Clearwater Compliance, LLC entered into a definitive agreement to acquire CynergisTek, Inc. (NYSEAM:CTEK) from Beryl Capital Management LLC and others for $17.4 million on May 23, 2022. Under the terms of the merger agreement, CynergisTek stockholders will receive $1.25 per share in cash. The merger agreement includes a 30-day period beginning on May 23, 2022 and expiring June 21, 2022 (and in certain cases 35 days, expiring June 26, 2022), which allows CynergisTek and its advisors to actively solicit, initiate, encourage or facilitate superior acquisition proposals from third parties. Upon completion of the transaction, CynergisTek will become a privately held subsidiary of Clearwater, and CynergisTek shares will no longer be listed on any public market. The merger agreement provides that Clearwater Compliance, LLC will be required to pay the Company a termination fee of $0.71 million upon termination of the merger agreement under certain circumstances. CynergisTek will be required to pay Parent a fee of $470,000 upon termination of the Merger Agreement under certain circumstances, including the termination by the Company to accept a Superior Proposal. CynergisTek will continue to be headquartered in Austin, Texas.

Transaction is subject to customary closing conditions, including approval by CynergisTek stockholders. CynergisTek's Board of Directors has unanimously approved the merger agreement with Clearwater and recommends that CynergisTek stockholders vote in favor of the proposed merger and the merger agreement. Board of Clearwater Compliance, LLC also approved the transaction. Mac McMillan, Chief Executive Officer and Co-Founder of CynergisTek, and Paul Anthony, Chief Financial Officer of CynergisTek, have entered into voting agreements pursuant to which they have agreed, among other things, to vote their shares of CynergisTek common stock in favor of the merger. As of June 23, 2022, the go-shop period has been expired for the transaction. As of June 29, 2022, the Excluded Party “go-shop” period with respect to the transaction has expired. The special meeting of CynergisTek stockholders will be held on August 31, 2022. As of August 31, 2022, the transaction was approved by CynergisTek Inc. Stockholders. The transaction is expected to close in the third quarter of 2022. As of August 31, 2022, the parties expect the transaction to close on September 1, 2022.

Craig-Hallum Capital Group LLC is providing a fairness opinion with a service fee of $250,000 with respect to the transaction to the Board of CynergisTek and acted as financial advisor as well. America's Growth Capital, LLC is acting as exclusive financial advisor to CynergisTek, with Kirton & McConkie, PC acting as CynergisTek's legal counsel and due diligence provider. Steve E. Isaacs, Sara Rosenberg, Olga Bogush, Lauralyn Bengel, Chris L. Bollinger, David S. Sattelberger, Hillary M. Stemple and Jason L. Zgliniec of ArentFox Schiff LLP is acting as legal counsel to Clearwater. Laurel Hill Advisory Group, LLC acted as information agent and Colonial Stock Transfer Company, Inc. acted as transfer agent to CynergisTek. CynergisTek will pay approximately $20,000, plus expenses to Laurel Hill Advisory. Eric Fahr and William Borden of BDO USA, LLP acted as Due Diligence Providers to Clearwater Compliance, LLC.