favor thereof and 30% of the aggregate votes cast by Common Stock, the special voting share and Series A Preferred Stock voting on the Reverse Stock Split are voted against such proposal, then 70% of the votes entitled to be cast by Series B Preferred Stock will be cast in favor of the proposal and 30% of such votes will be cast against the proposal.

The allocation of the voting power with respect to the Reverse Stock Split is illustrated in the following table:

____________

(1)      Shares of Series B Preferred Stock will be voted in a manner that “mirrors” the proportions of the votes of the shares of Common Stock (excluding any shares of Common Stock that are not voted), the special voting share (excluding any portion of the special voting share equivalents not voted) and the shares of Series A Preferred Stock.

What is the difference between a stockholder of record and a beneficial owner of shares held in street name?

Stockholder of Record.    Record.    If your shares are registered directly in your name with the Company’s transfer agent, Continental Stock Transfer & Trust Company, or registered directly in your name in the Company’s stock ledger, you are considered the stockholder of record with respect to those shares, and the proxy materials were sent directly to you by the Company and you received a proxy card.

Beneficial Owner of Shares Held in Street Name.    Name.    If your shares are held in an account at a brokerage firm, bank, broker-dealer,broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the proxy materials were forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the AnnualSpecial Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Those instructions are contained in a “voting instruction form” delivered to you.

If I am a stockholder of record of the Company’s voting stock, how do I vote?

There are three ways to vote:

•        In person.    If you are a stockholder of record, you may vote in person at the Special Meeting. The Company will give you a ballot when you arrive.

•        Via the Internet.    You may vote by proxy via the Internet by going to www.cstproxyvote.com and using the code written on your proxy card to access your proxy electronically.

Even if you plan to attend the AnnualSpecial Meeting, it is strongly recommended you vote by proxy via the Internet or complete and return your proxy card before the AnnualSpecial Meeting date just in case your plans change.

If I am a beneficial owner of shares held in street name, how do I vote?

There are three ways to vote:

•        Via the Internet.    You may vote by proxy via the Internet by following the instructions provided by your brokerage firm, bank, broker-dealer or other similar organization that holds your shares.

•        By Mail.    You may vote by proxy by completing the voting instruction form from your brokerage firm pursuant to the instructions provided to you by such brokerage firm, filling out the voting instruction form and sending it back in the envelope provided by your brokerage firm, bank, broker-dealer or other similar organization that holds your shares.

What is the proxy card?

The proxy card enables you to appoint Jessica Billingsley, our Chief Executive Officer and Chairman of the Board, and John Fowle,Dean Ditto, our Chief Financial Officer, and Secretary, as your representatives at the AnnualSpecial Meeting. By completing and returning the proxy card, you are authorizing these persons to vote your shares at the AnnualSpecial Meeting in accordance with your instructions on the proxy card. This way your shares will be voted whether or not you attend the AnnualSpecial Meeting. Even if you plan to attend the AnnualSpecial Meeting, it is strongly recommended you complete and return your proxy card before the AnnualSpecial Meeting date just in case your plans change. If a proposal comes up for vote at the AnnualSpecial Meeting that is not on the proxy card, the proxy will vote your shares, under your proxy, according to their best judgment to the extent permissible by applicable law.

I share an address with another stockholder and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the proxy materials to multiple stockholders who share the same address unless we receive contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will deliver promptly a separate copy of the proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of the proxy materials, including this Proxy Statement, and the Annual Report, stockholders may contact us as follows:

AKERNA CORP.
1550 Larimer Street #246

Denver, Colorado 80202

Attention: Secretary

Stockholders who hold shares in street name (as described below) may contact their brokerage firm, bank, broker-dealer,broker-dealer, or other similar organization to request information about householding.

Can I change my vote after I have voted?

You may revoke your proxy and change your vote at any time before the vote on each proposal at the AnnualSpecial Meeting. You may vote again on a later date via the Internet (in which case only your latest Internet proxy submitted prior to the AnnualSpecial Meeting will be counted), by requesting, signing and returning a new proxy card or voting instruction form with a later date, or by attending the AnnualSpecial Meeting and voting in person if you are a stockholder of record. However, your attendance at the AnnualSpecial Meeting will not automatically revoke your proxy unless you vote again at the AnnualSpecial Meeting or specifically request that your prior proxy be revoked by delivering to the Company’s Secretary, at the Company’s headquarters at 1550 Larimer Street #246, Denver, Colorado 80202, a written notice of revocation prior to or at the AnnualSpecial Meeting.

Please note, however, that if your shares are held of record by a brokerage firm, bank or other nominee, you must instruct your broker, bank or other nominee that you wish to change your vote by following the procedures on the voting instruction form provided to you by the broker, bank or other nominee. If your shares are held in street name, and you wish to attend the AnnualSpecial Meeting and vote at the AnnualSpecial Meeting, you must bring to the AnnualSpecial Meeting a legal proxy from the broker, bank or other nominee holding your shares, confirming your beneficial ownership of the shares and giving you the right to vote your shares.

How many shares must be present or represented to conduct business at the AnnualSpecial Meeting?

The quorum requirement for holding the AnnualSpecial Meeting and transacting business is that the holders of a majorityone-third of the issued and outstanding voting shares as of the Record Date, and entitled to vote at the AnnualSpecial Meeting, be present in person or represented by proxy. “Broker non-votes,non-votes,” which are described below, and abstentions are counted for the purpose of determining the presence of a quorum.

How are votes counted?

You may vote “for,” “against,” or “withhold” in relation to the election of a director nominee to the Board and “for,” “against,” or “abstain” on each of the other proposals being placed before our stockholders. If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items.

If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.non-votes.” Broker non-votesnon-votes occur when brokers or others who hold shares in street name for a beneficial owner that has not provided instructions on how to vote on a particular matter. Matters on which a broker is not permitted to vote without instructions from the beneficial owner and instructions are not given are referred to as “non-routine”“non-routine” matters.

The ratification of auditors, the Authorized Share IncreaseReverse Stock Split and the Adjournment Proposal are “routine” and as such a matter on which brokers and nominees can vote on behalf of their clients if clients do not furnish voting instructions. The election of directors, the CN Nasdaq 20% Cap Removal Proposal, the 365 Nasdaq 20% Cap Removal Proposal, the Incentive Plan Amendment are non-routine and as such a matter on which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions.

How many votes are required to approve each of the proposals?

Reverse Stock Split

Election of Directors

AsThe approval of the date of this proxy statement, the election of directors is non-contested. Under our Bylaws, for an uncontested election, a nominee for director shall be elected if the number of votes cast at the Annual Meeting by the holders of the voting stock present in person or represented by proxy and entitled to vote at the Annual Meeting for a nominee’s election exceeds the votes cast against/withheld for such nominee’s election. This means that a vote marked “withheld” will have the same effect as a vote against a nominee. The election of directors is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions. As broker non-votes are not votes cast, broker non-votes will have no effect on the outcome of the election of directors.

Ratification of Marcum LLP

The ratification of the appointment of Marcum as the Company’s independent registered public accounting firm for fiscal year 2022Reverse Stock Split requires the affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal to ratify the appointment of Marcum. Because this proposal is a routine matter, brokers will have discretionary voting on this matter if they do not receive instructions.

CN Nasdaq 20% Cap Removal Proposal

The approval of the CN Nasdaq 20% Cap Removal Proposal requires affirmative vote of a majority of votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. The proposal is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the CN Nasdaq 20% Cap Removal Proposal.

365 Nasdaq 20% Cap Removal Proposal

The approval of the 365 Nasdaq 20% Cap Removal Proposal requires affirmative vote of a majority of votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. The proposal is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the 365 Nasdaq 20% Cap Removal Proposal.

Authorized Share Increase

The approval of the Authorized Share Increase requires affirmative vote of a majority of outstanding voting stock entitled to vote on the matter at the AnnualSpecial Meeting as of the Record Date. Failures to vote and abstentions and broker “non-votes”“non-votes”, if any, will be the equivalent of a vote AGAINST this proposal. Because this proposal is a routine matter, brokers will have discretionary voting on this matter if they do not receive instructions.

Incentive Plan Amendment

Adjournment Proposal

The Incentive Plan AmendmentAdjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the AnnualSpecial Meeting and entitled to vote on such proposal. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the Incentive Plan Amendment.

Adjournment Proposal

nonThe Adjournment Proposal requires -votesthe affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes,, which are not considered “votes cast,” will have no effect on the outcome of the Adjournment Proposal. Because this proposal is a routine matter, brokers will have discretionary voting on this matter if they do not receive instructions.

Will my shares be voted if I do not sign and return my proxy card?

If your shares are held in street name or in your name and you do not sign and return your proxy card, your shares will not be voted unless you vote in person at the AnnualSpecial Meeting.

What happens if I do not indicate how to vote my proxy?

If you just sign your proxy card without providing further instructions, your shares will be voted “FOR” each nominee to be elected as a Class I director to the Board, “FOR” the ratification of appointment of the Company’s independent auditor, “FOR” the approval of the CN Nasdaq 20% Cap Removal Proposal, “FOR” approval of 365 Nasdaq 20% Cap Removal Proposal, “FOR” the approval of Authorized Share Increase, “FOR” the approval of the Incentive Plan AmendmentReverse Stock Split and “FOR” the Adjournment Proposal.

Is my vote kept confidential?

Proxies, ballots and voting tabulations identifying stockholders are kept confidential and will not be disclosed except as may be necessary to meet legal requirements.

Where do I find the voting results of the AnnualSpecial Meeting?

We will announce voting results at the AnnualSpecial Meeting. The final voting results will be tallied by the inspector of election and published in a Current Report on Form 8-K,8-K, which the Company is required to file with the SEC within four business days following the AnnualSpecial Meeting.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

General

Our current Board is comprised of five (5) directors. Our Board is divided into three classes: Class I; Class II; and Class III. The directors in Class I have a term expiring at this Annual Meeting and again atThis proxy statement contains “forward-looking statements” within the 2025 annual meeting of stockholders, the directors in Class II have a term expiring at the 2023 annual meeting of stockholders, and the directors in Class III have a term expiring at the 2024 annual meeting of stockholders. The Class I directors are Matthew R. Kane and Tahira Rehmatullah; the Class II director is Scott Sozio, and the Class III directors are Jessica Billingsley and Barry Fishman.

Nominees

The Nominating Committee of our Board has nominated each of Matthew R. Kane and Tahira Rehmatullah to serve as Class I directors until the 2025 annual meeting of stockholders (subject to their respective earlier removal, death or resignation) or until their successors are elected and qualified.

We have been advised by each of Mr. Kane and Ms. Rehmatullah that they are willing to be named as a nominee and each are willing to continue to serve as a director if elected. Unless you indicate otherwise, shares represented by executed proxies will be voted for the election as directors of each nominee.

Mr. Kane and Ms. Rehmatullah are currently directors. We have no reason to believe that anymeaning of the nominees will be unavailable to servePrivate Securities Litigation Reform Act of 1995, as amended, that are based on the Board or, if elected, will decline to serve. Should any one or more of these nominees become unable or unwilling to serve, which is not anticipated, the Board may designate substitute nominees, in which event the proxy representatives will vote proxies that otherwise would be voted for the named nominees for the election of such substitute nominee or nominees.

Required Vote

There are two directorships up for election to the Board that will serveexpectations, estimates and projections as Class I directors until the 2025 annual meeting of stockholders or until their respective successors are elected and qualified. As of the date of this Proxy Statement. These forward-looking statements include but are not limited to statements and information concerning statements regarding:

•        our consummation and timing of the Reverse Stock Split;

•        the intended benefits of the Reverse Stock Split, including that the Reverse Stock Split is in the best interests of the Company’s stockholders, is expected to result in an increase to the per share trading price of our Common Stock, and is expected to make such Common Stock more attractive to a broader range of institutional and other investors; and

•        the market’s near and long term reaction to the Reverse Stock Split.

Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often but not always using phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, will occur or be achieved) are not statements of historical fact and may be forward-looking statements and are intended to identify forward-looking statements.

These forward-looking statements are based on the beliefs of the management of the Company as well as on assumptions that such management believes to be reasonable, based on information currently available at the time such statements were made. However, there can be no assurance that forward-looking statements will prove to be accurate. Such assumptions and factors include, among other things, the anticipated benefits and risks of the Reverse Stock Split, as further provided and described below.

By their nature, forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward- looking statements. Forward-looking statements are subject to a variety of risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

•        difficulties, delays, unanticipated costs or our inability to consummate the Reverse Stock Split on the expected terms and conditions or timeline;

•        difficulties, delays or the inability to increase the per share trading price of our Common Stock as a result of the Reverse Stock Split, including future decreases in the price of Common Stock due to, among other things, the announcement of the Reverse Stock Split or our inability to make our Common Stock more attractive to a broader range of institutional or other investors, as a result of, among other things, investors viewing the Reverse Stock Split negatively or due to future financial results, market conditions, the market perception of our business, our inability to realize anticipated cost reductions or other factors adversely affecting the market price of our Common Stock, notwithstanding the Reverse Stock Split or otherwise;

•        unanticipated negative reactions to the Reverse Stock Split or unanticipated circumstances or results that could negatively affect interest in our Common Stock by the investment community; or

•        general business, economic, competitive, political, regulatory and social uncertainties; risks related to competition; risks related to factors beyond the control of the Company; the global economic climate; the execution of strategic growth plans; insurance risks; and litigation.

This list is not exhaustive of the factors that may affect any of the forward-looking statements of the Company. Forward-looking statements are statements about the future and are inherently uncertain. Actual results could differ materially from those projected in the forward-looking statements as a result of the matters set out in this Proxy Statement generally and certain economic and business factors, some of which may be beyond the control of the Company. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the proposals contained in this Proxy Statement. The Company does not intend, and does not assume, any obligation to update any forward-looking statements, other than as required by applicable law. For all of these reasons, Company stockholders should not place undue reliance on forward-looking statements.

PROPOSAL ONE — REVERSE STOCK SPLIT

General

Our Board has unanimously determined that it is in the best interests of the Company and our stockholders to amend Article IV.A of the Certificate of Incorporation (such amendment as shown in Appendix B) to effect a reverse stock split of our issued and outstanding shares of Common Stock at a ratio of 20 to 1 (such that each twenty shares of common stock issued and outstanding prior to the reverse stock split will be combined into one share of common stock following the reverse stock split) and effective upon a date to be determined by the Board to be no later than November 30, 2022 (the “Reverse Stock Split”).

Reasons for the Reverse Stock Split

NASDAQ Deslisting Notice

We have received a delisting notice from The NASDAQ Stock Market. Our Common Stock may be involuntarily delisted from trading on The NASDAQ Capital Market if we fail to regain compliance with the minimum closing bid price requirement of $1.00 per share of Common Stock. A delisting of our Common Stock is likely to reduce the liquidity of our Common Stock and may inhibit or preclude our ability to raise additional financing and may also materially and adversely impact our credit terms with our vendors.

The quantitative listing standards of The NASDAQ Stock Market, or NASDAQ, require, among other things, that listed companies maintain a minimum closing bid price of $1.00 per share. We failed to satisfy the minimum bid price threshold for 30 consecutive trading days and on May 24, 2022, we received a letter from NASDAQ indicating our deficiency and that we have been provided an initial period of 180 calendar days, or until November 21, 2022, in which to regain compliance. If at any time during this 180-day compliance period the closing bid price of our common stock is at least $1.00 per share for a minimum of ten consecutive business days, then the Nasdaq Stock Market will provide us with written confirmation of compliance and the matter will be closed.

If the Company does not regain compliance within the 180-day grace period, it may be eligible to receive an additional 180-day grace period; provided that the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirements, and provides written notice of its intention to cure the bid price deficiency during the second 180-day grace period, by effecting a reverse stock split, if necessary.

The last reported sale price of our Common Stock on the Nasdaq Capital Market on October 6, 2022 was $0.114 per share. In consideration of (i) the low trading price creating greater volatility in the trading of the Common Stock on the NASDAQ and (b) the Company’s need to drastically increase the closing bid price in the Company’s Common Stock in the near future to maintain a listing on the NASDAQ, the Board believes that it is in the best interests of stockholders and the Company to increase the stock price by conducting the Reverse Stock Split.

Based on the last sale price of our Common Stock on the Nasdaq Capital Market on October 6, 2022 of $0.114, the Reverse Stock Split of 20 to 1 would yield a price per share of $2.28, which management of the Company believes should be sufficient to ensure compliance with the NASDAQ listing requirements even with expected fluctuations in the price per share following the Reverse Stock Split.

If our stockholders do not approve the Reverse Stock Split, the Company may be delisted from the NASDAQ Capital Market due to our failure to maintain a minimum bid price for our Common Stock of $1.00 per share as required by the NASDAQ Marketplace Rules. Even if the Company effects the Reverse Stock Split, the Company may still be subject to delisting if the bid price of the Common Stock fails to stay above $1.00 for the required 10 trading day period.

Convertible Note Obligations

On October 5, 2021, we entered into a Securities Purchase Agreement (the “SPA”) with certain purchasers in relation to the sale and purchase of Senior Convertible Notes of the Company (“Senior Convertible Notes”). Under the terms of the SPA and the Senior Convertible Notes, the Company is required to reserve 200% of the maximum number of shares of Common Stock issuable upon conversion of all the Senior Convertible Notes then outstanding assuming for

purposes thereof that (x) the Senior Convertible Notes are convertible at the alternate conversion price assuming an alternate conversion date as of such applicable date of determination, and (y) any such conversion shall not take into account any limitations on the conversion of the Senior Convertible Notes set forth in the Senior Convertible Notes. The alternate conversion price is defined as that price which shall be the lower of (i) the applicable conversion price as in effect on the applicable conversion date of the applicable alternate conversion and (ii) the greater of (x) the floor price then in effect and (y) 80% of the Market Price as of such alternate conversion date with respect thereto.

The conversion price of the Senior Convertible Notes is subject to adjustment in the event the Company issues common stock or securities convertible into common stock at a price lower than the then-current conversion price. As a result of the Company’s recent offering of units, upon agreement with the holders of the Senior Convertible Notes, the conversion price of the Senior Convertible Notes was adjusted from $4.05 to $0.3105. As a result of our issuance of the Preferred Stock on October 4, 2022, the conversion price of the Senior Convertible Notes was adjusted from $0.3105 to $0.2375.

As a result of this adjustment, the conversion price is lower than the floor price and the required reserve amount of shares of Common Stock is therefore determined with the conversion price. Based on the approximately $14.66 million principal amount of Senior Convertible Notes outstanding, the Senior Convertible Notes would be convertible into 61,726,316 shares of our common stock and the required reserve amount is currently 123,452,632 shares.

On September 27, 2022, the holders of the Senior Convertible Notes granted a waiver of the share reserve requirements under the Notes and related stock purchase agreement for a period from August 30, 2022 until November 30, 2022 conditioned on the Company pursuing a reverse stock split by no later than November 30, 2022 to cure the deficiency.

As of October 6, 2022, the Company had 80,435,679 shares of Common Stock outstanding; 500,001 shares of preferred stock (including 500,000 Preferred Stock) outstanding; 51,465,978 shares of Common Stock issuable upon the exercise of warrants; 383,358 shares of Common Stock issuable upon vesting of outstanding restricted stock units and restricted stock awards; 291,192 shares of Common Stock issuable upon conversion of exchangeable shares; 3,366,346 shares of Common Stock reserved for future issuance under our equity incentive plan; 123,452,632 shares of common stock to be reserved for issuance upon conversion of our outstanding Senior Convertible Notes (following expiration of current reserve waiver of November 30, 2022); and 20,000,000 shares of Common Stock to be reserved for issuance upon conversion of Preferred Stock, subject to completion of the Reverse Stock Split. This totals 279,395,185 shares of Common Stock issued and outstanding or reserved/to be reserved for issuance under outstanding securities of the Company. The Company’s authorized capital is currently 150,000,000. Therefore, there is a shortfall and following expiration of the reserve waiver for the Senior Secured Convertible Notes, no shares of Common Stock remain available for issuance or reservation for issuance.

While the holders of the Senior Convertible Notes waived their share reserve requirements, the terms of the SPA and the Senior Convertible Notes and the waiver require the Company to seek to increase its authorized capital at a special meeting of the stockholders.

If the Company cannot reserve sufficient shares under the Senior Convertible Notes or is otherwise unable to issue shares of common stock upon conversion of the Senior Convertible Notes, the Company will be required to settle such obligations in cash amounts as they become due and payable as calculated pursuant to the terms of the Senior Convertible Notes.

The Board considered the considerable dilution in settling the Senior Convertible Notes in shares of Common Stock would have on current stockholders, but given the Company’s current cash position, the Board has determined that not having the flexibility to settle the obligations of the Senior Convertible Notes in shares of Common Stock and perhaps having to settle those obligations, in whole or in part, in cash would potentially materially, negatively impact the Company’s business plans and not be in the best interests of the Company’s stockholders despite the dilutive effect of settling such securities in shares of Common Stock. To the extent our cash and cash equivalents are insufficient to enable us to make cash payments with respect to the Senior Convertible Notes and the number of shares of Common Stock required to settle those obligations is beyond our authorized capital, if we are unable to negotiate a settlement or restructuring with the holders of such notes or the persons entitled to the earn-out payment, we may be subject to a lawsuit, foreclosure on the Senior Convertible Notes and may be required to seek protection under the federal bankruptcy laws

Issuance of Preferred Stock

On October 4, 2022, the Company closed a preferred stock offering, in which the Company issued 400,000 shares of Series A Preferred Stock with an aggregate stated value of $4 million and 100,000 shares of Series B Preferred Stock with an aggregate stated value of $1 million. Total gross proceeds from the offering, before the deduction of discounts, fees and offering expenses, are approximately $5 million. Each share of Preferred Stock has a purchase price of $9.50, representing an original issue discount of 5% of the $10.00 stated value of each share. Each share of Preferred Stock is convertible into shares of Common Stock at a conversion price of $0.25 per share.

Each share of Series A Preferred Stock outstanding on the Record Date has a number of votes equal to the number of shares of Common Stock issuable upon conversion of such share (whether or not such shares are then convertible). Accordingly, as of the Record Date, each share of Series A Preferred Stock has approximately 40 votes, which is determined by dividing $10.00, the stated value of one share of Series A Preferred Stock, by $0.25, the conversion price. As of the Record Date, there were 400,000 shares of our Series A Preferred Stock issued and outstanding, convertible into an aggregate of 16,000,000 shares of Common Stock. The holders of the Series A Preferred Stock have agreed to not transfer their shares of Series A Preferred Stock until after the Special Meeting, attend the Special Meeting, vote all shares of Series A Preferred Stock in favor of the Reverse Stock Split, and, upon request by the Company, grant the Company or its designee an irrevocable proxy statement,to vote all shares of Series A Preferred Stock in favor of the Reverse Stock Split.

Each share of Series B Preferred Stock outstanding on the Record Date entitles the holder thereof to 4,000 votes on the Reverse Stock Split Proposal. As of the Record Date, there were 100,000 shares of our Series B Preferred Stock issued and outstanding, convertible into an aggregate of 4,000,000 shares of Common Stock and entitled to 400,000,000 votes on the Reverse Stock Split. The holders of the Series B Preferred Stock have agreed to not transfer their shares of Series B Preferred Stock until after the Special Meeting, attend the Special Meeting, vote all shares of Series B Preferred Stock in the same proportion as the aggregate shares of Common Stock (excluding any shares of Common Stock that are not voted), the special voting share (excluding any portion of the special voting share equivalents not voted), and the aggregate shares of Series A Preferred Stock are voted on the Reverse Stock Split and, upon request by the Company, grant the Company or its designee an irrevocable proxy to vote the shares of Series B Preferred Stock in accordance with the above. As an example, if 70% of the aggregate votes cast by Common Stock and Series A Preferred Stock voting on the Reverse Stock Split are voted in favor thereof and 30% of the aggregate votes cast by Common Stock and Series A Preferred Stock voting on the Reverse Stock Split are voted against such proposal, then 70% of the votes entitled to be cast by Series B Preferred Stock will be cast in favor of the proposal and 30% of such votes will be cast against the proposal.

Amendments to the Certificate of Incorporation

The following paragraph will be added to the FOURTH paragraph of the Certificate of Incorporation:

“Upon the effectiveness of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, every 20 shares of the Corporation’s issued and outstanding Common Stock, par value $0.0001 per share, that are issued and outstanding immediately prior to [date] shall, automatically and without any further action on the part of the Corporation or the holder thereof, be combined into one (1) validly issued, fully paid and non-assessable share of the Corporation’s Common Stock, par value $0.0001 per share, subject to the treatment of fractional interests as described below. Notwithstanding the immediately preceding sentence, no fractional shares will be issued in connection with the reverse stock split. Stockholders of record who otherwise would be entitled to receive fractional shares, will be entitled to rounding up of their fractional share to the nearest whole share. No stockholders will receive cash in lieu of fractional shares. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”) shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the adjustment for fractional shares as described above.”

Material Effects of the Proposed Reverse Stock Split

Upon the effectiveness of the amendment to our Certificate of Incorporation effecting the Reverse Stock Split, the outstanding shares of our Common Stock will be combined into a lesser number of shares such that one share of Common Stock will be issued for 20 outstanding shares of Common Stock. In connection with the Reverse Stock Split, any fractional shares that would otherwise be issued as a result of the Reverse Stock Split will be rounded up to

the nearest whole share. Even if stockholder approval of the Reverse Stock Split is obtained, the Board may abandon the Reverse Stock Split in its sole discretion if it determines that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders.

The Reverse Stock Split will not change the number of authorized shares of Common Stock, which will remain at 150,000,000.

The Reverse Stock Split will affect all holders of our Common Stock uniformly and will not affect any stockholder’s percentage ownership interest in the Company (subject to de minimus changes resulting from the treatment of fractional shares). In addition, the Reverse Stock Split will not affect any holder of Common Stock’s proportionate voting power (subject to de minimus changes resulting from the treatment of fractional shares).

Based on our shares of Common Stock outstanding as of the Record Date, the principal effects of the Reverse Stock Split will be that the number of shares of our Common Stock issued and outstanding will be reduced from 80,435,679 shares as of the Record Date to 4,021,783 shares without giving effect to any rounding up of fractional shares.

The table below sets forth, as of October 6, 2022 and for illustrative purposes only, certain effects of the Reverse Stock Split including on our total outstanding Common Stock equivalents (without giving effect to the treatment of fractional shares).

