MJ Freeway Acquisition Co entered into a definitive agreement to acquire Software Business of Akerna Corp. (NasdaqCM:KERN) for $5 million on April 28, 2023. The purchase price consists of $4 million cash at closing and $1 million of the purchase price will be made available to Akerna upon signing of the securities purchase agreement in the form of a one-year loan that will be forgiven at closing of the proposed sale transaction. The purchase price is subject to adjustment at closing of the transaction attributable to variances from target working capital and further adjustment post-closing upon delivery of a post-closing statement by MJ Freeway Acquisition Co within 75 days after the closing subject to a $0.5 million cap on any post-closing working capital adjustments. Alleaves, Inc. will be participating in the financing of the acquisition by MJ Acquisition Co. In the event that MJ Freeway Acquisition or Akerna terminates the purchase agreement, Averna will be required to pay MJ Freeway Acquisition a termination fee of $0.29 million and reimburse MJ Freeway Acquisition for its reasonable fees and expenses up to $60,000. The transaction has an outside date of December 31, 2023. As of October 4, 2023, the amount of cash to be paid at closing was reduced from $4 million to $2 million. On November 15, 2023, MJ loaned an additional $150,000 to Akerna increasing the amount payable under the note from $1,500,000 to $1,650,000, and in relation thereto, Akerna and MJ entered into a second amendment to the Purchase Agreement to reduce the additional cash to be paid at closing from $2 million to $1.85 million.

The transaction is subject to customary closing conditions as well as the required approval of the stockholders of Akerna and the simultaneous closing of the Akerna merger transaction. Akerna plans to use the proceeds of the transaction, after expenses, to pay its remaining outstanding accounts payable and pay down any remaining principal balance on its outstanding senior secured convertible notes, net of $500,000 retained for outstanding obligations and net cash requirements associated with the proposed merger between Akerna and Gryphon. Bryant Park Capital is acting as financial advisor to Alleaves. Jason Brenkert and C. Christopher Bercaw of Dorsey & Whitney LLP acted as legal advisor to Dorsey & Whitney LLP. William Kushner of PremierCounsel, LLP acted as legal advisor to MJ Freeway Acquisition Co.