|9 Months Ended|
Sep. 30, 2021
|Subsequent Events [Abstract]|
Note 11 - Subsequent Events
365 Cannabis Acquisition
On October 1, 2021, Akerna acquired The Nav People, Inc. d.b.a. 365 Cannabis ("365 Cannabis"), a cannabis ERP and business management software system built on Microsoft Dynamics 365 Business Central, in a $17.0 million deal comprised of $5.0 million in cash and $12.0 million in stock.
Because the acquisition occurred after September 30, 2021, no results of operations of 365 Cannabis are included in our condensed consolidated statements of operations for the three and nine months ended September 30, 2021. It is currently impractical to disclose a preliminary purchase price allocation or pro forma financial information combining both companies as of the earliest period presented in these financial statements, as 365 Cannabis is currently in the process of closing their books and records.
Senior Convertible Note Financing
On October 5, 2021, Akerna entered into a securities purchase agreement with the two institutional investors that held the Company's convertible notes issued in June of 2020 (the "2020 Notes") to sell senior secured notes in a private placement (the "Senior Convertible Notes"). The Senior Convertible Notes have an aggregate principal amount of $20,000,000, an aggregate original issue discount of 10%, and rank senior to all our other outstanding and future indebtedness. Approximately $3.3 million of the proceeds from the Senior Convertible Notes were used to payoff the 2020 Notes, which were then to be cancelled. The net proceeds from the issuance of the Senior Convertible Notes was approximately $14.6 million, following the original issue discount and deductions for expenses and paydown of the 2020 Notes. These net proceeds will be used to support Akerna's ongoing growth initiatives and continued investment in current and future technology infrastructure. The Senior Convertible Notes are convertible into shares of common stock of Akerna at a conversion price of $4.05 per share. The Senior Convertible Notes mature on October 5, 2024 and are to be repaid in monthly installments beginning on January 1, 2022. The Senior Convertible Notes can be repaid in common shares or cash.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef