ZOM Zomedica Corp

Item 1.01. Entry into a Material Definitive Agreement.

On June 14, 2022, Zomedica Corp. (the “Company”) and its wholly-owned subsidiary Zomedica Inc. entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Revo Squared LLC (the “Revo Squared”) and its majority member (Revo Squared and it majority member are referred to herein as the “Selling Parties”) pursuant to which Zomedica Inc. agreed to acquire substantially all of the assets of Revo Squared (the “Acquisition”). Revo Squared, based in Marietta, Georgia, is in the business of developing, manufacturing, marketing, distributing and selling diagnostic imaging products and services for use in animal health, including its SuperView, Sonoview Color, Sonoview Mini/Mini Plus and Microview product offerings (the “Revo Squared Products”).

The base purchase price for the Acquisition will be $6.0  million in cash, which will be subject to adjustments based on the amount of Revo’s Squared’s working capital at the closing of the Acquisition. $500,000 of the base purchase price will be deposited into a third-party escrow account for a period of 15 months to support Revo Squared’s indemnification obligation under the Purchase Agreement. The Company has also agreed to issue ten-year warrants (the “Warrants”) at the closing of the Acquisition to purchase an aggregate of 10,000,000 of the Company’s common shares to Revo Squared at a per share exercise price equal to the closing price of the Company’s common shares either on the trading day immediately prior to the date of closing of the Acquisition (if the closing occurs prior to the close of trading on the date of closing) or on the date of the closing of the Acquisition (if the closing occurs after the close of trading).  Zomedica Inc. has also agreed to pay Revo Squared aggregate earn-out payments of up to $4.0 million based on the achievement of milestones related to future net sales from Revo Squared Products. One-time earn-out payments of $2.0 million each will be payable upon net sales from Revo Squared Products exceeding $5.0 million and $10.0 million during any calendar year ending on or prior to December 31, 2027.

The Purchase Agreement contains customary representations, warranties and covenants of the parties. The Purchase Agreement also contained indemnification provisions pursuant to which the Selling Parties have agreed to indemnify Zomedica Inc. and its affiliate against certain losses, subject to the limitations set forth therein, including losses related to breaches of representations, warranties and covenants.

The closing of the Acquisition is subject to closing conditions set forth in the Purchase Agreement. Consummation of the Acquisition is expected to occur on or around July 1, 2022, subject to the satisfaction or waiver of closing conditions.

The Purchase Agreement is attached to this report as Exhibit 2.1 and incorporated herein by reference. The foregoing description of the Purchase Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety by the contents of the actual Purchase Agreement.

The Purchase Agreement is included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Revo Squared or the Company or any of their respective businesses, subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement were made by the parties thereto only for purposes of the Purchase Agreement and as of specific dates, and were made solely for the benefit of the parties to the Purchase Agreement. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Revo Squared or the Company or any of their respective subsidiaries or affiliates.