As filed with the Securities and Exchange Commission on January 8, 2024

Registration No. 333-271857

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

__________________________________________

Pre-Effective Amendment No. 6
Form S-4/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

__________________________________________

AKERNA CORP.
(Exact name of registrant as specified in its charter)

__________________________________________

Delaware

 

7374

 

83-2242651

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

1550 Larimer Street #246
Denver, Colorado 80202
1-888-932-6537
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________________________________

Corporation Service Company
251 Little Falls Drive
Wilmington, Delaware 19808
1-888-492-3540
(Name, address, including zip code, and telephone number, including area code, of agent for service)

__________________________________________

Copies to:

Jason K. Brenkert, Esq.
Dorsey & Whitney LLP
1400 Wewatta Street, Suite 400
Denver, Colorado 80202
Telephone: (303) 352
-1133

 

Barry Grossman, Esq.
Meredith Laitner, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Telephone: (212) 370
-1300

 

Steven Gasser, Esq.
Premier Counsel LLP
201 Spear Street, Suite 1100
San Francisco, California 94015
Telephone: (415) 409
-1790

__________________________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement and the satisfaction or waiver of all other conditions under the Merger Agreement described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

       

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) 

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) 

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

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The information in this proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated January 8, 2024

 

PROPOSED MERGER
YOUR VOTE IS VERY IMPORTANT

__________________________________________

To the Stockholders of Akerna Corp.:

On January 27, 2023, Akerna Corp., a Delaware corporation (“Akerna”), Akerna Merger Co., a Delaware corporation and wholly owned direct subsidiary of Akerna (“Merger Sub”), and Gryphon Digital Mining, Inc., a Delaware corporation (“Gryphon”), entered into an Agreement and Plan of Merger, as may be amended from time to time (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Gryphon, with Gryphon surviving as a wholly owned subsidiary of Akerna (the “Merger”). Akerna following the Merger is referred to herein as the “combined company.”

At the effective time of the Merger (the “Effective Time”), each share of Gryphon’s common stock, par value $0.0001 per share (the “Gryphon Common Stock”), and Gryphon’s preferred stock, par value $0.0001 per share (the “Gryphon Preferred Stock,” collectively referred to herein with the Gryphon Common Stock as the “Gryphon Shares”), outstanding immediately prior to the Effective Time will be converted into the right to receive a per share portion of the aggregate number of shares of Akerna’s common stock, par value $0.0001 per share (the “Akerna Common Stock”), to be issued at the Effective Time as consideration for the Merger, as calculated pursuant to the terms set forth in the Merger Agreement (the “Merger Consideration”) (subject to adjustment to account for the proposed Akerna reverse stock split), as described in more detail in the section titled “The Merger Agreement — Merger Consideration” beginning on page 116 of the accompanying proxy statement/prospectus.

The estimated exchange ratio of shares of Akerna’s common stock for Gryphon Common Stock and Gryphon Preferred Stock will be approximately 1.6834 shares of Akerna common stock for each one share of Gryphon Common Stock and Preferred Stock based on Merger Consideration of 34,318,117 shares of Akerna Common Stock. The estimated exchange ratio assumes: (i) a fully-diluted number of shares of Akerna common stock after giving effect to an assumed 20 to 1 reverse stock split in Akerna common stock of 2,869,142 shares at the effective time of the Merger, which includes (pre-reverse stock split) 10,352,069 shares outstanding on the date hereof, warrants exercisable to acquire 2,573,299 shares of Akerna common stock, restricted stock units which vest and settle for 9,347 shares of Akerna common stock, 12,476 shares issuable upon redemption of Akerna exchangeable shares, Akerna Series C Preferred Stock exchanged at an assumed price of $0.20 per share into 17,110,000 shares of Akerna common stock, approximately 19,075,660 shares of Akerna common stock issuable upon conversion of $3.15 million principal amount of Akerna’s convertible notes and 8,250,000 shares of Akerna common stock issuable upon conversion of $1.65 million principal amount of Akerna’s promissory note held by MJ Acquisition Corp. (“MJ Acquisition”) at an assumed conversion price of $0.20 per share. The assumed number of shares issuable upon exchange of Akerna’s convertible notes is based on an assumed principal amount outstanding of approximately $3.15 million ($6.58 million currently outstanding less $3.42 million exchanged into Series C Preferred Stock at an exchange price of $0.50 per share) and a conversion price of $0.50 per share (exchanged at 121% of principal amount). The assumed number of shares issuable upon exchange of Series C Preferred Stock is based on an assumed exchange price of $0.20 per share. The estimated exchange ratio also assumes 20,386,730 shares of Gryphon Common Stock and Preferred Stock issued and outstanding at the closing of the Merger, Gryphon warrants to acquire 1,067,968 Gryphon Common Stock and a post-reverse stock split closing price per share of Akerna Common Stock of $4.00 on the date that is two trading days preceding the closing of the Merger, the trading day immediately preceding closing of the Merger and the 5-day volume weighted average price for the 5-day period ending on the trading day immediately prior to the closing of the Sale Transaction.

 

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Each share of Akerna Common Stock reserved for issuance upon the exercise of each warrant to purchase Akerna Common Stock, that is issued and outstanding at the Effective Time will remain issued and outstanding, and such securities will be unaffected by the Merger.

Immediately after the consummation of the Merger, Akerna equityholders as of immediately prior to the Merger are expected to own approximately 7.5% of the outstanding equity interests of the combined company on a fully diluted basis and former Gryphon equityholders are expected to own approximately 92.5% of the outstanding equity interests of the combined company on a fully diluted basis. Actual ownership percentages will depend on the actual calculation of the Merger Consideration at closing, which will depend on a number of variables, including the last sales price of Akerna Common Stock on the second trading day immediately prior to closing of the Merger and the amount of the principal remaining outstanding on Akerna’s convertible notes following any conversions or company redemptions that occur prior to closing and the number of shares of Akerna Common Stock that may be issued to settle accounts payable of Akerna prior to closing. Following the Merger, Gryphon’s business will be the business of the combined company.

Akerna has also entered into a Securities Purchase Agreement, as may be amended from time to time (the “Purchase Agreement”), with Akerna Canada Ample Exchange Inc. (“Akerna Exchange”), a wholly owned subsidiary of Akerna, and MJ Acquisition Corp. (“MJ Acquisition”), on April 28, 2023 as amended on September 28, 2023 and November 15, 2023, pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Purchase Agreement, Akerna will sell to MJ Acquisition all of the issued and outstanding membership interests of MJ Freeway, LLC, a Colorado limited liability company (“MJ Freeway” and such membership interests, the “Membership Interests”), and Akerna Exchange will sell to MJ Acquisition all of the issued and outstanding common and preferred shares of Ample Organics, Inc., an Ontario corporation (“Ample” and such common and preferred shares, the “Capital Stock”), for an aggregate purchase price of $1,850,000, subject to adjustments as set forth in the Purchase Agreement, and a loan to Akerna from MJ Acquisition in the amount of $1,650,000 (funded $1,000,000 on April 28, 2023, $500,000 on October 11, 2023 and $150,000 on November 15, 2023), which principal amount will convert into shares of common stock of Akerna at closing (the “Sale Transaction”). Subsequently, on December 28, 2023, pursuant to the terms of the Purchase Agreement, Akerna and Akerna Exchange entered into a share purchase agreement with Wilcompute Systems Group Inc. (“Wilcompute”) pursuant to which Akerna Exchange sold all of the Capital Stock of Ample to Wilcompute for approximately $638,000. In accordance with the Purchase Agreement, in lieu of delivering the Capital Stock of Ample at the closing of the Sale Transaction, Akerna will instead deliver to MJ Acquisition the $638,000 purchase price received from Wilcompute, which Akerna expects to be in the form of a reduction of the purchase price paid by MJ Acquisition from $1.85 million to approximately $1.22 million.

Shares of Akerna Common Stock are currently listed on The Nasdaq Capital Market under the symbol “KERN.” Akerna will file an initial listing application for the combined company with The Nasdaq Stock Market Inc., or Nasdaq. After completion of the Merger, Akerna will be renamed “Gryphon Digital Mining, Inc.” and it is expected that the common stock of the combined company will trade on The Nasdaq Capital Market under the symbol “GRYP.”

On January 4, 2024, the last trading day before the date of the accompanying proxy statement/prospectus, the closing sale price of Akerna Common Stock was $0.3940 per share.

Akerna is holding its special meeting of stockholders in order to obtain the stockholder approvals necessary to complete the Merger, the Sale Transaction and related matters. The Akerna special meeting will be held on January 29, 2024, at 9:00 a.m. Mountain Time at 201 Milwaukee Street, Suite 200, Denver, CO 80206, unless postponed or adjourned to a later date. At the Akerna special meeting, Akerna will ask its stockholders to:

1.      approve the issuance of shares of Akerna Common Stock to Gryphon stockholders, pursuant to the terms of the Merger Agreement, and the change of control resulting from the Merger;

2.      approve the sale of the Membership Interests of MJ Freeway and the Capital Stock of Ample to MJ Acquisition, pursuant to the terms of the Purchase Agreement and the transactions contemplated thereby;

3.      approve an amendment to the amended and restated certificate of incorporation of Akerna to effect a reverse stock split of the issued and outstanding Akerna Common Stock within a range, as determined by the board of directors of Akerna and agreed to by Gryphon, of one new share of Akerna Common Stock for every fifteen (15) to one hundred (100) shares (or any number in between) of outstanding shares of Akerna Common Stock;

 

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4.      approve an amendment to the amended and restated certificate of incorporation of Akerna to increase the number of authorized shares of Akerna Common Stock from 150,000,000 to 300,000,000;

5.      approve an amendment to the amended and restated certificate of incorporation of Akerna to change the corporate name from Akerna Corp. to “Gryphon Digital Mining, Inc.”;

6.      approve the Akerna Corp. 2024 Omnibus Incentive Plan;

7.      approve the issuance of shares of Akerna Common Stock to MJ Acquisition Corp. upon the conversion of $1,650,000 in principal amount of a secured convertible promissory note held by MJ Acquisition Corp. in accordance with the terms of such secured convertible promissory note;

8.      authorize the adjournment of the Akerna special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 — 7; and

9.      transact such other business as may properly come before the stockholders at the Akerna special meeting or any adjournment or postponement thereof.

As described in the accompanying proxy statement/prospectus, certain Akerna stockholders who in the aggregate own approximately 41% of the outstanding voting securities of Akerna as of December 21, 2023, and certain Gryphon stockholders who in the aggregate own approximately 72% of the Gryphon Shares as of December 21, 2023, are parties to support agreements or support letters with Gryphon and/or Akerna, as the case may be (the “Support Agreements”). Pursuant to the Support Agreements, such Akerna securityholders have agreed to vote in favor of the foregoing proposals and certain other matters at any meeting of Akerna’s stockholders (or any adjournment or postponement thereof), and such Gryphon stockholders have agreed to vote in favor of, and to adopt and approve, the Merger, the Merger Agreement and the related transactions at any meeting of Gryphon’s stockholders (or any adjournment or postponement thereof), or by written consent, in each case subject to the terms of the Support Agreements. The Support Agreements will terminate upon certain events, including any termination of the Merger Agreement in accordance with its terms.

Following the effectiveness of the Registration Statement on Form S-4 of which the accompanying proxy statement/prospectus is a part and pursuant to the Merger Agreement, Gryphon shall seek approval by written consent of the Merger Agreement and the Merger from its stockholders.

After careful consideration, the Akerna and Gryphon boards of directors have approved the Merger Agreement and the Merger and the respective proposals referred to above, and each of the Akerna and Gryphon boards of directors has determined that it is advisable to enter into the Merger Agreement and related transactions. The Akerna board of directors has also approved the Purchase Agreement and the Sale Transaction and has determined that it is advisable to enter into the Purchase Agreement and related transactions. The Akerna board of directors recommends that its stockholders vote “FOR” the proposals described in the accompanying proxy statement/prospectus.

More information about Akerna, Gryphon, the Merger Agreement, the Purchase Agreement, the transactions contemplated thereby and the foregoing proposals is contained in the accompanying proxy statement/prospectus. Akerna urges you to read the accompanying proxy statement/prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 25 OF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS.

Akerna and Gryphon are excited about the opportunities the Merger brings to both Akerna’s and Gryphon’s securityholders and thank you for your consideration and continued support.

Sincerely,

Jessica Billingsley

 

Robby Chang

Chief Executive Officer

 

Chief Executive Officer and President

Akerna Corp.

 

Gryphon Digital Mining, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the accompanying proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated January 5, 2024 and is first being mailed to Akerna stockholders on or about January 9, 2024.

 

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AKERNA CORP.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JANUARY 29, 2024

Dear Stockholders of Akerna:

On behalf of the board of directors of Akerna Corp., a Delaware corporation (“Akerna”), we are pleased to deliver this proxy statement/prospectus for (i) the proposed merger between Akerna and Gryphon Digital Mining, Inc., a Delaware corporation (“Gryphon”), pursuant to which Akerna Merger Co., a wholly owned subsidiary of Akerna (“Merger Sub”) will merge with and into Gryphon, with Gryphon surviving as a wholly owned subsidiary of Akerna (the “Merger”) and (ii) the proposed sales by (A) Akerna of all of the issued and outstanding membership interests of MJ Freeway LLC, a Colorado limited liability company, and (B) Akerna Canada Ample Exchange Inc. (“Akerna Exchange”) of all of the issued and outstanding common and preferred shares of Ample Organics Inc., an Ontario corporation, to MJ Acquisition Corp, a Delaware corporation (“MJ Acquisition” and such transactions, the “Sale Transaction”).

The special meeting of stockholders of Akerna will be held on January 29, 2024 at 9:00 a.m. local time, at 201 Milwaukee Street, Suite 200, Denver, CO 80206 for the following purposes:

1.      To approve the issuance of Akerna common stock in the Merger in accordance with the terms of the Agreement and Plan of Merger, dated as of January 27, 2023, as amended, by and among Akerna, Merger Sub and Gryphon, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus (as may be amended from time to time, the “Merger Agreement”) and the change of control of Akerna resulting from the Merger (the “Merger Proposal”).

2.      To approve the Securities Purchase Agreement, dated as of April 28, 2023, as amended, by and by and among Akerna, Akerna Exchange and MJ Acquisition, a copy of which is attached as Annex B to the accompanying proxy statement/prospectus (the “Purchase Agreement”), the Sale Transaction and the other transactions contemplated thereby (the “Sale Transaction Proposal”).

3.      To approve the amendment to the amended and restated certificate of incorporation of Akerna to effect a reverse stock split of Akerna common stock, at a ratio of one (1) new share for every fifteen (15) to one hundred (100) shares of outstanding Akerna common stock, with the exact ratio and effective time of the reverse stock split of Akerna common stock to be determined by the Akerna board of directors, agreed to by Gryphon and publicly announced by press release (the “Akerna Reverse Stock Split”), in the form attached as Annex C to the accompanying proxy statement/prospectus.

4.      To approve an amendment to the amended and restated certificate of incorporation of Akerna to increase the number of authorized shares of common stock of Akerna from 150,000,000 to 300,000,000 (the “Akerna Authorized Share Increase”), in the form attached as Annex D to the accompanying proxy statement/prospectus.

5.      To approve an amendment to the amended and restated certificate of incorporation of Akerna to change the corporate name from Akerna Corp. to “Gryphon Digital Mining, Inc.” (the “Akerna Name Change”), in the form attached as Annex E to the accompanying proxy statement/prospectus.

 

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6.      To approve the Akerna 2024 Omnibus Incentive Plan (the “2024 Plan”), in the form attached as Annex F to the accompanying proxy statement/prospectus.

7.      To approve the issuance of Akerna common stock upon the conversion of $1,650,000 in principal amount of a secured convertible promissory note held by MJ Acquisition Corp. in accordance with the terms of such secured convertible promissory note a copy of which is attached as Annex G to the accompanying proxy statement/prospectus (the “MJ Acquisition Promissory Note Conversion”).

8.      To consider and vote upon an adjournment of the Akerna special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 — 7 (the “Adjournment Proposal”).

9.      To transact such other business as may properly come before the Akerna special meeting or any adjournment or postponement thereof

The Akerna Board has fixed, December 21, 2023 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Akerna special meeting and any adjournment or postponement thereof. Only holders of record of shares of common stock of Akerna or shares of preferred stock of Akerna at the close of business on the record date are entitled to notice of, and to vote at, the Akerna special meeting. At the close of business on the record date, Akerna had shares of common stock outstanding and entitled to vote and shares of preferred stock outstanding and entitled to vote on a common stock equivalent basis with the shares of common stock at the special meeting.

Your vote is important. The affirmative vote of a majority of the votes properly cast at the Akerna special meeting, whether present at the special meeting or represented by proxy at the special meeting, is required for approval of Proposal Nos. 1, 6, 7 and 8. The affirmative vote of the holders of a majority of shares of Akerna common stock and preferred stock having voting power outstanding on the record date for the Akerna special meeting is required for approval of Proposal Nos. 2, 3, 4 and 5. The affirmative vote of the holders of a majority of shares of Akerna common stock having voting power outstanding on the record date for the Akerna special meeting and voting as a separate class is required for the approval of Proposal No. 4. Proposal No. 1 is conditioned upon the approval of Proposal Nos. 2, 3, 4, 5 and 6. Proposal No. 2 is conditioned upon the approval of Proposal No. 1 and 7. Therefore, the Merger cannot be consummated without the approval of the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase, the Akerna Name Change and the 2024 Plan, and the Sale Transaction cannot be consummated without the approval of the Merger Proposal and the MJ Acquisition Promissory Note Conversion.

Even if you plan to virtually attend the Akerna special meeting, Akerna requests that you sign and return the enclosed proxy or vote by mail or online to ensure that your shares will be represented at the Akerna special meeting if you are unable to attend. You may change or revoke your proxy at any time before it is voted at the Akerna special meeting.

By Order of Akerna Board,

Jessica Billingsley

Chief Executive Officer

Denver, Colorado

January 5, 2024

THE AKERNA BOARD HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS IN THE BEST INTERESTS OF, AND ADVISABLE TO, AKERNA AND ITS STOCKHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. THE AKERNA BOARD UNANIMOUSLY RECOMMENDS THAT AKERNA STOCKHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.

 

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REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important additional business and financial information about Akerna Corp. that is not included in or delivered with the document but can be found in documents previously filed by Akerna with the Securities and Exchange Commission (the “SEC”). You may obtain this information without charge through the SEC’s website (http://www.sec.gov) or upon your written or oral request by contacting the Secretary of Akerna Corp., 1550 Larimer Street #246, Denver, Colorado 80202, Attention: Secretary or by calling (888) 492-3540.

To ensure timely delivery of these documents, any request should be made no later than January 17, 2024 to receive them before the Akerna special meeting.

For additional details about where you can find information about Akerna, please see the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

 

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TABLE OF CONTENTS

 

Page

GLOSSARY OF TERMS

 

iii

QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

 

vi

PROSPECTUS SUMMARY

 

1

RISK FACTORS

 

25

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

 

79

THE SPECIAL MEETING OF AKERNA STOCKHOLDERS

 

81

THE TRANSACTIONS

 

85

THE MERGER AGREEMENT

 

116

AGREEMENTS RELATED TO THE MERGER

 

131

THE PURCHASE AGREEMENT

 

134

MJ ACQUISITION PROMISSORY NOTE

 

144

AKERNA DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE

 

145

AKERNA EXECUTIVE COMPENSATION

 

146

GRYPHON’S EXECUTIVE AND DIRECTOR COMPENSATION

 

153

PROPOSAL NO. 1: MERGER APPROVAL OF THE ISSUANCE OF COMMON STOCK IN THE MERGER AND THE CHANGE OF CONTROL RESULTING FROM THE MERGER

 

158

PROPOSAL NO. 2: SALE TRANSACTION APPROVAL OF THE SALE TRANSACTION

 

159

PROPOSAL NO. 3: AKERNA REVERSE STOCK SPLIT APPROVAL OF THE AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AS AMENDED OF AKERNA TO EFFECT THE REVERSE STOCK SPLIT

 

160

PROPOSAL NO. 4: AKERNA AUTHORIZED SHARE INCREASE APPROVAL OF THE AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AS AMENDED OF AKERNA TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF AKERNA

 

166

PROPOSAL NO. 5: AKERNA NAME CHANGE APPROVAL OF THE AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AS AMENDED OF AKERNA TO CHANGE THE CORPORATE NAME FROM AKERNA CORP. TO “GRYPHON DIGITAL MINING, INC.”

 

168

PROPOSAL NO. 6: 2024 PLAN APPROVAL OF THE 2024 PLAN

 

169

PROPOSAL NO. 7: MJA PROMISSORY NOTE CONVERSION APPROVAL OF THE ISSUANCE OF COMMON STOCK UPON CONVERSION OF THE MJA PROMISSORY NOTE

 

177

PROPOSAL NO. 8: ADJOURNMENT APPROVAL OF POSSIBLE ADJOURNMENT OF THE SPECIAL MEETING

 

179

AKERNA’S BUSINESS

 

180

AKERNA MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

193

DESCRIPTION OF AKERNA CAPITAL STOCK

 

217

PRINCIPAL STOCKHOLDERS OF AKERNA

 

222

GRYPHON’S BUSINESS

 

224

GRYPHON MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

237

PRINCIPAL STOCKHOLDERS OF GRYPHON

 

258

MANAGEMENT FOLLOWING THE MERGER

 

260

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS OF THE COMBINED COMPANY

 

265

MARKET PRICE AND DIVIDEND INFORMATION

 

268

COMPARISON OF RIGHTS OF HOLDERS OF AKERNA CAPITAL STOCK AND GRYPHON SHARE CAPITAL

 

269

PRINCIPAL STOCKHOLDERS OF PROPOSED COMBINED COMPANY

 

276

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GLOSSARY OF TERMS

Unless otherwise stated in this proxy statement / prospectus or the context otherwise requires, the following terms shall have the meanings below:

AD&D” means accidental death and dismemberment.

AML” means anti-money laundering.

API Interface” means application programming interface, which is a way for two or more computer programs to communicate with each other.

ASC” means the Accounting Standards Codification.

ASIC” means application-specific integrated circuit, which is a device designed for the sole purpose of mining cryptocurrencies.

BI Platform” means business intelligence platform, which is an application that helps businesses gather, understand and visualize their data.

Bitcoin Core Project” means the most popular software used to connect to the Bitcoin network and run a node.

BitLicense” means a business license permitting regulated virtual currency activities, issued by the New York State Department of Financial Services.

Bitmain Antminer” means a bitcoin mining machine produced by Bitmain.

Black-Scholes Option Pricing Model” means a pricing model used to determine the fair price or theoretical value for a call or a put option based on six variables such as volatility, type of option, underlying stock price, time, strike price, and risk-free rate.

Block” means a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain.

Blockchain” means a distributed ledger system that is a sequence of blocks, or units of digital information, stored consecutively in a public database.

BTC” means bitcoin.

BTC Block Reward” means the bitcoin awarded to a miner or group of miners for solving the cryptographic problem required to create a new block on the Bitcoin blockchain.

BTC Network Hashrate” means the hashrate being used by the Bitcoin network.

CAD” means Canadian dollar.

CBD” means cannabidiol, which is a chemical found in marijuana.

CCSS” means the Cryptocurrency Security Standard, which are security standards for any information system that handles and manages crypto wallets as part of its business logic.

CFPB” means the Consumer Financial Protection Bureau.

CFTC” means the Commodity Futures Trading Commission.

CIS” means the Center for Internet Security.

Cold Storage” means offline storage of cryptocurrencies, typically involving hardware non-custodial wallets, USBs, offline computers, or paper wallets.

CPU” means central processing unit, which is the primary component of a computer that acts as its control center.

CRM” means customer relationship management.

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Cryptographic Protocol” means an abstract or concrete protocol that performs a security-related function and applies cryptographic methods. Cryptographic protocols are widely used for secure application-level data transport.

CSA” means the Controlled Substances Act.

DAI” means the stablecoin on the Ethereum blockchain whose value is kept as close to one USD as possible through a system of decentralized participants incentivized by smart contracts to perform maintenance and governance functions.

Distributed Ledger” means a ledger in which data is stored across a network of decentralized nodes. A distributed ledger is a system for recording the transaction of assets in a decentralized manner. Unlike centralized solutions, such as databases, distributed ledgers do not have a central repository for storing recorded data. Nodes process and verify transactions.

EBITDA” means earnings before interest, taxes, depreciation, and amortization.

ERP” means enterprise resource planning software.

FFIEC” means the Federal Financial Institutions Examination Council.

GitHub” means the platform and cloud-based service for software development and version control using Git, allowing developers to store and manage their code.

GPU” means a graphics processing unit, which is a specialized electronic circuit initially designed to accelerate computer graphics and image processing.

Hash” means the computation run by mining hardware in support of the blockchain; therefore, a miner’s “hash rate” refers to the rate at which it is capable of solving such computations.

Hash Rate” means the speed at which a computer can take any set of information and use an algorithm to reduce that information into a string of letters and numbers of a certain length, known as a “hash.”

HSM” means a physical computing device that safeguards and manages secrets (most importantly digital keys), performs encryption and decryption functions for digital signatures, strong authentication and other cryptographic functions.

Luna” means the cryptocurrency coin associated with the Terra open-source blockchain.

Monte Carlo Model” means an algorithm that relies on repeated random sampling to obtain numerical results.

NIST” means the National Institute of Standards and Technology.

Node” means the most basic unit and critical part of a blockchain infrastructure, storing its data and allowing all communication (transaction) to pass through it. It can be run by any personal computing device or server. Nodes are interconnected, and hence, can readily pass data amongst each other. It is essential for them to be always up-to-date in order to function properly.

Private Key” means an alphanumeric string that is generated at the creation of a crypto wallet address and serves as its password or the access code. Whoever has access to a private key has absolute control over its corresponding wallet, access to the funds contained within, and can transfer or trade assets and use the account for other purposes.

Proof-of-Stake” means a blockchain consensus mechanism in addition to Proof-of-Work that maintains the integrity of blockchain. Proof-of-Stake involves miners validating additional blocks if they have greater amounts of money locked up in the system. For example, a miner who stakes 10% of coins will only be able to mine 10% of the blocks. Proof-of-Stake can be less vulnerable to cyberattacks as its structure penalizes the miner who attacks the system. Additionally, many researchers believe Proof-of-Stake is significantly more energy efficient and secure compared to Proof-of-Work, although some critics question the integrity of these claims.

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Proof-of-Work” means a consensus mechanism used in many cryptocurrencies, including Bitcoin, to validate transactions and create new blocks on the blockchain. Proof-of-Work is a process by which miners compete with each other to solve complex mathematical puzzles in order to validate transactions and create new blocks. The miner who solves the puzzle first is rewarded with a certain amount of cryptocurrency.

Public Key” means a series of alphanumeric characters used to encrypt plain text messages into ciphertext. A public key is used in conducting peer-to-peer transactions without the need to reveal the composition of one’s private keys, supporting a cryptographic function that allows for a safe and secure exchange of assets and information without the need for a third party. A user provides his public key in order to engage in a peer-to-peer transaction with any individual. They can also keep this key publicly available. All private keys, which are secret keys used to access crypto funds, are associated with a corresponding particular public key since they are mutually generated using advanced asymmetric algorithm systems. This ensures that no one can derive the private key of any user just by knowing their public keys.

S19 Antminer” means the S19 model miner produced by Bitmain.

S19 Pro Antminer” means the S19 Pro model miner produced by Bitmain.

S19j Pro Antminer” means the S19j Pro model miner produced by Bitmain.

Section 404” means Section 404 of the Sarbanes-Oxley Act.

Securities Act” means the Securities Act of 1933.

SHA 256” means the patented cryptographic hash function that outputs a value that is 256 bits long.

SOC 1 & SOC 2” mean the Service Organization Control audit reports.

Stablecoin” means a cryptocurrency with a fixed value that is usually pegged to a leading fiat currency like the U.S. dollar, a basket of fiat currencies or exchange-traded commodity such as precious metals.

TerraUSD” means the decentralized and algorithmic stablecoin of the Terra blockchain.

Tether” means the stablecoin platform that pioneered the stablecoin model with its launch of USDT tokens in 2014.

USDT” means the cryptocurrency stablecoin pegged to the U.S. dollar and backed “100%” by Tether’s reserves.

Wallet” means a device, physical medium, program or service that stores users’ public and private keys, while providing an easy-to-use interface to manage crypto balances. They also support cryptocurrency transfers through the blockchain.

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

Except where specifically noted, the following information and all other information contained in this proxy statement/prospectus does not give effect to the proposed reverse stock split at a ratio of one (1) new share for every fifteen (15) to one hundred (100) shares of outstanding Akerna common stock described in Proposal No. 3 (the “Akerna Reverse Stock Split”) in this proxy statement/prospectus. If the Merger (as defined below) and the Akerna Reverse Stock Split are approved, the Akerna Reverse Stock Split will be effected immediately prior to the closing of the Merger.

The following section provides answers to frequently asked questions about the Transactions (as defined below). This section, however, provides only summary information. For a more complete response to these questions and for additional information, please refer to the cross-referenced sections.

Q:     What are the Transactions?

A:     Akerna Corp. (“Akerna”, also referred to herein as “we,” “us,” “our,” and the “Company”), Gryphon Digital Mining, Inc. (“Gryphon”) and Akerna Merger Co., a wholly owned subsidiary of Akerna (“Merger Sub”) have entered into an Agreement and Plan of Merger, dated as of January 27, 2023, as may be amended from time to time (the “Merger Agreement”). Under the Merger Agreement, Merger Sub will, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, merge with and into Gryphon, with Gryphon surviving as a wholly owned subsidiary of Akerna (the “Merger”). Under specified circumstances, Akerna may be required to pay a termination fee to Gryphon, as further described in the section titled “The Merger Agreement — Termination Fee” in this proxy statement/prospectus.

Akerna has also entered into a Securities Purchase Agreement, dated April 28, 2023, as may be amended from time to time (the “Purchase Agreement”) with MJ Acquisition Corp. (“MJ Acquisition”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Purchase Agreement, Akerna will sell to MJ Acquisition all of the issued and outstanding membership interests of MJ Freeway LLC, a Colorado limited liability company (“MJ Freeway” and such membership interests, the “Membership Interests”), and Akerna’s wholly owned subsidiary Akerna Canada Ample Exchange Inc. (“Akerna Exchange”) will sell to MJ Acquisition all of the issued and outstanding common and preferred shares of Ample Organics Inc., an Ontario corporation (“Ample” and such common and preferred shares, the “Capital Stock”) for an aggregate cash purchase price of $1.85 million (the “Purchase Price”), subject to adjustments as set forth in the Purchase Agreement and a loan to Akerna from MJ Acquisition in the amount of $1,650,000 (funded $1,000,000 on April 28, 2023, $500,000 on October 11, 2023 and $150,000 on November 15, 2023), which principal amount will convert into shares of common stock of Akerna, par value $0.0001 per share (the “Akerna Common Stock”) at closing (the “Sale Transaction”). Subsequently, on December 28, 2023, pursuant to the terms of the Purchase Agreement, Akerna and Akerna Exchange entered into a share purchase agreement with Wilcompute Systems Group Inc. (“Wilcompute”) pursuant to which Akerna Exchange sold all of the Capital Stock of Ample to Wilcompute for approximately $638,000. In accordance with the Purchase Agreement, in lieu of delivering the Capital Stock of Ample at the closing of the Sale Transaction, Akerna will instead deliver to MJ Acquisition the $638,000 purchase price received from Wilcompute, which Akerna expects to be in the form of a reduction of the purchase price paid by MJ Acquisition from $1.85 million to approximately $1.22 million. The $1.65 million loan was made pursuant to a secured convertible promissory note dated November 15, 2023 (the “MJA Promissory Note”) and related security documents, which the MJA Promissory Note will be converted in full at the closing of the Sale Transaction with any interest being surrendered at the closing of the Sale Transaction. The $1.85 million will be paid in cash at closing. Akerna may at its sole option request that a portion of the $1.85 million to be paid at closing be paid prior to closing to fund ongoing operations and any such amounts funded will be moved from the Purchase Price to the MJA Promissory Note. Under specified circumstances, Akerna may be required to pay MJ Acquisition a termination fee, as further described in the section titled “The Purchase Agreement — Termination Fee” beginning on page 142 of this proxy statement/prospectus.

The Merger and the Sale Transaction are collectively referred to herein as the “Transactions.” The consummation of the Merger and the closing of the Sale Transaction are conditioned on each other, and the parties expect that, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement and the Purchase Agreement, respectively, the Sale Transaction will be consummated immediately following the closing of the Merger.

Q:     What will happen in the Merger?

A:           Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) each share of Gryphon’s common stock, par value $0.0001 per share (the “Gryphon Common Stock”), and Gryphon’s preferred stock, par value $0.0001 per share (the “Gryphon Preferred Stock,” collectively referred

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to herein with the Gryphon Common Stock as the “Gryphon Shares”) outstanding immediately prior to the Effective Time, will be converted into the right to receive a per share portion of the aggregate number of Akerna Common Stock, to be issued at the Effective Time as consideration for the Merger, as calculated pursuant to the terms set forth in the Merger Agreement (the “Merger Consideration”) (subject to adjustment to account for the Akerna Reverse Stock Split), as described in more detail in the section titled “The Merger Agreement — Merger Consideration” beginning on page 116 of this proxy statement/prospectus.

Each share of Akerna Common Stock, each share of Akerna Common Stock reserved for issuance upon the exercise of each warrant to purchase Akerna Common Stock, that is issued and outstanding at the Effective Time will remain issued and outstanding, and such securities will be unaffected by the Merger. Akerna anticipates that the outstanding exchangeable shares of Akerna will be redeemed for shares of Akerna Common Stock prior to the closing of the Merger.

Akerna following the Merger is referred to herein as the “combined company.” Immediately after the consummation of the Merger, Akerna equityholders as of immediately prior to the Merger are expected to own approximately 7.5% of the outstanding equity interests of the combined company on a fully diluted basis and former Gryphon equityholders are expected to own approximately 92.5% of the outstanding equity interests of the combined company on a fully diluted basis. Actual ownership percentages will depend on the actual calculation of the Merger Consideration at closing, which will depend on a number of variable factors, including the trading price of Akerna Common Stock on the second trading day immediately prior to closing and the amount of the principal remaining outstanding on Akerna’s convertible notes and the amount of accounts payable by Akerna that is settled in shares of Akerna Common Stock. Following the Merger, Gryphon’s business will be the business of the combined company. After the completion of the Merger, the combined company will change its corporate name to “Gryphon Digital Mining, Inc.”

Q:     What are the exchange agreements with the holders of Akerna’s senior secured convertible notes?

A:     Concurrently with the signing of the Merger Agreement, Akerna entered into exchange agreements (the “Exchange Agreements”) with each of the holders (each, an “Akerna Note Holder”) of its senior secured convertible notes (the “Akerna Notes”) issued pursuant to a securities purchase agreement dated October 5, 2021.

Pursuant to the Exchange Agreements, each Akerna Note Holder agreed to exchange a certain aggregate conversion amount of the Notes no greater than the lesser of (i) the aggregate amount then outstanding under the Akerna Notes and (ii) such portion of the maximum note amount set forth in the Exchange Agreement for such Holder that is convertible into 19.9% of the voting rights of the Company outstanding as of the time immediately following the issuance of the Series C Preferred Stock into such number of shares of newly designated Series C Preferred Stock of Akerna, which will have an aggregate voting power and economic value equal to the aggregate number of shares of Akerna Common Stock then issuable upon conversion of such amount of Akerna Notes.

Q:     What are the terms of the Series C Preferred Stock into which the Akerna Notes will convert?

A:     The Series C Preferred Stock is non-convertible, voting preferred stock. Each Akerna Note Holder will hold Series C Preferred Stock with voting power equal to 19.9% of the total voting power outstanding as of the record date for the special meeting of stockholders of Akerna. Upon the closing of the Merger, Akerna expects that the Series C Preferred Stock will be exchanged into Akerna Common Stock at the market price for the Akerna Common Stock immediately preceding the closing of the Merger (the “New Preferred Exchange Shares”). The Series C Preferred Stock can also be redeemed for cash at the option of Akerna and in limited circumstances redeemed for cash at the option of the holder.

Q:     What will happen at the closing of the Merger to the remaining amount of Akerna Notes not exchanged for Series C Preferred Stock, if any?

A:     Under the Exchange Agreements, Akerna has agreed that 50% of the gross proceeds from any subsequent placement will be used to repay the aggregate amounts then outstanding under the Akerna Notes, allocated pro rata to the Akerna Note Holders then outstanding based on the aggregate principal amount of Akerna Notes outstanding as of the time of such applicable subsequent placement (“Subsequent Placement Redemption”).

Akerna has agreed that on or prior to the closing of the Merger, if any Akerna Notes are then outstanding, Akerna will consummate one or more Company Optional Redemptions (as defined in the Akerna Notes) pursuant to the terms of the Akerna Notes (as amended under the Exchange Agreements), using the lesser of (A) the difference

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of (I) the sum of (x) all cash then held by Akerna (or any of its subsidiaries) and (y) any cash to be paid, directly or indirectly, to Akerna (or any of its subsidiaries) in connection with the transactions contemplated by the Merger Agreement and/or the Purchase Agreement, as applicable, less (II) $500,000 and (B) an aggregate amount of cash equal to the Company Optional Redemption Price of the aggregate Conversion Amount (as defined in the Akerna Notes) of the Akerna Notes then outstanding (with each such Company Optional Redemption allocated pro rata to the Akerna Note Holders then outstanding based upon the aggregate principal amount of Akerna Notes then outstanding) (the “Cash Sweep”).

Upon closing of the Merger, the Exchange Agreements provide that if any portion of the Akerna Notes remain outstanding other than such portion of the applicable Company Optional Redemption Price of the Akerna Notes to be paid in cash pursuant to the Cash Sweep, to exchange the remaining Conversion Amount of the Notes into such aggregate number of shares of common stock of the combined company (the “New Note Exchange Shares” together with the New Preferred Exchange Shares, the “Final Closing Exchange Shares”) equal to the quotient of (A) the applicable Company Optional Redemption Price of the remaining Conversion Amount of the Akerna Notes then outstanding divided by (B) the lower of (x) the lowest volume weighted average price of the Akerna Common Stock during the five (5) trading day period ending, and including, the trading day immediately prior to the closing and (y) the Conversion Price (as defined in the Akerna Notes) in effect as of the closing. The Company Optional Redemption price will be the greater of (i) 121% of the Conversion Amount and (ii) 115% of the product of (a) the Conversion Rate (as defined in the Akerna Notes) and (b) the highest closing sale price of Akerna Common Stock on the date preceding the exchange.

However, that to the extent that any issuances of Final Closing Exchange Shares to an Akerna Note Holder at the closing in accordance with the Exchange Agreements or pursuant to the Series C Certificate of Designations, as applicable would result in such Akerna Holder and its other attribution parties exceeding 4.99% of the issued and outstanding shares of common stock of the combined company (a “Maximum Percentage Event”), then such Akerna Holder shall not be entitled to receive such aggregate number of Final Closing Exchange Shares in excess of the maximum percentage (and shall not have beneficial ownership of such Final Closing Exchange Shares (or other equivalent security) as a result of the closing (and beneficial ownership) to such extent of any such excess), such remaining portion of such Final Closing Exchange Shares that would have otherwise been issued to the Akerna Holder at the Final Closing (such remaining portion of Final Closing Exchange Shares, the “Abeyance Shares”), such portion of the Akerna Note and/or shares of Series C Preferred Stock, as applicable, shall alternatively be exchanged for the right to receive such Abeyance Shares, at such time or times as its right thereto would not result in such Akerna Holder and the other attribution parties exceeding the maximum percentage, at which time or times, if any, such Akerna Holder shall be granted such remaining portion of such Abeyance Shares in accordance with the Exchange Agreements and/or pursuant to the Series C Certificate of Designations, as applicable.

Q:     How many shares of Akerna Common Stock will be issued upon exchange of Series C Preferred Stock?

A:     It is anticipated that the Series C Preferred Stock will be exchanged for shares of Akerna Common Stock at a market price at the time of the closing of the Merger. Assuming a market price of $0.20 per a share of Akerna Common Stock, the Series C Preferred Stock with be exchange for approximately 17,110,000 shares of Akerna Common Stock pre-reverse stock split or 855,500 shares of Akerna Common Stock post-reverse stock split assuming a 20 for 1 reverse stock split.

Q:     How many shares of Akerna Common Stock will be issued upon conversion of the MJA Promissory Note?

A:     Under the MJA Promissory Note, the $1,650,000 in principal amount of the MJA Promissory Note will convert at the 5-day volume weighted average price of the Akerna Common Stock as quoted on The Nasdaq Capital Market for the 5 trading days immediately preceding the date of the closing of the Sale Transaction. Based on an assumed price per share of $0.20 per share, this would result in 8,250,000 shares of Akerna Common Stock being issued upon conversion or 412,500 shares of Akerna Common Stock post-reverse stock split assuming a 20 for 1 reverse stock split. This amount may increase if Akerna requests that a portion of the Purchase Price be loaned to Akerna prior to the closing, in which case, such additional amount loaned to Akerna will increase the principal amount of the MJA Promissory Note by the amount loaned and reduce the amount of cash payable to Akerna at the closing of the Sale Transaction. All shares of Akerna Common Stock issued upon conversion of the MJA Promissory Note will be included in the shares of Akerna Common Stock outstanding prior to the closing of the Merger and will be taken into account in calculating the Merger Consideration, which will dilute current Akerna stockholders.

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Q:     Will Akerna stockholders receive any portion of the proceeds from the Sale Transaction?

A:     Akerna currently has outstanding Akerna Notes in aggregate principal amount of approximately $6.58 million and accounts payable of approximately $1.4 million as of the date hereof that are not being assumed by MJ Acquisition in connection with the Sale Transaction. Further, as a condition to the closing of the Merger, Akerna must be free of debt, not have any outstanding accounts payable or other liabilities and have at least $500,000 in cash to help Gryphon cover any potential future liabilities arising from the Sale Transaction or otherwise.

Following adjustments to the Purchase Price at closing of the Sale Transaction, payment of expenses related to the Transactions (including severance and transaction bonuses to certain Akerna employees), payment of accounts payable of Akerna not assumed by MJ Acquisition, and setting aside the minimum $500,000 in cash for closing the Merger, pursuant to the terms of the Exchange Agreements, as discussed above, any cash remaining in the accounts of Akerna will be used to conduct a cash redemption of any remaining principal amount of the Akerna Notes pursuant to their terms. Akerna may seek to settle certain amounts of its outstanding accounts payable and the amounts payable to its officers in relation to the closing of the Merger and the Sale Transaction through the issuance of shares of Akerna Common Stock. Any such issuances would be included in the shares of Akerna Common Stock outstanding prior to the closing of the Merger and will be taken into account in calculating the Merger Consideration, which could dilute current Akerna stockholders. Any principal amount of Akerna Notes remaining following the cash redemption will be exchanged into common stock of the combined company immediately following the consummation of the Merger, but such shares of common stock will be treated as shares of Akerna Common Stock outstanding immediately prior to the Effective Time and will be taken into account in calculating the Merger Consideration. Given the ongoing significant expenses incurred by Akerna in relation to the Transactions, current and expected accounts payable and the principal amount left on the Akerna Notes, Akerna does not expect any proceeds from the Sale Transaction to remain following the cash redemption of the Akerna Notes. Any proceeds of the Sale Transaction that do remain will fund the combined company. To the extent that proceeds from the Sale Transaction are used to conduct a cash redemption of the Akerna Notes, this will reduce the amount of principal of the Akerna Notes that will be exchanged into shares of common stock of the combined company and thereby reduce dilution of the estimated 7.5% of the equity interests of the combined company on a fully diluted basis that equityholders of Akerna will hold following completion of the Merger.

Q:     What will happen if, for any reason, either of the Transactions does not close?

A:     The closing of the Merger and the closing of the Sale Transaction are conditioned on each other. Therefore, if, for any reason, the Merger does not close and the Merger Agreement is terminated, the Sale Transaction will not close, unless Akerna and MJ Acquisition determine to waive that condition to closing and proceed with the Sale Transaction. Similarly, if, for any reason, the Sale Transaction does not close and the Purchase Agreement is terminated, the Merger will not close unless Akerna and Gryphon determine to waive that condition to closing and proceed with the Merger. Akerna does not currently believe that it would waive the condition to closing for either of the Transactions and therefore if either fails close it is not anticipated that the other Transaction would proceed.

In the event that the Merger does not close and the Merger Agreement is terminated but the Sale Transaction proceeds, the Akerna board of directors (the “Akerna Board”) may elect to, among other things, attempt to complete another strategic transaction including a transaction similar to the Merger, continue to operate the remaining business of Akerna or to dissolve and liquidate the remaining assets of Akerna, and may still elect to implement the Akerna Reverse Stock Split.

In the event that the Sale Transaction does not close and the Purchase Agreement is terminated, Akerna would not have sufficient cash to eliminate its debt or pay its accounts payable, which would not be sufficient to satisfy these closing conditions under the Merger Agreement and it is unlikely that Gryphon would elect to proceed with the Merger.

Akerna has invested significant time and incurred, and expects to continue to incur, significant expenses related to the Transactions. In the event that either of the Transactions does not close, the Akerna Board may elect, among other things, to attempt to complete other strategic transactions or the Akerna Board may instead divest all or a portion of Akerna’s business or assets if viable alternative strategic transactions are not available. Under certain

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circumstances, Akerna may be obligated to pay Gryphon or MJ Acquisition a termination fee or reimburse certain expenses of Gryphon or MJ Acquisition, as more fully described in the section titled “Prospectus Summary — The Merger Agreement — Termination” beginning on page 128 of this proxy statement/prospectus, the section titled “The Merger Agreement — Termination Fee” beginning on page 130 of this proxy statement/prospectus, the section titled “Prospectus Summary — The Purchase Agreement — Termination” beginning of page 141 of this proxy statement/prospectus, and the section titled “The Purchase Agreement — Termination” beginning on page 141 of this proxy statement/prospectus.

Q:     What are the conditions to closing the Transactions?

A:     For more information regarding the conditions to closing the Transactions, see the sections “The Merger Agreement — Conditions to the Completion of the Merger” and “The Purchase Agreement — Conditions to the Completion of the Sale Transaction” beginning on pages 119 and 135, respectively, of this proxy statement/prospectus.

Q:     Why are Akerna and Gryphon proposing to merge?

A:     Akerna and Gryphon believe that the Merger will result in a company with a strong leadership team and substantial capital resources, which will better position Gryphon to advance its bitcoin mining operations. For a more complete description of the reasons for the Merger, please see the sections titled “The Merger — Akerna Reasons for the Merger” and “The Merger — Gryphon Reasons for the Merger” beginning on pages 95 and 99, respectively, of this proxy statement/prospectus.

Q:     Why am I receiving this proxy statement/prospectus?

A:     You are receiving this proxy statement/prospectus because you have been identified as a stockholder of Akerna as of December 21, 2023, the record date for the special meeting, and you are entitled to vote at the Akerna special meeting to approve the matters set forth herein or you have been identified as a holder of Gryphon Shares who will receive shares of Akerna Common Stock in the Merger. Stockholders of Akerna as of the record date are entitled to vote at the Akerna special meeting to approve the issuance of shares of Akerna Common Stock in the Merger in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger, the Sale Transaction with MJ Acquisition, the proposed Akerna Reverse Stock Split, the Akerna Authorized Share Increase, the Akerna Name Change, the 2024 Plan, the MJA Promissory Note Conversion and the adjournment of the special meeting, if necessary, to solicit additional proxies. This document serves as:

        a proxy statement of Akerna used to solicit proxies for the Akerna special meeting to vote on the matters set forth herein; and

        a prospectus of Akerna used to offer shares of Akerna Common Stock in exchange for Gryphon Shares in the Merger.

Q:     What is required to consummate the Merger?

A:     To consummate the Merger, Akerna stockholders must approve:

        the issuance of shares of Akerna Common Stock in the Merger in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger;

        the Sale Transaction and the transactions contemplated under the Purchase Agreement;

        the amendment to the amended and restated certificate of incorporation of Akerna effecting the Akerna Reverse Stock Split;

        the amendment to the amended and restated certificate of incorporation of Akerna effecting the Akerna Authorized Share Increase;

        the amendment to the amended and restated certificate of incorporation of Akerna effecting the Akerna Name Change;

        the adoption of the 2024 Plan; and

        the issuance of shares of Akerna Common Stock upon conversion of the MJA Promissory Note.

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Holders of Gryphon Shares must adopt the Merger Agreement and approve the transactions contemplated in the Merger Agreement.

The approval by the stockholders of Akerna of the issuance of Akerna Common Stock in the Merger in accordance with the terms of the Merger Agreement requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting. The approval of the Sale Transaction and the transactions contemplated under the Purchase Agreement requires the affirmative vote of the holders of a majority of the shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Reverse Stock Split requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Authorized Share Increase requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting and the affirmative vote of the holders of a majority of the shares of Akerna Common Stock, voting as a separate class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Name Change requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the 2024 Plan requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting. The approval by the stockholders of Akerna of the issuance of Akerna Common Stock upon conversion of the MJA Promissory Note requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting.

The adoption of the Merger Agreement and approval of the transactions contemplated in the Merger Agreement by the stockholders of Gryphon requires the affirmative vote (or written consent) by the holders of a majority of the outstanding Gryphon Shares, voting as one class on an as-converted basis.

In addition to the requirement of obtaining such securityholder approvals and appropriate regulatory approvals, including the approval of The Nasdaq Capital Market, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. One such closing condition consists of a requirement that Akerna have a minimum of $500,000 of net cash at the closing of the Merger. For a more complete description of the closing conditions under the Merger Agreement, please see the section titled “The Merger Agreement — Conditions to the Completion of the Merger” beginning on page 119 of this proxy statement/prospectus.

Certain Gryphon stockholders, including directors and executive officers of Gryphon, who in the aggregate own approximately 72% of the outstanding Gryphon Shares, certain Akerna securityholders, including certain directors and executive officers of Akerna, who in the aggregate own or have the right to acquire approximately 1.6% of the outstanding shares of Akerna Common Stock, and holders of the Akerna Notes who in the aggregate own Series C Preferred Stock with voting power equivalent to 39.8% of the outstanding voting power as of the record date for the Special Meeting, are parties to support agreements or support letters with Akerna or Gryphon, as applicable. The Akerna securityholders who are a party to the support agreement with Gryphon (the “Merger Support Agreement”) and the holders of Akerna Notes who are a party to support letters with Akerna (the “Merger Lender Support Letters”) have agreed to vote (a) in favor of the Akerna stockholder proposals set forth herein and (b) against any “acquisition proposal,” as defined in the Merger Agreement, and subject to certain exceptions, have also agreed not to transfer their shares of Akerna Common Stock or voting preferred stock.

Following the Registration Statement on Form S-4, of which this proxy statement/prospectus is a part, being declared effective by the U.S. Securities and Exchange Commission (the “SEC”) and pursuant to the conditions of the Merger Agreement, Gryphon stockholders who are party to the support agreements with Akerna have each agreed to execute an action by written consent, referred to as the written consent, in favor of the approval and adoption of the Merger Agreement, and approval of the transactions contemplated by the Merger Agreement.

Therefore, absent termination of the Merger Agreement, holders of a sufficient number of Gryphon Shares required to adopt the Merger Agreement and approve the Merger have agreed to adopt the Merger Agreement and approve the Merger, and no meeting of Gryphon stockholders to adopt the Merger Agreement and approve the Merger will be held. Nevertheless, all Gryphon stockholders will have the opportunity to elect to adopt the Merger Agreement, thereby approving the Merger and related transactions, by signing and returning to Gryphon a written consent.

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For a more complete description of the closing conditions under the Merger Agreement, Akerna and Gryphon urge you to read the section titled “The Merger Agreement — Conditions to the Completion of the Merger” in this proxy statement/prospectus.

Q:     What is required to consummate the Sale Transaction?

A:     To consummate the Sale Transaction, Akerna stockholders must authorize the Sale Transaction by approving the Purchase Agreement and the transactions contemplated thereby. The approval of the Purchase Agreement and the transactions contemplated thereby requires the affirmative vote of holders of a majority of the outstanding Akerna Common Stock and preferred stock having voting power on the record date for the Akerna special meeting. In addition to the requirement of obtaining such stockholder approval and appropriate regulatory approvals, each of the other closing conditions set forth in the Purchase Agreement must be satisfied or waived. This includes approval of the MJA Promissory Note Conversion which requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting.

Certain Akerna securityholders, including certain directors and executive officers of Akerna, who in the aggregate own or have the right to acquire approximately 1.6% of the outstanding shares of Akerna Common Stock and holders of the Akerna Notes who in the aggregate own Series C Preferred Stock with voting power equivalent to 39.8% of the outstanding voting power as of the record date, are parties to support agreements or support letters with Akerna or MJ Acquisition, as applicable. The Akerna securityholders who are a party to the support agreement with MJ Acquisition (the “Sale Transaction Support Agreement”) and the holders of Akerna Notes who are a party to support letters with Akerna (the “Sale Transaction Lender Support Letters”) have agreed to vote (a) in favor of the Akerna stockholder proposals set forth herein and (b) against any “acquisition proposal,” as defined in the Purchase Agreement, and subject to certain exceptions, have also agreed not to transfer their shares of Akerna Common Stock or voting preferred stock.

For a more complete description of the closing conditions under the Purchase Agreement, Akerna urges you to read the section titled “The Purchase Agreement — Conditions to the Completion of the Sale Transaction” beginning on page 135 in this proxy statement/prospectus.

Q:     What will stockholders and warrant holders of Gryphon receive in the Merger?

A:     Gryphon stockholders holding issued and outstanding Gryphon Shares immediately prior to the Effective Time of the Merger will receive shares of Akerna Common Stock, and warrants to purchase shares of Gryphon Common Stock (the “Gryphon Warrants”) that are outstanding and unexercised immediately prior to the Effective Time will be assumed by the combined company and become a warrant to purchase an adjusted number of shares of common stock of the combined company, at an adjusted exercise price per share but subject to the same terms and conditions as the applicable Gryphon Warrant.

The estimated exchange ratio of shares of Akerna’s common stock for Gryphon Common Stock and Gryphon Preferred Stock will be approximately 1.6834 shares of Akerna common stock for each one share of Gryphon Common Stock and Preferred Stock based on Merger Consideration of 34,318,117 shares of Akerna Common Stock. The estimated exchange ratio assumes: (i) a fully-diluted number of shares of Akerna common stock after giving effect to an assumed 20 to 1 reverse stock split in Akerna common stock of 2,869,142 shares at the effective time of the Merger, which includes (pre-reverse stock split) 10,352,069 shares outstanding on the date hereof, warrants exercisable to acquire 2,573,299 shares of Akerna common stock, restricted stock units which vest and settle for 9,347 shares of Akerna common stock, 12,476 shares issuable upon redemption of Akerna exchangeable shares, Akerna Series C Preferred Stock exchanged at an assumed price of $0.20 per share into 17,110,000 shares of Akerna common stock, approximately 19,075,660 shares of Akerna common stock issuable upon conversion of $3.15 million principal amount of Akerna’s convertible notes and 8,250,000 shares of Akerna common stock issuable upon conversion of $1.65 million principal amount of Akerna’s promissory note held by MJ Acquisition Corp. (“MJ Acquisition”) at an assumed conversion price of $0.20 per share. The assumed number of shares issuable upon exchange of Akerna’s convertible notes is based on an assumed principal amount outstanding of approximately $3.15 million ($6.58 million currently outstanding less $3.42 million exchanged into Series C Preferred Stock at an exchange price of $0.50 per share) and a conversion price of $0.50 per share (exchanged at 121% of principal amount). The assumed number of shares issuable upon exchange of Series C Preferred Stock is based on an assumed exchange price of $0.20 per share. The estimated exchange ratio also assumes 20,386,730 shares of Gryphon Common Stock and Preferred Stock issued and outstanding at the closing of the

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Merger, Gryphon warrants to acquire 1,067,968 Gryphon Common Stock and a post-reverse stock split closing price per share of Akerna Common Stock of $4.00 on the date that is two trading days preceding the closing of the Merger, the trading day immediately preceding closing of the Merger and the 5-day volume weighted average price for the 5-day period ending on the trading day immediately prior to the closing of the Sale Transaction.

Following the closing of the Merger, the former Gryphon equityholders immediately before the Merger are expected to own approximately 92.5% of the outstanding equity interests of the combined company on a fully diluted basis and the securityholders of Akerna immediately before the Merger are expected to own approximately 7.5% of the outstanding equity interests of the combined company on a fully diluted basis. Actual ownership percentages will depend on the actual calculation of the Merger Consideration at closing, which will depend on a number of variables, including the last sales price of Akerna Common Stock on the second trading day immediately prior to closing of the Merger and the amount of the principal remaining outstanding on the Akerna Notes following any conversions or company redemptions that occur prior to closing.

For a more complete description of what Gryphon stockholders and warrant holders will receive in the Merger, please see the sections titled “The Merger Agreement — Merger Consideration” beginning on pages 116 of this proxy statement/prospectus.

Q:     Who will be the directors of the combined company following the Merger?

A:     Following the Merger, the board of directors of Gryphon Digital Mining, Inc. will be as follows:

 

Name

 

Current Principal Affiliation

Robby Chang

 

Gryphon Chief Executive Officer, President and Director

Brittany Kaiser

 

Gryphon Chair of the Board

Heather Cox

 

Gryphon Director

Steve Gutterman

 

Gryphon Director

Jessica Billingsley

 

Akerna Chief Executive Officer and Chair of the Board

Q:     Who will be the executive officers of the combined company following the Merger?

A:     Immediately following the Merger, the executive management team of the combined company is expected to be composed solely of the members of the Gryphon executive management team prior to the Merger as set forth below:

 

Name

 

Position

Robby Chang

 

Chief Executive Officer and President

Simeon Salzman

 

Chief Financial Officer

Q:     Will the common stock of the combined company trade on an exchange?

A:     Shares of Akerna Common Stock are currently listed on The Nasdaq Capital Market under the symbol “KERN.” Akerna will file an application to list the shares of Akerna Common Stock comprising the Merger Consideration, and to continue to list the common stock of the combined company, on Nasdaq following the consummation of the Merger and the transactions contemplated by the Merger Agreement and the Purchase Agreement. After completion of the Merger, Akerna will be renamed “Gryphon Digital Mining, Inc.” and it is expected that the common stock of the combined company will trade on The Nasdaq Capital Market under the symbol “GRYP” On January 4, 2024 the last trading day before the date of this proxy statement/prospectus, the closing sale price of Akerna Common Stock was $0.3940 per share.

Q:     What are the material U.S. federal income tax consequences of the Merger to Gryphon stockholders?

A:     Each of Akerna and Gryphon intends the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). In general and subject to the qualifications and limitations set forth in the section titled “The Transactions — Certain Material U.S. Federal

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Income Tax Consequences,” if the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, the material tax consequences to U.S. Holders (as defined in the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences”) of Gryphon Shares should be as follows:

        a Gryphon stockholder generally will not recognize gain or loss upon the exchange of Gryphon Shares for Akerna Common Stock pursuant to the Merger;

        a Gryphon stockholder’s aggregate tax basis for the shares of Akerna Common Stock received in the Merger generally will equal the stockholder’s aggregate tax basis in the Gryphon Shares surrendered in the Merger; and

        the holding period of the shares of Akerna Common Stock received by a Gryphon stockholder in the Merger generally will include the holding period of the Gryphon Shares surrendered in exchange therefor.

Ellenoff Grossman & Schole LLP, counsel to Gryphon, has delivered an opinion to Gryphon that, on the basis of certain factual representations made by Akerna and Gryphon, and subject to certain assumptions set forth therein, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. This opinion is attached as Exhibit 8.1 to the Registration Statement of which this proxy statement/prospectus forms a part. However, tax matters are very complicated, and the tax consequences of the Merger to a particular Gryphon stockholder will depend on such stockholder’s circumstances. Accordingly, each Gryphon stockholder is strongly urged to consult with his, her or its tax advisor for a full understanding of the tax consequences of the Merger to that stockholder, including the applicability and effect of federal, state, local and non-U.S. income and other tax laws. For more information, please see the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences” beginning of page 112 of this proxy statement/prospectus.

Q:     What are the material U.S. federal income tax consequences of the Akerna Reverse Stock Split to U.S. Holders of Akerna Common Stock?

A:     An Akerna U.S. Holder (as defined below) generally should not recognize gain or loss upon the Akerna Reverse Stock Split. Please review the information in the section titled “Proposal No. 3: Approval of the Amendment to the Amended and Restated Certificate of Incorporation of Akerna Effecting the Akerna Reverse Stock Split — Tax Consequences of the Akerna Reverse Stock Split” beginning on page 165 of this proxy statement/prospectus for a more complete description of the material U.S. federal income tax consequences of the Akerna Reverse Stock Split to Akerna U.S. Holders.

The tax consequences to an Akerna U.S. Holder of the Akerna Reverse Stock Split will depend on if the Akerna Reverse Stock Split is treated as a tax deferred “recapitalization” for U.S. federal income tax purposes. If the Akerna Reverse Stock Split qualifies as a recapitalization, then an Akerna U.S. Holder generally will not recognize gain or loss on the Akerna Reverse Stock Split. In general, the aggregate tax basis of the post-split shares of Akerna Common Stock received will be equal to the aggregate tax basis of the pre-split shares of Akerna Common Stock exchanged therefor and the holding period of the post-split shares of Akerna Common Stock received will include the holding period of the pre-split shares of Akerna Common Stock exchanged. Treasury Regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of the shares of Akerna Common Stock surrendered to the shares of Akerna Common Stock received pursuant to the Akerna Reverse Stock Split. U.S. Holders of shares of Akerna Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

The state and local tax consequences of the Akerna Reverse Stock Split may vary significantly as to each Akerna U.S. Holder depending upon the jurisdiction in which such holder resides. Each Akerna U.S. Holder should consult their tax advisors as to the specific tax consequences to them.

Q:     What are the material U.S. federal income tax consequences of the Sale Transaction to U.S. Holders of Akerna?

A:     The proceeds of the Sale Transaction will be used to pay accounts payable and Transaction expenses, and to pay down existing debt under the Akerna Notes. After these payments, any remaining proceeds will be used to fund the combined company, and such proceeds will not be distributed to Akerna stockholders. As a result, there should not be any material U.S. federal income tax consequences to Akerna U.S. Holders in relation to the Sale Transaction.

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Q:     Why am I being asked to approve the Akerna Authorized Share Increase?

A:     The Akerna Board approved the proposal approving the amendment to the Akerna amended and restated certificate of incorporation effecting the Akerna Reverse Stock Split to ensure that the combined company has adequate available shares of common stock in financing ongoing operations through future equity financings, if required, so that the combined company can maintain working capital and meet its plan of operations. Currently, there are 150,000,000 shares of Akerna Common Stock authorized for issuance with 10,352,069 shares of Akerna Common Stock issued and outstanding, warrants exercisable to acquire 2,573,299 shares of Akerna Common Stock, and restricted stock units which vest and settle for 9,347 shares of Akerna Common Stock, exchangeable shares to be redeemed for 12,476 shares of Akerna Common Stock and the Akerna Notes which we estimate will be exchanged into shares of Series C Preferred Stock exchangeable into 17,110,000 shares of Akerna Common Stock and the remaining Akerna Notes convertible for approximately 19,075,660 shares of Akerna Common Stock (based on approximately $3.15 million outstanding principal amount after the exchange of a portion thereof into Series C Preferred Stock, 121% repayment premium and a conversion price of $0.50, which is the current conversion price for the Akerna Notes) and 8,250,000 shares of Akerna Common Stock estimated to be issuable upon conversion of $1.65 million in principal amount of the MJA Promissory Note at a conversion price of $0.20 per share for an aggregate total of approximately 57,382,841 shares of Akerna Common Stock on a fully diluted basis immediately prior to the Reverse Stock Split. Assuming a Reverse Stock Split ratio of 20 to 1 in the Akerna Reverse Stock Split, this would result in approximately 2,869,142 shares of common stock outstanding on a fully diluted basis immediately prior to closing of the Merger and would result in the issuance of approximately 34,318,117 shares to Gryphon’s stockholders as Merger Consideration for an aggregate total of approximately 38,255,227 shares of common stock outstanding or reserved for issuance and leaving 111,744,773 shares of common stock available for issuance. To ensure that the combined company has adequate authorized share capital the Akerna Board is asking stockholders to increase the number of authorized shares of common stock from 150,000,000 to 300,000,000.

Q:     Why am I being asked to approve the Akerna Reverse Stock Split?

A:     The Akerna Board approved the proposal approving the amendment to the Akerna amended and restated certificate of incorporation effecting the Akerna Reverse Stock Split primarily because in order for Nasdaq to approve the continued listing of the common stock of the combined company on The Nasdaq Capital Market following the completion of the Merger, the combined company will need to meet the initial listing standards for The Nasdaq Capital Market. One of the initial listing standards is a minimum trading price of $4.00 per share. Given the recent trading price of the Akerna Common Stock, Gryphon and Akerna anticipate that the Akerna Reverse Stock Split will be required in order to meet this standard. If Proposal No. 1 is not approved at the Akerna special meeting, the Akerna board of directors may still elect to effect the Akerna Reverse Stock Split, primarily to regain compliance with the continued listing standards of The Nasdaq Capital Market. For further details, see the section titled “Akerna Proposal No. 2: Approval of the Amendment to the Amended and Restated Certificate of Incorporation of Akerna Effecting the Akerna Reverse Stock Split.”

Q:     Why am I being asked to approve the 2024 Plan?

A:     The Akerna Board approved the proposal approving the 2024 Plan to ensure that the combined company has a comprehensive equity incentive plan in place to attract and retain qualified officers, directors, employees and consultants and to provide adequate incentive to align the goals of management of the combined company with increased stockholder value. The 2024 Plan will replace Akerna’s 2019 Long-Term Incentive Plan which is out dated and does not have sufficient shares of common stock authorized for issuance of awards thereunder to meet the needs of the combined company. The 2024 Plan modernizes the combined company’s equity incentive structure and will provide for sufficient shares to meet the combined company’s equity incentive goals.

Q:     Why am I being asked to approve the MJA Promissory Note Conversion?

A:     The Akerna Board approved the proposal approving the MJA Promissory Note Conversion as it is a condition to the closing of the Sale Transaction. The MJA Promissory Note will convert concurrently with the closing of the Sale Transaction at the 5-day volume weighted average price of the Akerna Common Stock as quoted on The Nasdaq Capital Market for the 5 trading days immediately preceding the date of the closing of the Sale Transaction. The amount of shares to be issued pursuant to the MJA Promissory Note Conversion will likely exceed 19.9% of the issued and outstanding shares of Akerna Common Stock on the date that the MJA Promissory Note was executed and delivered by Akerna. Pursuant to the rules of the Nasdaq Capital Market, the approval of

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the stockholders of Akerna is required to permit the issuance of shares of Akerna Common Stock at a price that is below the market value of the Akerna Common Stock (as determined under the rules of the Nasdaq Capital Market) and therefore Akerna is seeking the approval of the stockholders to issue the shares of Akerna Common Stock upon conversion.

Q:     As an Akerna stockholder, how does Akerna Board recommend that I vote?

A:     After careful consideration, Akerna Board unanimously recommends that Akerna stockholders vote:

        “FOR” Proposal No. 1 to approve the issuance of shares of Akerna Common Stock to the holders of Gryphon Shares in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger;

        “FOR” Proposal No. 2 to approve the Purchase Agreement and the transactions contemplated thereby, including the Sale Transaction;

        “FOR” Proposal No. 3 to approve an amendment to the amended and restated certificate of incorporation of Akerna to effect the Akerna Reverse Stock Split, at a ratio of one (1) new share for every fifteen (15) to one hundred (100) shares outstanding;

        “FOR” Proposal No. 4 to approve an amendment to the amended and restated certificate of incorporation of Akerna to effect the Akerna Authorized Share Increase;

        “FOR” Proposal No. 5 to approve an amendment to the amended and restated certificate of incorporation of Akerna to effect the Akerna Name Change;

        “FOR” Proposal No. 6 to approve the 2024 Plan;

        “FOR” Proposal No. 7 to approve the MJA Promissory Note Conversion; and

        “FOR” Proposal No. 8 to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 through 7.

Q:     Do persons involved in the Transactions have interests that may conflict with mine as an Akerna stockholder?

A:     Yes. In considering the recommendation of the Akerna Board with respect to issuing shares of Akerna Common Stock pursuant to the Merger Agreement, the change of control of Akerna resulting from the Merger, the Sale Transaction and the other matters to be acted upon by Akerna stockholders at the special meeting, Akerna stockholders should be aware that certain members of the Akerna Board and executive officers of Akerna have interests in the Merger that may be different from, or in addition to, interests they have as Akerna stockholders.

Akerna’s executive officers, including Jessica Billingsley, its Chief Executive Officer, who is also the Chairman of the Akerna Board, Scott Sozio, Head of Corporate Development and a director on the Akerna Board, and Dean Ditto, its Chief Financial Officer are contractually entitled to severance payments and/or change in control bonus incentive fees.

In addition, each member of the Akerna executive team and the Akerna Board is entitled to full accelerated vesting of all outstanding restricted stock units of Akerna upon a change in control, as defined in Akerna’s Equity Incentive Plan, regardless of whether s/he is terminated as a result of the transaction.

Based on the terms of her current employment agreement, Jessica Billingsley will be entitled to receive a total value of approximately $602,854 in connection with the consummation of the Merger, which includes approximately $602,400 as part of her severance payments under her employment agreement and approximately $454 in value associated with the acceleration of outstanding restricted stock units. Additionally, Ms. Billingsley will continue on the board of the combined company after the closing of the Merger and would be eligible for certain compensation as a non-employee director.

Based on his current employment terms, Dean Ditto will be entitled to receive a total value of approximately $210,733 in connection with the consummation of the Merger, which includes approximately $85,733 as part of his severance payments and benefits under his employment terms.

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Under the terms of a change in control bonus incentive agreement with Akerna, Scott Sozio will be entitled to receive a total value of approximately $350,924 in connection with the consummation of the Merger, which includes approximately $350,000 as part of his change in control incentive bonus and approximately $924 in value associated with the acceleration of outstanding restricted stock units.

As of December 21, 2023, the record date for the special meeting, the directors and executive officers of Akerna owned, in the aggregate, 1.2% of the outstanding shares of Akerna Common Stock (0.7% of the outstanding voting shares) and have agreed to vote in favor of the Merger and related transactions. The above officers of Akerna may acquire additional share of Akerna Common Stock at the closing of the Merger as settlement, in part, of the amounts owed to them as stated above. Such issuances would be done at market value under the rules of the Nasdaq Capital Market.

The Akerna Board was aware of these interests and considered them, among other matters, in the decision to approve the Merger Agreement. For more information, please see the section titled “The Transactions — Interests of the Akerna Directors and Executive Officers in the Transactions” in this proxy statement/prospectus.

Q:     What risks should I consider in deciding whether to vote in favor of the Merger Proposal and the Sale Transaction Proposal?

A:     You should carefully review the section titled “Risk Factors” beginning on page 25 of this proxy statement/prospectus, which set forth certain risks and uncertainties related to the Merger, risks and uncertainties to which the combined company’s business will be subject, and risks and uncertainties to which each of Akerna and Gryphon, as independent companies, are subject.

Q:     What stockholder presence is required for quorum at the Akerna special meeting?

A:     The presence, in person or being represented by proxy, at the Akerna special meeting of the holders of one-third of the shares of Akerna Common Stock and Akerna voting preferred stock outstanding, or equal to 5,736,182 voting shares, is necessary to constitute a quorum at the meeting for the purpose of approving the proposals.

Q:     How many votes am I entitled per share?

A:     Each share of Akerna Common Stock entitles the holder thereof to one vote on each proposal at the Akerna special meeting. Akerna’s special voting preferred share is entitled to vote a number of shares equivalent to 12,476 shares of Akerna Common Stock on each proposal at the Akerna special meeting. Each share of Series C Preferred Stock is entitled to vote a number of shares equivalent to 2,000 shares of Akerna Common Stock on each proposal. In the aggregate, the Series C Preferred Stock is entitled to vote a number of shares equivalent to 6,844,000 shares of Akerna Common Stock. Holders of Akerna Common Stock, special voting share and Series C Preferred Stock will vote on all matters at the Akerna special meeting as a single class, except for the Akerna Authorized Shares Increase upon which the holders of the Akerna Common Stock will also vote as a separate class. Only the holders of Akerna Common Stock, our special voting share and Series C Preferred Stock are entitled to vote at the Akerna special meeting. There are no cumulative voting rights.

Q:     What stockholder votes are required to approve the proposals at the Akerna special meeting?

A:     The affirmative vote of the holders of a majority of the outstanding shares of Akerna Common Stock and preferred stock, voting as one class, is required for approval of the Sale Transaction, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase, and the Akerna Name Change. The affirmative vote of a majority of the outstanding shares of Akerna Common Stock, voting as a separate class, is required for the approval of the Akerna Authorized Share Increase. The affirmative vote of a majority of the votes properly cast at the Akerna special meeting, whether present at the special meeting or represented by proxy at the special meeting, is required for approval of the Merger, the 2024 Plan, the MJA Promissory Note Conversion and the Adjournment Proposal.

Votes will be counted by the inspector of election appointed for the meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and any broker non-votes. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. Abstentions will be counted toward the vote totals for each proposal and will have the same effect as “AGAINST” votes. Broker non-votes will have no effect on the Merger Proposal, the proposal to approve the

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2024 Plan, the MJA Promissory Note Conversion and the Adjournment Proposal but will have the same effect as votes “AGAINST” the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase and the Akerna Name Change.

As of December 21, 2023, the record date for the special meeting, the directors and certain executive officers of Akerna owned or controlled approximately 1.2% of the outstanding shares of Akerna Common Stock entitled to vote at the Akerna special meeting. As of December 21, 2023, the record date for the special meeting, the Akerna stockholders that are party to the Merger Support Agreement with Gryphon and the Sale Transaction Support Agreement with MJ Acquisition, including the directors and certain executive officers of Akerna, owned an aggregate of shares of Akerna Common Stock representing approximately 1.2% of the outstanding shares of Akerna Common Stock. The holders of the Akerna Notes that entered into the Merger Lender Support Letters and the Sale Transaction Lender Support Letters own Series C Preferred Stock with voting rights equivalent to approximately 39.8% of the outstanding voting power on December 21, 2023, the record date for the special meeting. Therefore an aggregate total of approximately 41% of the outstanding shares entitled to vote on the matters at the Akerna special meeting are subject to the Merger Support Agreement, the Sale Transaction Support Agreement, the Merger Lender Support Letters or the Sale Transaction Lender Support Letters.

Pursuant to the Merger Support Agreement and the Sale Transaction Support Agreement, these stockholders, including the directors and certain executive officers of Akerna, have agreed to vote all shares of Akerna Common Stock owned by them as of the record date in favor of all the proposals at the Akerna special meeting. The Merger Lender Support Letters and the Sale Transaction Lender Support Letters provide, among other things, that the holders of the Akerna Notes will vote all of the shares of Akerna capital stock held or acquired by them in favor of the all the proposals at the Akerna special meeting and against any competing acquisition proposals. The Merger Lender Support Letters and the Sale Transaction Lender Support Letters also place certain customary restrictions on the transfer of shares of Akerna capital stock held by the respective signatories thereto prior to the closing of the Merger or the Sale Transaction, respectively. The Merger Support Agreement, the Sale Transaction Support Agreement, the Merger Lender Support Letters and the Sale Transaction Lender Support Letters are discussed in greater detail in the sections titled “Agreements Related to the Merger” and “Agreements Related to the Sale Transaction” in this proxy statement/prospectus.

Q:     What do I need to do now?

A:     Akerna urges you to read this proxy statement/prospectus carefully, including the annexes attached hereto, and to consider how the Transactions affect you.

If you are an Akerna stockholder of record, you may provide your proxy instructions in one of four different ways:

        You can attend the Akerna special meeting and vote during the special meeting.

        You can mail your signed proxy card in the enclosed return envelope.

        You can provide your proxy instructions via telephone by following the instructions on your proxy card.

        You can provide your proxy instructions via the internet by following the instructions on your proxy card.

Your signed proxy card, telephonic proxy instructions, or internet proxy instructions must be received by January 28, 2024, 11:59 p.m. Mountain Time, to be counted.

If you hold your shares in “street name” (as described below), you may provide your proxy instructions via telephone or the internet by following the instructions on your vote instruction form. Please provide your proxy instructions only once, unless you are revoking a previously delivered proxy instruction, and as soon as possible so that your shares can be voted at the Akerna special meeting.

Q:     What happens if I do not return a proxy card or otherwise vote or provide proxy instructions, as applicable?

A:     If you are an Akerna stockholder, the failure to return your proxy card or otherwise provide proxy instructions will reduce the aggregate number of votes required to approve Proposal Nos. 1, 6, 7 and 8 and will have the same effect as voting AGAINST Proposal Nos. 2, 3, 4 and 5, and your shares will not be counted for purposes of determining whether a quorum is present at the Akerna special meeting. Banks, brokers and other nominees will have discretion to vote on Proposal Nos. 2, 3 and 4.

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Q:     May I attend the Akerna special meeting and vote in person?

A:     Stockholders of record as of December 21, 2023, will be able to attend and participate in the Akerna special meeting. To join the Akerna special meeting and vote, you will need to provide proof that you are a stockholder of record as of the record date for the special meeting or the validly appointed proxy of a stockholder of record, which proof may include your proxy card. If your shares are held in “street name,” you should contact your bank, broker or other nominee to obtain a valid proxy to vote your shares at the meeting or otherwise vote through your bank, broker or other nominee.

Q:     Where and when is the Akerna Special Meeting?

A:     The Akerna special meeting will be held on January 29, 2024 at 9:00 a.m. Mountain Time at 201 Milwaukee Street, Suite 200, Denver, CO 80206. All Akerna stockholders of record as of the record date, or their duly appointed proxies, may attend the special meeting.

Q:     Who counts the votes?

A:     Continental Stock Transfer and Trust (“CST”) will be engaged as Akerna’s independent agent to tabulate stockholder votes, which Akerna refers to as the inspector of election. If you are a stockholder of record, your executed proxy card is returned directly to CST for tabulation. If you hold your shares through a broker, your broker returns one proxy card to its intermediaries on behalf of all its clients and a global proxy card is delivered to CST for counting proxy votes at the meeting.

Q:     If my Akerna shares are held in “street name” by my broker, will my broker vote my shares for me?

A:     Unless your broker has discretionary authority to vote on certain matters, your broker will not be able to vote your shares of Akerna Common Stock on matters requiring discretionary authority without instructions from you. If you do not give instructions to your broker, your broker can vote your Akerna shares with respect to “discretionary,” routine items but not with respect to “non-discretionary,” non-routine items. Discretionary items are proposals considered routine on which your broker may vote shares held in “street name” in the absence of your voting instructions. The Akerna Reverse Stock Split, the Akerna Authorized Share Increase and the Akerna Name Change will be routine matters. With respect to non-routine items for which you do not give your broker instructions, your Akerna shares will be treated as broker non-votes. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.

Q:     What are broker non-votes and do they count for determining a quorum?

A:     Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker (i) has not received voting instructions from the beneficial owner and (ii) lacks discretionary voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters.

Broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Akerna special meeting. Broker non-votes will not be treated as votes cast for or against a proposal and accordingly will not have any effect with respect to the outcome of the approval of the Merger Proposal, the approval of the 2024 Plan, the approval of the MJA Promissory Note Conversion or the Adjournment Proposal and will have the same effect as a vote AGAINST the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase and the Akerna Name Change.

Q:     May I change my vote after I have submitted a proxy or provided proxy instructions?

A:     Akerna stockholders of record, unless such stockholder’s vote is subject to a Merger Support Agreement, Sale Transaction Support Agreement, a Merger Lender Support Letter or a Sale Transaction Lender Support Letter, may change their vote at any time before their proxy is voted at the Akerna special meeting in one of four ways:

        You may submit another properly completed proxy with a later date by mail or via the internet.

        You can provide your proxy instructions via telephone at a later date.

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        You may send a written notice that you are revoking your proxy to Akerna Corp., 1550 Larimer Street #246, Denver, Colorado 80202, Attention: Secretary.

        You may attend the Akerna special meeting, revoke your proxy and vote in person. Simply attending the Akerna special meeting will not, by itself, revoke your proxy.

Your signed proxy card, telephonic proxy instructions, internet proxy instructions, or written notice must be received by January 28, 2024, 11:59 p.m. Mountain Time, to be counted.

If an Akerna stockholder that owns Akerna shares in “street name” has instructed a broker to vote its shares of Akerna Common Stock, the stockholder must follow directions received from its broker to change those instructions.

Q:     Who is paying for this proxy solicitation?

A:     Akerna will bear the cost of printing and filing of this proxy statement/prospectus and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Akerna Common Stock for the forwarding of solicitation materials to the beneficial owners of Akerna Common Stock. Akerna will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials.

Akerna will also retain Advantage Proxy, Inc. to assist it in soliciting proxies using the means referred to above. Akerna will pay the fees of Advantage Proxy, Inc., which Akerna expects to be approximately $10,000, plus reimbursement of out-of-pocket expenses.

Q:     Who can help answer my questions?

A:     If you are an Akerna stockholder and would like additional copies of this proxy statement/prospectus without charge or if you have questions about the Merger, the Sale Transaction or any of the other proposals, including the procedures for voting your shares, you should contact:

Akerna Corp.
1550 Larimer Street #246
Denver, Colorado 80202
Attention: Secretary
Telephone: 1-888-932-6537

If you have questions about the Merger, the Sale Transaction or any of the other proposals, including the procedures for voting your shares, please contact:

Advantage Proxy, Inc.
24925 13th P1 S
Des Moines, WA 98198
Call Toll-Free: 1-877-870-8565
Email: ksmith@advantageproxy.com

If you are a Gryphon equityholder and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the Merger, you should contact:

Gryphon Digital Mining, Inc.
5953 Mabel Road, Unit 138
Las Vegas, NV 89110
Attention: Rob Chang
Telephone: (877) 646-3374
E-mail: rob@gryphonmining.com

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PROSPECTUS SUMMARY

This summary highlights selected information from this proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Transactions and the proposals being considered at the Akerna special meeting, you should read this entire proxy statement/prospectus carefully, including the Merger Agreement, the Purchase Agreement and the other annexes to which you are referred in this proxy statement/prospectus. For more information, please see the section titled “Where You Can Find More Information” beginning on page 279 of this proxy statement/prospectus. Except where specifically noted, the following information and all other information contained in this proxy statement/prospectus does not give effect to the proposed Akerna Reverse Stock Split.

The Companies

Akerna Corp.

Akerna is a leading provider of enterprise software solutions within the cannabis industry. Cannabis businesses face significant complexity due to the stringent regulations and restrictions that shift based on regional, state, and national governing bodies. As the first to market more than ten years ago, Akerna’s family of software platforms help to enable regulatory compliance and inventory management across the entire supply chain. When the legal cannabis market started to grow, Akerna identified a need for organic material tracking and regulatory compliance software as a service (SaaS) solution customized specifically for the unique needs of the industry. By providing an integrated ecosystem of applications and services that help our clients enable compliance, regulation, consumer safety and taxation, Akerna is building the technology backbone of the cannabis industry. While designed specifically for the unique needs of the cannabis market, Akerna’s solutions are adaptable for other industries requiring government regulatory oversight, or where the tracking of organic materials from seed or plant to end products is desired.

Executing upon its expansion strategy, Akerna acquired complementary cannabis brands to grow the scope of Akerna’s cannabis ecosystem. Since 2019, Akerna has integrated six new brands into the Akerna product and service offering. Akerna’s first acquisition, Solo Sciences (“Solo”), was initiated in the fall of 2019, with the full acquisition completed in July 2020. Akerna added Trellis Solutions (“Trellis”) to our portfolio on April 10, 2020 and finalized the acquisition of Ample Organics (“Ample”) and Last Call Analytics (“Last Call”) on July 7, 2020. More recently, on April 1, 2021 Akerna completed its acquisition of Viridian Sciences Inc. (“Viridian”), a cannabis business management software system built on SAP Business One, followed by the acquisition of The NAV People, Inc. d.b.a 365 Cannabis (“365 Cannabis”), a cannabis business management software system built on Microsoft Business Central, on October 1, 2021. Through its growing family of companies, Akerna provides highly versatile platforms that equip its clients with a central data management system for tracking regulated products. Akerna’s solutions also provide clients with integrated security, transparency, and scalability capabilities, all while helping maintain compliance with their governing regulations.

In February of 2022, the Akerna Board determined to seek to engage a financial advisor to determine if Akerna should seek strategic alternatives to enhance stockholder value. In March 2022, Akerna engaged JMP Securities LLC (“JMP”) as its financial advisor and in May of 2022, Akerna announced that it was exploring strategic alternatives with the assistance of JMP. In May of 2022, Akerna also announced a corporate restructuring including a reduction in workforce and certain operating costs aimed at preserving capital.

In November of 2022, Akerna and Gryphon and Akerna and POSaBIT Systems Corporation (“POSaBIT”) entered into separate non-binding letters of intent to explore the possibility of engaging in a strategic transaction.

On January 27, 2023, Akerna entered into a purchase agreement (the “POSaBIT Purchase Agreement”) with Akerna Exchange and POSaBIT. Under the terms and subject to the satisfaction of the conditions described in the POSaBIT Purchase Agreement, including approval of the transaction by Akerna’s stockholders, Akerna agreed to sell to POSaBIT (or a subsidiary of POSaBIT) all of the membership interests in MJ Freeway and Akerna Exchange agreed to sell to POSaBIT all of the outstanding capital stock of Ample for an aggregate purchase price of $4,000,000 in cash.

Concurrently with the execution of the POSaBIT Purchase Agreement, on January 27, 2023, Akerna entered into the Merger Agreement with Gryphon and Merger Sub. Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the stockholders of Akerna and Gryphon, Merger Sub will be merged with and into Gryphon, with Gryphon surviving the Merger as a wholly owned subsidiary of Akerna. The Merger is intended to qualify as a tax-deferred reorganization for U.S. federal income tax purposes. If the Merger is completed, the business of Gryphon will become the business of the combined company as described beginning on page 224 of this proxy statement/prospectus under the caption “Gryphon’s Business.”

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On April 5, 2023, Akerna terminated the POSaBIT Purchase Agreement pursuant to section 9.01(c)(iii) thereof, because the Akerna Board determined that the offer letter of Alleaves Inc., a Delaware corporation (“Alleaves”) delivered to the Akerna Board on March 17, 2023, which ultimately resulted in the Purchase Agreement with MJ Acquisition, was or was likely to result in a “Superior Offer” under the terms of the POSaBIT Purchase Agreement and therefore the Akerna Board had a fiduciary obligation to Akerna’s securityholders to terminate the POSaBIT Purchase Agreement to pursue that offer. As a result of the termination, Akerna owes POSaBIT a termination fee of $140,000 and payment of up to $60,000 in reasonable fees and expenses of POSaBIT within 10 Business Days of receipt of reasonable documentation supporting such fees and expenses.

On April 28, 2023, Akerna entered into the Purchase Agreement with Akerna Exchange and MJ Acquisition. Under the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, including approval of the transaction by Akerna’s stockholders, Akerna agreed to sell to MJ Acquisition (or a subsidiary of MJ Acquisition) all of the membership interests in MJ Freeway and Akerna Exchange agreed to sell to MJ Acquisition all of the outstanding capital stock of Ample for an aggregate purchase price of $5,000,000 in cash.

Concurrently with the execution of the Purchase Agreement, on April 28, 2023, Akerna, Merger Sub and Gryphon entered into a first amendment to agreement and plan of Merger (the “First Amending Agreement”) which amends the Merger Agreement to amend the definition of “MJF Purchaser” thereunder to MJ Acquisition Corp. and pursuant to which Gryphon consents to Akerna entering into the Purchase Agreement and related documents.

On June 14, 2023, Akerna, Merger Sub and Gryphon entered into a second amendment to agreement and plan of Merger (the “Second Amending Agreement”) which amends the definition of Merger Consideration to mean the greater of (a) a number of shares of Akerna Common Stock equal to (i) the quotient obtained by dividing (A) the number of shares of Akerna Common Stock on a fully diluted basis (B) 0.075, minus (ii) the Akerna fully diluted share number minus (iii) the adjusted Gryphon warrant reserve number, and (b) a number of shares of Akerna Common Stock equal to the quotient obtained by dividing (i) $115,625,000 by (ii) the last sale price of the Akerna Common Stock on the second trading day immediately preceding the closing of the Merger.

On September 28, 2023, Akerna, Akerna Exchange and MJ Acquisition Corp. entered into a first amendment to the Purchase Agreement (the “Purchase Agreement Amendment”) which amended certain of the terms of the Purchase Agreement. Principally, the Purchase Agreement Amendment: (i) changed the outside date of the Purchase Agreement to December 31, 2023; (ii) amended the Purchase Agreement to reduce the amount of cash to be paid at closing from $4 million to $2 million; (iii) amended the Purchase Agreement to add a new section which provides that prior to closing under the Purchase Agreement MJ Acquisition Corp will work in good faith on a best efforts basis across multiple interested parties on behalf of and with the express approval of Akerna to secure for Akerna the highest purchase price possible for the shares of Ample, and Akerna shall cause the proceeds from such sale to be included in the assets of MJ Freeway effective as of the closing of the Sale Transaction; provided that, notwithstanding the foregoing, in the event that the shares of Ample are sold to a third-party for a net purchase price above $700,000, Akerna shall be entitled to retain all net proceeds in excess of $700,000; (iv) provided that, within 3 business days of the Purchase Agreement Amendment, MJA will loan Akerna an additional $500,000 to fund Akerna’s working capital requirements; and (v) provided that concurrently with the funding of the additional $500,000 loan to Akerna, Akerna will issue an amended and restated convertible secured promissory note (“MJA Promissory Note”) to MJ Acquisition Corp. and related security documents. The MJA Promissory Note will convert into shares of Akerna Common Stock at the closing the Sale Transaction.

On November 15, 2023, Akerna, Akerna Exchange and MJ Acquisition Corp. entered into a second amendment to the Purchase Agreement (the “Second Purchase Agreement Amendment”) which amended certain of the terms of the Purchase Agreement. Principally, the Second Purchase Agreement Amendment: (i) amended the Purchase Agreement to reduce the amount of cash to be paid at closing from $2 million to $1.85 million; (ii) amended the Purchase Agreement to provide that the proceeds from any sale of the shares of Ample prior to the Closing are to be remitted to the MJ Acquisition Corp. upon the closing of such sale (not to exceed $700,000 less $20,000 to cover Akerna’s legal expenses; (iii) provided that concurrently with the Second Purchase Agreement Amendment, MJ Acquisition Corp. will loan Akerna an additional $150,000 to fund Akerna’s working capital requirements; and (iv) provided that concurrently with the funding of the additional $150,000 loan to Akerna, Akerna will issue an amended and restated convertible secured promissory note in the amount of $1.65 million (“MJA Promissory Note”) to MJ Acquisition Corp. and related security documents. The MJA Promissory Note will convert into shares of Akerna Common Stock at the closing the Sale Transaction.

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On December 20, 2023, Akerna and the Holders entered into Amendment No. 1 to the Exchange Agreements (the “Amended Exchange Agreements”), respectively, to amend the terms of the Exchange Agreements related to the Initial Closing (as defined therein) and the issuance of shares of the Company’s Series C Non-Convertible Preferred Stock (the “Series C Preferred Stock”) at the Initial Closing. In connection with the Initial Closing under the Amended Exchange Agreements, the Company issued an aggregate total of 3,244 shares of Series C Preferred Stock upon exchange of $3,422,000 in principal amount of Akerna Notes.

On December 28, 2023, pursuant to the terms of the Purchase Agreement, Akerna and Akerna Exchange entered into a share purchase agreement with Wilcompute Systems Group Inc. (“Wilcompute”) pursuant to which Akerna Exchange sold all of the Capital Stock of Ample to Wilcompute for approximately $638,000. In accordance with the Purchase Agreement, in lieu of delivering the Capital Stock of Ample at the closing of the Sale Transaction, Akerna will instead deliver to MJ Acquisition the $638,000 purchase price received from Wilcompute, which Akerna expects to be in the form of a reduction of the purchase price paid by MJ Acquisition from $1.85 million to approximately $1.22 million. On December 28, 2023, Akerna, Akerna Exchange and MJ Acquisition Corp. enerted into a third amendment to the Purchase Agreement to reduce certain of the indemnity caps therein to reflect the sale of the Capital Stock of Ample to Wilcompute.

Our principal executive offices are located at 1550 Larimer Street #246, Denver, Colorado 80202, and our telephone number is (888) 932-6537 and our Internet website address is www.akerna.com. The information on our website is not a part of, or incorporated in, this proxy statement/prospectus.

Gryphon Digital Mining Inc.

Founded in October 2020, Gryphon is a bitcoin mining company based in Las Vegas, Nevada. Gryphon commenced its digital assets mining operations in September 2021. Gryphon’s mission is to create a net carbon neutral bitcoin miner. Gryphon’s revenue model is to mine and hold bitcoin, and then sell only the bitcoin that is necessary to pay its operating expenses and to reinvest in operational expansion.

Gryphon’s operations encompass the following:

        Self-Mining:    Gryphon operates approximately 7,400 bitcoin ASIC mining computers, referred to as “miners,” from Bitmain Technologies Limited (“Bitmain”) that Gryphon has installed at third-party hosted mining data centers located in New York, Georgia and North Carolina. Revenue generated by the mining of bitcoin is measured on a dollar per megawatt-hour (“MWh”) basis and is variable based on the price of Bitcoin, the measure of difficulty, transaction volume and global hash rates.

        ESG-Led Mining:    Gryphon is an ESG-committed bitcoin miner with the mission to create the world’s largest bitcoin miner with a neutral carbon footprint. Gryphon currently uses net carbon neutral energy in its power mix.

Gryphon launched its mining operations in September 2021 upon the receipt of the first of 12 batches of 600 Bitmain S19j Pro Antminers. Gryphon has deployed a total of approximately 7,400 S19j Pro Antminers from Bitmain pursuant to the Bitmain Agreement (as defined below) and subsequent market purchases.

Given the significant amount of power that ASIC miners require to operate, Gryphon believes most mining companies focus completely on low-cost electricity without considering the impact of the power’s production on the climate. Gryphon’s strategy is to focus on working with power hosting partners that are committed to climate science and also can produce reliable, low-cost power. Gryphon uses 25 megawatts of space at its primary hosting facility in New York, which relies on renewable hydro energy. As it deploys additional miners, Gryphon will work with hosting partners that have committed to providing carbon neutral power.

Gryphon’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate the continuation of Gryphon as a going concern and the realization of assets and satisfaction of liabilities in the ordinary course of business. These financial statements do not include any adjustments that might result from Gryphon’s inability to continue as a going concern. However, Gryphon’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about Gryphon’s ability continue as a “going concern.” Gryphon is a privately-held corporation and its securities do not trade on any marketplace. The principal executive offices of Gryphon are located at 5953 Mabel Road, Unit 138, Las Vegas, NV 89110, and its telephone number is (877) 646-3374.

See “Gryphon’s Business” and “Gryphon Management’s Discussion and Analysis of Financial Condition and Results of Operations” for important business and financial information regarding Gryphon.

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Akerna Merger Co.

Akerna Merger Co. is a Delaware corporation and a wholly-owned subsidiary of Akerna, and was formed solely for the purposes of carrying out the Merger.

MJ Acquisition Corp.

MJ Acquisition Corp. is a Delaware corporation engaged in cannabis technologies. MJ Acquisition Corp. received a portion of its financing for the Sale Transaction Purchase Price from Alleaves through a loan. Alleaves is not a stockholder or an affiliate of MJ Acquisition Corp. and the two companies do not have any overlapping executive officers or directors. Alleaves is also involved in cannabis technologies, including integrated payments, point of sale, cultivation, delivery, production and distribution technologies. The principal executive offices of MJ Acquisition are located at 16192 Coastal Highway, Lewes, Delaware 19958 and its telephone number is 203-550-3679.

The Transactions

The Merger (see page 286)

If the Merger is completed, Merger Sub will merge with and into Gryphon, with Gryphon surviving as a wholly-owned subsidiary of Akerna. The Merger is expected to be accounted for as a reverse acquisition, at the time of the closing of the Merger.

Subject to the terms and conditions of the Merger Agreement, at the Effective Time, each Gryphon Share outstanding immediately prior to the Effective Time will be converted into the right to receive a per share portion of the shares of Akerna Common Stock comprising the Merger Consideration (subject to adjustment to account for the proposed Akerna Reverse Stock Split), as described in more detail in the section titled “The Merger Agreement — Merger Consideration” beginning on page 116 of this proxy statement/prospectus.

Each share of Akerna Common Stock, each share of Akerna Common Stock reserved for issuance upon the exercise of each warrant to purchase Akerna Common Stock, that is issued and outstanding at the Effective Time will remain issued and outstanding, and such securities will be unaffected by the Merger.

Akerna following the Merger is referred to herein as the “combined company.” After the completion of the Merger, the combined company will change its corporate name to “Gryphon Digital Mining, Inc.” Immediately after the consummation of the Merger, Akerna equityholders as of immediately prior to the Merger are expected to own approximately 7.5% of the outstanding equity interests of the combined company on a fully diluted basis and former Gryphon equityholders are expected to own approximately 92.5% of the outstanding equity interests of the combined company on a fully diluted basis. Ownership percentages will depend on the calculation of the Merger Consideration at closing, which will depend on a number of variables, including the last sales price of Akerna Common Stock on the second trading day immediately prior to closing of the Merger and the amount of the principal remaining outstanding on Akerna’s convertible notes following any conversions or company redemptions that occur prior to closing and the number of shares of Akerna Common Stock that may be issued to settle accounts payable of Akerna prior to closing.

The closing of the Merger will occur as promptly as practicable, but in no event later than the second business day, after the last of the conditions to the Merger has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the Merger, but subject to the satisfaction or waiver of each such conditions)), or at such other time, date and place as Akerna and Gryphon mutually agree. Akerna and Gryphon anticipate that the consummation of the Merger will occur in Akerna’s first fiscal quarter of 2024. However, because the Merger is subject to a number of conditions, neither Akerna nor Gryphon can predict exactly when the closing of the Merger will occur or if it will occur at all. The closing of the Merger and the closing of the Sale Transaction are conditioned on each other and the parties expect that, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement and the Purchase Agreement, respectively, the Sale Transaction will be consummated immediately following the closing of the Merger.

Sale Transaction (see page 286)

Akerna has also entered into the Purchase Agreement with MJ Acquisition pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Purchase Agreement, Akerna will sell to MJ Acquisition all of the membership interests in MJ Freeway and Akerna Exchange will sell to MJ Acquisition all of the capital stock of Ample for an aggregate cash purchase price of $1.85 million, subject to adjustments and a loan to Akerna from MJ Acquisition in the amount of $1,650,000 (funded $1,000,000 on April 28, 2023, $500,000 on October 11, 2023 and $150,000 on November 15, 2023), which principal amount will convert into shares of common stock of Akerna at closing pursuant

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to the MJA Promissory Note. On December 28, 2023, pursuant to the terms of the Purchase Agreement, Akerna and Akerna Exchange entered into a share purchase agreement with Wilcompute pursuant to which Akerna Exchange sold all of the Capital Stock of Ample to Wilcompute for approximately $638,000. In accordance with the Purchase Agreement, in lieu of delivering the Capital Stock of Ample at the closing of the Sale Transaction, Akerna will instead deliver to MJ Acquisition the $638,000 purchase price received from Wilcompute, which Akerna expects to be in the form of a reduction of the purchase price paid by MJ Acquisition from $1.85 million to approximately $1.22 million. All shares of Akerna Common Stock issued upon conversion of the MJA Promissory Note will be included in the shares of Akerna Common Stock outstanding prior to the closing of the Merger and will be taken into account in calculating the Merger Consideration, which will dilute current Akerna stockholders.

The closing of the Sale Transaction will occur as promptly as practicable, but in no event later than the second business day, after the last of the conditions to the Sale Transaction has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the Sale Transaction, but subject to the satisfaction or waiver of each such conditions), or at such other time as Akerna and MJ Acquisition agree. Akerna anticipates that the consummation of the Sale Transaction will occur in Akerna’s first fiscal quarter of 2024. However, because the Sale Transaction is subject to a number of conditions, Akerna cannot predict exactly when the closing of the Sale Transaction will occur or if it will occur at all. The closing of the Merger and the closing of the Sale Transaction are conditioned on each other and the parties expect that, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement and the Purchase Agreement, respectively, the Sale Transaction will be consummated immediately following the closing of the Merger.

Akerna Reasons for the Transactions (see page 95) and Gryphon Reasons for the Merger (see page 99)

After consideration and consultation with its senior management and its financial and legal advisors, the Akerna Board unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated thereby and the Purchase Agreement, the Sale Transaction and the other transactions contemplated thereby are advisable, fair to and in the best interests of Akerna and its stockholders. The Akerna Board considered various reasons to reach its determination. For example the Akerna Board considered and assessed:

        the financial condition and prospects of Akerna and its current business and the risks associated with continued operations, including Akerna’s history of substantial losses, the need for a likely highly dilutive equity capital raise in the near term to fund ongoing operations, risks related to servicing the Akerna Notes and the potential for a default under the terms of the Akerna Notes, the current stock price of the Akerna Common Stock and overall prospects of Akerna’s current operations, the timeline for profitable operations and the costs of operating as a public company;

        the risks and delays associated with, and uncertain value and costs to Akerna stockholders of, liquidating Akerna, including the uncertainties of continuing cash burn while debt and contingent liabilities are resolved, the likelihood that there would not be sufficient cash upon liquidation to satisfy Akerna’s debt obligations resulting in no cash available for distribution to stockholders, uncertainty of timing of release of any remaining cash until contingent liabilities are resolved, and the risks and costs associated with being a shell company prior to any such cash distribution;

        the risks and challenges of attempting to continue to operate Akerna on a stand-alone basis, including the substantial time required and uncertainty to successfully address the ongoing losses of continued operations and the need to service the Akerna Notes and challenges in retaining staff with limited cash and projected financial losses;

        that the Akerna Board and its financial advisor undertook a comprehensive and thorough process of reviewing and analyzing potential strategic alternatives and merger partner candidates to identify the opportunity that would, in the Akerna Board’s view, create the most value for Akerna stockholders;

        the Akerna Board’s belief, after a thorough review of strategic alternatives and discussions with Akerna’s senior management, financial advisors and legal counsel, that the Merger and Sale Transaction are more favorable to Akerna stockholders than the potential value that might have resulted from other strategic alternatives available to Akerna, including to operate Akerna on a stand-alone basis;

        the Akerna Board’s belief that, as a result of arm’s length negotiations with Gryphon, Akerna and its representatives negotiated the best ratio to which Gryphon was willing to agree, and that the other terms of the Merger Agreement include the most favorable terms to Akerna in the aggregate to which Gryphon was willing to agree;

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        the Akerna Board’s belief that, as a result of arm’s length negotiations with MJ Acquisition, Akerna and its representatives negotiated the best cash purchase price to which MJ Acquisition was willing to agree, and that the other terms of the Purchase Agreement include the most favorable terms to Akerna in the aggregate to which MJ Acquisition was willing to agree;

        the expected cash resources of the combined company and the likelihood the combined company would possess sufficient cash resources to fund future operations of the combined company;

        Akerna’s management and its financial and legal advisors financial, regulatory, legal and technical due diligence on Gryphon’s business and operations;

        the Akerna Board’s view, following a review with Akerna’s management of Gryphon’s current business plan, of the likelihood that the combined company would possess sufficient cash resources at the closing of the Merger to fund the business of the combined company through upcoming value inflection points;

        the lack of prospects of and risks associated with finding other strategic candidates;

        the ability of Akerna stockholders to participate in the growth and value creation of the combined company following the closing of the Merger by virtue of their continued ownership of Akerna Common Stock;

        the current financial market conditions and historical market prices, volatility, and trading information for Akerna Common Stock;

        the experience of the senior management team and board of directors of the combined company, which will consist of experienced representatives from Gryphon’s management team and board of directors and one representative from Akerna’s Board;

        the Akerna Board’s consideration of the financial analyses of JMP, including its opinion to the Akerna Board as to the fairness, from a financial point of view and as of the date of the opinion, to Akerna of the consideration to be paid by Akerna in the Merger and the consideration to be received by Akerna in the POSaBIT Sale Transaction, as more fully described below under the caption “The Merger — Opinion of Akerna’s Financial Advisor,” beginning on page 103 in this proxy statement/prospectus; and

        the variety of risks and other countervailing factors related to entering into the Merger Agreement and Purchase Agreement as joint transactions, including the potential effect of termination fees, the substantial expense incurred in connection with the Transactions and the risks and uncertainties associated with Gryphon’s business and various other risks.

The board of directors of Gryphon (the “Gryphon Board”) has unanimously approved the Merger Agreement, the Merger and the transactions contemplated thereby. The Gryphon Board reviewed several factors in reaching its decision and believes that the Merger Agreement, the Merger and the transactions contemplated thereby are in the best interests of Gryphon and its stockholders. Several factors considered by the Gryphon Board included:

        the financial condition, historical results of operations and strategic objectives of Gryphon;

        the exchange ratio to be paid by Akerna pursuant to the Merger, where it is expected that Gryphon shareholders receive approximately 92.5% and Akerna shareholders receive approximately 7.5% of the combined company, and the related anticipated allocation of the equity interests of the combined company, on a fully diluted basis, following completion of the Merger;

        the risks associated with structuring the Merger and the Sale Transaction as joint transactions, including the potential difficulties associated with coordinating and completing both transactions simultaneously and the risk that the Sale Transaction does not close on a timely basis or at all;

        the terms of the Merger Agreement, the Purchase Agreement and related transaction documents, concluding the terms, in the aggregate, were reasonable;

        the current capitalization of Akerna, including the terms of the Akerna Notes, and the ability of Akerna to simplify its capitalization prior to completion of the Merger;

        the terms of the Exchange Agreements, the treatment of the Akerna Notes contemplated thereby and the entry by the holders of Akerna Notes into Merger Lender Support Letters;

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        the potential increased access to sources of capital and a broader range of investors to support Gryphon’s Bitcoin mining operations following consummation of the Merger and the expected continued listing of the combined company on The Nasdaq Capital Market, compared to if Gryphon continued to operate as a privately held company;

        the potential to provide its current stockholders with greater liquidity by owning stock in a public company;

        the cash resources of the combined company, with $5.5 million of cash and cash equivalents on a pro forma basis as of September 30, 2023 after giving effect to the Merger, which Gryphon Board believes is sufficient to enable Gryphon to pursue its near term goals and business plans;

        the determination that the expected relative percentage ownership of Akerna stockholders and Gryphon’s stockholders in the combined company was appropriately based, in the judgment of the Gryphon Board, on the Gryphon Board’s assessment of the approximate valuations of Akerna and Gryphon; and

        the expectation that the Merger with Akerna would be a more time- and cost-effective means to access capital than other options considered by the Gryphon Board, including additional private financings or an initial public offering.

For a more complete description of the reasons for the Merger, please see the sections titled “The Transactions — Akerna Reasons for the Transactions” and “The Transactions — Gryphon Reasons for the Merger” beginning on pages 95 and 99, respectively, of this proxy statement/prospectus.

Opinion of Akerna’s Financial Advisor (see page 103)

JMP rendered its opinion to the Akerna Board that, as of January 26, 2023, based on and subject to the factors and assumptions set forth in the opinion, the consideration to be received by Akerna in the sale transaction under the POSaBIT Purchase Agreement (the “POSaBIT Sale Transaction”) and the consideration to be paid by Akerna in the Merger was fair, from a financial point of view, to Akerna. For a more complete description of the opinion of JMP, please see the section titled “The Merger — Opinion of Akerna’s Financial Advisor” beginning on page 103.

The Akerna Board considered whether to obtain a new fairness opinion in relation to entering into the Purchase Agreement with MJ Acquisition subsequent to the January 26, 2023 opinion delivered by JMP. The Akerna Board determined that such fairness opinion was not necessary in determining that the new transaction with MJ Acquisition is advisable, fair to and in the best interests of Akerna and its stockholders for the following reasons: (i) the fact that the POSaBIT deal was a cash only deal and that the deal with MJ Acquisition was also cash only with a premium of an additional $1 million in purchase price representing an increase in value of 25% and a superior offer to the transaction with POSaBIT, (ii) the Purchase Agreement is materially identical to the POSaBIT Purchase Agreement outside of the increased purchase price, (iii) the consideration to be received by Akerna in the Merger remained unchanged (iv) the transaction with MJ Acquisition provided Akerna with access to $1 million of the cash purchase price immediately on signing of the Purchase Agreement in the form of a secured bridge loan, which additional cash resources increased the likelihood of Akerna being able to fund operations and corporate expenses through closing of the Merger and the Sale Transaction, making such closing more likely under the transaction with MJ Acquisition than the transaction with POSaBIT, (v) the Board’s determination in coordination with Akerna management that the business and prospects of Akerna’s business had not changed materially from January 26, 2023, the date the opinion was delivered by JMP and (vi) the significant cost and delay in timing of obtaining a new fairness opinion created additional risk to the closing of the Merger and the Sale Transaction.

The Akerna Board considered whether to obtain a new fairness opinion in relation to entering into the Second Amendment to the Merger Agreement subsequent to the January 26, 2023 opinion delivered by JMP. The Akerna Board determined that such fairness opinion was not necessary in determining that the Second Amendment to the Merger Agreement was advisable, fair and in the best interests of Akerna and its stockholders for the following reasons: (i) the presentation of share price scenarios by management of Akerna and representatives of JMP making it clear that the change in value to Akerna stockholders would only occur if there was a significant drop in the market value of Akerna shares immediately prior to closing of the Merger, including the analysis that even a drop to $0.01 per share of Akerna Common Stock would only result in a decrease in value to Akerna stockholders of approximately 1% of the combined company on a fully diluted basis, which would be valued at approximately $1.2 million based on a minimum valuation of Gryphon at approximately $116 million and since the combined deal value of the Merger and the Sale Transaction together had been increased by $1 million through entering into the transaction with MJ Acquisition, the

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Board determined that the overall deal value to Akerna since January 26, 2023 had not materially changed, and (ii) the Board’s determination in coordination with Akerna management that business and prospectus of Akerna had not materially changed since January 26, 2023.

The Akerna Board considered whether to obtain a new fairness opinion in relation to entering into the Purchase Agreement Amendment subsequent to the January 26, 2023 opinion delivered by JMP. The Akerna Board determined that such fairness opinion was not necessary in determining that the Purchase Agreement Amendment was advisable, fair and in the best interests of Akerna and its stockholders for the following reasons: (i) the combined deal value of the Merger and the Sale Transaction to the stockholders of Akerna was not materially decreased by the reduction in the cash Purchase Price, (ii) Akerna needed the additional $500,000 loan from MJ Acquisition Corp. to cover operating expenses to close and (iii) the Board’s determination in coordination with Akerna management that business and prospects of Akerna had not materially changed since January 26, 2023.

While the Akerna Board believes that the opinion delivered by JMP is still useful in determining the fairness of the Merger and the Sale Transaction to stockholders of Akerna due to the factors set forth above, stockholders should note that because the Akerna Board did not seek a new opinion from JMP following terminating the POSaBIT Purchase Agreement and entering into the Purchase Agreement and prior to entering into the Second Amendment to the Merger Agreement and the Purchase Agreement Amendment, the opinion of JMP does not address the current terms of the Merger and the Sale Transaction and Akerna stockholders should use caution in relying on such opinion.

The full text of JMP’s written opinion sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on and scope of the review undertaken by JMP in connection with its opinion. JMP’s written opinion is attached as Annex H to this proxy statement/prospectus and is incorporated herein by reference. The summary of JMP’s opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of JMP’s opinion. We urge Akerna stockholders to read carefully JMP’s opinion, together with the summary thereof in this proxy statement/prospectus, in its entirety.

JMP’s opinion was directed and addressed to the Akerna Board (in its capacity as such) in connection with its consideration of the POSaBIT Sale Transaction and the Merger. JMP’s opinion did not address the underlying decision of the Akerna Board to proceed with or effect the POSaBIT Sale Transaction or the Merger or the relative merits of the POSaBIT Sale Transaction or the Merger as compared to any alternative strategy or transaction that might exist for Akerna. JMP’s opinion does not constitute a recommendation as to how the Akerna Board or any Akerna stockholder should act or vote with respect to the Merger or any other matter.

Overview of the Merger Agreement

Merger Consideration (see page 116)

At the Effective Time, each Gryphon Share that is issued and outstanding immediately prior to the Effective Time will be converted into the right to receive a number of shares of Akerna Common Stock determined by the Merger Consideration as detailed below.

The Merger Agreement does provide for adjustment (including an adjustment as a result of the proposed Akerna Reverse Stock Split) to the total number of shares of Akerna Common Stock that Gryphon stockholders will be entitled to receive as part of the Merger, based on changes in the market price of Akerna Common Stock prior to the closing of the Merger, provided however that the Merger Agreement provides for a minimum valuation of Gryphon of approximately $116 million and Gryphon stockholders at a minimum will receive such number of shares of Akerna Common Stock as reflects this minimum valuation regardless of the market price of Akerna Common Stock at the closing of the Merger. The market value of the shares of Akerna Common Stock issued pursuant to the Merger will depend on the market value of the shares of Akerna Common Stock at the time the Merger closes, and could vary significantly from the market value of the shares of Akerna Common Stock on the date of this proxy statement/prospectus, subject to the minimum value of approximately $116 million.

At the Effective Time, by virtue of the Merger and without any action on the part of the Akerna or the Merger Sub, Gryphon or any holder of Gryphon Shares:

        each Gryphon Share that is issued and outstanding immediately prior to the Effective Time shall automatically be converted into and become the right to receive the applicable per share portion of the “merger consideration” with respect to such Gryphon Share as set forth in the allocation statement to be delivered pursuant to the Merger Agreement (“merger consideration” is defined in the Merger Agreement

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to mean the greater of: (A) a number of shares of Akerna Common Stock equal to (a) the quotient obtained by dividing (i) the number of shares of Akerna capital stock issued and outstanding at the Effective Time on a fully diluted basis (giving effect to the exchange of all amounts outstanding under the Akerna Notes and all shares of Series C Preferred Stock for shares of common stock of the combined company pursuant to the terms of the Exchange Agreements and the Akerna Notes) (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 Akerna Common Stock the Gryphon Warrants will become exercisable for upon closing of the Merger and (B) a number of shares of Akerna Common Stock equal to the quotient obtained by dividing (a) $115,625,000 by (b) the last reported sale price of Akerna Common Stock on the Nasdaq on the second business day prior to the Effective Time). As of the Effective Time, all such Gryphon Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder shall thereafter cease to have any rights with respect thereto, except the right to receive the consideration set forth in the Merger Agreement;

        each outstanding Gryphon Warrant will be assumed by Akerna and become a warrant to purchase an adjusted number of shares of common stock of the combined company, at an adjusted exercise price per share but subject to the same terms and conditions as the Gryphon Warrant; and

        each issued and outstanding share of capital stock of Merger Sub shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.0001 per share, of the surviving company of the Merger.

Conditions to the Completion of the Merger (see page 119)

To consummate the Merger, Akerna stockholders must approve the Merger Proposal, the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Name Change, the Akerna Authorized Share Increase and the 2024 Plan. Additionally, the Gryphon stockholders must approve the Merger and adopt the Merger Agreement and the related transactions. In addition to obtaining such securityholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived, including, among other things:

        no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing or making illegal the consummation of the Merger or the Sale Transaction shall be in effect;

        the Registration Statement on Form S-4, of which this proxy statement/prospectus is a part, must have become effective in accordance with the provisions of the Securities Act of 1933, as amended, and must not be subject to any stop order or proceeding, or any proceeding threatened by the SEC, seeking a stop order with respect to the registration statement that has not been withdrawn;

        each of Akerna and Gryphon must have performed or complied in all material respects with all covenants and obligations in the Merger Agreement required to be performed or complied with by it on or before the consummation of the Merger;

        all conditions for the closing of the Sale Transaction shall have been performed or waived in accordance with the Purchase Agreement and the Sale Transaction shall be consummated immediately after the consummation of the Merger; and

        Nasdaq shall have approved the continued listing of the Akerna Common Stock (including the shares of Akerna Common Stock comprising the Merger Consideration pursuant to the Merger Agreement) on Nasdaq following the consummation of the Merger and the other transactions contemplated therein.

The obligation of Gryphon to close the Merger is also subject to satisfaction of certain additional conditions, including, among other things, (i) the accuracy of Akerna’s representations and warranties in the Merger Agreement and compliance by Akerna with its covenants and agreements in the Merger Agreement; (ii) no Akerna material adverse effect; (iii) compliance with the Merger Support Agreement and Merger Lender Support Letters; (iv) continued listing of the Akerna Common Stock on The Nasdaq Capital Market through the Effective Time; (v) compliance by Akerna with the Purchase Agreement; (vi) compliance with the Exchange Agreements by the holders of Akerna Notes and Akerna, termination of all agreements relating to the Akerna Notes and the release of all related encumbrances; (vii) all redemptions of Akerna preferred stock (other than the Series C Preferred Stock) being completed; (viii) the winding down of Akerna’s legacy business; (ix) completion of the Akerna Reverse Stock Split; (x) Akerna having $500,000 in cash on hand; (xi) satisfaction of all conditions precedent to the exchange of all amounts outstanding under the Akerna Notes and all shares of Series C Preferred Stock for common

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stock of the combined company immediately following the completion of the Merger, pursuant to the Exchange Agreements; and (xii) the Registration Statement contemplated by that certain Registration Rights Agreement, dated as of June 12, 2023, by and between Akerna and MJ Bridge Co., Inc., shall have been declared effective under the Securities Act by the SEC.

No Solicitation (see page 122)

Pursuant to the Merger Agreement, Akerna has agreed that it will not, and will not permit or authorize any of its subsidiaries or their respective representatives, directly or indirectly, to:

        solicit, initiate, endorse, knowingly encourage or facilitate any inquiry, proposal or offer with respect to, or the making or completion of, any “Acquisition Proposal,” as defined in the Merger Agreement, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal;

        enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal; and

        resolve, agree or propose to do any of the foregoing; provided, that Akerna may (x) advise any person of the restrictions of the Merger Agreement; and (y) advise any person making an acquisition proposal that the Akerna Board has determined that such acquisition proposal does not constitute a “Superior Proposal” (as defined in the Merger Agreement), in each case, if, in so doing, no other information that is prohibited from being communicated under the Merger Agreement is communicated to such person.

