COMS COMSovereign Holding Corporation (CE)

On October 4, 2021, we completed our previously announced acquisition (the “Acquisition”) of SAGUNA Networks Ltd., a company organized under the laws of the State of Israel (“SAGUNA”), pursuant to a Share Purchase Agreement dated as of August 17, 2021 (the “Purchase Agreement”) among our company, SAGUNA, the holders of common shares of SAGUNA that are parties thereto, which held approximately 99.8% of the voting power of the outstanding capital stock of SAGUNA, and Ben Weiss, solely in his capacity as the representative of the shareholders of SAGUNA.

 As previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on August 20, 2021, we agreed to acquire 100% of the outstanding capital stock of SAGUNA pursuant to the terms of the Purchase Agreement. In accordance with the terms of the Purchase Agreement, in consideration for the transfer to us of their shares of the capital stock and other securities of SAGUNA, the stockholders of SAGUNA, including the holders of outstanding options and warrants, received, in the aggregate: (i) $33,017 in cash and (ii) 6,422,099 shares of our common stock, par value $0.0001 per share, of which an aggregate of 1,284,420 shares is being held in an escrow fund for purposes of satisfying any post-closing indemnification claims of the former SAGUNA security holders under the Purchase Agreement. In addition, at the closing of the Acquisition, we issued to certain employees of SAGUNA five-year warrants to purchase an aggregate of 1,540,000 shares of our common stock at a purchase price of $2.09 per share, that vest after six consecutive months of employment at Saguna, and we paid approximately $130,000 of outstanding payables of SAGUNA.

SAGUNA, based in Yokneam, Israel, is the software developer behind the award-winning SAGUNA Edge Cloud, which transforms communication networks into powerful cloud-computing infrastructures for applications and services including augmented and virtual reality, IoT, edge analytics, high-definition video, connected cars, autonomous drones and more. SAGUNA allows these next-generation applications to run closer to the user in a wireless network, dramatically cutting down on latency, which is a fundamental and critical requirement of 5G. SAGUNA’s Edge Cloud operates on general purpose computing hardware but can be optimized to support the latest artificial intelligence (AI) and machine learning features through dedicated accelerators.

The information provided under this Item 2.01 is a summary of certain portions of the Purchase Agreement and does not purport to be a complete description of, and is subject to and qualified in its entirety by, (i) the information provided under Item 1.01 of our Current Report on Form 8-K filed on August 20, 2021 and (ii) the text of the Purchase Agreement, a copy of which was attached as Exhibit 10.1 to our Current Report on Form 8-K filed on August 20, 2021 and is incorporated by reference herein as Exhibit 10.1 hereto.