WaveDancer, Inc. (NasdaqCM:WAVD) entered into a definitive agreement to acquire Knowmadics, Inc for $90 million on March 18, 2022. The purchase price of comprises approximately $56.5 million in cash and $27.8 million of stock to purchase Knowmadics shares, warrants and options. An amount of $42.08 million in cash and $19.02 million in WaveDancer stock will be paid for Knowmadics shares, $8.8 million cash and $8.7 million stock for Knowmadics warrants, $5.8 million cash and $5.8 million in options in respect of Option Rollover Consideration for Knowmadics options. WaveDancer intends to raise approximately $67 million in a private offering of its common shares in connection with the transaction. In case of termination, WaveDancer and Knowmadics shall be entitled as its sole and exclusive remedy to liquidated damages in the amount of $0.25 million.

Upon close, Knowmadics will become a wholly-owned subsidiary of WaveDancer. The acquisition is subject to customary closing conditions, including securing the financing for the transaction, the receipt of WaveDancer shareholder approval for the shares it intends to issue to finance the transaction, completion of limited due diligence investigation by WaveDancer and regulatory approvals. It is expected to close in the second quarter of 2022. Wyatt A. Deal of Hunton Andrews Kurth LLP acted as legal advisor to Knowmadics while Eric G. Orlinsky and Jacqueline A. Brooks of Saul Ewing Arnstein & Lehr LLP acted as legal advisors to WaveDancer, Inc. GrowthPoint Technology Partners, LLC acted as financial advisor to Knowmadics.

WaveDancer, Inc. (NasdaqCM:WAVD) cancelled the definitive agreement to acquire Knowmadics, Inc on June 6, 2022. The Company terminated the Agreement under the financing contingency set forth in the Agreement as opposed to relying upon other termination rights available to the Company. Under the Agreement, closing was contingent upon the Company undertaking a financing to raise the funds required to complete the acquisition. After using its commercially reasonable efforts to take all actions or to do all things reasonably necessary to arrange such financing, the Company determined that the financing could not be completed and exercised its right to terminate the Agreement in accordance with its terms.