Further, Akerna has also agreed that it will, and will cause each of its subsidiaries their respective representatives to, (A) immediately cease and cause to be terminated all existing discussions and negotiations with any person conducted heretofore with respect to any Acquisition Proposal or potential Acquisition Proposal and immediately terminate all physical and electronic data room access previously granted to any such person, (B) request the prompt return or destruction of all confidential information previously furnished with respect to any Acquisition Proposal or potential Acquisition Proposal, and (C) not terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement to which it or any of its affiliates or representatives is a party with respect to any Acquisition Proposal or potential Acquisition Proposal, and will enforce the provisions of any such agreement, which shall include seeking any injunctive relief available to enforce such agreement (provided, that Akerna will be permitted to grant waivers of, and not enforce, any standstill agreement, but solely to the extent that the Akerna Board has determined in good faith, after consultation with its outside counsel, that failure to take such action (1) would prohibit the counterparty from making an unsolicited acquisition proposal to the Akerna Board in compliance with the terms of the Merger Agreement and (2) would constitute a breach of its fiduciary duties to the Akerna stockholders under applicable law).

Termination (see page 128)

Either Akerna or Gryphon may terminate the Merger Agreement upon mutual consent. Either party may terminate the Merger Agreement: (i) if any of the representations or warranties of the other party set forth in the Merger Agreement shall not be true and correct or if the other party has failed to perform any covenant or agreement on the part of such party set forth in the Merger Agreement; (ii) the Merger is not consummated by the outside date (July 15, 2023); (iii) there is a governmental order prohibiting the Merger; or (iv) upon failure to obtain the approval of the Akerna stockholders of all of the proposals set forth in this proxy statement/prospectus. Gryphon may terminate the Merger Agreement if: (A) the Akerna Board changes its recommendation to stockholders with respect to the Merger; (B) the Akerna Board fails to reaffirm its recommendation to stockholders with respect to the Merger following a tender offer for Akerna; (C) the Akerna Board fails to reaffirm its recommendation to stockholders with respect to the Merger following a publicly announced acquisition proposal for Akerna; (D) Akerna breaches its non-solicitation covenants in the Merger Agreement; or (E) the Akerna Board resolves to do any of the above. Akerna may terminate the Merger Agreement for acceptance of a superior proposal.

Termination Fee (see page 130)

In the event that Gryphon or Akerna terminates the Merger Agreement pursuant to certain of the sections set forth above, Akerna will be required to pay Gryphon a termination fee of $275,000, less any reimbursed expenses.

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Merger Support Agreements (see page 131)

Certain Gryphon stockholders, including directors and executive officers of Gryphon, are parties to Support Agreements with Akerna. Following the Registration Statement on Form S-4, of which this proxy statement/prospectus is a part, being declared effective by the SEC, and pursuant to the conditions of the Merger Agreement, Gryphon stockholders who are party to the Support Agreements have each agreed to execute an action by written consent, referred to as the written consent, in favor of the approval and adoption of the Merger Agreement, and approval of the transactions contemplated by the Merger Agreement. The Support Agreements will terminate upon certain events, including any termination of the Merger Agreement in accordance with its terms.

The Gryphon directors, officers and stockholders that are party to Support Agreements with Akerna owned approximately 72% of the outstanding Gryphon Shares as of January 4, 2024.

Akerna directors and officers who held shares of Akerna Common Stock as of the date of the Merger Agreement (each in their capacities as stockholders) are each party to a Merger Support Agreement with Gryphon pursuant to which, among other things, each of these stockholders agreed, solely in his or her capacity as a stockholder, to vote all of his or her shares of Akerna Common Stock (a) in favor of the Akerna stockholder proposals set forth herein and (b) against any “acquisition proposal,” as defined in the Merger Agreement, and subject to certain exceptions, have also agreed not to transfer their shares of Akerna Common Stock and voting preferred stock. The directors and officers of Akerna that are party to such Merger Support Agreement with Gryphon owned an aggregate of 120,073 outstanding shares of Akerna Common Stock, representing approximately 1.2% of the outstanding Akerna Common Stock as of December 21, 2023, which is the record date for the special meeting.

Each of the holders of the Akerna Notes entered into Merger Lender Support Letters with Akerna. The holders of the Akerna Notes that entered into Merger Lender Support Letters own Series C Preferred Stock with voting rights equivalent to approximately 39.8% of the outstanding voting rights on December 21, 2023, which is the record date for the special meeting. Therefore an aggregate total of approximately 41% of the outstanding shares of Akerna capital stock entitled to vote on the matters at the Akerna special meeting are subject to the Merger Support Agreement or Merger Lender Support Letters. The Merger Lender Support Letters provide, among other things, that the holders of the Akerna Notes will vote all of the shares of Akerna capital stock held or acquired by them in favor of the all the proposals at the Akerna special meeting and against any competing acquisition proposals. The Merger Lender Support Letters also place certain customary restrictions on the transfer of shares of Akerna capital stock held by the respective signatories thereto prior to the closing of the Merger.

Exchange Agreements, Akerna Notes and Series C Preferred Stock

Concurrently with the signing of the Merger Agreement, Akerna entered into the Exchange Agreements with the Akerna Note Holders.

Pursuant to the Exchange Agreements, as amended, each Akerna Note Holder agreed to exchange a certain aggregate conversion amount of the Akerna Notes no greater than the lesser of (i) the aggregate amount then outstanding under the Akerna Notes and (ii) such portion of the maximum note amount set forth in the Exchange Agreement for such Akerna Note Holder that is convertible into 19.9% of the voting rights of the Company outstanding as of the time immediately following the issuance of the Series C Preferred Stock into such number of shares of newly designated Series C Preferred Stock of Akerna, which will have an aggregate voting power and economic value equal to the aggregate number of shares of common stock then issuable upon conversion of such amount of Akerna Note.

The Series C Preferred Stock is non-convertible, voting preferred stock. Akerna anticipates that the Series C Preferred Stock will be exchanged into Akerna Common Stock at a price per share equal to the market price at the time of the exchange (the “New Preferred Exchange Shares”). The Series C Preferred Stock can also be redeemed for cash at the option of Akerna and in limited circumstances redeemed for cash at the option of the holder.

Under the Exchange Agreements, Akerna has agreed that 50% of the gross proceeds from any subsequent placement will be used to repay the aggregate amounts then outstanding under the Akerna Notes, allocated pro rata to the Akerna Note Holders then outstanding based on the aggregate principal amount of Akerna Notes outstanding as of the time of such applicable subsequent placement (“Subsequent Placement Redemption”).

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Further, Akerna has agreed that on or prior to the closing of the Merger, if any Akerna Notes are then outstanding, Akerna will consummate one or more Company Optional Redemptions (as defined in the Akerna Notes) pursuant to the terms of the Akerna Notes (as amended under the Exchange Agreements), using the lesser of (A) the difference of (I) the sum of (x) all cash then held by Akerna (or any of its subsidiaries) and (y) any cash to be paid, directly or indirectly, to Akerna (or any of its subsidiaries) in connection with the transactions contemplated by the Merger Agreement and/or the Purchase Agreement, as applicable, less (II) $500,000 and (B) an aggregate amount of cash equal to the Company Optional Redemption Price of the aggregate Conversion Amount (as defined in the Akerna Notes) of the Akerna Notes then outstanding (with each such Company Optional Redemption allocated pro rata to the Akerna Note Holders then outstanding based upon the aggregate principal amount of Akerna Notes then outstanding) (the “Cash Sweep”).

Upon closing of the Merger, the Exchange Agreements provide that if any portion of the Akerna Notes remain outstanding other than such portion of the applicable Company Optional Redemption Price of the Akerna Notes to be paid in cash pursuant to the Cash Sweep, to exchange the remaining Conversion Amount of the Notes into such aggregate number of shares of common stock of the combined company (the “New Note Exchange Shares”, together with the New Preferred Exchange Shares, the “Final Closing Exchange Shares”) equal to the quotient of (A) the applicable Company Optional Redemption Price of the remaining Conversion Amount of the Akerna Notes then outstanding divided by (B) the lower of (x) the lowest volume weighted average price of the Akerna Common Stock during the five (5) trading day period ending, and including, the trading day immediately prior to the closing and (y) the Conversion Price (as defined in the Akerna Notes) in effect as of the closing.

Provided, however, that to the extent that any issuances of Final Closing Exchange Shares to an Akerna Note Holder at the closing in accordance herewith or pursuant to the Series C Certificate of Designations, as applicable would result in such Akerna Note Holder and its other attribution parties exceeding 4.99% of the issued and outstanding shares of common stock of the combined company (a “Maximum Percentage Event”), then such Akerna Note Holder shall not be entitled to receive such aggregate number of Final Closing Exchange Shares in excess of the maximum percentage (and shall not have beneficial ownership of such Final Closing Exchange Shares (or other equivalent security) as a result of the closing (and beneficial ownership) to such extent of any such excess), such remaining portion of such Final Closing Exchange Shares that would have otherwise been issued to the Akerna Note Holder at the closing (such remaining portion of Final Closing Exchange Shares, the “Abeyance Shares”), such portion of the Akerna Note and/or shares of Series C Preferred Stock, as applicable, shall alternatively be exchanged for the right to receive such Abeyance Shares, at such time or times as its right thereto would not result in such Akerna Note Holder and the other attribution parties exceeding the maximum percentage, at which time or times, if any, such Akerna Note Holder shall be granted such remaining portion of such Abeyance Shares in accordance herewith and/or pursuant to the Series C Certificate of Designations, as applicable.

Management Following the Merger (see page 260)

Effective as of the closing of the Merger, the combined company’s executive officers are expected to be certain members of the Gryphon executive management team prior to the Merger, including:

Name

 

Position

Robby Chang

 

Chief Executive Officer and President

Simeon Salzman

 

Chief Financial Officer

Overview of the Purchase Agreement

Purchase Agreement (see page 134)

Under the Purchase Agreement and subject to the terms and conditions contained therein, MJ Acquisition will acquire all of Akerna’s rights, title and interest in and to the Membership Interests and all of Akerna Exchange’s rights, title, and interest in and to the Capital Stock as described in the Purchase Agreement for a purchase price of $1,850,000 in cash and a loan to Akerna from MJ Acquisition in the amount of $1,650,000 (funded $1,000,000 on April 28, 2023, $500,000 on October 11, 2023 and $150,000 on November 15, 2023), which principal amount will convert into shares of common stock of Akerna at closing pursuant to the MJA Promissory Note. Subsequently, on December 28, 2023, pursuant to the terms of the Purchase Agreement, Akerna and Akerna Exchange entered into a share purchase agreement with Wilcompute pursuant to which Akerna Exchange sold all of the Capital Stock of Ample to Wilcompute for approximately $638,000. In accordance with the Purchase Agreement, in lieu of delivering the Capital Stock of Ample at the closing of the Sale Transaction, Akerna will instead deliver to MJ Acquisition the $638,000 purchase

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price received from Wilcompute, which Akerna expects to be in the form of a reduction of the purchase price paid by MJ Acquisition from $1.85 million to approximately $1.22 million. All shares of Akerna Common Stock issued upon conversion of the MJA Promissory Note will be included in the shares of Akerna Common Stock outstanding prior to the closing of the Merger and will be taken into account in calculating the Merger Consideration, which will dilute current Akerna stockholders.

Conditions to the Completion of the Sale Transaction (see page 135)

To consummate the Sale Transaction, Akerna stockholders must authorize the Sale Transaction by approving the Purchase Agreement and the transactions contemplated thereby and approve the MJA Promissory Note Conversion. In addition to obtaining such stockholder approval, each of the other closing conditions set forth in the Purchase Agreement must be satisfied or waived.

No Solicitation (see page 137)

Under the Purchase Agreement, Akerna may not, and may not authorize or permit any of its affiliates or any of its or their respective directors, officers, employees or other representatives to (i) directly or indirectly solicit, initiate or knowingly encourage, induce or facilitate any “acquisition proposal,” as defined in the Purchase Agreement, or any inquiry or proposal that may reasonably be expected to lead to an “acquisition proposal” or (ii) directly or indirectly participate in any discussions or negotiations with any person regarding, or furnish to any person any information with respect to, or cooperate in any way with any person (whether or not a person making an “acquisition proposal”) with respect to, any “acquisition proposal”, or any inquiry or proposal that may reasonably be expected to lead to an “acquisition proposal”. Akerna was also required to, among other things, immediately cease and cause to be terminated all existing solicitation, discussions or negotiations with any person conducted prior to entering into the Purchase Agreement with respect to any “acquisition proposal,” or any inquiry or proposal that may reasonably be expected to lead to an “acquisition proposal.”

Termination (see page 141)

Either Akerna or MJ Acquisition can terminate the Purchase Agreement under certain circumstances, which would prevent the Sale Transaction from being consummated.

Termination Fee (see page 142)

If the Purchase Agreement is terminated under certain circumstances, Akerna will be required to pay MJ Acquisition a termination fee equal to $290,000 and reimburse MJ Acquisition for up to a maximum of $60,000 in reasonable fees and expenses.

Sale Transaction Support Agreements (see page 143)

Akerna directors and officers who held shares of Akerna Common Stock as of the date of the Purchase Agreement (each in their capacities as stockholders) are each party to a Sale Transaction Support Agreement with MJ Acquisition pursuant to which, among other things, each of these stockholders agreed, solely in his or her capacity as a stockholder, to vote all of his or her shares of Akerna Common Stock (a) in favor of the Akerna stockholder proposals set forth herein and (b) against any “acquisition proposal,” as defined in the Purchase Agreement, and subject to certain exceptions, have also agreed not to transfer their shares of Akerna Common Stock and voting preferred stock. The directors and officers of Akerna that are party to such Sale Transaction Support Agreement with MJ Acquisition owned an aggregate of 120,073 outstanding shares of Akerna Common Stock, representing approximately 1.2% of the outstanding Akerna Common Stock as of December 21, 2023, which is the record date for the special meeting.

Each of the holders of the Akerna Notes entered into Sale Transaction Lender Support Letters with Akerna. The holders of the Akerna Notes that entered into Sale Transaction Lender Support Letters own Series C Preferred Stock with voting rights equivalent to approximately 39.8% of the outstanding voting rights on December 21, 2023, which is the record date for the special meeting. Therefore an aggregate total of approximately 41% of the outstanding shares of Akerna capital stock entitled to vote on the matters at the Akerna special meeting are subject to the Sale Transaction Support Agreement or Sale Transaction Lender Support Letters. The Merger Lender Support Letters provide, among other things, that the holders of the Akerna Notes will vote all of the shares of Akerna capital stock held or acquired by them in favor of the all the proposals at the Akerna special meeting and against any competing acquisition proposals. The Sale Transaction Lender Support Letters also place certain customary restrictions on the transfer of shares of Akerna capital stock held by the respective signatories thereto prior to the closing of the Sale Transaction.

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Interests of Certain Directors, Officers and Affiliates of Akerna and Gryphon (see pages 111 and 112)

In considering the recommendation of the Akerna Board with respect to issuing shares of Akerna Common Stock pursuant to the Merger Agreement, the change of control of Akerna resulting from the Merger, the Sale Transaction and the other matters to be acted upon by Akerna stockholders at the special meeting, Akerna stockholders should be aware that certain members of the Akerna Board and executive officers of Akerna have interests in the Merger that may be different from, or in addition to, interests they have as Akerna stockholders.

Akerna’s executive officers, including Jessica Billingsley, its Chief Executive Officer, who is also the Chairman of the Akerna Board, Scott Sozio, Head of Corporate Development and a director on the Akerna Board, and Dean Ditto, its Chief Financial Officer are contractually entitled to severance payments and/or change in control bonus incentive fees.

In addition, each member of the Akerna executive team and the Akerna Board is entitled to full accelerated vesting of all outstanding restricted stock units of Akerna upon a change in control, as defined in Akerna’s Equity Incentive Plan, regardless of whether s/he is terminated as a result of the transaction.

Based on the terms of her current employment agreement, Jessica Billingsley will be entitled to receive a total value of approximately $602,854 in connection with the consummation of the Merger, which includes approximately $602,400 as part of her severance payments and benefits under her employment agreement and approximately $454 in value associated with the acceleration of outstanding restricted stock units. Additionally, Ms. Billingsley will continue on the board of the combined company after the closing of the Merger and would be eligible for certain compensation as a non-employee director.

Based on his current employment terms, Dean Ditto will be entitled to receive a total value of approximately $210,733 in connection with the consummation of the Merger, which includes approximately $85,733 as part of his severance payments and benefits under his employment terms.

Under the terms of a change in control bonus incentive agreement with Akerna, Scott Sozio will be entitled to receive a total value of approximately $350,924 in connection with the consummation of the Merger, which includes approximately $350,000 as part of his change in control incentive bonus and approximately $924 in value associated with the acceleration of outstanding restricted stock units.

As of December 21, 2023, the directors and executive officers of Akerna owned, in the aggregate, 1.2% of the outstanding shares of Akerna Common Stock and have agreed to vote in favor of the Merger and related transactions. The above officers of Akerna may acquire additional share of Akerna Common Stock at the closing of the Merger as settlement, in part, of the amounts owed to them as stated above. Such issuances would be done at market value under the rules of the Nasdaq Capital Market.

The Akerna Board was aware of these interests and considered them, among other matters, in the decision to approve the Merger Agreement. For more information, please see the section titled “The Transactions — Interests of the Akerna Directors and Executive Officers in the Transactions” in this proxy statement/prospectus.

Regulatory Approvals

Akerna and Gryphon must comply with applicable federal and state securities laws and the rules and regulations of Nasdaq in connection with the issuance of shares of Akerna Common Stock to Gryphon’s stockholders in connection with the transactions contemplated by the Merger Agreement and the filing of this proxy statement/prospectus with the SEC. Akerna does not require, and consequently, does not intend to seek, any regulatory approval from antitrust authorities to consummate the transactions.

Certain Material U.S. Federal Income Tax Consequences

Certain Material U.S. Federal Income Tax Consequences of the Merger (see page 112)

Each of Akerna and Gryphon intends the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code. In general and subject to the qualifications and limitations set forth in the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences of the Transactions,” if the Merger qualifies

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as a “reorganization” within the meaning of Section 368(a) of the Code, the material tax consequences to U.S. Holders (as defined in the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences of the Transactions”) of Gryphon common stock will be as follows:

        a Gryphon stockholder generally will not recognize gain or loss upon the exchange of Gryphon Shares for Akerna Common Stock pursuant to the Merger;

        a Gryphon stockholder’s aggregate tax basis for the shares of Akerna Common Stock received in the Merger generally will equal the stockholder’s aggregate tax basis in the Gryphon Shares surrendered in the Merger; and

        the holding period of the shares of Akerna Common Stock received by a Gryphon stockholder in the Merger generally will include the holding period of the Gryphon Shares surrendered in exchange therefor;

Ellenoff Grossman & Schole LLP, counsel to Gryphon, has delivered an opinion to Gryphon that, on the basis of certain factual representations made by Akerna and Gryphon, and subject to certain assumptions set forth therein, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. This opinion is attached as Exhibit 8.1 to the Registration Statement of which this proxy statement/prospectus forms a part. However, tax matters are very complicated, and the tax consequences of the Merger to a particular Gryphon shareholder will depend on such shareholder’s circumstances. Accordingly, you are strongly urged to consult your tax advisor for a full understanding of the tax consequences of the Merger to you, including the applicability and effect of federal, state, local and non-U.S. income and other tax laws. For more information, please see the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences” beginning of page 112 of this proxy statement/prospectus.

Material U.S. Federal Income Tax Consequences of the Akerna Reverse Stock Split (see page 163)

An Akerna U.S. Holder (as defined below) generally should not recognize gain or loss upon the Akerna Reverse Stock Split. Please review the information in the section titled “Proposal No. 3: Approval of the Amendment to the Amended and Restated Certificate of Incorporation of Akerna Effecting the Akerna Reverse Stock Split — Tax Consequences of the Akerna Reverse Stock Split” beginning on page 165 of this proxy statement/prospectus for a more complete description of the material U.S. federal income tax consequences of the Akerna Reverse Stock Split to Akerna U.S. Holders.

The tax consequences to an Akerna U.S. Holder of the Akerna Reverse Stock Split will depend on if the Akerna Reverse Stock Split is treated as a tax deferred “recapitalization” for U.S. federal income tax purposes. If the Akerna Reverse Stock Split qualifies as a recapitalization, then an Akerna U.S. Holder generally will not recognize gain or loss on the Akerna Reverse Stock Split. In general, the aggregate tax basis of the post-split shares of Akerna Common Stock received will be equal to the aggregate tax basis of the pre-split shares of Akerna Common Stock exchanged therefor and the holding period of the post-split shares of Akerna Common Stock received will include the holding period of the pre-split shares of Akerna Common Stock exchanged. Treasury Regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of the shares of Akerna Common Stock surrendered to the shares of Akerna Common Stock received pursuant to the Akerna Reverse Stock Split. U.S. Holders of shares of Akerna Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

The state and local tax consequences of the Akerna Reverse Stock Split may vary significantly as to each Akerna U.S. Holder depending upon the jurisdiction in which such holder resides. Each Akerna U.S. Holder should consult their tax advisors as to the specific tax consequences to them.

Material U.S. Federal Income Tax Consequences of the Sale Transaction (see page 112)

The proceeds of the Sale Transaction will be used to pay accounts payable and Transaction expenses and pay down existing debt under the Akerna Notes. After these payments, any remaining proceeds will be used to fund the combined company, and such proceeds will not be distributed to Akerna stockholders. As a result, there should not be any material U.S. federal income tax consequences to Akerna U.S. Holders in relation to the Sale Transaction.

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Nasdaq Stock Market Listing (see page 115)

Akerna will file an initial listing application for the combined company common stock with Nasdaq. If such application is accepted, Akerna anticipates that the common stock of the combined company will be listed on The Nasdaq Capital Market following the closing of the Merger under the trading symbol “GRYP.”

Anticipated Accounting Treatment (see page 115)

The Merger will be accounted for as a reverse acquisition in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, Gryphon will be deemed to be the accounting acquirer for financial reporting purposes. As a result of the Merger, the net assets of Akerna will be recorded at their acquisition-date fair value in the financial statements of Gryphon and the reported operating results prior to the Merger will be those of Gryphon.

Appraisal Rights and Dissenters’ Rights (see page 115)

Under the Delaware General Corporation Law (“DGCL”), Akerna stockholders are not entitled to appraisal rights in connection with the Merger.

Gryphon stockholders who hold voting common stock are entitled to appraisal rights in connection with the Merger under Delaware law. For more information about such rights, see the provisions of DGCL attached hereto as Annex I, and the section titled “The Transactions — Appraisal Rights and Dissenters’ Rights” in this proxy statement/prospectus.

Comparison of Rights of Holders of Shares (see page 269)

Akerna is incorporated under the laws of the State of Delaware and Gryphon is incorporated under the laws of the State of Delaware. Accordingly, the rights of Akerna stockholders and Gryphon stockholders are governed by the DGCL. As a result of the Merger, Gryphon stockholders who receive shares of Akerna Common Stock will become Akerna stockholders; their rights as stockholders will be governed by the DGCL and the Akerna organizational documents and will have different rights as holders of Akerna Common Stock than they had as holders of Gryphon Common Stock or Gryphon Preferred Stock. The differences between the rights of these respective holders result from the differences between the respective governing documents of Gryphon and Akerna, as the same may be amended in connection with the Merger. For additional information, see the section titled “Comparison of Rights of Holders of Akerna Capital Stock and Gryphon Share Capital” beginning on page 269 of this proxy statement/prospectus.

Risk Factors (see page 25)

Both Akerna and Gryphon are subject to various risks associated with their businesses and their industries. In addition, the Transactions, including the possibility that the Transactions may not be completed, poses a number of risks to each company and its respective stockholders. These risks include the following:

Risks Related to the Merger:

        Neither Akerna nor Gryphon can be sure if or when the Merger will be completed.

        The market value of Gryphon may be difficult to determine, the market value of Akerna and Gryphon may change between the date of this proxy statement/prospectus and the date that the Merger is completed and the fairness opinion obtained by Akerna will not reflect subsequent changes.

        The percentage ownership of the combined company as determined in the Merger Agreement is not adjustable based on the market price of Akerna Common Stock, so the Merger Consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed.

        Failure to complete the Merger may result in Akerna paying a termination fee to Gryphon and could significantly harm the market price of the Akerna Common Stock and negatively affect Akerna’s future business and operations.

        The closing of the Merger is subject to approval by the Akerna stockholders and the Gryphon stockholders. Failure to obtain these approvals would prevent the closing of the Merger.

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        The Merger may be completed even though certain events occur prior to the closing that materially and adversely affect Akerna or Gryphon.

        Certain officer and directors of Akerna and Gryphon have interests in the Merger that are different from Akerna and Gryphon stockholders.

        The market price of the combined company’s common stock following the Merger may decline as a result of the Merger.

        Akerna stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with or following the Merger.

        Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

        Because the lack of a public market for the Gryphon Shares makes it difficult to evaluate their value, the stockholders of Gryphon may receive shares of Akerna Common Stock in the Merger that have a value that is less than, or greater than, the fair market value of the Gryphon Shares.

        If the conditions to the Merger are not met, the Merger will not occur.

        Litigation relating to the Merger could require Akerna or Gryphon to incur significant costs and suffer management distraction, and could delay or enjoin the Merger.

        If the Merger is not completed, the Akerna Board may decide to pursue a dissolution and liquidation of Akerna. In such an event, the amount of cash available for distribution to its stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

        The combined company’s ability to use net operating loss carryforwards and certain tax credit carryforwards may be subject to limitation in connection with the Merger and other ownership changes.

        Following the completion of the Merger, the combined company may issue additional securities.

Risks Related to the Exchange Agreements

        The exchange of the Akerna Notes in Series C Preferred Stock and the exchange of any remaining Akerna Notes into shares of common stock of the combined company will significantly dilute current Akerna stockholders and diminish the pro rata portion of the 7.5% of the combined company to be held by Akerna stockholders.

Risks Related to the Proposed Sale Transaction

        While the Sale Transaction is pending, it creates unknown impacts on Akerna’s future which could materially and adversely affect Akerna business, financial condition and results of operations.

        The failure to consummate the Sale Transaction may materially and adversely affect Akerna’s business, financial condition and results of operations.

        Certain provisions of the Purchase Agreement may discourage third parties from submitting alternative proposals for the subsidiaries and assets being sold, including proposals that may be superior to the arrangements contemplated by the Purchase Agreement.

        The closing of the Merger is conditioned on the consummation of the Sale Transaction.

        A Superior Offer under the Purchase Agreements or a Superior Proposal under the Merger Agreement could result in either or both of the Merger and the Sale Transaction being significantly delayed or not being consummated at all.

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        There could be litigation surrounding our termination of the POSaBIT Purchase Agreement which could delay closing of the Merger and Sale Transaction or otherwise result in the combined company owing damages for breach of the POSaBIT Purchase Agreement which could impact the combined company’s financial condition.

        The conversion of the MJA Promissory Note into shares of common stock of the combined company will significantly dilute current Akerna stockholders and diminish the pro rata portion of the 7.5% of the combined company to be held by Akerna stockholders.

Risks Related to Akerna

Risks Related to Our Financial Condition and Operating History

        There is substantial doubt about our ability to continue as a going concern.

        We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future.

        We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects.

        Our long-term results of operations are difficult to predict and depend on the commercial success of our clients, the continued growth of the cannabis industry generally, and the regulatory environment within which the cannabis industry operates.

        Direct and indirect consequences of the COVID-19 pandemic may have material adverse consequences.

Risks Related to the Cannabis Industry

        As a company whose clients operate in the cannabis industry, we face many unique and evolving risks.

        Marijuana remains illegal under U.S. federal law

        Uncertainty of federal enforcement

        We could become subject to racketeering laws

        Banking regulations could limit access to banking services and expose us to risk

        Dividends and distributions could be prevented if our receipt of payments from clients is deemed to be proceeds of crime

        Further legislative development beneficial to our operations is not guaranteed

        The cannabis industry could face strong opposition from other industries

        The legality of marijuana could be reversed in one or more states

        Changing legislation and evolving interpretations of the law

        Dependence on client licensing

        Insurance risks

        Bankruptcy risks

        The cannabis industry is an evolving industry and we must anticipate and respond to changes.

Risks Related to Our Business

        A significant portion of our business is from government contracts, which present certain unique risks.

        Our operations may be adversely affected by disruptions to our information technology, or IT, systems, including disruptions from cybersecurity breaches of our IT infrastructure.

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        Privacy regulation is an evolving area and compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our clients and market our products and services.

        We rely on third parties for certain services made available to users of our platforms, which could limit our control over the quality of the user experience and our cost of providing services.

        Acquisitions and integration issues may expose us to risks.

        To grow and be successful, we need to attract and retain qualified personnel.

        We are smaller and less diversified than many of our potential competitors.

        Our business and stock price may suffer as a result of our limited public company operating experience and if securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock in an adverse manner, the price and trading volume of our common stock could decline.

Risks Related to Intellectual Property

        Protecting and defending against intellectual property claims may have a material adverse effect on our business.

        Our success depends in part upon our ability to protect our core technology and intellectual property.

        Others may assert intellectual property infringement claims against us.

Risks Related to Our Charter Documents

        Anti-takeover provisions contained in Akerna’s amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt and limit the price investors might be willing to pay in the future for our common stock and could entrench management.

        create a staggered Board of Directors making it more difficult for stockholders to remove a majority of the Board of Directors and take control;

        grant the Board of Directors the ability to designate the terms of and issue new series of preferred shares, which can be created and issued by the Board of Directors without prior stockholder approval, with rights senior to those of the common stock; and

        impose limitations on our stockholders’ ability to call special stockholders’ meetings.

        Our corporate opportunity provisions in Akerna’s amended and restated certificate of incorporation could enable management to benefit from corporate opportunities that might otherwise be available to us.

        Akerna’s amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Risks Related to the Akerna Notes

        The issuance of shares of our common stock pursuant to the Akerna Notes may result in significant dilution to our stockholders.

        Our obligations to the Akerna Note Holders are secured by a security interest in substantially all of our assets, if we default on those obligations, the Akerna Note Holders could foreclose on our assets.

        The Akerna Note Holders have certain additional rights upon an event of default under such Akerna Notes, which could harm our business, financial condition, and results of operations and could require us to reduce or cease our operations.

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Risks Related to Akerna Common Stock

        If Akerna’s Common Stock is delisted from Nasdaq, the liquidity and price of Akerna’s Common Stock could decrease and Akerna’s ability to obtain financing could be impaired.

        We may seek to raise additional funds, finance acquisitions, or develop strategic relationships by issuing securities that would dilute investors’ ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of shares of Akerna Common Stock.

        Warrants are exercisable for Akerna Common Stock, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

        Certain of our warrants are accounted for as a derivative liability and are recorded at fair value upon issuance with any changes in fair value each period reported in our statement of operations, which may have an adverse effect on the market price of our securities.

        If we do not maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants, public holders will only be able to exercise such warrants on a “cashless basis.”

        Provisions of the warrants could discourage an acquisition of us by a third party.

        We may face additional risks, including regulatory, litigation, stockholder or other actions and negative impacts on our stock price, as a result of the material weakness in our internal control over financial reporting and revisions to our financial statements.

        The market price of Akerna Common Stock is particularly volatile given our status as a relatively new public company with a generally small and thinly traded public float, which could lead to wide fluctuations in our share price. Stockholders may be unable to sell their shares of Akerna Common Stock at or above their purchase price, which may result in substantial losses to them.

        The market price of Akerna Common Stock is still likely to be highly volatile and subject to wide fluctuations, and stockholders may be unable to resell shares of common stock at or above the price at which they are acquired.

        We have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment may be limited to potential future appreciation in the value of Akerna Common Stock.

General Risks

        Any failure to maintain effective disclosure controls and procedures and internal control over our financial reporting could materially adversely affect us.

        Failure to remediate material weaknesses in internal controls over financial reporting could result in material misstatements in our financial statements.

        The requirements of being a public company may strain our resources and divert management’s attention.

        We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

        Our operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics.

        Proposed legislation in the U.S. Congress, including changes in U.S. tax law, and the recently enacted Inflation Reduction Act of 2022, may adversely impact us and the value of our common stock.

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Risks Related to Gryphon

Risks Related to the Price of Bitcoin

        Gryphon’s future success will depend upon the value of Bitcoin; the value of Bitcoin may be subject to pricing risk and has historically been subject to wide swings.

        The lack of regulation of digital asset exchanges which Bitcoin, and other cryptocurrencies, are traded on, may expose Gryphon to the effects of negative publicity resulting from fraudulent actors in the cryptocurrency space, and can adversely affect an investment in Gryphon.

        The Bitcoin market is exposed to financially troubled cryptocurrency-based companies.

        There is a lack of liquid markets for, and possible manipulation of, blockchain/cryptocurrency-based assets.

        Acceptance and/or widespread use of Bitcoin are uncertain.

        The bitcoin reward for successfully uncovering a block will halve several times in the future and Bitcoin value may not adjust to compensate Gryphon for the reduction in the rewards Gryphon receives from its mining efforts.

        Cryptocurrencies, including Bitcoin, face significant scaling obstacles that can lead to high fees or slow transaction settlement times.

        Transaction fees may decrease demand for Bitcoin and prevent expansion that could adversely impact an investment in Gryphon.

        The price of Bitcoin may be affected by the sale of Bitcoin by other vehicles investing in Bitcoin or tracking Bitcoin markets.

        The development of other cryptocurrencies and/or digital currencies may adversely affect the value of Bitcoin.

        If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in Gryphon.

        The decentralized nature of cryptocurrency systems may lead to slow or inadequate responses to crises, which may negatively affect Gryphon’s business.

        The impact of geopolitical and economic events on the supply and demand for Bitcoin is uncertain.

        Gryphon faces risks of Internet disruptions, which could have an adverse effect on the price of Bitcoin.

Risks Related to Operations

        Gryphon is an early-stage company and has a limited history of generating profits.

        Gryphon’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about Gryphon’s ability continue as a “going concern.”

        Gryphon may be unable to access sufficient additional capital to fund its operations or for future strategic growth initiatives.

        Gryphon has a substantial amount of debt and significant debt service obligations.

        Any valuation at this stage is difficult to assess.

        If the bitcoin reward for solving blocks and transaction fees is not sufficiently high, Gryphon may not have an adequate incentive to continue mining and may cease mining operations, which will likely lead to Gryphon’s failure to achieve profitability.

        Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of mining machines and have a negative environmental impact. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as Gryphon’s.

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        Gryphon’s bitcoin may be subject to loss, theft or restriction on access.

        Incorrect or fraudulent cryptocurrency transactions may be irreversible.

        Gryphon may be affected by price fluctuations in the wholesale and retail power markets.

        If Gryphon is unable to secure power supply at prices or on terms acceptable to it, a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results would occur.

        Gryphon’s business is dependent on a small number of digital asset mining equipment suppliers.

        Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to an ongoing significant shortage.

        Gryphon’s reliance primarily on a single model of miner may subject its operations to increased risk of design flaws.

        There are risks related to technological obsolescence, the vulnerability of the global supply chain to Bitcoin hardware disruption, and difficulty in obtaining new hardware, which may have a negative effect on Gryphon’s business.

        Gryphon’s use of third-party mining pools exposes it to additional risks.

        Gryphon relies on hosting arrangements to conduct its business, and the availability of such hosting arrangements is uncertain and competitive and may be affected by changes in regulation in one or more countries.

        The mining data centers at which Gryphon maintains its mining equipment may experience damages, including damages that are not covered by insurance.

        Gryphon may not be able to compete with other companies, some of whom have greater resources and experience.

        Gryphon’s operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in Bitcoin.

        The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives.

        Gryphon may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect Gryphon’s business.

        There is a possibility of Bitcoin mining algorithms transitioning to proof of stake validation and other mining related risks, which could make Gryphon less competitive and ultimately adversely affect Gryphon’s business.

        Gryphon may not be able to realize the benefits of forks. Forks in a digital asset network may occur in the future which may affect the value of bitcoin held by Gryphon.

        Gryphon’s business, results of operations, and financial condition may be impacted by the recent coronavirus (COVID-19) outbreak.

        The impacts of climate change may result in additional costs or risks.

Risks Related to Governmental Regulation and Enforcement

        As cryptocurrencies may be determined to be investment securities, Gryphon may inadvertently violate the Investment Company Act of 1940 and incur large losses as a result and potentially be required to register as an investment company or terminate operations and Gryphon may incur third-party liabilities.

        If regulatory changes or interpretations of Gryphon’s activities require its registration as a money services business under the regulations promulgated by The Financial Crimes Enforcement Network under the authority of the U.S. Bank Secrecy Act, Gryphon may be required to register and comply with such regulations. If regulatory changes or interpretations of Gryphon’s activities require the licensing or other

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registration of Gryphon as a money transmitter (or equivalent designation) under state law in any state in which Gryphon operates, Gryphon may be required to seek licensure or otherwise register and comply with such state law. In the event of any such requirement, to the extent Gryphon decides to continue, the required registrations, licensure and regulatory compliance steps may result in extraordinary, non-recurring expenses to Gryphon. Gryphon may also decide to cease its operations. Any termination of certain operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

        There is no one unifying principle governing the regulatory status of cryptocurrency nor whether cryptocurrency is a security in each context in which it is viewed. Regulatory changes or actions in one or more countries may alter the nature of an investment in Gryphon or restrict the use of digital assets, such as cryptocurrencies, in a manner that adversely affects Gryphon’s business, prospects or operations.

        Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin-related activities or that accept bitcoin as payment, including financial institutions of investors in Gryphon’s common stock.

        It may be illegal now, or in the future, to acquire, own, hold, sell or use bitcoin, ether, or other cryptocurrencies, participate in blockchains or utilize similar cryptocurrency assets in one or more countries, the ruling of which would adversely affect Gryphon.

        Gryphon’s interactions with a blockchain may expose Gryphon to specially designated nationals or blocked persons or cause Gryphon to violate provisions of law that did not contemplate distributed ledger technology.

        Since there has been limited precedent set for financial accounting or taxation of digital assets other than digital securities, it is unclear how Gryphon will be required to account for digital asset transactions and the taxation of Gryphon’s businesses.

Risks Related to the Combined Company

        If any of the events described in “Risks Related to Akerna” or “Risks Related to Gryphon” occur, those events could cause potential benefits of the Merger not to be realized.

        There has been no prior public market for Gryphon’s common stock, the stock price of the combined company’s common stock may be volatile or may decline regardless of its operating performance and you may not be able to resell your shares at or above the purchase price.

        The combined company will continue to incur increased costs as a result of operating as a public company, and its management team will be required to devote substantial time to new compliance initiatives.

        The combined company’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of the combined company’s common stock.

        The combined company’s operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause the combined company’s stock price to fluctuate or decline.

        After the Merger, the combined company’s executive officers, directors and principal stockholders, if they choose to act together, will continue to control or significantly influence all matters submitted to stockholders for approval.

        Sales of a substantial number of shares of the combined company’s common stock by the combined company’s stockholders in the public market could cause the combined company’s stock price to fall.

        Delaware law and provisions in the combined company’s amended and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of the combined company’s common stock.

        The combined company’s amended and restated bylaws designate a state or federal court located within the state of Delaware as the exclusive forum for substantially all disputes between the combined company and its stockholders, which could limit the combined company’s stockholders’ ability to choose the judicial forum for disputes with the combined company or its directors, officers or employees.

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        To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

        Future sales and issuances of the combined company’s common stock or rights to purchase common stock, including pursuant to the combined company’s equity incentive plans, could result in dilution of the percentage ownership of its stockholders and could cause the combined company’s stock price to fall.

        Gryphon does not currently intend to pay dividends on the combined company’s common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of the combined company’s common stock.

        If the Merger does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. Holders of Gryphon common stock will be required to recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Gryphon common stock for the combined company’s common stock in the Merger.

        The historical financial information of Akerna and Gryphon presented herein may not be representative of their respective results or financial condition if they had been operated as a combined company, and as a result may not be representative of the combined company’s results or financial condition after the Merger.

        The unaudited pro forma condensed combined financial information presented herein may not be representative of the combined company’s results after the Merger.

        Failure by the combined company to comply with the initial listing standards of Nasdaq will prevent its stock from being listed on Nasdaq and may prevent the closing of the Merger.

        The Merger will result in changes to Akerna’s board of directors and the combined company may pursue different strategies than either Akerna or Gryphon may have pursued independently.

        Following the Merger, the combined company may be unable to realize the anticipated benefits of the Merger.

        The combined company’s management will be required to devote a substantial amount of time to comply with public company regulations.

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” beginning on page 25 of this proxy statement/prospectus. Akerna and Gryphon, both encourage you to read and consider all of these risks carefully.

Market Price and Dividend Information

The closing price of Akerna Common Stock on January 26, 2023, the last trading day prior to the public announcement of the Merger, was $1.78 per share, and the closing price of Akerna Common Stock on January 4, 2024 was $0.3940 per share, in each case as reported on The Nasdaq Capital Market. As of December 21, 2023, which is the record date for the special meeting, there were approximately 229 holders of record of Akerna Common Stock, one holder of record of our special voting preferred share and two holders of record of our Series C Preferred Stock.

Because the market price of Akerna Common Stock is subject to fluctuation, the market value of the shares of Akerna Common Stock that Gryphon stockholders will be entitled to receive in the Merger may increase or decrease.

Gryphon is a private company, and the Gryphon Common Stock and the Gryphon Preferred Stock are not publicly traded.

Dividends

Akerna has never declared or paid cash dividends on its capital stock and does not anticipate paying any cash dividends in the foreseeable future. Gryphon has never paid or declared any cash dividends on its share capital. Gryphon intends to retain all available funds and any future earnings for use in the operation of its business and does not anticipate paying any cash dividends on its share capital in the foreseeable future. Notwithstanding the foregoing, any determination to pay cash dividends subsequent to the Merger will be at the discretion of the combined company’s board of directors and will depend upon a number of factors, including the combined company’s results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the combined company’s board of directors deems relevant.

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RISK FACTORS

The combined company (for the purpose of this “Risk Factors” section, “we,” “us” and “our”) will be faced with a market environment that cannot be predicted and that involves significant risks and uncertainties, many of which will be beyond our control. You should carefully consider all of the information set forth in this proxy statement/prospectus. The combined company’s business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price its common stock would likely decline and you might lose all or part of your investment. In addition to the other information contained in this proxy statement/ prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of Akerna Common Stock. You should also read and consider the other information in this proxy statement/prospectus and additional information about Akerna set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the SEC. Please see the section titled “Where You Can Find More Information” beginning on page 279 of this proxy statement / prospectus for further information. This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. The combined company’s results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this proxy statement/prospectus and Akerna’s other SEC filings. See also “Cautionary Statement Concerning Forward-Looking Statements” on page 79 of this proxy statement / prospectus.

Risks Related to the Merger

Neither Akerna nor Gryphon can be sure if or when the Merger will be completed.

The consummation of the Merger is subject to the satisfaction or waiver of various conditions, including the authorization of the Merger by Gryphon’s stockholders and the approval of the proposals described in this proxy statement / prospectus by Akerna’s stockholders. Neither Akerna nor Gryphon can guarantee that the closing conditions set forth in the Merger Agreement will be satisfied. If Akerna is unable to satisfy the closing conditions in Gryphon’s favor or if other mutual closing conditions are not satisfied, Gryphon will not be obligated to complete the Merger. Under certain circumstances, Akerna would be required to pay Gryphon a termination fee of $275,000 less any reimbursed expenses.

If the Merger is not completed, the Akerna Board, in discharging its fiduciary obligations to Akerna stockholders, will evaluate other strategic alternatives or financing options that may be available, which alternatives may not be as favorable to Akerna stockholders as the Merger. Any future sale or merger, financing or other transaction may be subject to further stockholder approval. Akerna may also be unable to find, evaluate or complete other strategic alternatives, which may have a materially adverse effect Akerna’s business.

Akerna’s and Gryphon’s efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, their respective businesses, which may materially adversely affect their results of operation and businesses. Uncertainty as to whether the Merger will be completed may affect Akerna’s and Gryphon’s ability to retain and motivate existing employees. A substantial amount of Akerna’s and Gryphon’s management’s and employees’ attention is being directed toward the completion of the Merger and Sale Transaction and thus is being diverted from their respective day-to-day operations. Uncertainty as to Akerna’s and Gryphon’s future could adversely affect their respective business and relationship with customers, collaborators, suppliers, vendors, regulators and other business partners. For example, customers, vendors, collaborators and other counterparties may defer decisions concerning working with Akerna or Gryphon, or seek to change existing business relationships with Akerna or Gryphon. Changes to, or termination of, existing business relationships could adversely affect Akerna’s results of operations and financial condition, as well as the market price of Akerna Common Stock. The adverse effects of the pendency of the Transactions could be exacerbated by any delays in completion of the Transactions or termination of the Merger Agreement and/or Purchase Agreement.

Until the Merger is completed, the Merger Agreement restricts Gryphon and Akerna from taking specified actions without the consent of the other party, and requires them to operate in the ordinary course of business consistent with past practice. These restrictions may prevent Gryphon and Akerna from making appropriate changes to their respective businesses or pursuing attractive business opportunities that may arise prior to the completion of the Merger.

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The market value of Gryphon may be difficult to determine, the market value of Akerna and Gryphon may change between the date of this proxy statement / prospectus and the date that the Merger is completed and the fairness opinion obtained by Akerna will not reflect subsequent changes.

The Akerna Board obtained an opinion of JMP to address the fairness of the consideration to be received by Akerna in the POSaBIT Sale Transaction and the consideration to be paid by Akerna in the Merger, from a financial point of view, to Akerna as of January 26, 2023. The Akerna Board determined that it was not necessary to receive an updated opinion from JMP in relation to entering into the Sale Transaction with MJ Acquisition and entering into the Second Amendment to the Merger Agreement subsequent to January 26, 2023 due to the factors discussed herein. Subsequent changes in the operation and prospects of Akerna or Gryphon, general market and economic conditions and other factors that may be beyond the control of Akerna or Gryphon, and on which JMP’s opinion was based, may significantly alter the value of Gryphon or Akerna, or the price of the shares of Akerna Common Stock, by the time the Merger is completed. Because Akerna does not anticipate asking JMP to update its opinion, the opinion will not address the fairness of the consideration from a financial point of view as of any other date other than the date of such opinion. For a description of the opinion that Akerna obtained from JMP, please refer to “The Merger — Opinion of Akerna’s Financial Advisor” beginning on page 103.

The percentage ownership of the combined company as determined in the Merger Agreement is adjustable based on the market price of Akerna Common Stock, so the Merger Consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed and amended, provided however that the Merger Consideration will be subject to a minimum value of approximately $116 million.

The Merger Agreement has set ownership percentage for the combined company based on the fully diluted capitalization of the parties as of the closing of the Merger, taking into account Gryphon’s outstanding warrants and Akerna’s outstanding warrants, restricted stock units, exchangeable shares, convertible notes, preferred stock and restricted stock awards, and subject to adjustment for the Akerna Reverse Stock Split to be implemented prior to the consummation of the Merger and subject to a minimum value of Akerna Common Stock to be issued to stockholders of Gryphon of approximately $116 million.

Any changes in the market price of Akerna Common Stock before the completion of the Merger will affect the number of shares of Akerna Common Stock issuable to Gryphon’s securityholders pursuant to the Merger Agreement to the extent that a drop in the price of Akerna Common Stock requires more shares of Akerna Common Stock to be issued to meet the minimum value of Gryphon of approximately $116 million. Therefore, if before the completion of the Merger the market price of the Akerna Common Stock increases from the market price of the Akerna Common Stock on the date of the Merger Agreement, then Gryphon’s securityholders could receive Merger Consideration with substantially greater value than the value of such Merger Consideration on the date of the Merger Agreement. Similarly, if before the completion of the Merger the market price of the Akerna Common Stock declines from the market price on the date of the Merger Agreement, then Gryphon’s securityholders could receive Merger Consideration with substantially lower value than the value of such Merger Consideration on the date of the Merger Agreement, subject to a minimum value of $116 million. Because the ownership percentage may adjust as a result of changes in the market price of the Akerna Common Stock, for each one percentage point change in the market price of the Akerna Common Stock, there is a corresponding one percentage point rise or decline, respectively, in the value of the total Merger Consideration payable to Gryphon’s securityholders pursuant to the Merger Agreement subject to a minimum value of $116 million.

Failure to complete the Merger may result in Akerna paying a termination fee to Gryphon and could significantly harm the market price of the Akerna Common Stock and negatively affect Akerna’s future business and operations.

If the Merger is not completed and the Merger Agreement is terminated under certain circumstances, Akerna may be required to pay Gryphon a termination fee of $275,000 less any reimbursed expenses. Even if a termination fee is not payable in connection with a termination of the Merger Agreement, Akerna will have incurred significant fees and expenses, which must be paid whether or not the Merger is completed. Further, if the Merger is not completed, it could significantly harm the market price of the Akerna Common Stock.

In addition, if the Merger Agreement is terminated and Akerna determines to seek another business combination, there can be no assurance that Akerna will be able to find a partner and close an alternative transaction on terms that are as favorable as or more favorable to Akerna than the terms set forth in the Merger Agreement.

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The closing of the Merger is subject to approval by Akerna stockholders and the Gryphon stockholders. Failure to obtain these approvals would prevent the closing of the Merger.

The closing of the Merger is subject to certain approvals by the Akerna stockholders and the Gryphon stockholders. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the Merger. Any delay in completing the Merger may materially adversely affect the timing and benefits that are expected to be achieved from the Merger.

The Merger may be completed even though certain events occur prior to the closing that materially and adversely affect Akerna or Gryphon.

The Merger Agreement provides that either Akerna or Gryphon can refuse to complete the Merger if there is a material adverse change affecting the other party between January 27, 2023, the date of the Merger Agreement, and the closing of the Merger. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Akerna or Gryphon, including, but not limited to:

        any change in applicable laws (including any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other law, directive, guidelines or recommendations by any governmental entity in each case in connection with or in response to COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act) or United States generally accepted accounting principles or any official interpretation thereof after the date of the Merger Agreement;

        changes in conditions of the financial, banking, capital or securities markets generally in the United States or any other country or region in the world, or changes therein, including changes in interest rates in the United States or any other country and changes in exchange rates for the currencies of any countries, or any change generally affecting the economy or the industry in which the party operates;

        the announcement or the execution of the Merger Agreement, the pendency or consummation of the Merger or the performance of the Merger Agreement, the ancillary documents thereto and the Transactions, including the impact thereof on the relationships, contractual or otherwise, of any such party, with customers, suppliers, licensors, distributors, partners, providers and employees;

        the compliance with the express terms of the Merger Agreement, the ancillary documents thereto and the Transactions or the taking of any action expressly required by the Merger Agreement, the ancillary documents thereto and the Transaction;

        any strike, embargo, labor disturbance, riot, protests, cyberterrorism event, earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire, meteorological event or other natural disaster, act of God or other force majeure event or any epidemic, disease, outbreak or pandemic (including COVID-19);

        any national or international political or social conditions in countries in which, or in the proximate geographic region of which, any such party operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel; and

        any failure of such party, taken as a whole, to meet any projections, forecasts or budgets (although the underlying facts and circumstances resulting in such failure may be taken into account to the extent not otherwise excluded).

Certain officer and directors of Akerna and Gryphon have interests in the Merger that are different from Akerna and Gryphon stockholders.

Some of Akerna’s and Gryphon’s officers and directors have interests in the Merger that are different from Akerna and Gryphon’s respective stockholders and that may influence them to support or approve the Merger without regard to the interests of Akerna and Gryphon’s respective stockholders.

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Certain officers and directors of Akerna and Gryphon participate in arrangements that provide them with interests in the Merger that are different from the interests of Akerna and Gryphon’s respective stockholders, including, among others, the continued service as an officer or director of the combined company, severance benefits, transaction bonuses, the acceleration of stock option and restricted stock unit vesting, continued indemnification and the potential ability to sell an increased number of shares of common stock of the combined company in accordance with Rule 144 under the Securities Act.

For example, Akerna is party to arrangements with its executive officers pursuant to their employment agreements and transaction success agreements that may result in the receipt by such executive officers of cash severance payments and other transaction success bonuses and benefits with a total value of approximately $1.2 million (collectively and not individually), but not including the value of any accelerated vesting of Akerna’s equity awards held by those officers. Additionally, Akerna’s officers and directors are parties to the Merger Support Agreement with Gryphon.

The Akerna Board was aware of these interests and considered them, among other matters, in the decision to approve the Merger Agreement.

The market price of the combined company’s common stock following the Merger may decline as a result of the Merger.

The market price of the combined company’s common stock may decline as a result of the Merger for a number of reasons, including if:

        investors react negatively to the prospects of the combined company’s business and financial condition following the Merger;

        the effect of the Merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or

        the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts.

Akerna stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with or following the Merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the Merger, Akerna stockholders will have experienced substantial dilution of their ownership interests in Akerna without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the Merger.

During the pendency of the Merger, Akerna may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect Akerna’s business.

Covenants in the Merger Agreement impede the ability of Akerna to enter into material transactions that are not in the ordinary course of business pending completion of the Merger, other than the Sale Transaction. As a result, if the Merger is not completed, Akerna may be at a disadvantage to its competitors during such period. In addition, while the Merger Agreement is in effect, Akerna generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets, or other business combination with any third party, subject to certain exceptions relating to fiduciary duties. Any such transactions that are impeded or prohibited pursuant to these covenants could be favorable to Akerna stockholders if consummated.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The Merger Agreement contains “no-shop” restrictions on Akerna’s ability to solicit, initiate, endorse, knowingly encourage or facilitate third party proposals relating to alternative transactions or to provide information to, or engage in discussions with, a third party in relation to an alternative transaction, subject to certain exceptions to permit the Akerna Board to comply with its fiduciary duties. Before the Akerna Board may change its recommendation to stockholders to adopt the Merger or terminate the Merger Agreement to accept a Superior Proposal (as defined in the

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Merger Agreement), Akerna must, among other things, provide Gryphon with notice and matching rights. Upon the termination of the Merger Agreement, including in connection with a Superior Proposal, Akerna may be required to pay up to $275,000 (less reimbursed expenses) as a termination fee.

These provisions could discourage a potential third party acquiror from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Merger. These provisions might also result in a potential third party acquiror proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the $275,000 termination fee that may become payable.

If the Merger Agreement is terminated and Akerna determines to seek another business combination, Akerna may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger Agreement.

Furthermore, as noted above, certain Akerna securityholders who in the aggregate own approximately 41% of the outstanding voting securities of Akerna as of December 21, 2023, which is the record date for the special meeting have entered into the Merger Support Agreement or Merger Lender Support Letters. These Akerna stockholders also agreed to vote against any Acquisition Proposal with respect to Akerna that competes with the transactions contemplated by the Merger Agreement (See “Agreements Related to the Merger — Support Agreements”). As a result, the Merger Support Agreement and Merger Lender Support Letters may discourage other parties from attempting to engage in a transaction with Akerna, even if those parties would otherwise be willing to offer greater value to Akerna stockholders than that offered by Gryphon under the Merger.

Because the lack of a public market for the Gryphon Shares makes it difficult to evaluate their value, the stockholders of Gryphon may receive shares of Akerna Common Stock in the Merger that have a value that is less than, or greater than, the fair market value of the Gryphon Shares.

The Gryphon Shares are privately held and are not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Gryphon. Because the percentage of Akerna Common Stock to be issued to Gryphon’s stockholders was determined based on negotiations between the parties, it is possible that the value of Akerna Common Stock to be received by Gryphon’s stockholders will be less than the fair market value of Gryphon, or Akerna may pay more than the aggregate fair market value for Gryphon.

If the conditions to the Merger are not met, the Merger will not occur.

Even if the Merger is approved by Akerna and Gryphon’s stockholders, specified conditions must be satisfied or waived to complete the Merger. Neither Akerna nor Gryphon can assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the Merger will not occur or will be delayed, and Akerna or Gryphon may lose some or all of the intended benefits of the Merger. Additionally, if the Merger does not occur, Akerna may not have sufficient cash to conduct an orderly wind-down and dissolution of its business. Akerna may seek an immediate dissolution, subject to a vote of its stockholders, in the event the Merger is not completed.

Litigation relating to the Merger could require Akerna or Gryphon to incur significant costs and suffer management distraction, and could delay or enjoin the Merger.

Akerna or Gryphon could be subject to demands or litigation related to the Merger, whether or not the Merger is consummated. Such actions may create uncertainty relating to the Merger, or delay or enjoin the Merger, and responding to such demands could divert management time and resources. In addition, such demands or litigation could lead to a dissolution or bankruptcy of Akerna if the costs associated with such demands or litigation are significant enough. For additional information regarding certain pending litigation matters relating to the Merger, see “Akerna’s Business — Legal Proceedings” on page 191 of this proxy statement/prospectus.

If the Merger is not completed, the Akerna Board may decide to pursue a dissolution and liquidation of Akerna. In such an event, the amount of cash available for distribution to its stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the Merger will be completed. If the Merger is not completed, the Akerna Board may decide to pursue a dissolution and liquidation of Akerna. In such an event, the amount of cash available for distribution to Akerna stockholders will depend heavily on the timing of such decision, as with the passage of time the amount of

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cash available for distribution will be reduced as Akerna continues to fund its operations. In addition, if the Akerna Board were to approve and recommend, and Akerna stockholders were to approve, a dissolution and liquidation of Akerna, Akerna would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Akerna stockholders. As a result of this requirement, a portion of Akerna’s remaining cash assets may need to be reserved pending the resolution of such obligations. In addition, Akerna may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, the Akerna Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Akerna Common Stock could lose all or a significant portion of their investment in the event of liquidation, dissolution or winding up of Akerna.

The combined company’s ability to use Akerna’s net operating loss carryforwards and certain tax credit carryforwards may be subject to limitation in connection with the Merger and other ownership changes.

As of December 31, 2022, Akerna had federal and state net operating loss (“NOL”) carryforwards of $58.9 million. The majority of federal NOL carryforwards are carried forward indefinitely. As of December 31, 2022, Akerna had $17.5 million of foreign net operating loss carryforwards that do not expire. Under Section 382 of the Code, changes in Akerna’s ownership may limit the amount of NOL carryforwards, research and development tax credit carryforwards and other tax attributes that could be utilized annually to reduce its future taxable income or tax liability, if any. This limitation would generally apply in the event of a cumulative change in its ownership of more than 50% within a three-year period. Any such limitation may significantly reduce the combined company’s ability to utilize Akerna’s NOL carryforwards and research and development tax credit carryforwards before they expire. The completion of the Merger, together with private placements and other transactions that have occurred since the inception of Akerna, may trigger such an ownership change pursuant to Section 382 of the Code. Any such limitation, whether as the result of the Merger, prior private placements, sales of common stock by existing Akerna stockholders, or additional sales of common stock by the combined company after the Merger, could have a material adverse effect on the combined company’s results of operations in future years.

Following the completion of the Merger, the combined company may issue additional securities.

Following the completion of the Merger, the combined company may issue additional securities (including equity securities) to finance its activities. If the combined company were to issue additional equity securities, the ownership interest of existing Akerna and Gryphon stockholders may be diluted and some or all of the combined company’s financial measures on a per share basis could be reduced. Moreover, as the combined company’s intention to issue additional equity securities becomes publicly known, the combined company’s share price may be materially adversely affected.

