Key Highlights

● SoundThinking agreed to be acquired by a Transom Capital affiliate for $8.00 cash per share plus a contingent value right.

● Each CVR pays up to $3.00, based on ShotSpotter and SafePointe revenue in the fiscal year beginning January 1, 2027.

● Parent's obligations have no financing condition, and Transom Capital Fund IV delivered an equity commitment letter for up to $120,630,251.00.

● The board unanimously recommended that stockholders tender, and the company must pay Parent a $4,500,000 termination fee in specified circumstances.

SoundThinking, Inc. (NASDAQ:SSTI) has agreed to be acquired by an affiliate of Transom Capital Group, LLC in a transaction that offers stockholders $8.00 in cash per share plus a non-transferable contingent value right, or CVR, worth up to $3.00. The company disclosed the merger agreement, dated September 28, 2026, in an 8-K filed on September 29. Closing is expected in the fourth quarter of 2026, subject to closing conditions.

The Offer and the CVR

The buyers are Transom Signal AcquireCo, LLC, called Parent, and its wholly owned subsidiary Transom Signal MergerSub, Inc., both affiliates of Transom Capital Group, LLC. Merger Sub must begin a tender offer no later than 15 business days after the agreement date, and the offer must remain open for 20 business days, subject to extension. Each share tendered receives $8.00 in cash without interest and one CVR.

Each CVR is a right to one payment of up to $3.00, based on revenue from the ShotSpotter and SafePointe products in the fiscal year beginning January 1, 2027 and, for certain limited revenues, 120 days afterward. If revenue reaches $73,500,000, holders receive $0.50 per CVR. Holders then receive an additional $0.05 for each $500,000 above that level up to $75,500,000, and an additional $0.05 for each $250,000 above $75,500,000 up to $87,000,000, with payments capped at $3.00. The filing states that "There can be no assurance that the Minimum Milestone or any Additional Milestone will be achieved, or that any payment will ever be made in respect of the CVRs."

Conditions, Financing and Protections

The offer requires that enough shares be tendered, together with any shares Parent already owns, to represent at least one share more than 50 percent of the outstanding shares. The company must consent to any waiver of that condition. The obligations of Parent and Merger Sub are not subject to a financing condition. Transom Capital Fund IV, L.P. delivered an equity commitment letter for up to $120,630,251.00 and a limited guarantee of certain obligations capped at $14,250,000. After the offer, the parties plan a merger under Section 251(h) of the Delaware General Corporation Law without a stockholder vote.

The board unanimously determined that the agreement is advisable, fair to and in the best interests of stockholders, and recommended that they tender. The company must pay Parent a $4,500,000 termination fee in specified circumstances, including if it terminates to accept a superior proposal. Either side may terminate if the offer is not completed by March 28, 2027, subject to extension.

The filing also describes tender and support agreements. Veradace Partners, which beneficially owns approximately 15.8 percent of the shares, agreed to tender and to vote against competing proposals. Gary M. Lauder and affiliated stockholders, who beneficially own approximately 17.0 percent, made similar commitments and agreed to reinvest in Transom Signal TopCo, LP after the merger.

Equity Awards and Executive Arrangements

Vested options with exercise prices below $8.00 convert into cash for the spread plus one CVR per share. Options priced from $8.00 to $10.99 receive only the cash value of a CVR payment, and those at $11.00 or more are cancelled for no consideration. Restricted stock units and performance stock units become cash awards of $8.00 per share plus a CVR, on their existing vesting schedules.

Under Item 5.02, the company approved transaction bonuses of $525,000 for Ralph A. Clark, President and Chief Executive Officer, and $200,000 for Alan R. Stewart, Chief Financial Officer, contingent on the merger closing and continued service. Severance amendments give both a lump sum equal to twelve months of base salary, twelve months of health insurance premiums and a pro-rated target bonus if terminated without cause or for good reason.

SoundThinking's CVR Milestones and Tender Timeline

The tender offer must start within 15 business days of September 28, 2026 and then stays open for 20 business days. The outside date is March 28, 2027, and the CVR revenue milestones run through 2027, so any CVR payment would come after the closing.