____________

*        – Less than 1%

(1)      Assumes $14.66 million in outstanding principal amount convertible at $0.2375 per share prior to reverse. Assumes that after the reverse the conversion price would increase to $4.75 per share and the price per share would increase to $2.28 based on the last sale price of our Common Stock on the Nasdaq Capital Market on October 6, 2022 of $0.114. Therefore the alternate conversion price to determine the reserve amount following the Reverse Stock Split would be 80% of $2.28 equaling $1.824. This price is an estimate only based on the above stated assumptions. The actual alternate conversion price and the reserve amount requirement will fluctuate depending on the market price following the Reverse Stock Split.

(2)      Preferred Stock may only be converted into Common Stock following the Reverse Stock Split.

As illustrated by the table above, the Reverse Stock Split would significantly increase the number of authorized and unissued shares of Common Stock available to settle the exercise or conversion of our outstanding derivative securities and avoid the penalties associated with being unable to settle such conversions and exercises.

In addition, the Reverse Stock Split would significantly increase the ability of our Board to issue authorized and unissued shares in future equity financings. The Board may cause the issuance of additional shares of Common Stock without further vote of the stockholders of the Company, except as provided under Delaware corporate law or under the rules of any national securities exchange or automated quotation system on which shares of Common Stock of the

Company are then quoted, listed or traded. The relative voting and other rights of holders of the Common Stock will not be altered by the availability of additional shares of Common Stock. Each share of Common Stock will continue to entitle its owner to one vote. When issued, the additional shares of Common Stock authorized by the Reverse Stock Split will have the same rights and privileges as the shares of Common Stock currently authorized and outstanding. Issuance of significant numbers of additional shares of the Company’s Common Stock in the future (i) will dilute current stockholders’ percentage ownership, (ii) if such shares are issued at prices below what current stockholders’ paid for their shares, will dilute the value of current stockholders’ shares and (iii) by reducing the percentage of equity of the Company owned by present stockholders, would reduce such present stockholders’ ability to influence the election of directors is non-contested. Under our Bylaws, for an uncontested election, a nominee for director shall be elected if the number of votes cast at the Annual Meetingor any other action taken by the holders of Common Stock and (iv) issuance of a material number of shares of Common Stock could create downward pressure on the voting stock presentper share price of the Common Stock, thereby further diminishing the value of stockholders’ shares of Common Stock.

If the Reverse Stock Split is approved, our stockholders will experience significant dilution as a result of shares of Common Stock issued pursuant to our outstanding Senior Convertible Notes and other derivative securities as set forth above. The Reverse Stock Split will increase the total number of authorized shares of Common Stock available for issuance. As a result, we would have a larger number of authorized but unissued shares from which to issue additional shares of Common Stock, or securities convertible or exercisable into shares of Common Stock, in personequity or represented by proxyconvertible debt financing transactions.

The principal effects of the Reverse Stock Split will be as follows:

•        each 20 shares of Common Stock will be combined into one new share of Common Stock, with any fractional shares that would otherwise be issuable as a result of the split being rounded up to the nearest whole share;

•        the number of shares of Common Stock issued and entitledoutstanding will be reduced accordingly, as illustrated in the table above;

•        proportionate adjustments will be made to vote at the Annual Meetingper share exercise prices and/or the number of shares of Common Stock issuable upon exercise or conversion of outstanding preferred shares, options, warrants, and any other convertible or exchangeable securities, including the Company’s Senior Convertible Notes, entitling the holders to purchase, exchange for, a nominee’s election exceedsor convert into, shares of Common Stock, which will result in approximately the votes cast against/withheldsame aggregate price being required to be paid for such nominee’s election. The election of directors is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if such clients do not furnish voting instructions. Broker non-votessecurities upon exercise or conversion as had been payable immediately preceding the Reverse Stock Split;

•        the Company will have noavailable shares to conduct future equity financings;

•        the number of shares reserved for issuance or under the securities described immediately above will be reduced proportionately; and

•        the number of shares of Common Stock available for future issuance will increase accordingly, as illustrated in the table above.

Possible Anti-Takeover Implications of the Reverse Stock Split

The issuance in the future of additional shares of our Common Stock made available by the Reverse Stock Split may have the effect of diluting the earnings or loss per share and book value per share, as well as the ownership and voting rights of the holders of our then-outstanding shares of Common Stock. In addition, an increase in the number of authorized but unissued shares of our Common Stock due to the Reverse Stock Split may have a potential anti-takeover effect, as our ability to issue additional shares could be used to thwart persons, or otherwise dilute the stock ownership of stockholders, seeking to control us. Further, the ability to issue our shares of Common Stock at a lower price may afford the Company added flexibility to deter a potential takeover of the Company by diluting the shares held by a potential suitor or issuing shares to a stockholder that will vote in accordance with the Board’s desires at a very low par value. While we are listed on the outcomeNASDAQ, there are some limitations on our ability to issue shares of Common Stock at lower than market prices outside of a public offering or to directors, executives, employees and individual consultants, which could limit the ability of the election. IfCompany to issue enough shares to deter a nomineepotential takeover. A takeover may be beneficial to independent stockholders because, among other reasons, a potential suitor may offer such stockholders a premium for their shares of Common Stock compared to the then-existing market price. The Reverse Stock Split is not elected, the current director for that directorship will continue until such director’s successor is elected and qualified.

OUR BOARD RECOMMENDS A VOTE “FOR” THE ELECTION TO THE BOARD OF EACH OF THE
ABOVE MENTIONED NOMINEES.

DIRECTORS AND EXECUTIVE OFFICERS

Directors, Nominees and Executive Officers

Directors

Jessica Billingsley has served as Chief Executive Officer and director since the consummation of our Business Combination on June 17, 2019, and Chairman of the Board since July 2019. Ms. Billingsley co-founded MJF, our wholly-owned subsidiary, in 2010 and served as President of MJF from 2010 to April 2018 and Chief Executive Officer since May 2018. An early investor in one of Colorado’s first legal medical cannabis businesses, Ms. Billingsley created the category of cannabis seed-to-sale technology after seeing the need first-hand. Prior to MJF, Ms. Billingsley was the founder and chief executive officer of Zoco, a technology services firm with clients across the United States. Ms. Billingsley has 20 years of technology and systems experience with rapidly scaling businesses, and founded her first business at the age of 22. Ms. Billingsley served on the board of the National Cannabis Industry Association from 2012 – 2019 and currently serves as Chair of the Board of the United States Cannabis Council. Ms. Billingsley was named one of Fortune’s 10 most promising women entrepreneurs in 2015 and named one of Inc. Magazine’s 100 Female Founders in 2018. Ms. Billingsley holds a dual degree from the University of Georgia in Computer Science and Communications. Ms. Billingsley was selected to serve onbeing recommended by our Board based on her extensive experience with technology and systems companies, broad experience in the telecommunications industry, and her background as an entrepreneur.

Scott Sozio has served as a director since October 2018, prior to the consummation of our merger on June 17, 2019. From October 2018 until the consummation of the merger on June 17, 2019, Mr. Sozio served as President and Secretary of Akerna. From September 2017 and until the merger in June 2019, Mr. Sozio served as the chief executive officer and a director of MTech Acquisition Corp. Since July 2019, Mr. Sozio has served as Head of Corporate Development., Mr. Sozio is the co-founder of Hypur Ventures and since June 2016, has served as its managing director. Since April 2015, Mr. Sozio has served as a director of Hypur Inc., a financial technology firm focused on banking compliance. Since September 2016, Mr. Sozio has served as a director of Simplifya Holdings, LLC, a cannabis compliance technology business, both portfolio companies of Hypur Ventures. Since February 2013, Mr. Sozio has served as a partner in Van Dyke Holdings, where he is responsible for its private investment portfolio. Prior to joining Van Dyke Holdings, Mr. Sozio was a vice president of Bay Harbour Management L.C., a distressed-debt focused hedge fund. He joined Bay Harbour in 2004 after working in the Financial Restructuring Advisory Group at CIBC World Markets. Mr. Sozio is the former Chairman of Island One, Inc., a timeshare company based in Florida (from 2011 to 2012), and acquired by Diamond Resorts as part of Diamond’s initial public offering,an anti-takeover strategy.

Reservation of Right to Delay the Filing of, or Abandon, the Reverse Stock Split

If stockholder approval is obtained to effect the Reserve Stock Split, the Board expects to implement the Reverse Stock Split on or before November 11, 2022. However, the Board reserves the authority to decide, in its sole discretion, to delay or abandon the Reverse Stock Split after such vote and a former director of Great Destinations, Inc., a timeshare sales business based in California (from 2013 to 2016), and acquired by Interval International in 2016. Mr. Sozio holds a B.A. in Architecture from Columbia University. Mr. Sozio was selected to serve on our Board based on his extensive experience in finance and investment management and his broad experience with working with cannabis companies.

Matthew R. Kane has served as a director sincebefore the consummation of our merger on June 17, 2019. Since December 2015, Mr. Kane has served as a director or MJF. In 2002, Mr. Kane co-founded and served as co-chief executive officer of Green Shades Software, Inc., a human resources, payroll and tax reporting software company, until 2019 where he has since served as a board member. Additionally, Mr. Kane has served as chief executive officer of Welltality, a health care technology start-up, from 2014 to 2018, where he has since served as a board member. He received his bachelor’s degree in Computer Information Systems from Jacksonville University in 2001, an MBA from the Warrington College of Business at the University of Florida in 2006, and a Masters in Information and Data Service at the University of California, Berkeley in 2020. He previously served for 11 years on the board of Jacksonville University from 2007 to May 2018 and was reappointed in 2019. Mr. Kane was selected to serve on our Board based on his extensive experience in in the software technology applications industry.

Tahira Rehmatullah has served as a director since consummation of our merger on June 17, 2019. Since October 2018, prior to the merger and until consummationeffectiveness of the mergerReverse Stock Split if it determines that the Reverse Stock Split is no longer in June 2019, Ms. Rehmatullah served as Vice President and Treasurer. Since 2016, Ms. Rehmatullah has been president of T3 Ventures, a strategy and management consulting firm. From September 2017 to June 2019, Ms. Rehmatullah was the chief financial officer of MTech Acquisitions Inc. From 2016 to 2019, Ms. Rehmatullah was a managing director of Hypur Ventures, where she was responsible for portfolio company management as well as investment sourcing and execution. From June 2017 to June 2018, Ms. Rehmatullah served as a director of Dope Media, a cannabis media company and portfolio company of Hypur Ventures. Prior to joining Hypur Ventures, from 2014 to 2016 Ms. Rehmatullah served as the general manager of Marley Natural, a cannabis brand based on the life and legacy of Bob Marley, where she was responsible for the brand launch as well as managing its day-to-day operations. From 2014 to 2016, Ms. Rehmatullah served as an investment manager at Privateer Holdings, a private equity firm with investments in the legal cannabis industry. Prior to her activities in the cannabis industry, from 2011 to 2012, Ms. Rehmatullah was a portfolio manager at City First Enterprises where she was responsible for underwriting, structuring and managing deals for their community development and investment portfolio. From 2007 to 2011, Ms. Rehmatullah was an associate at Perry Capital where she led research initiatives for the asset-backed securities team. Her career began in Ernst & Young’s Financial Services Advisory practice in 2005. Ms. Rehmatullah holds an M.B.A. from the Yale School of Management and a B.S. in Finance and minor in Life Sciences from The Ohio State University. Ms. Rehmatullah was selected to serve on our Board based on her extensive experience in finance and investment management and her broad experience working with cannabis companies

Barry Fishman has served as a director since he was elected to the Board at the 2021 Annual Meeting of the Stockholders on June 7, 2021. Over the past two decades, Barry has been the Chief Executive Officer of four life science companies (two listed on the Toronto Stock Exchange), including VIVO Cannabis from 2017-2020, Merus Labs International from 2014-2017, Teva Canada from 2003-2012 and Taro Canada from 2000-2003. From 1979-1982, Mr. Fishman was a Senior Associate at Deloitte. Mr. Fishman has also served as a director of five public and three not-for-profit organizations. In 2015, Barry was inaugurated into the Canadian Healthcare Marketing Hall of Fame for his contributions to healthcare and exemplary service to the community. Mr. Fishman is a Certified Public Accountant. Mr. Fishman holds a Bachelor degree in Communications from McGill University. Mr. Fishman was selected to serve on our Board based on his extensive public company experience as both a Chief Executive Officer and a director and based on his being a Certified Public Accountant who can provide better guidance on accounting issues and review on the Company’s audit committee.

Executive Officers

John Fowle has served as Chief Financial Officer since December 17, 2019. From May 2019 through December 2019, Mr. Fowle served as Chief Financial Officer of Rev360, an optometry software and business services company. During that time, Mr. Fowle oversaw the company’s financial operations and risk management functions and supported the company’s strategic divestiture of the software business unit. From July 2015 through May 2019, Mr. Fowle served as Vice President, Corporate Controller and Officer of Welltok, Inc., an emerging-growth, data-driven, enterprise SaaS company that delivers the healthcare industry’s leading consumer activation platform. From May 2013 through July 2015, Mr. Fowle served as Corporate Controller of Clarient Diagnostic Services, Inc., a NeoGenomics Company, a specialty molecular biology laboratory focused on cancer diagnostics, testing and research. Prior to that, Mr. Fowle held a variety of increasingly responsible senior financial management positions in GE Healthcare, Panasonic Avionics and Freedom Communications. Mr. Fowle holds a Bachelor of Science degree in Business Administration from the University of Southern California, a Master of Business Administration from the University of California, Irvine, and is a Certified Public Accountant.

Ray Thompson was appointed President and Chief Ooperating Officer of Akerna in January 2022, and he served as Chief Operating Officer from November 2018 to January 2022. From November 2016 to January 2018, Mr. Thompson worked as the head of customer and sales Operations for Gloo, a people development SaaS company. During that time, Mr. Thompson reported to the executive team to develop and execute on market strategies, product offerings, financial projections, and talent management. From October 2008 to October 2016, Mr. Thompson served as corporate senior vice president of VisionLink, a multiagency humanitarian software platform, managing across all aspects of the business providing enterprise SaaS solutions to federal and state governments and international humanitarian organizations. From 1996 to 2008, Mr. Thompson served in various executive sales and marketing roles across multiple technologies companies. Mr. Thompson holds a Masters in Business Administration from the University of Denver.

David McCullough has served as Chief Technology Officer of Akerna since July 1, 2020. Mr. McCullough has been with Akerna and MJF since 2015, previously serving as Akerna’s executive vice president of product & engineering. Before joining MJF, Mr. McCullough was the Chief Technology Officer of StudentPublishing.com, during that time, he actively managed the technical aspects of Student Publishing’s sale to and system integration with lulu.com. Mr. McCullough has over 16 years of software engineering experience, including extensive government systems experience. Mr. McCullough has previously served as a professor at New Mexico State University where he taught courses in data communications and networking. Mr. McCullough holds a master’s degree in Computer Science. MCSE, CCNP, A+. N+.

Board Qualifications

Our Board has not formally established any specific, minimum qualifications that must be met by each of its officers or directors or specific qualities or skills that are necessary for one or more of its officers or members of the Board to possess. However, we expect to generally evaluate the following qualities: educational background, diversity of professional experience, including whether the person is a current or was a former chief executive officer or chief financial officer of a public company or the head of a division of a prominent organization, knowledge of our business, integrity, professional reputation, independence, wisdom, and ability to represent the best interests of our stockholders.

Our officers and the Board will be composed of a diverse group of leaders in their respective fields. Many of these officers or directors have senior leadership experience at various companies. In these positions, they have also gained experience in core management skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, and leadership development. Many of our officers and directors also have experience serving on boards of directors and/or board committees of other public companies and private companies, and have an understanding of corporate governance practices and trends, which provides an understanding of different business processes, challenges, and strategies. Further, these officers and directors also have other experience that makes them valuable, such as managing and investing assets or facilitating the consummation of business investments and combinations.

We, along with our officers and directors, believe that the above-mentioned attributes, along with the leadership skills and other experiences of our officers and board members described above, provide us with a diverse range of perspectives and judgment necessary to facilitate our goals of shareholder value appreciation through organic and acquisition growth.

Number and Terms of Office of Officers and Directors

Our Board is divided into three classes: Class I; Class II; and Class III. The directors in Class I have a term expiring at this Annual Meeting and again at the 2025 annual meeting of stockholders, the directors in Class II have a term expiring at the 2023 annual meeting of stockholders, and the directors in Class III have a term expiring at the 2024 annual meeting of stockholders. The Class I directors are Matthew R. Kane and Tahira Rehmatullah, the Class II director is Scott Sozio, and the Class III directors are Jessica Billingsley and Barry Fishman.

Our officers are appointed by the Board and serve at the discretion of the Board, rather than for specific terms of office. Our Board is authorized to appoint persons to the offices set forth in our Amended and Restated Bylaws as it deems appropriate.

Arrangements between Officers and Directors

To our knowledge, there is no arrangement or understanding between any of our directors, executive officers or nominees to the Board and any other person, including directors, executive officers and nominees, pursuant to which the director, executive officer or nominee was selected to serve as a director, officer or nominee.

Family Relationships

None of our directors, executive officers or nominees to the Board are related by blood, marriage, or adoption to any other director, executive officer, nominee or other key employees.  

Other Directorships

None of our directors are currently also directors of issuers with a class of securities registered under Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act). In the past five years, Mr. Fishman has served as a director to Merus Labs International Inc., Aurora Cannabis Inc., Field Trip Health Ltd., and VIVO Cannabis Inc.; and Ms. Rehmatullah served as a director for Good Works Acquisition Corp. from August 2020 to August 2021.

Legal Proceedings

We are not aware of any of our directors, nominees for the Board, or executive officers being involved in any legal proceedings in which they are adverse to us or in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401(f) of Regulation S-K.

CORPORATE GOVERNANCE

Director Independence

The Board evaluates the independence of each nominee for election as a director of our Company in accordance with the Nasdaq Listing Rules. Pursuant to these rules, a majority of our Board must be “independent directors” within the meaning of the Nasdaq Listing Rules, and all directors who sit on our Audit Committee, Nominating Committee and Compensation Committee must also be independent directors.

The Nasdaq definition of “independence” includes a series of objective tests, such as the director or director nominee is not, and was not during the last three years, an employee of the Company and hasits stockholders. In no event will the Board implement the Reverse Stock Split later than November 30, 2022.

Fractional Shares

Our stockholders will not received certain payments from, or engagedreceive fractional post-Reverse Stock Split shares in various types of business dealingsconnection with the Company. In addition,Reverse Stock Split. Instead, any fractional shares that would otherwise be issuable as further required by the Nasdaq Listing Rules, the Board has made a subjective determination as to each independent director that no relationships exist which, in the opinionresult of the Board, would interfere with such individual’s exerciseReverse Stock Split will be rounded up to the nearest whole share. No stockholders will receive cash in lieu of independent judgment in carrying out his or her responsibilities as a director. In making these determinations, the Board reviewed and discussed information provided by the directors with regard to each director’s business and personal activities as they may relate to Company and its management.fractional shares.

As a result, the Board has affirmatively determined that each of Matthew R. Kane, Tahira Rehmatullah, and Barry Fishman are independent in accordance with the Nadsaq Listing Rules. The Board has also affirmatively determined that all members of our Audit Committee, Nominating Committee and Compensation Committee are independent directors.

Meetings of the Board and Committees

No Going Private Transaction

The Board met on 15 occasions duringReverse Stock Split is not intended as, and will not have the fiscal year ended December 31, 2021. Noneeffect of, a “going private transaction” covered by Rule 13e-3 under the incumbent directors attended fewer than 75% ofU.S. Exchange Act. Following the board meetings. Board members are not requiredReverse Stock Split, the Company will continue to attendbe subject to the Annual Meeting and no directors, except Ms. Billingsley, attended the 2021 Annual Meeting.

There are three committees of the Board: the Audit Committee; the Nominating Committee; and the Compensation Committee.

Audit Committee

We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A)periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Effective Time

The proposed Reverse Stock Split would become effective as of 12:01 a.m., Eastern Time on the date specified in the amendment to the Certificate of Incorporation effecting the Reverse Stock Split as filed with the office of the Secretary of State of Delaware or such other time on that date as the Board may determine (the “Effective Time”). Except as explained above with respect to fractional shares, at the Effective Time, shares of our Common Stock issued and Nasdaq Listing Rules. In addition,outstanding immediately prior thereto will be combined, automatically and without any action on the part of our Board adoptedstockholders, into one share of our Common Stock in accordance with the ratio of 1 for 20.

After the Effective Time, our Common Stock will have a written charter for the Audit Committee,new committee on uniform securities identification procedures (“CUSIP”) number, which is available on the Company’s website at www.akerna.com, which compliesa number used to identify our equity securities, and stock certificates with the older CUSIP numbers will need to be exchanged for stock certificates with the new CUSIP numbers by following the procedures described below.

After the Effective Time, we will continue to be subject to periodic reporting and other requirements of Rule 10A-3 of the Exchange Act. Unless our Common Stock is delisted by NASDAQ because of our failure to comply with the $1.00 minimum bid price requirement or any other listing standards, our Common Stock will continue to be listed on The NASDAQ Capital Market under the symbol “KERN.”

The Audit Committee consistsProcedures for effecting the Reverse Stock Split and Exchange of Barry Fishman, Matthew R. Kane,Stock Certificates

If the Company’s stockholders approve the Reverse Stock Split and Tahira Rehmatullah, eachthe Board determines that it is in the Company’s best interest to effect the Reverse Stock Split, the Reverse Stock Split would become effective at such time as the amendment to the Certificate of whomIncorporation, the form of which is independent withinattached as Appendix B to this Proxy Statement, is filed with the meaningSecretary of State of Delaware or such time and date as stated therein when filed.

As soon as practicable after the effective date of the Nasdaq Listing RulesReverse Stock Split, the Company will notify its stockholders that the Reverse Stock Split has been implemented. Continental Stock Transfer & Trust Company, the Company’s transfer agent, will act as exchange agent for purposes of implementing the exchange of stock certificates. Holders of pre-Reverse Stock Split shares of our Common Stock will be asked to surrender to the exchange agent certificates representing pre-Reverse Stock Split shares of our Common Stock in accordance with the procedures to be set forth in a letter of transmittal that will be delivered to the Company’s common stockholders. No new certificates will be issued to a stockholder until the stockholder has surrendered to the exchange agent his, her or its outstanding certificate(s) together with the properly completed and Rule 10A-3executed letter of transmittal. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO. Stockholders whose shares are held by their stockbroker do not need to submit old share

certificates for exchange. These shares will automatically reflect the new quantity of shares based on the Reverse Stock Split. Beginning on the effective date of the Exchange Act. In addition,Reverse Stock Split, each Audit Committee member satisfiescertificate representing pre-Reverse Stock Split shares will be deemed for all corporate purposes to evidence ownership of post-Reverse Stock Split shares.

Effect on Registered and Beneficial Holders of Common Stock

Upon the Audit Committee independence standardseffectiveness of the Reverse Stock Split, shares of our Common Stock held by stockholders that hold their shares through a broker or other nominee will be treated in the same manner as shares held by registered stockholders that hold their shares in their names. Brokers and other nominees that hold shares of our Common Stock will be instructed to effect the Reverse Stock Split for the beneficial owners of such shares. However, those brokers or other nominees may implement different procedures than those to be followed by registered stockholders for processing the Reverse Stock Split. Stockholders whose shares of our Common Stock are held in the name of a broker or other nominee are encouraged to contact their broker or other nominee with any questions regarding the procedure of implementing the Reverse Stock Split with respect to their shares.

Effect on Registered “Book-Entry” Holders of Our Common Stock

Registered holders of shares of our Common Stock may hold some or all of their shares electronically in book-entry form under the Exchange Act. Our Board has determineddirect registration system for the securities. Those stockholders will not have stock certificates evidencing their ownership of shares of our Common Stock, but generally have a statement reflecting the number of shares registered in their accounts.

Stockholders that Mr. Fishman qualifies as an Audit Committee financial expert, as defined by SEC rules, based on education, experience and background. Mr. Fishman serves as chairpersonhold registered shares of our Common Stock in book-entry form do not need to take any action to receive post-Reverse Stock Split shares. Any such stockholder that is entitled to post-Reverse Stock Split shares will automatically receive, at the stockholder’s address of record, a transaction statement indicating the number of post-Reverse Stock Split shares held following the implementation of the Audit Committee.Reverse Stock Split.

Dissenters’ Rights

The Audit Committee’s duties, include, but areOur stockholders will not limited to: (i) reviewing and discussingbe entitled to dissenters’ rights with management and the independent auditor the annual audited financial statements, and recommendingrespect to the board whetherproposed amendment to the audited financial statements should be included in our annual reports; (ii) discussing with management and the independent auditor significant financial reporting issues and judgments madeCertificate of Incorporation in connection with the preparationReverse Stock Split.

No Effect on Authorized Preferred Stock

Pursuant to our Certificate of Incorporation, our capital stock consists of a total of 155,000,000 authorized shares, of which 150,000,000 shares, par value $0.0001 per share, are designated as Common Stock and 5,000,000 shares, par value $0.0001 per share, are designated as preferred stock. The proposed Reverse Stock Split would not impact the total authorized number of shares of preferred stock, the number of outstanding preferred shares or the par value of the preferred stock. Any conversion rights of preferred stock into the Common Stock would be effected by the Reverse Split as described below.

Effect on Dividends

The payment of dividends, including the timing and amount dividends, must be made in accordance with our Certificate of Incorporation and the requirements of the Delaware General Corporation Law (the “DGCL”). We cannot assure you that any dividends will be paid in the future on the shares of Common Stock. Any declaration and payment of future dividends to holders of our Common Stock will be at the discretion of our Board and will depend on many factors, including our financial statements; (iii) discussing with management major risk assessmentcondition, earnings, capital requirements, level of indebtedness, statutory future prospects and risk management policies; (iv) monitoringcontractual restrictions applicable to the independencepayment of dividends, and other considerations that our Board deems relevant.

Accounting Matters

The Reverse Stock Split will change the number of shares of Common Stock issued and outstanding. As a result, as of the independent auditor; (v) verifying the rotationeffective time of the lead (or coordinating) audit partner having primary responsibilityReverse Stock Split, the stated capital attributable to the shares of our Common Stock on our balance sheet will be reduced proportionately based on the ratio for the auditReverse Stock Split to reflect the new number of shares outstanding and the audit partner responsibleadditional paid-in capital account will be credited with the amount by which the stated capital is reduced. The per share net income or loss will be restated because there will be fewer shares of Common Stock outstanding.

Effect on Our Preferred Shares, Senior Secured Convertible Notes, Options and Warrants

If the Reverse Stock Split is effected, the number of shares of Common Stock issuable upon exercise or conversion of our outstanding preferred shares, stock options (including shares reserved for reviewingissuance under the auditCompany’s stock plans) and warrants will be proportionately adjusted by the applicable administrator, using the ratio as requiredthe Reverse Stock Split, rounded up to the nearest whole share. In connection with the Reverse Stock Split, the Board or the applicable administrator will implement only applicable technical, conforming changes to the securities, including ratably reducing the authorized shares of Common Stock available for awards under the Company’s stock plans. In addition, the conversion price for each outstanding preferred share and Senior Convertible Note and the exercise price for each outstanding stock option and warrant would be increased in inverse proportion to the split ratio such that upon an conversion or exercise, the aggregate conversion price for conversion of preferred stock or Senior Convertible Notes and the aggregate exercise price payable by law; (vi) reviewingthe optionee or warrantholder to the Company for the shares subject to the option or warrant would remain approximately the same as the aggregate exercise price prior to the Reverse Stock Split. Additionally, the number of shares of Common Stock available for issuance pursuant to our equity incentive plans will be reduced in proportion to the Reverse Stock Split.

Interests of Directors and approving all related-party transactions; (vii) inquiringExecutive Officers

Our directors and discussing with managementexecutive officers do not have substantial interests, directly or indirectly, in the matters set forth in this proposal except to the extent of their ownership of shares of our compliance with applicable laws and regulations; (viii) pre-approving all audit services and permitted non-audit services to be performed byCommon Stock or any other of our independent auditor, including the fees and termssecurities.

Certain Material U.S. Federal Income Tax Consequences of the services to be performed; (ix) appointing or replacing the independent auditor; (x) determining the compensation and oversightReverse Stock Split

The following is a summary of material United States federal income tax consequences of the workReverse Stock Split to holders of our Common Stock. Except where noted, this summary deals only with our Common Stock that is held as a capital asset.

This summary is based upon provisions of the independent auditor (including resolutionInternal Revenue Code of disagreements between management1986, as amended (the “Code”), and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; (xi) establishing procedures for the receipt, retentionUnited States Treasury regulations, rulings and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and (xii) approving reimbursement of expenses incurred by our management team in identifying potential target businesses.

The Audit Committee met 9 times during the fiscal year ended December 31, 2021.

Nominating Committee

Our Board adopted a written charter for the Nominating Committee, which is available on the Company’s website at www.akerna.com.

The Nominating Committee consists of Tahira Rehmatullah, Matthew R. Kane and Barry Fishman. Ms. Rehmatullah servesjudicial decisions as chairperson of the Nominating Committee. Specific responsibilitiesdate hereof. Those authorities may be changed, perhaps retroactively, so as to result in United States federal income tax consequences different from those summarized below.

This summary does not address all aspects of the Nominating Committee include: (i) identifying, evaluatingUnited States federal income taxes that may be applicable to holders of Common Stock and selecting, or recommending that Board approve, nominees for election to Board; (ii) evaluating, on an annual basis, the performance of Board and of individual directors; (iii) establishing subcommittees for the purpose of evaluating special or unique matters; (iv) evaluating the adequacy of corporate governance practices and reporting; (v) reviewing management succession plans; and (vi) developing and making recommendations to Board regarding corporate governance guidelines and matters.

The Nominating Committee met 7 times in the fiscal year ended December 31, 2021.

Each of the nominees up for election at the Annual Meeting was recommended to the Board by the Nominating Committee.

Compensation Committee

The Compensation Committee has adopted a written charter, which is available on the Company’s website at www.akerna.com.

The Compensation Committee consists of Tahira Rehmatullah, Matthew R. Kane and Barry Fishman each of whom is independent within the meaning of the Nasdaq Listing Rules. Mr. Kane serves as chairperson of the Compensation Committee.

The Compensation Committee has the overall responsibility for determining and approving the compensation of the Company’s Chief Executive Officer and reviewing and approving the annual base salaries and annual incentive opportunities of the Company’s executive officers. The Company may utilize the services of independent consultants to perform analyses and to make recommendations relative to executive compensation matters. These analyses and recommendations are to be conveyed to the Compensation Committee, and the Compensation Committee takes such information into consideration in making its compensation decisions. The Compensation Committee diddoes not engage any advisory firm as a compensation consultant in fiscal 2020.

The Compensation Committee met 9 times during the fiscal year ended December 31, 2021.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee has ever been an officer or employee of Akerna. None of Akerna’s executive officers serve, or have served during the last fiscal year, as a member of the Board, compensation committee,deal with non-U.S., state, local or other board committee performing equivalent functionstax considerations that may be relevant to stockholders in light of any other entity that has one or more executive officers serving as one of Akerna’s directors or on the Compensation Committee.

Audit Committee Report*

The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee acts undertheir particular circumstances. In addition, it does not represent a written charter adopted and approved by the Board, which is reviewed by the Board annually. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 of the Exchange Act and Nasdaq Listing Rules. In accordance with Section 407detailed description of the United States Sarbanes-Oxley Actfederal income tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws (including if you are a dealer in securities or currencies; a financial institution; a regulated investment company; a real estate investment trust; an insurance company; a tax-exempt organization; a person holding shares as part of 2002a hedging, integrated or conversion transaction, a constructive sale or a straddle; a trader in securities that has elected the mark-to-market method of accounting for your securities; a person liable for alternative minimum tax; a person who owns or is deemed to own 10% or more of our voting stock; a partnership or other pass-through entity for United States federal income tax purposes; a person whose “functional currency” is not the United States dollar; a United States expatriate; a “controlled foreign corporation”; or a “passive foreign investment company”, a corporation organized outside the United States, any state thereof, or the District of Columbia that are nonetheless treated as a U.S. person for U.S. federal income tax purposes, a corporation that accumulates earnings to avoid U.S. federal income tax, a person subject to special accounting rules, an S corporation or a partnership or other entity treated as a partnership for U.S. federal income tax purposes).

We cannot assure you that a change in law will not alter significantly the tax considerations that we describe in this summary. No ruling from the Internal Revenue Service or opinion of counsel will be obtained regarding the federal income tax consequences to stockholders as a result of the Reverse Stock Split.

If a partnership (or other entity treated as a partnership for United States federal income tax purposes) holds our Common Stock, the tax treatment of a partner will generally depend upon the status of the partner and Item 407(d)(5)(ii)the activities of the partnership. If you are a partner of a partnership holding our Common Stock, you should consult your own tax advisors.

The Reverse Stock Split, if implemented, is intended to be a tax-free recapitalization under the Code. If the Reverse Stock Split qualifies as a tax-free recapitalization under the Code, then, generally, for United States federal income tax purposes, no gain or loss will be recognized by the Company in connection with the Reverse Stock Split, and (iii)no gain or loss will be recognized by stockholders that exchange their shares of Regulation S-K,pre-split Common Stock for shares of post-split Common Stock. The post-split Common Stock in the hands of a stockholder following the Reverse Stock Split will have an aggregate tax basis equal to the aggregate tax basis of the pre-split Common Stock held by that stockholder immediately prior to the Reverse Stock Split. A stockholder’s holding period for the post-split Common Stock generally will be the same as the holding period for the pre-split Common Stock exchanged therefor.

Alternative characterizations of the Reverse Stock Split are possible. For example, while the Reverse Stock Split, if implemented, would generally be treated as a tax-free recapitalization under the Code, stockholders whose fractional shares resulting from the Reverse Stock Split are rounded up to the nearest whole share may recognize gain for United States federal income tax purposes equal to the value of the additional fractional share. However, we believe that, in such case, the resulting tax liability may not be material in view of the low value of such fractional interest. The U.S. federal income tax consequences of the receipt of such additional fraction of a share are not clear. We are not making any representation as to whether the receipt of one whole share in lieu of a fractional share will result in income or gain to any stockholder. Stockholders should consult their own tax advisors regarding the characterization of the Reverse Stock Split for United States federal income tax purposes.

THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL U.S. INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF YOUR SPECIFIC CIRCUMSTANCES.

Certain Risks Associated with the Reverse Stock Split

The Board believes that the Reverse Stock Split will increase the price level of our shares of Common Stock and, as a result, may enable the Company to maintain listing of our Common Stock on The NASDAQ Capital Market. Given the volatility and fluctuations in the capital markets, however, the Board has identified Mark Iwanowski as the “Audit Committee Financial Expert.” A copy of the Audit Committee Charter is available on the Corporation’s website at www.akerna.com.

The responsibilities of the Audit Committee include recommending to the Board an accounting firm to be nominated for stockholder approval as the Company’s independent auditor. The Audit Committee is responsible for recommending to the Boardbelieves that the Company’s financial statementslikelihood of our stock price increasing to meet the NASDAQ listing requirements within the 180-day grace period without the Reverse Stock Split is remote and that the related management’s discussion and analysis be included in its Annual Report on Form 10-K. The Audit Committee tookCompany likely will have to take additional actions to comply with NASDAQ requirements. There are a number of steps in making this recommendation forrisks associated with the fiscal year ended December 31, 2021.Reverse Stock Split, including as follow:

First,•        The Board cannot predict the Audit Committee discussed with Marcum those matters required to be discussed by the applicable requirementseffect of the Public Company Accounting Oversight Board, including information regardingReverse Stock Split upon the scopemarket price for our shares of Common Stock, and resultsthe history of similar reverse stock splits for companies in like circumstances has varied.

•        The market price per share of Common Stock after the Reverse Stock Split may not rise in proportion to the reduction in the number of shares of Common Stock outstanding resulting from the Reverse Stock Split. If the market price of our shares of Common Stock declines after the Reverse Stock Split, the percentage decline as an absolute number and as a percentage of the audit. These communications and discussions are intended to assistCompany’s overall market capitalization may be greater than would occur in the Audit Committee in overseeing the financial reporting and disclosure process.

Second, the Audit Committee discussed with Marcum the independence of Marcum and received from Marcum the letter required by applicable standardsabsence of the Public Company Accounting Oversight Board for independent auditor communications with Audit Committees, asReverse Stock Split. Accordingly, the total market capitalization of our Common Stock after the Reverse Stock Split may be modified or supplemented, concerning its independence as required under applicable independence standards for auditors of public companies. This discussion and disclosure assistedlower than the Audit Committee in evaluating such independence.

Finally,total market capitalization before the Audit Committee reviewed and discussed, with the Company’s management and Marcum, the Company’s audited financial statements for the fiscal year ended December 31, 2021 and the related management’s discussion and analysis to be included in the Corporation’s Annual Report on Form 10-K. 

Based on the discussions with Marcum concerning the audit, their independence, the financial statement review, and such other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the Board that the Corporation’s financial statements and the related management’s discussion and analysis be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Submitted by:

Audit Committee of the Board

/s/ Barry Fishman

/s/ Matthew R. Kane

/s/ Tahira Rehmatullah

Board Leadership Structure and Role in Risk Oversight

Our Board currently consists of five directors. The Board has not appointed a lead independent director. Due to the size of the Board, the independent directors are able to closely monitor the activities of our Company. In addition, the independent directors are able to meet independently with the Company’s independent registered public accounting firm without management to discuss the Company’s financial statements and related audits. Therefore, the Board has determined that a lead independent director is not necessary at this time. To the extent the composition of the Board changes and/or growsReverse Stock Split. Moreover, in the future, the Board may re-evaluate the need for a lead independent director.

Management is responsible for the day-to-day management of risks the Company faces, while the Board as a whole has ultimate responsibility for the Company’s oversight of risk management. Our Board takes an enterprise-wide approach to risk oversight, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. A fundamental part of risk oversight is not only understanding the risks a Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. As a critical part of this risk management oversight role, our Board encourages full and open communication between management and the Board. Our Board regularly reviews material strategic, operational, financial, compensation and compliance risks with management. In addition, our management team regularly reports to the full Board regarding their areas of responsibility and a component of these reports is risk within the area of responsibility and the steps management has taken to monitor and control such exposures. Additional review or reporting on risk is conducted as needed or as requested by our Board.

Consideration of Director Nominees

Stockholder Recommendations and Nominees

The policymarket price of our Nominating Committee is to consider properly submitted recommendations for candidates toCommon Stock following the Board from stockholders. Any stockholder recommendations for consideration byReverse Stock Split may not exceed or remain higher than the Nominating Committee should include the candidate’s name, biographical information, information regarding any relationships between the candidate and the Company within the last three years, a description of all arrangements between the candidate and the recommending stockholder and any other person pursuant to which the candidate is being recommended, a written indication of the candidate’s willingness to serve on the Board, any other information required to be provided under securities laws and regulations, and a written indication to provide such other information as the Nominating Committee may reasonably request. There are no differences in the manner in which the Nominating Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder or otherwise. Stockholder recommendations to the Board should be sent to:

Akerna Corp.

1550 Larimer Street #246, Denver, Colorado 80202

Attention: Secretary

In addition, our Amended and Restated Bylaws permit stockholders to nominate directors for consideration at an annual meeting of stockholders. Stockholders wishing to nominate a candidate for director at the annual meeting of stockholders must give written notice to Akerna Corp., 1550 Larimer Street #246, Denver, CO 80202, Attention: Secretary, either by personal delivery or by United States mail, postage prepaid. The stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) daysmarket price prior to the first anniversaryReverse Stock Split.

•        The market price per share of our shares of Common Stock post-Reverse Stock Split may not remain in excess of the dateminimum bid price per share as required by NASDAQ, or the Company may fail to meet the other requirements for continued listing on the NASDAQ, including the minimum value of listed securities, as described above, resulting in the delisting of our Common Stock.

•        The market price of our shares of Common Stock may also be affected by the Company’s performance and other factors, the effect of which the Board cannot predict.

•        Although the Board believes that a higher stock price may help generate the interest of new investors, the Reverse Stock Split may not result in a per-share price that will successfully attract certain types of investors and such resulting share price may not satisfy the investing guidelines of institutional investors or investment funds. Further, other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the interest of new investors in the shares of our Common Stock. As a result, the trading liquidity of the immediately preceding year’s annual meetingshares of stockholders; provided, however, that if the dateour Common Stock may not improve as a result of the annual meetingReverse Stock Split and there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above.

•        The Reverse Stock Split could be viewed negatively by the market and other factors, such as those described above, may adversely affect the market price of the shares of our Common Stock. Consequently, the market price per post-Reverse Stock Split shares may not increase in proportion to the reduction of the number of shares of our Common Stock outstanding before the implementation of the Reverse Stock Split. Accordingly, the total market capitalization of our shares of Common Stock after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split.

•        In the future, the market price of the shares of our Common Stock following the Reverse Stock Split may not exceed or remain higher than the market price of the shares of our Common Stock prior to the Reverse Stock Split.

•        If the Reverse Stock Split is advancedeffected and the market price of the shares of our Common Stock then declines, the percentage decline may be greater than would occur in the absence of the Reverse Stock Split. Additionally, the liquidity of the shares of our Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the implementation of the Reverse Stock Split.

•        The Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.

•        In the event the Reverse Stock Split is approved we will have additional shares of Common Stock to settle our obligations under the Senior Convertible Notes and other securities which may result in significant dilution to our stockholders

Required Vote

The affirmative vote of the holders of a majority of the outstanding voting stock is required to amend our Certificate of Incorporation to effect the Reverse Stock Split. Failures to vote, abstentions and broker “non-votes”, if any, will be the equivalent of a vote AGAINST this proposal.

IF OUR STOCKHOLDERS DO NOT APPROVE THE REVERSE STOCK SPLIT, THE BOARD BELIEVES THAT THE LONG-TERM FINANCIAL VIABILITY OF THE COMPANY COULD BE THREATENED DUE TO (I) OUR INABILITY TO SETTLE OUR OBLIGATIONS UNDER THE CONVERTIBLE NOTES AND (II) THE COMPANY’S INABILITY TO CONSUMMATE FUTURE EQUITY OFFERINGS TO MEET ITS ONGOING EXPENSES. SOME OF THESE CONSEQUENCES MAY BE MITIGATED IF THE REVERSE STOCK SPLIT IS APPROVED AND IMPLEMENTED.

OUR BOARD RECOMMENDS A VOTE “FOR” THE REVERSE STOCK SPLIT

PROPOSAL TWO — ADJOURNMENT OF THE SPECIAL MEETING
TO SOLICIT ADDITIONAL PROXIES

Adjournment of the Special Meeting

In the event that the number of shares of Common Stock present in person via attendance at the Special Meeting or represented by proxy at the Special Meeting and voting “FOR” the adoption of any of the proposals specified in the Notice of Special Meeting is insufficient to adopt every or any proposal, we may move to adjourn the Special Meeting in order to enable the Board to solicit additional proxies in favor of the adoption of such proposal specified in the Notice of Special Meeting. In that event, we will ask stockholders to vote upon the adjournment proposal and on the other proposals discussed in this proxy statement. If the adjournment is for more than thirty (30) days, prior to or delayed by more than sixty (60) days after the anniversary of the preceding year’s annual meeting, to be timely, notice by the stockholder must be so received not later than the close of business on the tenth (10^th) day following the day on whicha notice of the dateadjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Vote Required and Board Recommendation

Approval of the annual meeting was mailed or public disclosureAdjournment Proposal requires the affirmative vote of a majority of the datevotes cast by holders of the annual meeting is first given or made (which for this purpose shall include any and all filings of the Corporation made on the EDGAR system of the SEC or any similar public database maintained by the SEC), whichever first occurs. To be timely for a special meeting of the stockholders called for the purpose of electing directors, a stockholder’s written notice to the Secretary of the Corporation must be delivered to or mailed and received at the principal executive offices of the Corporation not later than thirty (30) days after the prior meeting of stockholders and no later than one hundred and eighty (180) days before the first anniversary date of the immediately preceding year’s annual meeting of stockholders. To be in proper form, a stockholder’s notice to the Secretary shall be in writing and shall set forth (i) the name and record address of such stockholder proposing such nomination and the beneficial owner, if any, on whose behalf the nomination is made; (ii) the class or series and number of shares of capitalvoting stock of the Corporation which are, directly or indirectly, owned beneficially or of record by such stockholder; (iii) a description of all direct and indirect compensation and other material monetary agreements, arrangements or understandings during the past three years, and any other material relationships, between such stockholder and each proposed nominee, including, without limitation, all information that would be required to be disclosed pursuant to the Regulations of the SEC if such stockholder were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant; (iv) any derivative positions held or beneficially held, directly or indirectly, by such stockholder; (v) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder with respect to any share of stock of the Corporation; (v) a representation that such stockholder intends to appearpresent in person or represented by proxy at the meetingSpecial Meeting and entitled to nominatevote on such proposal. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the persons named in its notice; and (vii) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filingsoutcome of the proposing stockholder required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied byAdjournment Proposal. Because this proposal is a written consent of each proposed nominee to being named or referred to as a nominee and to serve as a directorroutine matter, brokers will have discretionary voting on this matter if elected. The Corporation may require any proposed nominee to furnish such other information (which may include attending meetings to discuss the furnished information) as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

Director Qualifications

The Board believes that all directors should have the highest personal integrity and have a record of exceptional ability and judgment. The Board also believes that directors should ideally reflect a mix of experience and other qualifications. There is no firm requirement of minimum qualifications or skills that candidates must possess. The Nominating Committee evaluates director candidates based on a number of qualifications, including their independence, judgment, leadership ability, expertise in the industry, experience developing and analyzing business strategies, financial literacy, risk management skills, and, for incumbent directors, his or her past performance. While neither the Board nor the Nominating Committee has adopted a formal policy with regard to the consideration of diversity when evaluating candidates for election to the Board, it is our goal to have a balanced Board, with members whose skills, background and experience are complimentary and, together, cover the variety of areas that impact our business.

The Nominating Committee initially evaluates a prospective nominee on the basis of his or her resume and other background information that has been made available to the committee. A member of the Nominating Committee will contact for further review those candidates who the committee believes are qualified, who may fulfill a specific board need and who would otherwise best make a contribution to the Board. If, after further discussions with the candidate, and other further review and consideration as necessary, the Nominating Committee believes that it has identified a qualified candidate, it will make a recommendation to the Board.

The qualifications of each of the Company’s directors are set forth in their respective biographies in this Proxy Statement.

Diversity

The Board values the benefits that diversity can bring and seeks to maintain a Board comprised of talented and dedicated directors with a diverse mix of experience, skills and backgrounds collectively reflecting the strategic needs of the business and the nature of the environment in which the Company operates.

In identifying qualified candidates for nomination to the Board, the Nominating Committee will consider prospective candidates based on merit, having regard to those competencies, expertise, skills, background and other qualities identified from time to time by the Board as being important in fostering a diverse and inclusive culture which solicits multiple perspectives and views and is free of conscious or unconscious bias and discrimination.

The Nominating Committee must give due consideration to characteristics, such as gender, age, ethnicity, disability, sexual orientation and geographic representation, which contribute to board diversity. The Nominating Committee may, in addition to conducting its own search, engage qualified independent advisors to assist in identifying prospective diverse director candidates that meet the selection criteria established by the Board and that support its diversity objectives. In implementing its responsibilities under this policy, the Nominating Committee will take into account the Board’s diversity objectives and the diverse nature of the business environment in which the Company operates, as well as the need to maintain flexibility to effectively address succession planning and to ensure that the Company continues to attract and retain highly qualified individuals to serve on the Board.

The chart below indicates the current diversity composition of the Board.

Code of Ethics

We adopted a Code of Ethics, applicable to all directors, executive officers and employees which is available on our website (www.akerna.com). Any amendment to or waivers from the Code of Ethics with respect to the Company’s directors or executive officers will be posted on the Company’s website. The Code of Ethics provides that any waiver thereof may be made only by the Board.

Procedures for Contacting Directors

The Board has established a process for stockholders to send communications to the Board. Stockholders may communicate with the Board generally or a specific director at any time by writing to: Akerna Corp., 1550 Larimer Street #246, Denver, CO 80202, Attention: Secretary. We review all messages received, and forward any message that reasonably appears to be a communication from a stockholder about a matter of stockholder interest that is intended for communication to the Board. Communications are sent as soon as practicable to the director to whom they are addressed, or if addressed to the Board generally, to the Chairman of the Nominating Committee. Because other appropriate avenues of communication exist for matters that are not of stockholder interest, such as general business complaints or employee grievances, communications that do not relate to matters of stockholder interest are not forwarded to the Board.receive instructions.

OUR BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL

17

(5)      Represents 290,654 shares and warrants to acquire 32,310 common shares held by Mr. Sozio. Does not reflect 58,582 restricted stock units issued pursuant to Akerna’s Incentive Plan, which vest as follows: 25,542 units shall vest on July 1, 2023 and 25,542 units shall vest on July 1, 2024, and 7,500 RSUs, which vest as follows: 2,500 units shall vest on December 1, 2022, 2,500 units shall vest on December 1, 2023, and 2,500 units shall vest on December 1, 2024.

(6)      Represents 56,912 shares of Common Stock.

(7)      Represents 6,261 shares of Common Stock.

(8)     Reflects 64,306 shares of Common Stock. Does not reflect 27,000 restricted stock units issued pursuant to Akerna’s Incentive Plan, which vest as follows: 2,000 RSUs, which vest as follows: 2,000 units shall vest on July 1, 2023, 10,000 RSUs, which vest as follows: 5,000 units shall vest on July 1, 2023, and 5,000 units shall vest on July 1, 2024, and 15,000 RSUs, which vest as follows: 5,000 units shall vest on December 1, 2022, 5,000 units shall vest on December 1, 2023, and 5,000 units shall vest on December 1, 2024.

(9)      Reflects 63,410 shares of Common Stock. Does not reflect 39,792 restricted stock units issued pursuant to Akerna’s Incentive Plan, which vest as follows: 2,500 RSUs, which vest as follows: 2,500 units shall vest on July 1, 2023, 6,679 RSUs, which vest as follows: 6,679 units shall vest on January 1, 2023. 6,250 RSUs, which vest as follows: 6,250 units shall vest on January 1, 2023, 10,000 RSUs, which vest as follows: 5,000 units shall vest on July 1, 2023, and 5,000 units shall vest on July 1, 2024, and 15,000 RSUs, which vest as follows: 5,000 units shall vest on December 1, 2022, 5,000 units shall vest on December 1, 2023, and 5,000 units shall vest on December 1, 2024.

(10)    Represents 34,205 shares of Common Stock.

(11)    Represents 2,646 shares of Common Stock.

Change in Control

We are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in Akerna’s control.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Employment of Scott Sozio

In July 2019, we hired Mr. Scott Sozio, at will, to serve as our Head of Corporate Development. As restructured in August 2020, Mr. Sozio receives an annual base salary of $150,000, a one-time grant of $600,000 in restricted stock units (92,166 restricted stock units) issued in August 2020 vesting over 4 years, as discussed below, and deal related compensation of 0.5% of the transaction value of acquisition completed by Akerna, payable one-half in restricted stock units of Akerna at the option of the Board.

In April 2020, Mr. Sozio was granted 1,230 restricted stock units of the Akerna under our 2019 Equity Incentive Plan in relation to the closing of our acquisition of Trellis, which vested immediately. In August of 2020, Mr. Sozio’s compensation was restructured and he was granted 92,166 restricted stock units, which vest one quarter each year beginning on July 1, 2021. In September 2020, Mr. Sozio was granted 10,000 restricted stock units as part of our annual employee grants, which vest one quarter each year beginning on July 1, 2021 and 38,527 restricted stock units in connection with the closing of our acquisition of Ample, which vested immediately. In April 2021, Mr. Sozio was granted 2,976 restricted stock units of the Akerna under our 2019 Equity Incentive Plan in relation to the closing of our acquisition of Viridian, which vested immediately. In October 2021, Mr. Sozio was granted 29,210 restricted stock units of the Akerna under our 2019 Equity Incentive Plan in relation to the closing of our acquisition of 365 Cannabis, which vested immediately. In April 2021, Mr. Sozio was granted 10,000 restricted stock units as part of our annual employee grants, which vest one quarter each year beginning on December 1, 2021

TechMagic

During the fiscal year ended June 30, 2020, we have been invoiced through our wholly-owned subsidiary Solo by TechMagic USA LLC, a Massachusetts limited liability, in an amount of approximately $657,000. When we acquired Solo in January 2020, there was an open balance payable to TechMagic of approximately $265,000. Subsequently, during the remainder of our fiscal year ended June 30, 2020, we received invoices totaling an aggregate additional amount of approximately $392,000. After our year ended June 30, 2020, through to the date hereof, we have received invoices totaling an aggregate amount of approximately $375,000. Currently, there are outstanding invoices totaling approximately $767,000. The invoices set forth services that TechMagic USA LLC purports to have provided to Solo regarding development of mobile software applications for MJF and Solo between March and November 2020. Mr. Ashesh Shah, formerly the president of Solo and currently the beneficial holder of 6.2% of our issued and outstanding shares of Common Stock is, to our knowledge, the founder and one of the principal managers of TechMagic USA LLC. The invoices state that the services were rendered pursuant to the terms of an agreement regarding the development of mobile software products for Solo, entered into between Solo and TechMagic at a time when Mr. Shah was a principal at both entities. On December 4, 2020, TechMagic filed suit against Solo in Massachusetts Superior Court seeking recovery of up to approximately $1.07 million. Akerna provided a notice of termination of the Master Services Agreement on November 23, 2020 and the parties dispute the effective date of the termination. Solo disputes the validity of the invoices, in whole or in part, and intends to defend the suit vigorously. Mr. Ashesh Shah, formerly the president of Solo and currently the holder of less than 5% of our issued and outstanding shares of common stock is, to our knowledge, the founder and one of the principal managers of TechMagic USA LLC. As of December 31, 2021 and December 31, 2020, we recognized a loss contingency of $0.5 million and $0.6 million, respectively.

Indemnification

Akerna’s amended and restated certificate of incorporation contains provisions limiting the liability of directors, and its amended and restated bylaws provides that it will indemnify the directors and executive officers to the fullest extent permitted under Delaware law. Akerna’s amended and restated certificate of incorporation and bylaws also provides the Board with discretion to indemnify the other officers, employees, and agents when determined appropriate by the Board. In addition, Akerna entered into an indemnification agreement with each of its directors and executive officers, which requires it to indemnify them.

Related Person Transactions Policy and Procedure

Akerna’s Code of Ethics requires it to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) Akerna or any of its subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of Akerna’s shares of Common Stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable to us than terms generally available from an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction.

PROPOSAL TWO — RATIFICATION OF APPOINTMENT OF AUDITORS

Introduction

The Audit Committee has appointed Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022 and recommends that stockholders vote “FOR” ratification of this appointment. Although stockholder approval of this appointment is not required by law and is not binding on the Company, the Audit Committee will take your vote on this proposal into consideration when appointing the independent registered public accounting firm in the future. Even if you ratify the appointment of Marcum LLP, the Audit Committee may, in its sole discretion, terminate such engagement and direct the appointment of another independent registered public accounting firm at any time during the year, although it has no current intention to do so. Marcum LLP was initially appointed by the Audit Committee on September 26, 2019. Representatives of Marcum LLP are not expected to be present at the Annual Meeting and are not expected to be available to respond to appropriate questions.

As discussed in greater detail below, the following table shows the fees paid or accrued by us to Marcum and during the fiscal year ended December 31, 2021, the transition period ended December 31, 2020, and fiscal year ended June 30, 2020:

“Audit Fees” relate to fees and expenses billed by Marcum for the annual audits, including the audit of our financial statements, review of our quarterly financial statements and for comfort letters and consents related to stock issuances.

“Audit-Related Fees” relate to fees for assurance and related services that traditionally are performed by independent auditors that are reasonably related to the performance of the audit or review of the financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews and consultation concerning financial accounting and reporting standards.

“Tax Fees” relate to fees for all professional services performed by professional staff in our independent auditor’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the Internal Revenue Service and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.

“All Other Fees” relate to fees for any services not included in the above-described categories.

21

Pre-Approval Policies and Procedures

The Audit Committee charter provides that the Audit Committee will pre-approve all audit services and non-audit services to be provided by our independent auditors before the accountant is engaged to render these services. The Audit Committee may delegate its authority to pre-approve services to one or more committee members, provided that the designees present the pre-approvals to the full committee at the next committee meeting. Akerna’s Audit Committee was formed upon consummation of the Business Combination. As a result, the Audit Committee did not pre-approve any of the foregoing services performed by Marcum. Since the formation of our Audit Committee, and on a going-forward basis, the Audit Committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Required Vote

The ratification of the appointment of Marcum LLP as the Company’s independent registered public accounting firm for fiscal year ending December 31, 2022 requires the affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal at the Annual Meeting. Abstentions and broker non-votes, if any, will have no effect on the outcome of this proposal. Such proposal is a “routine” matter on which brokers and nominees can vote on behalf of their clients if clients do not furnish voting instructions.

OUR BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF MARCUM LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

.

PROPOSAL THREE — APPROVAL OF CN NASDAQ 20% CAP REMOVAL PROPOSAL

General

On October 5, 2021, we entered into a Securities Purchase Agreement (the “SPA”), with the two institutional investors (each a “Note Holder”, and collectively the “Note Holders”), that hold the Company’s then-outstanding convertible notes issued in June of 2020 (the “2020 Notes”), to sell to the Holders a new series of senior secured convertible notes (the “Convertible Notes”) of Akerna in a private placement (the “Private Placement”), with an aggregate principal amount of $20,000,000 having an aggregate original issue discount of 10%, and ranking senior to all outstanding and future indebtedness of the Company. Approximately $3.3 million of the proceeds from the Convertible Notes was used to pay off the 2020 Notes, which were then cancelled.

General Terms of the Convertible Notes

Convertible Notes mature on October 5, 2024 (the “Maturity Date”). The Convertible Notes are payable in monthly installments beginning on January 1, 2022. The Convertible Notes were issued and sold with an original issue discount and do not bear interest except upon the occurrence of an Event of Default (as defined in the Convertible Notes), in which event the applicable rate will be 15.0% per annum. On the installment dates from and including January 1, 2022 through and including March 1, 2022, the Company will pay an installment amount, or the Installment Amount, equal to the lesser 100% of $1,100,000 in principal amount or 110% of the principal amount then outstanding under the Convertible Notes. With respect to installment dates from, and including April 1, 2022 through to, but not including, the Maturity Date, the Company will pay an Installment Amount equal to the lesser 110% of $1,100,000 in principal amount in principal amount or 110% of the principal amount then outstanding under the Convertible Notes. On the Maturity Date, the Company will pay 110% of the principal amount then outstanding under the Convertible Notes. The Company may not prepay a portion of the principal amount nor interest, if any, but the Company may redeem the Convertible Notes in their entirety pursuant to the Company’s redemption right.

Conversion

The Convertible Notes are convertible at any time in whole or in part, subject to Akerna not issuing more shares of Common Stock than permitted under the rules of the Nasdaq prior to obtaining the Stockholder Approval, at the option of the holders thereof, into shares of the Common Stock at a rate equal to the amount of principal, interest (if any) and unpaid late charges (if any), divided by a conversion price of $4.05, the Conversion Price. The Conversion Price is subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar transaction.

In connection with the occurrence of Events of Default, the Note Holders will be entitled to convert all or any portion of the Convertible Notes at an alternate conversion price equal to the lower of (i) the conversion price then in effect, and (ii) the greater of (x) the floor price of $0.54 and (y) 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 the volume-weighted average price of the Common Stock during the ten (10) consecutive trading day period ending and including the trading day immediately prior to the applicable date of determination, divided by (B) two (2), but not less than the floor price of $0.54.

Exchange Cap

The Convertible Notes shall not be convertible to the extent the conversion would result in Akerna issuing more shares of Common Stock than permitted under the rules of the Nasdaq until such time as we shall have obtained Akerna stockholder approval (the “Exchange Cap”), which we are seeking pursuant to this proposal.

Why does the Company need Stockholder Approval?

Our Common Stock is listed on Nasdaq and, as such, we are subject to the Nasdaq Listing Rules. Nasdaq Listing Rule 5635(d) is referred to as the “NASDAQ 20% Rule.” In order to comply with the NASDAQ 20% Rule and to satisfy conditions under the SPA, we are seeking stockholder approval for elimination of the Exchange Cap to permit the potential issuance of more than 20% of our outstanding Common Stock upon conversion of the Convertible Notes.

The NASDAQ 20% Rule requires that an issuer obtain stockholder approval prior to certain issuances of Common Stock or securities convertible into or exchangeable for Common Stock at a price less than the greater of market price or book value of such securities (on an as exercised basis) if such issuance equals 20% or more of the Common Stock or voting power of the issuer outstanding before the transaction in relation to the Private Placement.

Without the Exchange Cap, the aggregate number of shares of Common Stock issuable upon the conversion of the Convertible Notes could exceed 20% of our outstanding Common Stock on the date we issued the Convertible Notes and could potentially be issued at a price less than the greater of the book value or market of the shares on the applicable date. Therefore, the Exchange Cap was added to the provisions of the Convertible Notes, which restrict the Convertible Notes from being convertible into shares of Common Stock in excess of 19.9% of our outstanding Common Stock on the date we issued the Convertible Notes.

To meet the requirements of the NASDAQ 20% Rule, we need stockholder approval under the Nasdaq Listing Rules to remove the Exchange Cap provisions under the Convertible Notes to permit the potential issuance of more than 20% of our outstanding Common Stock upon conversion of the Convertible Notes.

What is the Effect on Current Stockholders if the CN Nasdaq 20% Cap Removal Proposal is Approved?

If our stockholders approve this proposal, we will be able to eliminate the NASDAQ 20% Rule and Exchange Cap in the Convertible Notes and therefore potentially issue shares of Common Stock issuable upon the conversion of the Convertible Notes in excess of 20% of our issued and outstanding shares of Common Stock as of the date we issued the Convertible Notes pursuant to the terms of the SPA.

Effect of Elimination of Exchange Cap

If stockholders approve the CN Nasdaq 20% Cap Removal Proposal, current stockholders may experience significant dilution of their current equity ownership in the Company. The Convertible Notes may be converted into shares of Common Stock at the election of the holder of the Convertible Notes.

For conversions at the election of the holder, at the current conversion rate of $4.05 for such conversions, the $20 million in principal amount of Convertible Notes would be convertible into 4,938,272 shares of Common Stock, representing approximately 13% dilution to current stockholders based on 32,390,419 shares of common stock issued and outstanding on March 27, 2022. For conversions in relation to the amortization payments on the Convertible Notes, the conversion price is determined as a discount to the then current market price, as described above, subject to a conversion floor price of $0.54. If all amortization payments are made at the conversion floor price of $0.54 per share, then the Company could potentially issue up to a maximum of approximately 37,037,037 shares of Common Stock representing 53% dilution to current stockholders based on 32,390,419 shares of common stock issued and outstanding on March 27, 2022. If the calculated discount to the current market price of the Company’s Common Stock on the actual date of such amortization payments is above $0.54, the Company will issue fewer shares than this maximum amount for settlement of such amortization payments.

What is the Effect on Current Stockholders if the CN Nasdaq 20% Cap Removal Proposal is not Approved?

Repayment of the Convertible Notes in Cash

If the CN Nasdaq 20% Cap Removal Proposal is not approved, to the extent that conversion of the Convertible Notes by the holders or by the Company pursuant to their terms would result in the issuance of more than 20% of the issued and outstanding shares of Common Stock at the time the Company issued the Convertible Notes, the Company would be unable to convert the Convertible Notes into shares and would be forced to pay cash to meet its obligations under the terms of the Convertible Notes.

Under the terms of the Convertible Notes, on the installment dates from and including January 1, 2022 through and including March 1, 2022, the Company will pay an installment amount, or the Installment Amount, equal to the lesser 100% of $1,100,000 in principal amount or 110% of the principal amount then outstanding under the Convertible Notes. With respect to installment dates from, and including April 1, 2022 through to, but not including, the Maturity Date, the Company will pay an Installment Amount equal to the lesser 110% of $1,100,000 in principal amount in principal amount or 110% of the principal amount then outstanding under the Convertible Notes. On the Maturity Date, the Company will pay 110% of the principal amount then outstanding under the Convertible Notes. Thus, the Company would have to make payments total in aggregate $22.0 million. If the current proposal is not approved by the stockholders and the Company cannot settle the Convertible Notes in shares, the Company will be forced to pay the installment amounts in cash. Currently, under the restrictions of the Exchange Cap, the Company may issue only 5,413,389 shares in settlement of installment conversions. Failure of the stockholders to approve the CN Nasdaq 20% Cap Proposal will drastically limit the ability of Company’s management to elect to make future installment payments in shares of Common Stock, which would result in utilizing the Company’s available cash to make installment payments under the Convertible Notes instead of funding its business operations and could negatively impact the Company’s financial condition and results of operations.

Potential Future Dilution

If the Company cannot issue shares of Common Stock in direct settlement of installment amounts under the Convertible Notes because of the Exchange Cap, and the Company does not otherwise have sufficient available cash to meet such obligations, the Company may seek to raise additional capital through the issuance of shares of Common Stock or preferred stock, which issuances may be at prices more dilutive to stockholders than the terms permitting conversion of installment amounts into shares under the Convertible Notes. To the extent that the Company engages in such transactions to raise additional capital, the current stockholders could be substantially diluted.