Risks Related to the Exchange Agreements

The exchange of the Akerna Notes in Series C Preferred Stock and the exchange of any remaining Akerna Notes into shares of common stock of the combined company will significantly dilute current Akerna stockholders and diminish the pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

At closing of the Merger, both the Series C Preferred Stock and the conversion amount of any remaining Akerna Notes will be exchanged for shares of common stock of the combined company. Akerna intends to exchange the Series C Preferred Stock into shares of common stock in the combined company at the market price at the close of the Merger, which at an assumed exchange price of $4.00 (post-reverse stock split) per share would total approximately 855,500 shares of common stock of the combined company (post-reverse stock split), and assuming the remaining portion of the Akerna Notes remains outstanding at closing of the Merger, then an additional 953,783 shares of common stock in the combined company (post-reverse stock split) will be issued to the Akerna Note Holders. The issuance of these shares of common stock will be counted in the calculation of fully diluted Akerna Common Stock for purposes of determining the numbers of share of Akerna Common Stock to be issued as Merger Consideration at the closing of the Merger. This will result in significant dilution to the Akerna stockholders in relation to their pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

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Risks Related to the Proposed Sale Transaction

While the Sale Transaction is pending, it creates unknown impacts on our future which could materially and adversely affect Akerna’s business, financial condition and results of operations.

While the Sale Transaction is pending, it creates unknown impacts on our future. Therefore, our current or potential business partners may decide to delay, defer or cancel entering into new business arrangements with us pending consummation of the Sale Transaction. The occurrence of these events individually or in combination could materially and adversely affect our business, financial condition and results of operations.

The failure to consummate the Sale Transaction may materially and adversely affect our business, financial condition and results of operations.

The Sale Transaction is subject to various closing conditions including, among others, the approval of the Sale Transaction by our stockholders. We cannot control these conditions and cannot assure you that they will be satisfied. If the Sale Transaction is not consummated, we may be subject to a number of risks, including the following:

        we may not be able to identify an alternate transaction, or if an alternate transaction is identified, such alternate transaction may not result in equivalent terms as compared to what is proposed in the Sale Transaction;

        the trading price of our common stock may decline to the extent that the current market price reflects a market assumption that the Sale Transaction will be consummated;

        the failure to complete the Sale Transaction may create doubt as to our ability to effectively implement our current business strategies;

        our costs related to the Sale Transaction, such as legal, accounting and financial advisory fees, must be paid even if the Sale Transaction is not completed; and

        our relationships with our customers, suppliers and employees may be damaged and our business may be harmed.

The occurrence of any of these events individually or in combination could materially and adversely affect our business, financial condition and results of operations, which could cause the market value of our common stock to decline.

Certain provisions of the Purchase Agreement may discourage third parties from submitting alternative proposals for the subsidiaries and assets being sold, including proposals that may be superior to the arrangements contemplated by the Purchase Agreement.

The Purchase Agreement contains “no-shop” restrictions on Akerna’s ability to solicit, initiate or knowingly encourage third party proposals relating to alternative transactions or to provide information to, or engage in discussions with, a third party in relation to an alternative transaction, subject to the ability of our Board of Directors to change their recommendation and terminate the Purchase Agreement in accordance with their fiduciary duties. Before our Board Directors may change its recommendation to stockholders or terminate the Purchase Agreement to accept a Superior Offer (as defined in the Purchase Agreement), Akerna must, among other things, provide MJ Acquisition with notice. Upon the termination of the Purchase Agreement, including in connection with a Superior Offer, we may be required to pay up to $290,000 as a termination fee plus $60,000 in reasonable fees and expenses.

These provisions could discourage a potential third party acquiror from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Sale Transaction. These provisions might also result in a potential third party acquiror proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the $290,000 termination fee and $60,000 in fees and expenses that may become payable.

If the Purchase Agreement is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Purchase Agreement.

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The closing of the Merger is conditioned on the conditions precedent of the Sale Transaction being satisfied or waived such that the Sale Transaction can be consummated immediately thereafter.

The closing of the Merger is conditioned on the conditions precedent of the Sale Transaction being satisfied or waived such that the Sale Transaction can be consummated immediately after the closing of the Merger. If we fail to meet all the conditions precedent to consummate the Sale Transaction, the Merger may still proceed if Gryphon waives that condition to closing, provided that the other closing conditions contained in the Merger Agreement are satisfied or waived. The occurrence of these events would result in the combined company continuing to own MJ Freeway and Ample following the closing of the Merger, which could cause the combined company to incur unanticipated costs and expenses in connection with such continued ownership, or pursuit of an alternative disposition of MJ Freeway and Ample. It is not currently anticipated that Gryphon would waive the condition of the conditions precedent to completion of the Sale Transaction being satisfied or waived and therefore failure to meet those conditions precedent to the Sale Transaction will likely result in the failure to consummate the Merger and will result in us continuing our operations, which may be adversely impacted by the failure of the Sale Transaction and Merger Transaction, seeking alternative transactions, which may have less value to the stockholders, or seeking to dissolve and liquidate Akerna.

A Superior Offer under the Purchase Agreements or a Superior Proposal under the Merger Agreement could result in either or both of the Merger and the Sale Transaction being significantly delayed or not being consummated at all.

If our Board of Directors receives either a Superior Proposal under the Merger Agreement and/or a Superior Offer under the Purchase Agreement, the Akerna Board may be required pursuant to its fiduciary duties to pursue such alternative transactions in the best interests of the stockholders. This may result in the delay of either of the Merger or the Sale Transaction if an alternative party needs to complete due diligence, finalize transaction documents and be substituted into the current structure of the Merger and/or Sale Transaction, and it could result in either or both of the Merger Agreement or Purchase Agreement being terminated in order for Akerna to pursue the Superior Proposal or Superior Offer, as the case may be. In such circumstances, in addition to the termination fees that may be payable under the terms of the Merger Agreement or Purchase Agreement (as discussed above) for the termination of such agreements, we may be sued for terminating such agreements by either Gryphon or MJ Acquisition, as the case may be, if the opposite party in those agreements disagrees with the Akerna Board’s determination of their fiduciary duties or otherwise believes we violated the terms of such agreements, including the “no-shop” provisions contained therein, in obtaining the proposed Superior Proposal or Superior Offer, as the case may be. Such lawsuit(s) could significantly delay the closing of the Merger and/or the Sale Transaction or prevent them from occurring altogether. If we terminate either of the Merger Agreement or the Purchase Agreement, there is no guarantee that the alternative Superior Proposal or Superior Offer, as the case may be, will be consummated. If such alternative transactions are not consummated, any other alternative transactions we may pursue may have less value to the stockholders or we may be forced to dissolve and liquidate Akerna.

There could be litigation surrounding our termination of the POSaBIT Purchase Agreement which could delay closing of the Merger and Sale Transaction or otherwise result in the combined company owing damages for breach of the POSaBIT Purchase Agreement which could impact the combined company’s financial condition.

The POSaBIT Purchase Agreement prohibited Akerna from soliciting a superior offer and only permitted the Akerna Board to terminate the POSaBIT Purchase Agreement pursuant to receipt of an unsolicited acquisition proposal that the Board determined to be a superior offer or reasonably likely to result in a superior offer. Upon receipt of a superior offer, the POSaBIT Purchase Agreement permitted the Akerna Board to terminate the agreement if the Akerna Board determined that their fiduciary duties to the securityholders of Akerna mandated that the Akerna Board change its recommendation and pursue the superior offer. While the Akerna Board did determine that the offer made by Alleaves on March 17, 2023 was reasonable likely to result in a superior offer and that their fiduciary duties mandated that they change their recommendation and Akerna terminate the POSaBIT Purchase Agreement, POSaBIT disagreed with those determinations and questioned whether Akerna violated the non-solicitation provisions of the POSaBIT Purchase Agreement and may seek legal action in the future to seek damages for breach of such provisions. Akerna does not believe that it has violated any of the terms of the POSaBIT Purchase Agreement, but any lawsuit by POSaBIT may delay closing or result in the combined company owing significant damages to POSaBIT for breach of the POSaBIT Purchase Agreement. Alleaves has entered into an indemnification agreement with Gryphon, of which Akerna is a third-party beneficiary, pursuant to which Alleaves has agreed to indemnify Gryphon and Akerna for any liability arising from Akerna terminating the POSaBIT Purchase Agreement.

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The exchange of the MJA Promissory Note into shares of common stock of the combined company will significantly dilute current Akerna stockholders and diminish the pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

At closing of the Sale Transaction, MJA Promissory Note will convert into shares of common stock of the combined company. The MJA Promissory Note will convert into 7,500,000 shares of common stock in the combined company assuming the 5-day volume weighted average price of Akerna Common Stock for the 5 days ending immediately prior to the closing of the Sale Transaction if $0.20 per share on a pre-reverse stock split basis. The issuance of these shares of common stock will be counted in the calculation of fully diluted Akerna Common Stock for purposes of determining the numbers of share of Akerna Common Stock to be issued as Merger Consideration at the closing of the Merger. This will result in significant dilution to the Akerna stockholders in relation to their pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

Risks Related to Akerna

Risks Related to Our Financial Condition and Operating History

There is substantial doubt about our ability to continue as a going concern.

The notes to our financial statements include disclosure regarding the substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This uncertainty could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Further reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Our ability to continue as a going concern is uncertain and dependent upon obtaining the financing necessary to meet our financial commitments and to continue our ongoing operations as currently planned. We do not have sufficient funds to meet planned expenditures over the next twelve months, and will need to seek additional debt or equity financing to meet our planned expenditures. We raised an additional $500,000 on June 14, 2023 to help fund our ongoing working capital requirements. We will require additional financing in the third quarter of 2023 to meet our ongoing operational working capital requirements and continue to meet the financial covenants of the Akerna Notes if the Merger and the Sale Transaction do not close prior to the end of August 2023. We plan to meet those requirements in part through the use of our at-the-market (“ATM”) facility, but there are no guarantees that the facility will permit us to raise sufficient cash to meet our ongoing requirements. These factors raise substantial doubt regarding our ability to continue as a going concern. If we are unable to raise sufficient capital we may have to reduce operations which could significantly affect our results of operations. If we fail to meet the financial covenants of our debt and cannot obtain a waiver from such provisions or otherwise come to an agreement with the holders of our debt, such holders may declare a default on the debt which could subject our assets to seizure and sale, negatively impacting our business. See “Risks Related to our Convertible Debt” below.

We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future.

We have incurred significant losses in each fiscal year since our inception in 2010. For the year ended December 31, 2022, we had a net loss of $79.1 million. For the year ended December 31, 2021 we had a net loss of $31.3 million. For fiscal year ended June 30, 2020, we had a net loss of $14.4 million. These losses have been due to the substantial investments we have made to develop our monitoring and compliance platforms and related software, market these products to government regulatory agencies and commercial businesses and growing our infrastructure to support the increased business. We expect to continue to invest in the further development of our platforms, software, and related product offerings and to grow both our government regulatory and commercial business client base. As a result, we expect our operating expenses to increase in the future due to expected increased sales and marketing expenses, operational costs, product development costs, and general and administrative costs and, therefore, our operating losses will continue or even increase at least through the near term. In addition, because we are a public company, we will incur significant legal, accounting, and other expenses that MJ Freeway did not incur as a non- public company. Furthermore, to the extent that we are successful in increasing our client base, we will also incur increased expenses because costs associated with generating and supporting client agreements are generally incurred upfront, while revenue is generally recognized ratably over the term of the agreement. You should not rely upon our recent revenue growth as indicative of future performance. We may not reach profitability in the near future or at any specific time in the future. If and when our operations do become profitable, we may not sustain profitability.

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We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects.

We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects. Our wholly-owned subsidiary, MJ Freeway, has been in existence since 2010, and much of our revenue growth has occurred during the past four years. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to:

        market acceptance of our current and future products and services;

        changing regulatory environments and costs associated with compliance;

        our ability to compete with other companies offering similar products and services;

        our ability to effectively market our products and services and attract new clients;

        existing client retention rates and the ability to upsell clients;

        the amount and timing of operating expenses, particularly sales and marketing expenses, related to the maintenance and expansion of our business, operations, and infrastructure;

        our ability to control costs, including operating expenses;

        our ability to manage organic growth and growth fueled by acquisitions;

        public perception and acceptance of cannabis-related products and services generally; and

        general economic conditions and events.

If we do not manage these risks successfully, our business and financial performance will be adversely affected.

Our long-term results of operations are difficult to predict and depend on the commercial success of our clients, the continued growth of the cannabis industry generally, and the regulatory environment within which the cannabis industry operates.

Our offers of products and services help government regulatory agencies and commercial businesses monitor regulatory compliance and operate efficiently and successfully in compliance with applicable state laws. Our long-term results will directly depend on the continued growth of the legalized cannabis industry (and public acceptance of cannabis-related products) and the ability of our current and future clients to successfully market their own products and services. If the legalized cannabis marketplace does not continue to grow because the public does not increasingly accept cannabis-related products or government regulators adopt laws, rules, or regulations that terminate or diminish the ability for commercial businesses to develop, market, and sell cannabis-related products, our business and financial performance would be materially adversely affected. Additionally, even if the cannabis marketplace continues to grow rapidly, and government regulation allows for the free-market development of this industry, products, and services competitive with those offered by us may enjoy better market acceptance.

The legalized cannabis industry may not continue to grow and the regulatory environment may not remain favorable to participants in the industry. More generally, our products and services may not experience growing market acceptance, which would adversely impact our ability to grow revenue.

Direct and indirect consequences of the COVID-19 pandemic may have material adverse consequences.

The current COVID-19 pandemic is creating extensive disruptions to the global economy. Governments, businesses, and the public are taking unprecedented actions to contain the spread of COVID-19 and to mitigate its effects, including quarantines, travel bans, shelter-in-place orders, closures of businesses, fiscal stimulus, and legislation designed to deliver monetary aid and other relief. While the scope, duration, and full effects of COVID-19 are rapidly evolving and not fully known, the pandemic and related efforts to contain it have disrupted global economic activity, adversely affected the functioning of financial markets, impacted interest rates, increased economic and market uncertainty, and disrupted trade and supply chains. If these effects continue for a prolonged period or result in sustained economic stress or recession, we may experience adverse effects on our operations. Specifically, if our clients are forced to reduce business hours or close their businesses for an extended period of time or if their customer base experiences financial hardship, our clients may experience a sharp decline in revenue and be unable to meet their obligations to us

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under existing agreements or be unwilling to extend their agreements past current terms, which may adversely impact our financial results. Further, we may experience a decrease in new clients due to a lack of financial resources or a decline in new markets as businesses and financial markets deal with the impact of COVID-19. As governments are focused on relief efforts and fiscal stimulus measures, important legislation to expand or clarify certain existing or new markets for our products may be postponed or abandoned, which may adversely impact our results. Further, these conditions may impact our ability to access financial markets to obtain the necessary funding to operate our business as currently contemplated, which may adversely affect our liquidity and working capital. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this registration statement, such as those relating to our operations and financial condition. Due to the highly uncertain and dynamic nature of events relating to the COVID-19 pandemic, it is not currently possible to estimate the impact of the pandemic on our business. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely. Through December 31, 2022, we have experienced delays in our consulting projects and the corresponding delay in revenue recognition for such projects, which we believe could be the result of government shutdowns and other regulatory uncertainty surrounding COVID-19.

Risks Related to the Cannabis Industry

As a company whose clients operate in the cannabis industry, we face many unique and evolving risks.

We currently serve government and private clients with respect to their tracking, monitoring, and compliance needs as they operate in the growing cannabis industry. Any risks related to the cannabis industry that may adversely affect our clients and potential clients may, in turn, adversely affect demand for our products. Specific risks faced by companies operating in the cannabis industry include, but are not limited to, the following:

Marijuana remains illegal under U.S. federal law

Marijuana is a Schedule-I controlled substance under the CSA, and is illegal under federal law. It remains illegal under U.S.’s federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those who do so. Additionally, 21 U.S.C. 856 a.1. states that it shall be unlawful to “knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.” Even in those states in which the use of marijuana has been authorized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana is not preempted by state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our clients’ inability to proceed with their operations, which would adversely affect demands for our products and services.

Uncertainty of federal enforcement

Any presidential administration, current or future, could change federal enforcement policy or execution and decide to enforce the federal cannabis laws more strongly. Recent administrations have disagreed on how strongly to enforce federal cannabis laws. For example, on August 29, 2013, the U.S. Department of Justice (the “DOJ”) under the Obama administration issued a memorandum (the “Cole Memorandum”), characterizing strict enforcement as an inefficient use of federal investigative and prosecutorial resources. The Cole Memorandum provided guidance to all federal prosecutors and indicated that federal enforcement of the CSA against cannabis-related conduct should be focused on specific priorities, including cannabis distribution to minors, violence in connection with cannabis distribution, cannabis cultivation on federal property, and collection of cannabis-derived revenue by criminal enterprises, gangs and cartels. On January 4, 2018, the DOJ under the Trump administration issued a memorandum (the “Sessions Memorandum”), which effectively rescinded the Cole Memorandum and directed federal prosecutors to enforce the CSA and to follow well-established principles when pursuing prosecutions related to cannabis activities. The DOJ under the Biden administration has not readopted the Cole Memorandum, but President Biden has indicated support for decriminalization of cannabis. On October 6, 2022, President Biden issued an executive order pardoning all persons convicted of simple possession of cannabis under the CSA and directed the Secretary of Health and Human Services and the Attorney General to initiate an administrative process to review the scheduling of cannabis under the CSA. Further, on December 2, 2022, President Biden signed into law the Medical Marijuana and Cannabidiol Research Expansion Act, which streamlines and expands the process for researching the medical use of cannabis. We

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cannot predict how the current administration or future administrations will enforce the CSA or other laws against cannabis activities. Any change in the federal government’s enforcement of current federal laws could cause significant financial damage to us. The legal uncertainty and possible future changes in law could negatively affect our revenues, results of operations and success generally.

Unless and until Congress amends the CSA with respect to medical and/or adult use cannabis, there is a risk that federal prosecutors may enforce the existing CSA. Federal authorities may decide to change their current posture and begin to enforce current federal cannabis law and, if they begin to aggressively enforce such laws, it is possible that they could allege that we violated federal laws by selling products used in the cannabis industry. As a result, active enforcement of the current federal regulatory position on cannabis may directly or indirectly adversely affect our revenues and profits.

In 2014, Congress passed a spending bill, (the 2015 Appropriations Bill), containing a provision (the “Appropriations Rider”), blocking federal funds and resources allocated under the 2015 Appropriations Bill from being used to “prevent such States from implementing their own State medical marijuana law.” The Appropriations Rider provided a budgetary constraint on the federal government from interfering with the ability of states to administer their medical marijuana laws, although it did not codify federal protections for medical marijuana patients and producers. Moreover, despite the Appropriations Rider, the DOJ maintains that it can still prosecute violations of the federal marijuana ban and continue cases already in the courts. In USA vs. McIntosh, the U.S. Court of Appeals for the Ninth Circuit held that this provision prohibits the DOJ from spending funds from relevant appropriations acts to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws. However, the Ninth Circuit’s opinion, which only applies to the states of Alaska, Arizona, California, Hawaii, and Idaho, also held that persons who do not strictly comply with all state laws and regulations regarding the distribution, possession and cultivation of medical-use cannabis have engaged in conduct that is unauthorized, and in such instances the DOJ may prosecute those individuals. The Appropriations Rider was included in the omnibus spending bill for fiscal years 2015, 2016, 2017, 2018, 2019, 2020 and 2021. On December 29, 2022, President Biden signed the omnibus spending bill, which included the Appropriations Rider, extending its application until September 30, 2023. However, there is no assurance that Congress will approve inclusion of a similar prohibition in future appropriations bills to prevent DOJ from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and local law. If the Appropriation Rider is not extended in the future, the risk of federal enforcement and override of state medical marijuana laws would increase.

Despite the rescission of the Cole Memorandum, the Department of the Treasury, Financial Crimes Enforcement Network, has not rescinded the “FinCEN Memo” dated February 14, 2014, which de-prioritizes enforcement of the Bank Secrecy Act against financial institutions and marijuana-related businesses which utilize them. This memo appears to be a standalone document and is presumptively still in effect. At any time, however, the Department of the Treasury, Financial Crimes Enforcement Network, could elect to rescind the FinCEN Memo. This would make it more difficult for us and our clients and potential clients to access the U.S. banking systems and conduct financial transactions, which would adversely affect our operations.

We could become subject to racketeering laws

While we do not grow, handle, process or sell cannabis or cannabis-derived products, our receipt of funds from clients that do conduct such operations in violation of federal law exposes us to risks related to federal racketeering laws. RICO is a federal statute providing criminal penalties in addition to a civil cause of action for acts performed as part of an ongoing criminal organization. Under RICO, it is unlawful for any person who has received income derived from a pattern of racketeering activity (which includes most felonious violations of the CSA), to use or invest any of that income in the acquisition of any interest, or the establishment or operation of, any enterprise which is engaged in interstate commerce. RICO also authorizes private parties whose properties or businesses are harmed by such patterns of racketeering activity to initiate a civil action against the individuals involved. Although RICO suits against the cannabis industry are rare, a few cannabis businesses have been subject to a civil RICO action. Any violation of RICO could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens or criminal charges, including but not limited to, seizure of assets, disgorgement of profits, cessation of our business activities or divestiture.

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Banking regulations could limit access to banking services and expose us to risk

Our receipt of payments from clients engaged in state-legal cannabis operations could also subject us to the consequences of a variety of federal laws and regulations that involve money laundering, financial record keeping and proceeds of crime, including the Bank Secrecy Act, as amended by Title III of the USA PATRIOT Act and any related or similar rules, regulations or guidelines, issued, administered or enforced by the federal government. Since we fund from activities that are illegal under the CSA, banks and other financial institutions providing services to us risk violation of federal anti-money laundering statutes (18 U.S.C. §§ 1956 and 1957), the unlicensed money-remitter statute (18 U.S.C. § 1960) and the Bank Secrecy Act, among other applicable federal statutes. Banks often refuse to provide banking services to businesses involved in the cannabis industry due to the present state of federal laws and regulations governing financial institutions. The inability to open bank accounts may make it difficult for us or our clients to operate and our client’s reliance on cash can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our business. Additionally, some courts have denied marijuana-related businesses bankruptcy protection, thus, making it very difficult for lenders to recoup their investments, which may limit the willingness of banks to lend to our clients and to us. The lack of banking and financial services presents unique and significant challenges to businesses in the cannabis industry and we may experience similar difficulties in obtaining and maintaining regular banking and financial services because of the activities of our clients.

Dividends and distributions could be prevented if our receipt of payments from clients is deemed to be proceeds of crime

In the event that any of our operations, or any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues accruing from such operations were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more federal statutes or any other applicable legislation. This could restrict or otherwise jeopardize our ability to declare or pay dividends or effect other distributions. Furthermore, while there are no current intentions to declare or pay dividends in the foreseeable future, in the event that a determination was made that our proceeds from operations (or any future operations) could reasonably be shown to constitute proceeds of crime, we may decide or be required to suspend declaring or paying dividends without advance notice and for an indefinite period of time.

Further legislative development beneficial to our operations is not guaranteed

Among other things, our business involves the provision of an online platform that provides monitoring and tracking of those involved in the cultivation, distribution, manufacture, storage, transportation, and/or sale of medical and adult-use cannabis products in compliance with applicable state law. The success of our business depends on the continued development of the cannabis industry and the activity of commercial business and government regulatory agencies within the industry. The continued development of the cannabis industry is dependent upon continued legislative and regulatory authorization of cannabis at the state level and a continued laissez-faire approach by federal enforcement agencies. Any number of factors could slow or halt progress in this area. Further regulatory progress beneficial to the industry cannot be assured. While there may be ample public support for legislative action, numerous factors impact the legislative and regulatory process, including election results, scientific findings or general public events. Any one of these factors could slow or halt progressive legislation relating to cannabis and the current tolerance for the use of cannabis by consumers, which could adversely affect the demand for our product and operations.

The cannabis industry could face strong opposition from other industries

We believe that established businesses in other industries may have a strong economic interest in opposing the development of the cannabis industry. Cannabis may be seen by companies in other industries as an attractive alternative to their products, including recreational marijuana as an alternative to alcohol, and medical marijuana as an alternative to various commercial pharmaceuticals. Many industries that could view the emerging cannabis industry as an economic threat are well established, with vast economic and federal and state lobbying resources. It is possible that companies within these industries could use their resources to attempt to slow or reverse legislation legalizing cannabis. Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial to the cannabis industry could have a detrimental impact on our clients and, in turn on our operations.

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The legality of marijuana could be reversed in one or more states

The voters or legislatures of states in which marijuana has already been legalized could potentially repeal applicable laws that permit the operation of both medical and retail marijuana businesses. These actions might force businesses, including those that are our clients, to cease operations in one or more states entirely.

Changing legislation and evolving interpretations of the law

Laws and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect our clients and, in turn, our operations. Local, state, and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require our clients and thus us to incur substantial costs associated with modification of operations to help ensure such clients’ compliance. In addition, violations of these laws, or allegations of such violations, could disrupt our clients’ business and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will limit the amount of cannabis growth or related products that our commercial clients are authorized to produce. We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our operations.

Dependence on client licensing

Our business is dependent on our clients obtaining various licenses from various municipalities and state licensing agencies. There can be no assurance that any or all licenses necessary for our clients to operate their businesses will be obtained, retained or renewed. If a licensing body were to determine that a client of ours had violated applicable rules and regulations, there is a risk the license granted to that client could be revoked, which could adversely affect our operations. There can be no assurance that our existing clients will be able to retain their licenses going forward, or that new licenses will be granted to existing and new market entrants.

Insurance risks

In the U.S, many marijuana-related businesses are subject to a lack of adequate insurance coverage. In addition, many insurance companies may deny claims for any loss relating to marijuana or marijuana-related operations based on their illegality under federal law, noting that a contract for an illegal transaction is unenforceable.

Bankruptcy risks

Because cannabis is illegal under U.S. federal law, and bankruptcy is a strictly federal proceeding, many courts have denied cannabis businesses federal bankruptcy protections, thus making it very difficult for lenders to recoup their investments in the cannabis industry in the event of a bankruptcy. If we were to seek protection from creditors pursuant to applicable bankruptcy or insolvency laws, even though we are not directly engaged in manufacturing, distributing, selling or otherwise handling cannabis under state cannabis laws, there is no guarantee that U.S. federal bankruptcy protections would be available to our United States operations, which would have a material adverse effect on us, our lenders and other stakeholders. While state-level receivership options do exist in some states as an alternative to bankruptcy, the efficacy of these alternatives cannot be guaranteed.

The cannabis industry is an evolving industry and we must anticipate and respond to changes.

The cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot be accurately predicted. While we have attempted to identify any risks specific to the cannabis industry, you should carefully consider that there are other risks that cannot be foreseen or are not described in this Annual Report, which could materially and adversely affect our business and financial performance. We expect that the cannabis market and our business will evolve in ways that are difficult to predict. For example, it is anticipated that over time, we will reach a point in most markets where we have achieved a market penetration level in which new client acquisitions are less productive, and the continued growth of our revenue will require more focus on increasing the rate at which existing clients purchase products and services across our platforms. Our long-term success will depend on our ability to successfully adjust our strategy to meet the changing market dynamics. If we are unable to successfully adapt to changes in the cannabis industry, our operations could be adversely affected.

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Risks Related to Our Business

A significant portion of our business is from government contracts, which present certain unique risks.

Contracts for Leaf Data Systems with government agencies in Pennsylvania and Utah represented 16%, 25% and 39% of our revenue for the year ended December 31, 2022, December 31, 2021 and six months ended December 31, 2020, respectively. In order to obtain a government contract for Leaf Data Systems, we are required to follow a competitive bidding process in each state where we seek a contract. Government contracts have very specific compliance requirements that often require contractors to invest material time and money to prepare a bid to ensure that our technology, processes, and staff meet these specific requirements. After expenditures of such time and money, there is no assurance that the bid will result in an award of a contract. Further, even if a contract is awarded, there are strict procedures that government agencies follow when it comes to reimbursement of the costs incurred in the course of fulfilling contracts. Accordingly, it is possible that some or all costs might not be reimbursed under a government contract as contemplated by us.

Government agencies also typically audit and investigate government contractors. These agencies review a contractor’s performance under its contracts, its cost structure, its business systems, and compliance with applicable laws, regulations, and standards. If an audit or investigation uncovers improper or illegal activities, we may be subject to civil or criminal penalties and administrative sanctions, including reductions of the value of contracts, contract modifications or terminations, forfeiture of profits, suspension of payments, penalties, fines, and suspension, or prohibition from doing business with the government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us. Any such imposition of penalties, or the loss of such government contracts, could materially adversely affect our business, financial condition, results of operations, and growth prospects.

There also is typically a longer window of liability under government contracts than private contracts, and the government can seek claims after the contract has ended and payments under the contract have been made. The terms of government contracts may also require the sharing of proprietary information, processes, software, and product development efforts with the government. Additionally, government employees are required to follow certain protocols to ensure there is no appearance of impropriety in the bidding process. As a result, bidders on government contracts must ensure that there is no appearance of favoritism, gift-giving, bribery, or the exertion of other influences in the bidding process. Any finding of the same can result in fines to the bidder and cancellation of contracts. The applicable state government generally has the ability to terminate our contract, in whole or in part, without prior notice, for convenience or for default based on performance. If a government contract were to be terminated for convenience, we generally would be protected by provisions covering reimbursement for costs incurred on the contract and profit on those costs, but not the anticipated profit that would have been earned had the contract been completed. The state government also has the ability to stop work under a contract for a limited period of time for its convenience.

We cannot assure you that we will be able to maintain our existing government contracts.

Our operations may be adversely affected by disruptions to our information technology, or IT, systems, including disruptions from cybersecurity breaches of our IT infrastructure.

We rely on information technology networks and systems, including those of third-party service providers, to process, transmit, and store electronic information. In particular, we depend on our information technology infrastructure for a variety of functions, including financial reporting, data management, project development, and email communications. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist attacks, sabotage, and similar events. Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to our information technology systems to sophisticated and targeted measures known as advanced persistent threats. The ever-increasing use and evolution of technology, including cloud-based computing, create opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our systems or in non- encrypted portable media or storage devices. We could also experience a business interruption, information theft of confidential information, or reputational damage from industrial espionage attacks, malware, or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Despite the implementation of network security measures and disaster recovery plans, our systems and those of third parties on which we rely may also be vulnerable to computer viruses, break-ins, and similar disruptions. If we or our vendors are unable (or are perceived as unable) to prevent such outages and breaches, our operations may be disrupted, and our business reputation could be adversely affected.

