CynergisTek Inc. Announces Expiration of "Go-Shop" Period and Qualification of an "Excluded Party"

[June 23, 2022]

CynergisTek, Inc. (NYSE American: CTEK) ("CynergisTek"), leading cybersecurity, privacy, compliance, and IT audit firm helping organizations in highly regulated industries navigate emerging security and privacy issues, announces the expiration of the initial "go-shop" period set forth in the previously announced merger agreement ("Merger Agreement") with Clearwater Compliance LLC (collectively with its affiliates, "Clearwater"), a healthcare focused cybersecurity, compliance, and risk management solutions firm, in an all cash transaction that values CynergisTek at approximately $17.7 million. All capitalized but undefined terms used herein have the meanings given in the Merger Agreement

Consistent with the terms of the Merger Agreement, during the "go-shop" period, CynergisTek and its financial advisors contacted 88 potentially interested parties, including 63 strategic buyers and 25 financial sponsors. Eight of the contacted parties executed confidentiality agreements, all of whom received a management one page overview of CynergisTek and four of whom requested and received a virtual meeting with members of senior management. As a result of the process, CynergisTek received an Acquisition Proposal from one of the potential strategic buyers (the "Go-Shop Proposal").

On June 22, 2022, the CynergisTek Board of Directors (the "Board") determined, in good faith after consultation with its outside counsel and financial advisor, that the Go-Shop Proposal would reasonably be expected to lead to a Superior Proposal, thereby making this strategic party an Excluded Party under the terms of the Merger Agreement. At this time, the Board has not determined that the Go-Shop Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from the Go-Shop Proposal or that any alternative transaction will be entered into or consummated.

At this time, CynergisTek remains subject to the Merger Agreement and is complying with the terms and conditions thereof, which remain ..

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