SANUWAVE Health, Inc. (OTCPK:SNWV) signed a non-binding LOI to acquire SEP Acquisition Corp. (NasdaqCM:SEPA) from Mercury Sponsor Group I LLC, investors affiliated with Sweat Equity Partners, LP, Mercury Life Sciences, Mercury Venture Partners and others on June 22, 2023. SANUWAVE Health, Inc. (OTCPK:SNWV) entered into a definitive merger agreement to acquire SEP Acquisition Corp. (NasdaqCM:SEPA) from Mercury Sponsor Group I LLC, investors affiliated with Sweat Equity Partners, LP, Mercury Life Sciences, Mercury Venture Partners and others for $82.8 million on August 23, 2023. The proposed business combination values the combined company at a pro forma enterprise value of $127.5 million. Subject to stockholder approval, all of SEPA?s shares of Class B common stock are to be exchanged for shares of Class A common stock at a ratio of one share of Class B common stock for 0.277 shares of Class A common stock. Furthermore, as a condition to closing, all of SEPA?s warrants, both public and private, must be exchanged at the same ratio for shares in the combined company, which will require stockholder and warrant holder approval. If approved by warrant holders, the publicly traded warrants will be valued at $0.50 per warrant and exchanged for shares of SEPA?s Class A common stock at closing, comprising a total of 450,336 shares of Class A common stock. In total, SEPA?s public warrant holders are expected to own approximately 4.0% of the pro forma combined company at closing. 7,793,000 shares of Class A Common Stock are expected to be issued as merger consideration to all SANUWAVE securityholders. Upon completion of the proposed transaction, the combined company is expected to operate under the SANUWAVE name and will be listed on the Nasdaq Capital Market under the symbol ?SNWV?. The proposed transaction values the combined company at an enterprise value of $127.5 million. SANUWAVE investors are anticipated to have an approximately 69.6% equity ownership in the new entity, assuming the combined company receives approximately $13.0 million of gross proceeds at closing, including $12.0 million from non-redeeming holders of SEPA?s Class A common stock and other PIPE investors, and $1.0 million from the SPAC sponsor converting a loan into equity on the same terms as the PIPE. Approximately $8.5 million of capital has already been committed, including $7.0 million of shares of SEPA?s Class A common stock held by investors affiliated with Sweat Equity Partners and Mercury Life Sciences who have agreed to enter into voting and non-redemption agreements. In the event that the merger agreement is terminated as a result of certain actions, SANUWAVE shall pay to SEPA an amount equal to $2.5 million.

The closing of the transaction is subject to, among other things, approval of the stockholders of SEPA and SANUWAVE; approvals of any required governmental authorities; the Consents required to be obtained from or made with any third Person (other than a Governmental Authority) shall have each been obtained or made, the SEPA charter amendments have been filed with the Delaware Secretary of State; reconstitution of the post-Closing Combined Company Board as contemplated under the merger agreement; the Registration Statement having been declared effective by the SEC; approval of the Class A Common Stock for listing on Nasdaq; the conversion of 80% or more of the SANUWAVE Convertible Notes and the exercise of 80% or more of the SANUWAVE Warrants; delivery of a fairness opinion from ValueScope in form and substance reasonably satisfactory to SANUWAVE; SEPA having, at the Closing, at least $12,000,000 resulting from proceeds of the PIPE Investment and from proceeds that have not been redeemed in the Redemption, and (vi) SEPA?s and SANUWAVE?s receipt of the deliverables contemplated by the merger agreement including Registration Rights Agreement, Amendment to Lock-Up Agreement and Amendment to Warrant Agreement. The boards of SANUWAVE and SEPA have unanimously approved the proposed business combination. SEPA Board has unanimously recommended shareholders to vote in favor of the business combination. As per the filling on January 22, 2024, SANUWAVE Health announced the company is holding a special meeting of stockholders on February 21, 2024 at 10:00 a.m. CT (11:00 a.m. ET) to vote on the previously announced merger with SEP Acquisition Corp. The business combination is expected to be completed in fourth quarter of 2023. As of January 29, 2024, transaction has been approved by the shareholders of SEP Acquisition. On Feb. 21, 2024, SANUWAVE announced the result of its special meeting to approve its business combination with SEP Acquisition Corp. The business combination was approved with 798,379,869 votes for, 5,221,765 votes against and 71,525 abstaining.

Ben A. Stacke, and Jonathan Nygren of Faegre Drinker Biddle & Reath LLP served as legal advisors to SANUWAVE. ValueScope Inc. acted as financial advisor and provided fairness opinion to SEPA Board. Tonya Mitchem Grindon, Nathan Kibler and Andrew Yonchak of Baker Donelson, Bearman, Caldwell & Berkowitz, PC served as legal advisors to SEPA. Baker Donelson, Bearman, Caldwell & Berkowitz, PC also conducted legal due diligence review on behalf of SEPA. Continental Stock Transfer & Trust Company acted as the transfer agent to SEPA. Morrow Sodali LLC acted as proxy solicitor to SEPA for a fee of $25,000 plus disbursements. ValueScope received professional fees of $65,000, subject to hourly fees for material revisions for rendering its opinion and presentations to the SEPA board.

SANUWAVE Health, Inc. (OTCPK:SNWV) cancelled the acquisition of SEP Acquisition Corp. (NasdaqCM:SEPA) from Mercury Sponsor Group I LLC, investors affiliated with Sweat Equity Partners, LP, Mercury Life Sciences, Mercury Venture Partners and others on June 25, 2024. The written notice provided that there shall be no liability on the part of any party or any of their respective representatives, and all rights and obligations of each party shall cease, except for those provisions which survive termination of the merger agreement.