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DENVER and TORONTO, Dec. 18, 2019 (GLOBE NEWSWIRE) — PRESS RELEASE — Akerna Corp., a cannabis compliance technology provider and developer of the industry’s first seed-to-sale enterprise resource planning (ERP) software technology (MJ Platform), has entered into a definitive agreement to acquire all of the issued and outstanding shares of Canadian-based Ample Organics Inc. in a cash and stock transaction valued at up to $45 million (C$60 million).

Ample Organics serves over 70 percent of the Canadian market with its seed-to-sale platform and was recognized as the 19th fastest growing company in Canada by The Globe and Mail in 2019.  Just last month, Ample Organics was selected to deliver the world’s first national cannabis tracking platform in St. Vincent and The Grenadines in 2020.  The contract win, which was a competitive RFP process, is a testament to Ample Organics’ competitive position in Canada, the largest national market today. It is anticipated that the award will drive accelerated growth as international markets continue to pass legislation to legalize cannabis.

“The cannabis economy runs on Akerna. Our acquisition of Ample Organics solidifies our position as the global technology provider serving the industry,” said Jessica Billingsley, chief executive officer of Akerna. “This combination will provide Akerna with a significant advantage as we accelerate on our vision to create the pre-eminent global technology platform, addressing the entire supply chain and its regulatory bodies through accountability and transparency.”

With this acquisition, Akerna is further executing on its business strategy of complementing strong organic growth with select acquisitions of highly targeted and synergistic technology companies.

“As a company, we’ve grown by working closely with world-class technology companies, regulators, start-ups, consultants, and banking institutions to create a seamless business experience for the global cannabis industry,” said John X. Prentice, founder, and chief executive officer of Ample Organics. “We believe this transaction will result in tremendous synergies and opportunities for both Ample Organics and Akerna. We look forward to the many accomplishments and successes that we expect to share in the future.”

Terms of the Transaction

Akerna is acquiring Ample Organics for up to $45 million (C$60 million), comprised of $5.7 million (C$7.5 million) cash and $32.3 million (C$42.5 million) in Akerna stock payable on closing. Additional consideration of $7.6M (C$10 million) in the form of a stock-based deferred consideration may be paid to Ample Organics shareholders if certain revenue targets are achieved by Ample Organics in the calendar year 2020.

Projected calendar-year 2020 revenue for Ample Organics is $8.7 million (C$11.5 million), reaching projected cash-flow positive in the second quarter. The acquisition multiple on 2020 revenue is 5.2x, assuming the deferred consideration is achieved in full.

The transaction is expected to close by the end of Q1 2020, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company. Cowen has provided a fairness opinion dated Dec. 17, 2019, to the Board of Directors of Akerna stating that as of the date of such opinion and based upon and subject to the assumptions, limitations, and qualifications stated in such opinion, the transaction is fair, from a financial point of view, to Akerna and its shareholders. Each of the officers and directors of Akerna has entered into voting support agreements in favor of the transaction.

Cowen is acting as exclusive financial advisor to Akerna, and INFOR Financial Inc. is acting as exclusive financial advisor to Ample Organics.

All numbers are based on currency exchange rates as of Dec. 17, 2019.

Call for Investors:

The company will host a conference call on Tuesday, Jan. 7, 2019, at 4:30 p.m. ET / 1:30 p.m. PT. To participate in the conference call, please dial 1-877-407-3982 (domestic) or 1-201-493-6780 (international). The passcode is 13697598. Please dial into the call at least five minutes before the scheduled start time.

The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of Akerna’s website, www.akerna.com. For interested individuals unable to join the live conference call, a replay of the call will be available through Tuesday, Jan. 21, 2020, at (844) 512-2921 (domestic) or (412) 317-6671 (international). The passcode for the call and replay is 13697598.