Bitcoin (BTC) mining firm Gryphon Digital Mining has announced that it is going public in an all-stock deal to acquire Akerna Corp. (KERN), the first cannabis compliance company on Nasdaq.
According to a release, the privately-owned company said it is purchasing the enterprise software company which will in turn sell its software business to POSaBIT systems corporation, a payment infrastructure in the cannabis industry. Upon the completion of the deal, the new company will be renamed Gryphon and headquartered in Las Vegas, Nevada.
Also, Rob Chang, the CEO of Gryphon will assume the role of the CEO for the new publicly listed company while Jessica Billingsley, the CEO of Akerna will join six other board members that will be designated by Gryphon as the board members of the company.
However, the miner’s equity holders will own about 92.5% of the new publicly traded entity while Akerna’s shareholders will own 7.5%. Additionally, the Denver-based Akerna intends to sell off its MJ platform and Leaf Data Systems to POSaBIT for $4 million. The company intends to use the proceeds from the sale to pay its remaining outstanding accounts as well as any leftover principal balance.
Gryphon’s deal with Akerna follows an earlier attempt by the miner to go public via a reverse merger with Sphere 3D, a publicly traded data management firm in 2021. The agreement was later terminated after a complicated regulatory approval process necessitated several extensions for the closing of the deal.
Bitcoin Mining Firms Face Challenges
While Gryphon is about to go public, several other players in the mining subsector have not enjoyed a similar fate due to fluctuating Bitcoin market prices and high energy costs that have affected profitability in the industry.
Core Scientific sought bankruptcy protection after factors including exposure to bankrupt Celsius caused a financial outlook for the firm and affected its profitability. Amidst the bankruptcy, the company planned not to liquidate but continue its mining operations.
As of the end of the year 2022, the top 10 mining companies in the industry collectively owed $2.6 billion. In the same year, the top 10 players sold almost all of their BTC mined in that period to offset part of their loan obligations and fund operations.
