACY ASSET SALE & RTO Also: *"We remain committed to building on this momentum and delivering value to stockholders in the fourth quarter."* FOURTH QUARTER = SOON I believe what is holding up the deal now is twofold: the finalisation of the asset sale and the letter of compliance from NASDAQ now that the RSS has taken place. SONM needs to trade for 10 days over $1 for this letter to be issued. That then means the SEC doesn't flag the non-compliance when the S4 drops. My hope is that we will finally get the S4 circa 10th-12th November.

Money-Recording4445

What’s your thoughts for SONM still. Ive held with about 1,000 invested before the split. My shares were converted post split. The stock price has continued to slide but there is only one option left for the company, to RTO to a company wanting to get listed. I think it may take up to a year for something to be announced and occur because from what I see, they are finalizing the sale of the assets. What are you doing, what are your thoughts, how much do you have and are you buying more?

Money-Recording4445

What’s your thoughts for SONM still. Ive held with about 1,000 invested before the split. My shares were converted post split. The stock price has continued to slide but there is only one option left for the company, to RTO to a company wanting to get listed. I think it may take up to a year for something to be announced and occur because from what I see, they are finalizing the sale of the assets. What are you doing, what are your thoughts, how much do you have and are you buying more?

Money-Recording4445

What’s your thoughts for SONM still. Ive held with about 1,000 invested before the split. My shares were converted post split. The stock price has continued to slide but there is only one option left for the company, to RTO to a company wanting to get listed. I think it may take up to a year for something to be announced and occur because from what I see, they are finalizing the sale of the assets. What are you doing, what are your thoughts, how much do you have and are you buying more?

nomadichedgehog

Difficult to say. We are all surprised it didn’t land yesterday. My current speculation is this is being held up for legal reasons. The stock has to trade over $1 for 10 consecutive days for the Nasdaq to issue the compliance letter. This is important, because if SONM drops the S4 and the SEC sees a delisting warning, it could hold up the whole transaction. So my best guess is we’ll see an S4 drop some time around 10-12 November. My only hope is we don’t bleed to death by the time that day comes.

clockworkwarrior

SONM. Flat(ish) after RSS is good news for RTO?

clockworkwarrior

SONM def cleared the shareholder vote. Where’s the announcements?

nomadichedgehog

SONM, which is about to reverse merge into Qumulus AI. Too bad the mods auto-ban any post related to it.

detectivedoot

Hey, man. I'm not ducking you. Just getting around to getting back on here. My inbox is full too. * At some point the market will have to price in the dilution. Whether that is 25 million shares or whatever it might end up being, it will have to happen. When do you think that will be? Dilution will be gradual and the gradual increase in float size can be a good thing for growth when the combined company will only be starting with \~20M shares. They will likely wait til ChEF is completed before considering a traditional split to increase float size. Assuming they perform well. * How are you calculating your $2 billion market cap? We know for a fact they have 60-80 MW in capacity (probably more given the new shell companies set up in Missouri and NY) but as of March they only had 550 GPUs deployed, which is peanuts. There is nothing else to indicate they are operating anywhere near full capacity. Again, this isn't FUD: it's a genuine question. $500M is at least 7000 latest Gen Nvidia GPUS, full buildouts included. We have no idea about true MW capacity or current colocations. Website claims 4,000 GPUs deploying this year. May be factoring in the $500M deal in this. City govt's they operate in are ducking any questions I ask about the company. Anyone giving this much capital towards this much hardware is receiving full disclosure. It's safe to say QAI has a major partnership with a big player. My bet is META. * How confident are you of the 6 month lock up? I accept it is fairly standard in these types of transactions but I haven't seen anything to say it's a 100% certainty, outside of it being a fairly common requirement for PIPE investors Reverse mergers and SPACs officially file w/ an S-4. All new shares issued by an S-4 have to be locked up for a certain period of time. W/ SPACs usually PIPE unlocks first. Ironically, this is to ensure price stability. * What is your short to medium SP target, and why? Short-Mid term I expect to see at least $50 as a given. So like 4x give or take * Do you think legacy SONM shareholders will end up with a better deal in the short term relative to the Orbic $3.60 pre-split offer? Yes, Doogee offer of $3.60 was good but even though I don't personally have good feelings towards Sonim board currently, they made the right call with QAI + social mobile asset sale. Execution is bad. \- Yes SONM holders will

nomadichedgehog

Congrats on an amazing find, and I hope you understand all I've tried to do since Day 1 is investigate/confirm your hypothesis - I was one of the few who paid attention and the only one who investigated further. Just to re-iterate what I said in my last reply to you, I misread the $1 million/day as 1 million/shares per day. That isn't spreading FUD, it's just an oversight. That said, I have a few points/questions that I'd like to see answered: * At some point the market will have to price in the dilution. Whether that is 25 million shares or whatever it might end up being, it will have to happen. When do you think that will be? * How are you calculating your $2 billion market cap? We know for a fact they have 60-80 MW in capacity (probably more given the new shell companies set up in Missouri and NY) but as of March they only had 550 GPUs deployed, which is peanuts. There is nothing else to indicate they are operating anywhere near full capacity. Again, this isn't FUD: it's a genuine question. * How confident are you of the 6 month lock up? I accept it is fairly standard in these types of transactions but I haven't seen anything to say it's a 100% certainty, outside of it being a fairly common requirement for PIPE investors * What is your short to medium SP target, and why? * Do you think legacy SONM shareholders will end up with a better deal in the short term relative to the Orbic $3.60 pre-split offer? Looking forward to your answers, and thanks again for the epic DD.

Sneakerfanboy

Been following this trade for awhile, and full disclosure I bought and currently hold SONM shares. However, I'm not super well versed in some of these concepts so help me out with this and correct me if I'm wrong, on the 27th october the RSS goes into effect, putting the share value at around 12.42 dollars given the current pricing right? If QAI, shares will start at around 10-14 according to your prediction, where is the value? I'm gessing I missed something along the way, so very happy to be corrected.

Due-Papaya-6217

Full port on $SONM

Bald_Plonker

SONM looking really interesting right now. After the BYND play is over. Still think BYND can get to $5 tomorrow

nomadichedgehog

Detective doot has corrected me on the amount of dilution we might face. I thought it was 1 million shares/day, but it's actually up to $1 million in shares/day. So that gives a lot more protection to SONM legacy shareholders than I thought. I am still retaining 50% of my position on this basis and may look to re-accumulate a bit more before the RSS goes through.

nomadichedgehog

I stand corrected on it being $1 million dollars/day, not 1 million shares - that was a misread of the filing. Assuming the circa $15 post-RSS price can hold and we get some good PRs from Qumulus then it sounds like we'll be good although the ultimate upside remains to be seen IMO. Qumulus' entire USP is hyperspeed, which would make me think they're not averse to tapping that $1 million every day if they need to. All this said, I think we can both agree that this RSS ratio was bad and doesn't reflect well on SONM management. I still have 50% of my original position and may look to re-accumulate depending on how the stock moves this week and any Qumulus PRs.

detectivedoot

Please send any and all SONM concerns to me. I’m still holding and I think I’ll buy more this week.  The FUD is absolutely out of control from the reverse split filing. Everyone seems to be willfully ignoring that $SONM executive director disclosed that he is also on QumulusAI Board of Directors.  HOW DO I REACH THESE KIIIIIIDS!

Kasper_vid

I’m not OP but the target is now essentially confirmed because the CEO of SONM is appointed to the QAI board. The official announcement can happen any day but will likely take place after the RSS goes in full effect

nomadichedgehog

The RSS ratio is 1:18. That means if the RSS were to happen today (it will go through on the 27th), the post-RSS share price will be 18 x current price = 18 x 0.79 (as of pre-market) = $14.22 You then multiply that share price by the number of shares that will be issued (350 million minimum, authorised number is actually 1 billion), and you get a valuation of $14.22 times 350 million = 5 billion. That's all very well, but as a SONM shareholder you are still 5x worse off than you would have been had the Orbic offer went through (because 0.79 x 5 = 3.60). So the only way to justify REJECTING that offer is to have a QAI valuation of 25 billion. Hopefully that makes sense.

Palocos

Just want to thank you for the good DD even if it fails. If the board really had shareholders best interests in mind it should have played like you hoped. But in my short time investing I've learnt that most of the time when a company becomes shit like SONM, it's the management fault. And you can't trust shitty management even when good opportunities fall on their laps. They'll probably get their money but that's more of a systemic problem with CEO's and management being overly compensated regardless of doing a good job. Still hope you guys can make money on this.

Rocketlucco

What does it mean for shares to be locked? They would dilute the stock but not allow people to buy, somehow retraining the value for original holders of SONM?

nomadichedgehog

If you had 18,000 shares pre-RSS, you now have 1,000 shares. But that is 1,000 shares in the NEW merged company (qumulus AI). That is the entire point of the play. If they picked a lower ratio, say 1:3, you'd be sitting on 6k shares in the newly merged company. This is relevant because Qumulus AI will issue 350 million shares, meaning legacy SONM shareholders will be diluted to hell. So the less shares you have, the less you can offset that dilution.

Winter-Negotiation76

$SONM Key 8-K Highlights • Reverse Split: 1-for-18 ratio effective Oct 27 @ 12:01 AM ET (new CUSIP 83548F408). • Reason: Nasdaq compliance extension to Dec 31 2025. • Authorized Shares: ↑ from 100 M → 1 B (potential for future financing). • QumulusAI Tie: Michael Mulica (Exec Chairman) is also on board of Global Digital Holdings / QumulusAI — no merger announced yet. 💰 Price Math • Pre-split close: $0.92 → Post-split theoretical ≈ $16.56 ( 0.92 × 18 ). • Actual open on Oct 27 may vary with sentiment &amp; volume. 📈 Trading Scenarios • Base: Short-term fade to $14–16 (typical post-split drift). • Bull: Hold &gt; $18 = buying strength + potential news catalyst. • Bear: &lt; $13 = listing/dilution fear dominates. 🧭 Next Key Dates • ⏰ Oct 27 AM: Split-adjusted open (Track vs $16.56 baseline). • 📉 Oct 27 Close: Range &amp; volume review. • QumulusAI board link = interesting but not deal confirmation. • High-risk / speculative zone until firm transaction news drops. https://www.sec.gov/ix?doc=/Archives/edgar/data/1178697/000149315225018637/form8-k.htm

Unhappy_Somewhere383

If I have 2000 shares of SONM divided by 18, I would get 111 shares of Qumulus, is that correct?

nomadichedgehog

The 8k has been filed. It confirms the RSS ratio and that Mike Mulica has been on the QAI board since September, so the thesis is all but confirmed. What is now very unclear is if there is truly any upside for SONM shareholders in QAI given the high RSS ratio. I'm still considering my position.

nomadichedgehog

The risk is indeed in the authorised common shares and ChEF, but I don't agree the existing float was smoked regardless. When the board shot down the Orbic takeover offer in the summer at $3.60/share on the basis of the RTO being a better avenue to bring "share holder value" to SONM shareholders, that provided a pre-RSS baseline of what current SONM shares are worth in the new QAI company. This is where you have to start getting into all sorts of calculations and speculations regarding QAI valuation and the amount of dilution current SONM shareholders will face. The thing is, it is entirely possible that SONM management didn't expect the massive sell off when rejecting the orbic offer. Perhaps they thought QAI deal would've gone through much faster but there have been delays. Perhaps they thought we'd be at $3, not under $1. Perhaps they really don't give a fuck about existing SONM shareholders despite their fudiciary duties and what they say otherwise. One thing is for sure and that is this RSS ratio seems ridiculously excessive. It signals to me that either they need a lot of headroom because they need to buy more time for dominoes to fall with QAI, or QAI have SONM board by the balls: "*we will only take you over and give you (the board) the options and warrants in QAI (something that is common in these types of mergers) if you dilute existing SONM shareholders to hell".* At the moment, it looks like there's only two options. QAI is a monster company on a level that no one can anticipate or see something, or the SONM board is fraudulent.

BuyDipsShortVIX

I don't have much experience in US markets and listing rules, and only understand basic RTO theory but if the market value of SONM holdings will be $17.5m out of $300m, then there is a profitable trade available here at any price under $17.5m MCAP right? Then you combine this with the current market conditions for AI companies on US markets and there's a strong argument for fairly rapid appreciation in SP soon after the ticker relists?

kuracoin

Correct me if I’m wrong, but the asset sale needs to close before they can do the RTO. The 8-K shows the deal as still pending (but confirmed as in progress?), so we just have to wait for that to happen before we can expect any announcement of the RTO? Also, I’ve been seeing people talk about the reverse split ratio being bad. Maybe it’s not favorable given the optics, but as far as the resulting share of QAI that current SONM shareholders would get, if the deal is anything like that of VINC and we assume SONM will stick with the numbers from the previously filed LOI, SONM will be $17.5m of $300m (total mcap of QAI) so it doesn’t really matter how many shares of SONM there are and what price they are? There will be roughly 1m shares of SONM after the reverse split, and with the RTO there will be about 17m shares of QAI. 1m shares of SONM after split / 0.05833 (% share of SONM holders of the new company after RTO) ≈ 17m shares of QAI ≈ $17-18 per QAI share (300m valuation / 17m shares)? VS Let’s say SONM did 1-10 reverse split, ≈ 18m shares / 10 = 1,800,000 shares / 0.0583 ≈ 30,800,000 shares of QAI. 300m valuation / 30,800,000 shares ≈ $9-10 per share of QAI So the percentages remain the same, and the valuations remain the same, regardless of what price SONM shares are and how many there are before RTO? Am I missing something here?

lixx502

Gotta assume SONM knows the RS and eventual RTO will be beneficial, otherwise they wouldn't be helping QAI with the RTO in the first place.

Slow-Astronaut-2135

So I know 1-18 is less than ideal, but even if QAI (assuming they're the RTO party) takes over we still have a pretty decent upside from current levels right? SONM is still o lying floating around 12m-ish market cap? Maybe im underthinking it, first time getting invoked in something like this. Very small position, 500 shares.

nomadichedgehog

Difficult to say because this has lifted the bar that Qumulus AI needs to be. Is it a stealth AI data centre that is going public to grow capital or is it a monster in disguise with huge deals that is 5-6x bigger than I even thought? Given SONM’s patchy management history I’m inclined to say it’s the former but I can’t be sure. I need to sleep on this.

Professional_Task694

Any thoughts on SONM?

clockworkwarrior

SONM. Let's see if they announce more details of the RTO

REEMFMetalHead

I'm seeing all kinds of stuff out there popping on volume, not being talked about. RANI SONM ACHV ELDN EQ ELBM IBIO

captain_casino

Pretty much. We're buying SONM expecting them to do the reverse take over with Qumulus AI, and by buying SONM now we would be getting in at a very low price compared to what a company like Qumulus would be worth.

Fr3ncis

Sorry im not an english native speaker, i should buy shares of SONM then ? Did i understand right?

sdomc

SONM. Up 18% for the day, volume still hasn’t taken off.

MoistLetterhead0110

First time doing this, so SONM shares will become Qumulus shares on IPO, or do i sell at buyout news? And depending on MW you will decide to hold Qumulus shares? If so what's your price target to sell Qumulus. Sorry for all the questions I'm learning this as I go.

nomadichedgehog

Yes you're right, and I should have been more clear with my language - the RSS vote was yesterday, it hasn't actually come into effect yet. Yes, the 350 mil share sale was to the financier but I was still making the point that if they were on the open market we would know about it. As for the ratio, yes there is a range in place but anything more than 1:10 or 1:15 max then the SONM will likely destroy all remaining SONM shareholder value and would then not be able to justify shooting down the $3.60/share offer from Orbic earlier in the summer. The ratio needs to be high enough to make Qumulus look IPO ready while justifying rejecting that offer. My guess is we will land somewhere between 1:5 and 1:10. Yes common stock is going up for PIPE investors/enabling financing, that doesn't mean the share pool will be bigger than the 350 million. And yes, RTO news will follow the news on the meeting. I expect we will get that news tonight after hours then RTO news on Monday before market opens.

psuidominus

Accessible to all shareholders of record as of Sept 15. I wasn’t on board yet. www.proxydocs.com/SONM https://www.proxypush.com/evote/SONM/registration/FDA59047290D4D27BC22364ED4E5ECA5/login

nomadichedgehog

Sadly, I don't think the board members of SONM lurk on reddit

sdomc

SONM

nomadichedgehog

No. The RSS has already happened (we’re just waiting on the ratio). There’s only 12 million SONM shares. Had they issued another 350 million we would’ve known about it because they would’ve had to file it and also the stock would’ve been diluted to oblivion.

MoistLetterhead0110

So buy SONM now and sell Qumulus at $7-$10 after RTO, if they supercede your expectations on what do you hold?

Meko1972

Understand that but the other company has to eat SONM financials/debt etc. 

nomadichedgehog

This is an asymmetric play that doesn't come around often. If the whole deal falls through I won't have any regrets, and I have enough of a portfolio size to absorb the hit. That said, I really doubt the deal fails at this point, but I accept stranger things have happened. The letter of intent was signed 4 months ago, the re-structuring has just happened at Qumulus in preparation for going public, and if any red flags came up in their due diligence of SONM then we would know by now. SONM board also has no reason to drag this out. If anything, they have bent over backwards to get this done (poison pill, asset sales and now RSS). But if it does fail then yes: I will looking to see how Qumulus eventually go public.

nomadichedgehog

SONM have to announce the RTO target via proxy statement. When they file that statement, the SEC has 10 days to respond. If SEC has no comments, SONM then need to file a definitive statement stating the exact day of the RTO vote and must give 20 days' notice. That means there will be a 30-day lag between SONM announcing the RTO target (which the market is currently asleep to) and the RTO actually happening. So to answer your question, there will be a 30-day run up to "IPO" prices. You can either get in now, or you can get in once the market has already piled in and pay a premium. You decide.

kuracoin

So the point of this (if anything) is to basically get in at “IPO” prices then? What’s the risk of a sell off if the thesis is true and the RTO goes off without a hitch? Why buy SONM now as opposed to shares of Qumulus when the RTO is actually finished?