Gryphon Digital Mining, Inc. entered into an agreement to acquire Akerna Corp. (NasdaqCM:KERN) in a reverse merger transaction on January 27, 2023. Under the terms of the agreement, Gryphon will become a wholly-owned subsidiary of Akerna in an all-stock transaction. Each share of Gryphon will receive a merger consideration, equal to (a) the quotient obtained by dividing (i) the number of shares of Akerna capital stock on a fully diluted basis (the “Akerna Fully Diluted Share Number”) by (ii) 0.075, minus (b) the Akerna Fully Diluted Share Number minus (c) the number of shares of common stock of Akerna the warrants of Gryphon will become exercisable for upon closing of the Merger); (ii) each outstanding warrant of Gryphon will be assumed by Akerna and become a warrant to purchase an adjusted number of shares of common stock of Akerna, at an adjusted exercise price per share but subject to the same terms and conditions as the warrant of Gryphon. Upon completion of the merger, on a pro-forma basis and based upon the number of Akerna shares to be issued in the proposed merger, current Gryphon equityholders are expected to own approximately 92.5% of the combined company and current Akerna equityholders are expected to own approximately 7.5% of the combined company. In a related transaction, Akerna has entered into an an agreement to sell its software business to POSaBIT Systems Corporation. As of April 5, 2023, Akerna has terminated the agreement to sell its software business to POSaBIT, and has received a superior unsolicited acquisition proposal for the software business from an undisclosed company which is under negotiation process.

The combined company is expected to continue to be publicly traded on Nasdaq. In the event of termination of the transaction, Akerna will be required to pay Gryphon a termination fee of $275,000. Post closing of the transaction, Akerna Corp. will be renamed Gryphon Digital Mining, Inc., and will be headquartered in Las Vegas, Nevada. Rob Chang will serve as Chief Executive Officer of the combined company. The merger agreement provides that the Board of Directors of the combined company will comprise of seven members of which a minimum of five will be filled upon completion of the merger, one designated by Akerna, being Jessica Billingsley, its current Chief Executive Officer, and the remaining six positions to be designated by Gryphon.

The transaction is subject to closing of the sale of software business transaction, approval of the stockholders of Akerna and Gryphon, approval of NASDAQ of the continued listing of Gryphon after the closing of the Merger, Form S-4 shall have been declared effective, Reverse Split shall have been consummated, Akerna having $500,000 in cash on hand and other customary closing conditions. The transaction has been unanimously approved by the Board of Directors of both Akerna and Gryphon. The merger is expected to provide Akerna shareholders with access to the bitcoin mining industry with one of its premier operators. Jason Brenkert of Dorsey & Whitney LLP acted as legal advisor to Akerna. Michael A. Hedge and Jason C. Dreibelbis of K&L Gates LLP acted as legal advisors to Gryphon. Steven B. Stokdyk of Latham & Watkins LLP represented JMP Securities LLC in its role as financial advisor to Akerna.