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We expect that risks and exposures related to cybersecurity attacks will remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats.

Privacy regulation is an evolving area and compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our clients and market our products and services.

Because we store, processes, and use data, some of which contains personal information, we are subject to complex and evolving federal, state, and foreign laws and regulations (including Canada’s Cannabis Act and related regulations and the European Union’s general data protection regulation, or GDPR) regarding privacy, data protection, and other matters. While we believe we are currently in compliance with applicable laws and regulations, many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm our business.

We rely on third parties for certain services made available to users of our platforms, which could limit our control over the quality of the user experience and our cost of providing services.

Some of the applications and services available through the Leaf Data System and MJ Platform are provided through relationships with third-party service providers. We do not typically have any direct control over these third-party service providers. These third-party service providers could experience service outages, data loss, privacy breaches, including cyber-attacks, and other events relating to the applications and services they provide that could diminish the utility of these services and which could harm users thereof. The MJ Platform itself does not depend on any third-party software or applications and is based entirely on open source technologies and custom programming. The MJ Platform, however, is hosted by Amazon Web Services, a third-party service provider. There are readily available alternative hosting services available should we desire or need to move to a different web host. Certain ancillary services provided by us also uses the services of third- party providers, for which, we believe, there are readily available alternatives on comparable economic terms. Offering integrated platforms, such as the Leaf Data System and MJ Platform which rely, in part, on the services of other providers lessens the control that we have over the total client experience. Should the third-party service providers we rely upon not deliver at standards we expect and desires, acceptance of our platforms could suffer, which would have an adverse effect on our business and financial performance. Further, we cannot be assured of entering into agreements with such third-party service providers on economically favorable terms.

Acquisitions and integration issues may expose us to risks.

Our business strategy includes making targeted acquisitions. Any acquisition that we make may be of significant size, may change the scale of our business and operations, and may expose us to new geographic, political, operating, financial, and geological risks. Our success in our acquisition activities depends on our ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with our own. Any acquisitions would be accompanied by risks. For example, there may be significant changes in our market value after we have committed to complete the transaction and have established the purchase price or exchange ratio; a potential targeted acquisition’s business and prospects may prove to be below expectations; we may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise and maintaining uniform standards, policies, and controls across the organization; the integration of the acquired business or assets may disrupt our ongoing business and our relationships with employees, clients, suppliers, and contractors; and the acquired business or assets may have unknown liabilities that may be significant. If we choose to use equity securities as consideration for such an acquisition, existing shareholders may suffer dilution. Alternatively, we may choose to finance any such acquisition with our existing resources. There can be no assurance that we would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions. To grow and be successful, we need to attract and retain qualified personnel.

In any future acquisitions, we may not be able to successfully integrate acquired personnel, operations, and technologies, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from future acquisitions due to a number of factors, including: (a) an inability to integrate or benefit from acquisitions in a profitable manner; (b) unanticipated costs or liabilities associated with the acquisition; (c) the incurrence of acquisition-related costs; (d) the diversion of management’s attention from other business concerns; (e) the loss of our or the acquired business’ key employees; or (f) the issuance of dilutive equity securities, the incurrence of debt, or the use of cash to fund such acquisitions.

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To grow and be successful, we need to attract and retain qualified personnel.

Our growth and success will depend to a significant extent on our ability to identify, attract, hire, train, and retain qualified professional, creative, technical, and managerial personnel. Competition for experienced and qualified talent in the cannabis industry can be intense. We may not be successful in identifying, attracting, hiring, training, and retaining such personnel in the future. If we are unable to hire, assimilate, and retain qualified personnel in the future, such inability could adversely affect our operations.

We are smaller and less diversified than many of our potential competitors.

While we believe we are a leading provider in the software solutions segment of the cannabis industry, there are general software design and integrated business platform companies seeking to provide online and software-based business solutions and operations integration to clients in numerous industries. The continued growth of the cannabis industry will likely attract some of these existing companies and incentivize them to produce solutions that are competitive with those offered by us. Many of these potential competitors are a part of large diversified corporate groups with a variety of other operations and expansive resources. We may not be able to successfully compete with larger enterprises devoting significant resources to compete in our target market space, which may negatively affect operations.

Our business and stock price may suffer as a result of our limited public company operating experience and if securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock in an adverse manner, the price and trading volume of our common stock could decline.

If we are unable to execute our business strategy, either as a result of our inability to manage effectively our business in a public company environment or for any other reason, our business, prospects, financial condition, and operating results may be harmed.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. We currently have limited coverage by securities and industry analysts. If no additional securities or industry analysts commence coverage of us, our stock price and trading volume would likely be negatively impacted. If any of the analysts who cover, or who may cover us in the future, change their recommendation regarding our stock in an adverse manner, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Risks Related to Intellectual Property

Protecting and defending against intellectual property claims may have a material adverse effect on our business.

Our ability to compete depends, in part, upon successful protection of our intellectual property relating to our Leaf Data Systems and MJ Platform, and intellectual property acquired in business combinations, such as Solo, Trellis, and Ample. We seek to protect our proprietary and intellectual property rights through patent applications, available copyright and trademark laws, nondisclosure agreements, and licensing and distribution arrangements with reputable companies in our target markets. While patent protection for inventions related to cannabis and cannabis-related products is available, there are substantial difficulties faced in the patent process by cannabis-related businesses. Further, patent applications may be rejected for numerous other reasons beyond those related to the cannabis industry, including that the subject matter of the application is found to be non-patentable. Our previous patent applications were denied and while we are continuing to pursue such applications and believe they are with merit, there can be no assurance that patents will be issued on these applications. The failure to be awarded patents on our technology could weaken our ability to enforce our intellectual property rights. Any such enforcement, whether we have been granted patent protection or not, would be costly, and there can be no assurance that we will have the resources to undertake all necessary action to protect our intellectual property rights or that we will be successful. Any infringement of our material intellectual property rights could require us to redirect resources to actions necessary to protect the same and could distract management from our underlying business operations. The infringement of our material intellectual property rights and resulting actions could adversely affect our operations.

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Our success depends in part upon our ability to protect our core technology and intellectual property.

Our success depends in part upon our ability to protect our core technology and intellectual property. To establish and protect our proprietary rights, we rely on a combination of patent applications, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights.

We generally control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, clients, and partners, and our software is protected by the U.S. and international copyright laws.

Despite efforts to protect our trade secrets and proprietary rights through intellectual property rights, licenses, and confidentiality agreements, unauthorized parties may still copy or otherwise obtain and use our software and technology, as was the case when our source code was compromised in June 2017. We have taken significant actions to improve security but will be required to regularly modify our systems to combat new hacking approaches as they develop. In addition, as our international operations expand, effective intellectual property protection may not be available or may be limited in foreign countries.

Others may assert intellectual property infringement claims against us.

Companies in the software and technology industries own large numbers of patents, copyrights, trademarks, and trade secrets, and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights. In addition, various “non-practicing entities” that own patents and other intellectual property rights often attempt to aggressively assert their rights in order to extract value from technology companies. It is possible that others may claim from time to time that our products misappropriate or infringe the intellectual property rights of third parties. Irrespective of the validity or the successful assertion of any such claims, we could incur significant costs and diversion of resources in defending against these claims, which could adversely affect our operations. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained in all cases. We may decide to settle such lawsuits and disputes on terms that are unfavorable to us. As a result, we may also be required to develop alternative non-infringing technology or practices or discontinue the practices. The development of alternative non-infringing technology or practices could require significant effort and expense or may not be feasible.

Risks Related to Akerna’s Charter Documents

Anti-takeover provisions contained in Akerna’s amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt and limit the price investors might be willing to pay in the future for our common stock and could entrench management.

Akerna’s amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

These provisions:

        create a staggered board of directors making it more difficult for stockholders to remove a majority of the board of directors and take control;

        grant the board of directors the ability to designate the terms of and issue new series of preferred shares, which can be created and issued by the board of directors without prior stockholder approval, with rights senior to those of the common stock;

        impose limitations on our stockholders’ ability to call special stockholders’ meetings; and

        make it more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

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In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our amended and restated certificate of incorporation, our bylaws, and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of the Akerna Board or initiate actions that are opposed by our then-current Akerna Board, including to delay or impede a merger, tender offer or proxy contest involving us. Any delay or prevention of a change in control transaction or changes in the Akerna Board could cause the market price of our common stock to decline.

Our corporate opportunity provisions in Akerna’s amended and restated certificate of incorporation could enable management to benefit from corporate opportunities that might otherwise be available to us.

Akerna’s amended and restated certificate of incorporation provides that the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to us, or any of our directors or officers in circumstances where the application of such doctrine would conflict with any fiduciary duties or contractual obligations they may otherwise have.

Our management may become aware, from time to time, of certain business opportunities (such as acquisition opportunities) and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunity. Further, such businesses may choose to compete with us for these opportunities, possibly causing these opportunities to not be available to us or causing them to be more expensive for us to pursue. These potential conflicts of interest could adversely impact our business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for ours.

Akerna’s amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Akerna’s amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers, and employees for breach of fiduciary duty, actions under the Delaware general corporation law or under our Amended and Restated Certificate of Incorporation, or actions asserting a claim governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. This choice of forum provision does not preclude or contract the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act or the Exchange Act of 1934, as amended, or the Exchange Act. Accordingly, our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision does not exclude stockholders from suing in federal court for claims under the federal securities laws but may limit a stockholder’s ability to bring such claims in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.

Alternatively, if a court were to find the choice of forum provision contained in our Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Risks Related to the Akerna Notes

The issuance of shares of our common stock pursuant to the Akerna Notes may result in significant dilution to our stockholders.

The conversion of the Akerna Notes could result in the issuance of a significant number of shares of our common stock. The current $3.15 million principal amount of the Akerna Notes is convertible at a price of $0.50 per share, which would result in the issuance of approximately 6.3 million shares of Akerna Common Stock upon the conversion

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of the Akerna Notes in full. At the option of Akerna, the installment payments on the Akerna Notes can be converted into shares of Akerna Common Stock at a price per share equal to the lower of (i) the conversion price then in effect, or (ii) the greater of (x) the floor price of $10.80 and (y) 90% of the lower of (A) the volume-weighted average price of the common stock as of the trading day immediately preceding the applicable date of determination and (B) the quotient of (I) the sum of the volume-weighted average price of the common stock for each of the two (2) trading days with the lowest volume-weighted average price of the common stock during the ten consecutive trading day period ending on and including the trading day immediately prior to the applicable date of determination, divided by (II) two.

Our obligations to the Akerna Note Holders are secured by a security interest in substantially all of our assets, if we default on those obligations, the Akerna Note Holders could foreclose on our assets.

Our obligations under the Akerna Notes and the related transaction documents are secured by a security interest in substantially all of our assets. As a result, if we default on our obligations under the Akerna Notes, the collateral agent on behalf of the Akerna Note Holders could foreclose on the security interests and liquidate some or all of our assets, which would harm our business, financial condition and results of operations and could require us to reduce or cease operations and investors may lose all or part of their investment.

Events of default under the Akerna Notes include: (i) the failure of the registration statement under the registration rights agreement between the Company and the holders of Akerna Notes to be filed with the SEC or the failure of the applicable registration statement to be declared effective by the SEC by deadlines set forth in the registration rights agreement; (ii) the effectiveness of the applicable registration statement lapses for any reason or such registration statement is unavailable to any holder of registrable securities and Rule 144 (subject to certain conditions) is not unavailable to any holder of the conversion shares; (iii) suspension of trading of the Akerna Common Stock a national securities exchange for five days; (iv) uncured conversion failure; (v) failure by Akerna to maintain required share allocations for the conversion of the Akerna Notes; (vi) failure by Akerna to pay principal when due; (vii) failure of Akerna to remove restricted legends from shares issued to a holder upon conversion of the Akerna Notes; (viii) the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $50,000 of indebtedness of Akerna; (ix) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against Akerna or any subsidiary and not dismissed within 45 days of initiation; (x) the commencement by Akerna or any subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law; (xi) the entry by a court of a decree, order, judgment or other similar document in respect of Akerna or any subsidiary of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law; (xii) final judgment for the payment of money aggregating in excess of $50,000 are rendered against Akerna or any subsidiary of Akerna and not bonded or discharged within 30 days; (xiii) failure of Akerna or any subsidiary to pay when due any debts in excess of $50,000 due to any third party; (xiv) breaches by Akerna or any subsidiary of any representations or warranties in the securities purchase agreement for the Akerna Notes or any document contemplated thereby; (xv) a false or inaccurate certification by Akerna that either (A) the “Equity Conditions” (as defined in the Akerna Notes) are satisfied, (B) there has been no “Equity Conditions Failure,” (as defined in the Akerna Notes) or (C) as to whether any Event of Default has occurred; (xvi) failure of Akerna or any subsidiary to comply with certain of the covenants in the Akerna Notes; (xvii) the occurrence of (A) at any time after the six month anniversary of the issuance date, any current public information failure that remains outstanding for a period of twenty (20) trading days or (B) any restatement of any financial statements of Akerna filed with the SEC; (xviii) any material adverse effect occurring; (xix) any provision of any transaction document shall at any time for any reason cease to be valid and binding or enforceable; (xx) any security document shall for any reason (other than pursuant to the express terms thereof or due to any failure or omission of the collateral agent) fail or cease to create a separate valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority lien; (xxi) any material damage to, or loss, theft or destruction of, any collateral, that is material to the business of the Company or any subsidiary and is not reimbursed by insurance; or (xxii) any Event of Default occurs under any other Akerna Notes.

The Akerna Note Holders have certain additional rights upon an event of default under such Akerna Notes, which could harm our business, financial condition, and results of operations and could require us to reduce or cease our operations.

Under the Akerna Notes, the holders have certain rights upon an event of default. Such rights include (i) the remaining principal amount of the Akerna Notes bearing interest at a rate of 15% per annum, (ii) during the event of default the holders of the Akerna Notes will be entitled to convert all or any portion of the Akerna Notes at an alternate conversion

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price equal to the lower of (i) the conversion price then in effect, and (ii) 80% of the lower of (x) the volume weighted average price of the common stock as of the trading day immediately preceding the applicable date of determination and (y) the quotient of (A) the sum of the volume weighted average price of the common stock for each of the two (2) trading days with the lowest volume weighted average price of the common stock during the ten consecutive trading day period ending and including the trading day immediately prior to the applicable date of determination, divided by (B) two, but not less than the floor price, and (iii) the holder having the right to demand redemption of all or a portion of the Akerna Notes, as described below. At any time after certain notice requirements for an event of default are triggered, an Akerna Note Holder may require us to redeem all or any portion of the convertible note by delivering written notice. The redemption price will equal the greater of (i) 115% of the outstanding principal of the convertible note to be redeemed and accrued and unpaid interest and unpaid late charges thereon, and (ii) an amount equal to the market value of the shares of the common stock underlying the Akerna Notes, as determined in accordance with the Akerna Notes. Upon the occurrence of certain events of default relating to the bankruptcy of Akerna, whether occurring prior to or following the maturity date, Akerna will be required to immediately redeem the Akerna Notes, in cash, for an amount equal to 115% of the outstanding principal of the Akerna Notes, and accrued and unpaid interest and unpaid late charges thereon, without the requirement for any notice or demand or other action by any holder or any other person or entity. We may not have sufficient funds to settle the redemption price and, as described above, this could trigger rights under the security interest granted to the holders and result in the foreclosure of their security interests and liquidation of some or all of our assets.

The exercise of any of these rights upon an event of default could substantially harm our financial condition, substantially dilute our other shareholders and force us to reduce or cease operations and investors may lose all or part of their investment.

Risks Related to Akerna Common Stock

If Akerna’s Common Stock is delisted from Nasdaq, the liquidity and price of Akerna’s Common Stock could decrease and Akerna’s ability to obtain financing could be impaired.

On March 22, 2023, Akerna received a notification letter from The Nasdaq Stock Market stating that Akerna is not in compliance with the minimum bid price requirement, which requires our listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”). The notification stated that Akerna had a compliance period of 180 calendar days, or until September 18, 2023, to regain compliance with the Minimum Bid Price Requirement.

On March 23, 2023, Akerna received notice from The Nasdaq Stock Market advising Akerna that it is not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Stockholders’ Equity Requirement”). In Akerna’s Annual Report on Form 10-K for the year ended December 31, 2022, Akerna reported stockholders’ equity of ($4,825,528), which is below the Stockholders’ Equity Requirement for continued listing.

Pursuant to the notice, Nasdaq gave Akerna 45 calendar days, or until May 8, 2023, to submit to Nasdaq a plan to regain compliance. Akerna submitted its plan on May 8, 2023 and the staff of the Nasdaq granted an extension for Akerna to regain compliance through September 19, 2023.

On September 19, 2023, Akerna received a determination letter (the “Determination Letter”) from The Nasdaq Stock Market stating that it had not regained compliance with Listing Rule 5550(a)(2) and is not eligible for a second 180 day period to regain compliance and that unless Akerna requested an appeal of this determination the trading of Akerna Common Stock would be suspended at the opening of business on September 28, 2023, and a Form 25-NSE would be filed with the SEC which will remove the Company’s securities from listing and registration on The Nasdaq Capital Market. The Company appealed the determination, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series and requested a hearing (the “Hearing”) before a Nasdaq Hearing Panel (the “Panel”) which is scheduled for November 9, 2023. The Hearing request stayed any delisting or suspension action pending the issuance of the Panel’s decision. The Hearing was held on November 9, 2023 and on November 17, 2023 the Panel granted Akerna an extension until January 31, 2024 to regain compliance by completing the Sale Transaction and the Merger. The Akerna Common Stock will remain listed pending continued compliance through January 31, 2024.

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In addition, as disclosed above Akerna received a notice from The Nasdaq Stock Market notifying Akerna that it was not in compliance with the Stockholders’ Equity Requirement and the Company had until September 19, 2023, to regain compliance with the Stockholders’ Equity Rule. However, The Nasdaq Stock Market indicated in the Determination Letter that, pursuant to Listing Rule 5810(d)(2), this deficiency serves as an additional and separate basis for delisting, and as such, Akerna should address its non-compliance with the Stockholders’ Equity Rule before a Panel at the Hearing.

There can be no assurance that Akerna will be able to regain compliance with the applicable Nasdaq listing requirements by January 31, 2024.

We may seek to raise additional funds, finance acquisitions, or develop strategic relationships by issuing securities that would dilute investors’ ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our shares of Akerna Common Stock.

Any additional financing that we secure, may require the granting of rights, preferences, or privileges senior to, or pari passu with, those of Akerna Common Stock. Any issuances by us of equity securities may be at or below the prevailing market price of Akerna Common Stock and in any event, may have a dilutive impact on stockholders’ ownership interest, which could cause the market price of our common stock to decline. We may also raise additional funds through the incurrence of debt, subject to the limitations imposed by the Akerna Notes, or the issuance or sale of other securities or instruments senior to our shares of common stock. We cannot be certain how the repayment of the Akerna Notes will be funded and we may issue further equity or debt in order to raise funds to repay the promissory notes, including funding that may be highly dilutive. The holders of any securities or instruments we may issue may have rights superior to the rights of our common stockholders. If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over holders of our common stock, it may negatively impact the trading price of our shares of common stock and stockholders may lose all or part of their investment.

Pursuant to the Merger Agreement, Akerna can raise up to $5 million in financings to meet its ongoing expenses until closing of the Merger. Any amounts above $5 million have to be loaned to Gryphon pursuant to the terms of the Merger Agreement.

Warrants are exercisable for Akerna Common Stock, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Currently, there are warrants to purchase 2,573,299 shares of Akerna Common Stock. Akerna’s warrants issued in 2019 are exercisable for 290,690 shares of Akerna Common Stock at $230.00 per share. Akerna’s warrants issued in July of 2022 are exercisable for a combined amount of 2,282,609 shares of Akerna Common Stock at $0.37 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the then-existing holders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock.

Certain of our warrants are accounted for as a derivative liability and are recorded at fair value upon issuance with any changes in fair value each period reported in our statement of operations, which may have an adverse effect on the market price of our securities.

We had 225,635 warrants that were issued in private placements that occurred concurrently with the initial public offering of Mtech Acquisitions Corp., our successor (the “private warrants”). These private warrants and the shares of Akerna Common Stock issuable upon the exercise of the private warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers or their permitted transferees, the private warrants will be redeemable by Akerna and exercisable by such holders on the same basis as the warrants included in the units sold in the initial public offering, in which case the 225,635 private warrants could be redeemed by Akerna for $2,256.35. Under generally accepted accounting principles in the United States (“GAAP”), Akerna is required to evaluate contingent exercise provisions of these warrants and then their settlement provisions to determine whether they should be accounted for as a warrant liability or as equity. As a result of the provision that the private warrants, when held by someone other than the initial purchasers or their permitted transferees, will be redeemable by Akerna, the requirements for accounting for these warrants as equity are not satisfied. Therefore, we are required to account for these private warrants as a warrant liability and record (a) that liability at fair value and (b) any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.

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If we do not maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants, public holders will only be able to exercise such warrants or pre-funded warrants on a “cashless basis.”

If we do not maintain a current and effective prospectus relating to the shares of common stock issuable upon exercise of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis,” and under no circumstances would we be required to make any cash payments or net cash settle such warrants to the holders. As a result, the number of shares of common stock that holders will receive upon exercise of the warrants will be fewer than it would have been had such holders exercised their warrants. Under the terms of the warrants, we have agreed to use our best efforts to maintain a current and effective prospectus relating to the shares of common stock issuable upon exercise of such warrants until the expiration of such warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential “upside” of the holder’s investment in our company may be reduced.

Provisions of the warrants could discourage an acquisition of us by a third party.

Certain provisions of the warrants could make it more difficult or expensive for a third party to acquire us. The warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants.

We may face additional risks, including regulatory, litigation, stockholder or other actions and negative impacts on our stock price, as a result of the material weakness in our internal control over financial reporting and revisions to our financial statements.

As a result of our material weaknesses in internal control over financial reporting, we face potential additional risks, including regulatory, litigation, stockholder or other actions and negative impacts on our stock price, which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in our internal control over financial reporting and the preparation of our financial statements. As of the date of this report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition.

The market price of the Akerna Common Stock is particularly volatile given our status as a relatively new public company with a generally small and thinly traded public float, which could lead to wide fluctuations in our share price. Stockholders may be unable to sell their shares of Akerna Common Stock at or above their purchase price, which may result in substantial losses to them.

The market for shares of Akerna Common Stock is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and we expect that our share price will continue to be more volatile than the shares of such larger, more established companies for the indefinite future. The volatility in our share price is attributable to a number of factors, including the fact that our shares are thinly traded relative to larger, more established companies. The price for shares of Akerna Common Stock could, for example, decline precipitously in the event that a large number of shares of Akerna Common Stock are sold on the market without commensurate demand. Currently, there are warrants to purchase 2,573,299 shares of Akerna Common Stock. Akerna’s warrants issued in 2019 are exercisable for 290,690 shares of Akerna Common Stock at $230.00 per share. Akerna’s warrants issued in July of 2022 are exercisable for a combined amount of 2,282,609 shares of Akerna Common Stock at $0.37 per share. Further, the current $3.15 million principal amount of the Akerna Notes is convertible at a price of $0.50 per share, which would result in the issuance of approximately 6.3 million shares of Akerna Common Stock upon the conversion of the Akerna Notes in full. If these securities are exercised or converted and sold into the open market could cause our stock price to decline. In addition, because we may be considered a speculative or “risky” investment due to our lack of profits to date, certain investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares of Akerna Common Stock on the market more quickly and at greater discounts, thus resulting in a rapid downward decline in the price of Akerna Common Stock. Many of these factors are beyond our control and may decrease the market price of Akerna Common Stock, regardless of our operating performance.

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The market price of Akerna Common Stock is still likely to be highly volatile and subject to wide fluctuations, and stockholders may be unable to resell shares of Akerna Common Stock at or above the price at which they are acquired.

The market price of Akerna Common Stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including, but not limited to:

        Variations in our revenues and operating expenses;

        Actual or anticipated changes in the estimates of our operating results or changes in stock market analyst recommendations regarding Akerna Common Stock, other comparable companies, or our industry generally;

        Market conditions in our industry, the industries of our clients, and the economy as a whole;

        Actual or expected changes in our growth rates or our competitors’ growth rates;

        Developments in the financial markets and worldwide or regional economies;

        Announcements of innovations or new products or services by us or our competitors;

        Announcements by the governments and other regulatory authorities relating to regulations that apply to our industry;

        Sales of Akerna Common Stock or other securities by us or in the open market; and

        Changes in the market valuations of other comparable companies.

The trading price of our shares of Akerna Common Stock might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results, and financial condition.

We have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment may be limited to potential future appreciation in the value of our common stock.

We currently intend to retain any future earnings to pay Transaction expenses and do not anticipate paying cash dividends on our shares of Akerna Common Stock in the foreseeable future. Payment of any future dividends will be at the discretion of the board of directors of the combined company after taking into account various factors, including without limitation, financial condition, operating results, cash needs, growth plans, and the terms of any credit agreements that the combined company may be a party to at the time. To the extent we do not pay dividends, the common stock of the combined company may be less valuable because a return on investment will only occur if and to the extent its stock price appreciates, which may never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize their investment, and if the price of the combined company’s common stock does not appreciate, then there will be no return on investment.

General Risks

Any failure to maintain effective disclosure controls and procedures and internal control over our financial reporting could materially adversely affect us.

We do not currently have effective disclosure controls and procedures and internal control over financial reporting. Effective disclosure controls and procedures provides reasonable assure that our public reports contain necessary material information as required by applicable securities laws. Effective internal control over financial reporting provides reasonable assurance on our ability to provide reliable financial reports, effectively prevent fraud and operate successfully as a public company. If we cannot provide accurate and timely reports and reliable financial reports or prevent fraud, our reputation and operating results would be harmed. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the regulatory compliance and reporting requirements that are applicable to us. Failure to remediate material weaknesses in internal controls over financial reporting could result in material misstatements in our financial statements.

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Our management has identified material weaknesses in our internal controls over financial reporting and has concluded that due to such material weaknesses, our internal controls over financial reporting (including disclosure controls and procedures) were not effective as of December 31, 2022. If not remediated, our failure to establish and maintain effective disclosure controls and procedures over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

The requirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations. Compliance with these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more employees in the future or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act (“Section 404”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. It cannot be predicted if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

Our operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics.

We may be impacted by business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods, and fires. An outbreak of any of the foregoing or fear of any of the foregoing could adversely impact us by disrupting the operations of our clients, which could result in delayed payments, non-renewal of contracts, and other adverse effects on the market for our products or by causing

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product development and implementation delays and disruptions (including as a result of government regulation and prevention measures). We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results, and financial condition.

Proposed legislation in the U.S. Congress, including changes in U.S. tax law, and the recently enacted Inflation Reduction Act of 2022, may adversely impact us and the value of our common stock.

Changes to U.S. tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.

The U.S. Congress is currently considering numerous items of legislation which may be enacted prospectively or with retroactive effect, which legislation could adversely impact our financial performance and the value of shares of our common stock. Additionally, states in which we operate or own assets may impose new or increased taxes. If enacted, most of the proposals would be effective for the current or later years. The proposed legislation remains subject to change, and its impact on us or our investors is uncertain.

In addition, the recently enacted Inflation Reduction Act of 2022 includes provisions that will impact the U.S. federal income taxation of corporations. Among other items, this legislation includes provisions that will impose a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock. It is unclear how this legislation will be implemented by the U.S. Department of Treasury and we cannot predict how this legislation or any future changes in tax laws might affect us or investors in our common stock.

Risks Related to Gryphon

Risks Related to the Price of Bitcoin

Gryphon’s future success will depend upon the value of Bitcoin; the value of Bitcoin may be subject to pricing risk and has historically been subject to wide swings.

Gryphon’s operating results depend on the value of Bitcoin because it is the only cryptocurrency that Gryphon mines. Specifically, Gryphon’s revenues from its bitcoin mining operations are based on two factors: (1) the number of bitcoin rewards Gryphon successfully mines and (2) the value of Bitcoin. In addition, Gryphon’s operating results are directly impacted by changes in the value of Bitcoin, because under the value measurement model, impairment of Bitcoin and realized gains will be reflected in Gryphon’s statement of operations (i.e., Gryphon will be marking bitcoin to fair value each closing period). This means that Gryphon’s operating results will be subject to swings based upon increases or decreases in the value of Bitcoin. Further, Gryphon’s current application-specific integrated circuit, or ASIC, machines (which Gryphon refers to as “miners”) are principally utilized for mining bitcoin and cannot mine other cryptocurrencies, such as ether, that are not mined utilizing the “SHA-256 algorithm.” If other cryptocurrencies were to achieve acceptance at the expense of Bitcoin causing the value of Bitcoin to decline, or if Bitcoin were to switch its proof of work algorithm from SHA-256 to another algorithm for which Gryphon’s miners are not specialized, or the value of Bitcoin were to decline for other reasons, particularly if such decline were significant or over an extended period of time, Gryphon’s operating results would be adversely affected, and there could be a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations, and harm investors.

Bitcoin market prices, which have historically been volatile and are impacted by a variety of factors (including those discussed below), are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. Furthermore, such prices may be subject to factors such as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of Bitcoin, which inflates and makes its market prices more volatile or creates “bubble” type risks for Bitcoin.

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Gryphon may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in Gryphon’s stock price, financing risk, risk of increased losses or impairments in its investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.

The use of crypto assets to, among other things, buy and sell goods and services and complete other transactions is part of a new and rapidly evolving industry that employs crypto assets based upon a computer generated mathematical and/or cryptographic protocol. The growth of this industry in general, and the use of crypto assets in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may adversely affect Gryphon’s operations. The factors affecting the further development of the industry, include, but are not limited to:

        Continued worldwide growth in the adoption and use of crypto assets;