Potential Event of Default

If this proposal is not approved, and if the Company does not have sufficient funds to make cash payments for the installment amounts and cannot raise such funds prior to an installment date, then the Company may default under the Convertible Notes. Occurrence of an event of default by the Company could have significant negative consequences for the Company and its stockholders. An event of default could harm the Company’s financial condition, force the Company to reduce or cease operations or could result in the Company declaring bankruptcy and the holders of the Convertible Notes seizing some or all of the assets of the Company and its subsidiaries which currently secure the Convertible Notes.

Obligation to Continue to Seek Approval

If our stockholders do not approve this proposal, we will be required to seek stockholder approval of this proposal every three months until we receive stockholder approval of this proposal or the Convertible Notes expire or are all converted pursuant to their terms. We are not seeking the approval of our stockholders to authorize our issuance of the Convertible Notes, as we have already issued the Convertible Notes, which are binding obligations on us. The failure of our stockholders to approve the proposal will not negate the existing terms of the documents relating to the Convertible Notes. The Convertible Notes will remain outstanding and the terms of the Convertible Notes will remain binding obligations of the Company.

Where can I find more information regarding the Convertible Notes?

The above descriptions set forth the material terms of the Convertible Notes. A more detailed description of the Convertible Notes, the Securities Purchase Agreement and related transaction documents can be read in the Company’s Current Report on Form 8-K as filed with the SEC on October 5, 2021.

The Securities Purchase Agreement and the Form of Convertible Notes are attached as exhibits to the Company’s Current Report on Form 8-K as filed with the SEC on October 5, 2021.

Required Vote of Stockholders

Approval of the this proposal requires the affirmative vote of a majority of votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. The proposal is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the CN Nasdaq 20% Cap Removal Proposal.

OUR BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF
THE CN NASDAQ 20% CAP REMOVAL PROPOSAL.

PROPOSAL FOUR — APPROVAL OF 365 NASDAQ 20% CAP REMOVAL PROPOSAL

General

On September 13, 2021, the Company entered into the 365 SPA with the 365 Sellers pursuant to which the Company agreed to purchase all of the issued and outstanding securities of 365 Cannabis from the 365 Sellers on the terms and conditions set forth therein. On October 1, 2021, the Company closed on the 365 SPA with the 365 Sellers (the “Closing”).

Purchase Price

The consideration amount under the Agreement was $17 million (the “Purchase Price”). The Purchase Price was payable as (a) at least $4 million of cash (the “Cash Consideration”) and (b) a number of fully paid and nonassessable shares of the Company’s Common Stock, that is equal to the Purchase Price less the Cash Consideration divided by $3.36, with the Cash Consideration being subject to upward adjustment by the Company in its sole discretion at Closing. At the Closing, the Company elected to pay $4.5 million in Cash Consideration, and the parties agreed to approximately $500,000 of Cash Consideration being moved to 12 months after the Closing. Therefore, the Company issued 3,571,429 shares of Common Stock (the “Stock Consideration”), representing an aggregate value of approximately $12 million. 357,143 shares of the Stock Consideration is being held in escrow for a period of, and will be released from escrow after a period of, 12 months, subject to certain indemnity claims under the Agreement. The shares of Common Stock are also subject to a lock-up agreement between the Company and the Sellers and will be released from lock-up as follows: (a) 50% of the Stock Consideration six months from the date of the Closing, (b) 25% of the Stock Consideration nine months from the date of Closing and (c) the remaining 25% of the Stock Consideration one year from the date of the Closing.

Earn-Out Payment

In addition to the purchase price of $17 million, the Company and the 365 Sellers have agreed to a potential earn-out payment (the “365 Earn-out Payment”), during the earn-out period of 12 months following the Closing equal to (a) 3.0 multiplied by the recurring revenue generated during the earn-out period from (i) sales of products of 365 Cannabis (less any excluded revenue) and (ii) sales of the products of Akerna’s other wholly-owned subsidiary, Viridian, to any customers other than the customers listed on exhibit A to the 365 SPA, each as determined by Akerna minus (b) the Purchase Price. In no event will the aggregate earn-out payment exceed $8,000,000.

The 365 Earn-out Payment is payable in cash or shares of Common Stock (the “365 Earn-out Shares”), in the sole discretion of Akerna; provided however, that Akerna will not issue shares of Common Stock to the extent that such issuance would violate the rules of Nasdaq without approval of the stockholders of Akerna, unless such approval has been obtained. The 365 Earn-out Payment is subject to early payment if certain key employees are terminated without cause prior to the end of the earn-out period, subject to monthly cumulative recurring revenue targets being met at the time of termination.

If any 365 Earn-out Payment is due and payable pursuant to the 365 SPA, then (i) to the extent that Company elects to pay such 365 Earn-out Payment in cash, the Company shall pay to each 365 Seller such seller’s pro rata share of such cash payment, and (ii) to the extent that the Company elects to pay such 365 Earn-out Payment in 365 Earn-out Shares, the Company shall issue to each 365 Seller such seller’s pro rata share of a number of 365 Earn-out Shares, valued at the “Earnout Buyer Price”, which equals to the volume weighted average closing trading price of the Common Stock on Nasdaq for the twenty (20) days prior to the end of the earn-out period, which amount, following such issuance, shall be appropriately adjusted to proportionately reflect any split, combination, stock dividend or other stock distribution of the Common Stock.

Why does the Company need Stockholder Approval?

Our Common Stock is listed on Nasdaq and, as such, we are subject to the Nasdaq Listing Rules. Nasdaq Listing Rule 5635(a), which requires stockholder approval for the issuance of the Common Stock in connection with the acquisition of the stock or assets of another company prior to issuances of Common Stock or securities convertible into or exchangeable for Common Stock that would result in the number of shares of Common Stock to be issued will be equal to or in excess of 20% of the number of shares of Common Stock outstanding before the issuance of the stock or securities.

The aggregate number of shares of Common Stock issuable pursuant to the 365 SPA, including the Stock Consideration and after the 365 Earn-out Payment if paid in 365 Earn-out Shares, could exceed 20% of our outstanding Common Stock before the entry into the 365 SPA and issuance of the Stock Consideration. Therefore, the Nasdaq Listing Rule limitation was added to the provisions of the 365 SPA, which subject the issuance of the 365 Earn-out Shares to the Nasdaq Listing Rules and shareholder approval.

To meet the requirements of Nasdaq Listing Rule 5635(a), we need stockholder approval under the Nasdaq Listing Rules to remove the Nasdaq limitation under the 365 SPA to permit the potential issuance of more than 20% of our outstanding Common Stock to satisfy the 365 Earn-out Payment.

What is the Effect on Current Stockholders if the 365 Nasdaq 20% Cap Removal Proposal is Approved?

If our stockholders approve this proposal, we will be able to potentially issue shares of Common Stock to satisfy the 365 Earn-out Payment obligations pursuant to the 365 SPA. To date we have issued 3,571,429 shares of Common Stock under the 365 SPA which represents 13.34% of the 26,780,066 issued and outstanding shares of Common Stock on September 13, 2021. This means that we could issue up to 1,781,906 additional shares of Common Stock under the 365 Earn-out Payment without stockholder approval. Removal of the 20% cap by the approval of this proposal would permit us to issue share of Common Stock in settlement of the Earn-out beyond this amount.

However, the current stockholders may experience significant dilution of their current equity ownership in the Company if we settle the 365 Earn-out in shares of Common Stock. The Company may pay the 365 Sellers the 365 Earn-out Payment in cash, 365 Earn-out Shares, or a combination of both. The 365 Earn-out Payment will be valued per share, at the Earnout Buyer Price, which equals to the volume weighted average closing trading price of the Common Stock on Nasdaq for the twenty (20) days prior to the end of the earn-out period, which amount, following such issuance, shall be appropriately adjusted to proportionately reflect any split, combination, stock dividend or other stock distribution of the Common Stock.

Based on the current volume weighted average closing trading price of the Common Stock on the Nasdaq for the twenty (20) days immediately prior to March 31, 2022, of $1.23 the Company could potentially issue up to approximately 6,504,065 shares of Common Stock, assuming settlement of the maximum 365 Earn-out Payment of $8 million and settlement entirely in shares of Common Stock, which would represent 16.7% dilution to the current stockholders based on 32,390,419 shares of common stock issued and outstanding on March 27, 2022. As there is no floor price pursuant to which the Company could elect to settle the 365 Earn-out in shares of Common Stock, the Company could issue up to 42,609,581 shares of common stock, being the difference between our current issued and outstanding of 32,390,419 shares of Common Stock and our authorized Common Stock limit in our Certificate of Incorporation, currently 75 million shares of Common Stock, representing an issue price of approximately $0.18 per share and dilution of approximately 57% to current stockholder. The Company could issue up to 117,609,581 shares of Common Stock if the Authorized Share Increase is approved by stockholders at this Annual Meeting, representing an issue price of approximately $0.06 per share and dilution of approximately 78%.

What is the Effect on Current Stockholders if the 365 Nasdaq 20% Cap Removal Proposal is not Approved?

If the 365 Nasdaq 20% Cap Removal Proposal is not approved, the Company would be unable to satisfy its obligations pursuant to the 365 SPA by issuing shares of the Common Stock and would be forced to pay cash to meet its obligations. As described above, we could issue up to 1,781,906 shares of Common Stock in settlement of the 365 Earn-out Payment without stockholder approval. The amount of the 365 Earn-out Payment this number of shares would settle depends on the volume weighted average closing trading price of the Common Stock on the Nasdaq for the twenty (20) days immediately prior to settlement. Based on the current volume weighted average closing trading price of the Common Stock on the Nasdaq for the twenty (20) days immediately prior to March 31, 2022, of $1.23 the Company could settle approximately $2.2 million of the 365 Earn-out Payment in shares of Common Stock, leaving approximately $5.8 million to be paid in cash.

Under the terms of the 365 SPA, the Company may make the 365 Earn-out Payment of up to $8 million to the 365 Sellers in cash. Failure of the stockholders to approve the 365 Nasdaq 20% Cap Removal Proposal will drastically limit the ability of Company’s management to elect to make the 365 Earn-out Payment in shares of Common Stock, which would result in utilizing the Company’s available cash to make the 365 Earn-out Payment instead of funding its business operations and could negatively impact the Company’s financial condition and results of operations.

Where can I find more information regarding the 365 SPA and 365 Earn-out Payment?

The above descriptions set forth the material terms of the 365 SPA. A more detailed description of the 365 SPA, the 365 Earn-out Payment and related transaction documents can be read in the Company’s Current Report on Form 8-K as filed with the SEC on September 21, 2021.

The 365 SPA is attached as an exhibit to the Company’s Current Report on Form 8-K as filed with the SEC on September 21, 2021.

Required Vote of Stockholders

Approval of this proposal requires the affirmative vote of a majority of votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. The proposal is a “non-routine” matter, which brokers and nominees cannot vote on behalf of their clients if clients do not furnish voting instructions. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the 365 Nasdaq 20% Cap Removal Proposal.

OUR BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF
THE 365 NASDAQ 20% CAP REMOVAL PROPOSAL.

PROPOSAL FIVE — APPROVAL OF AUTHORIZED SHARE INCREASE

Introduction

The Board has unanimously approved, subject to stockholder approval, an amendment to our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the number of authorized shares of our Common Stock from 75,000,000 shares, par value $0.0001, to 150,000,000 shares, par value $0.0001 (such amendment as shown in Appendix B). The remaining provisions of our Certificate of Incorporation would remain unchanged. The Board has determined that this amendment is in the best interest of the Company and its stockholders and recommends that the stockholders approve this amendment.

Why did the Board approve the Authorized Share Increase?

We believe that the Authorized Share Increase, if approved, will provide us with the flexibility to settle our obligations under the Convertible Notes and the 365 SPA through the issuance of shares of our Common Stock, meet our obligations under our outstanding warrants and provide room to issue awards under our 2019 Long Term Incentive Plan to help retain our officers and employees and to issue shares of Common Stock in future equity financings to meet our ongoing capital requirements.

How many shares of Common Stock are currently outstanding or subject to issuance?

As of March 27, 2022, we had 75,000,000 shares of Common Stock authorized for issuance under our Certificate of Incorporation of which only 42,609,581 shares of Common Stock were unissued. We have the following obligations and potential obligations to issue shares of Common Stock in the future, which total a potential aggregate ranging from 12,204,668 shares of Common Stock (assuming conversion of the Convertible Notes at $4.05 and assuming no issuance of shares of Common Stock for the 365 Earn-out Payment) to 50,807,498 shares of Common Stock (assuming conversion of the Convertible Notes at the floor price of $0.54 and settlement of the entire 365 Earn-out Payment for share of Common Stock as described below):

If the Authorized Share Increase is approved, it will increase the number of shares of Common Stock available for issuance to settle our obligations under the Convertible Notes and the 365 SPA. Absent the availability of shares of Common Stock, the Company may be forced to settle its obligations under the Convertible Notes and the 365 SPA by payment of cash, if available. Further, the Company may be forced to redeem the Convertible Notes for cash. If the Company does not have sufficient cash to settle its obligations under the Convertible Notes or the 365 SPA, the Company may be unable to continue operations if it cannot otherwise negotiate the settlement of such obligations.

For this reason, the Board determined that the Authorized Share Increase would give the Company greater flexibility in settling these securities by increasing the number of shares of Common Stock available for issuance.

What is the purpose of the Authorized Share Increase?

The Board recommends the Authorized Share Increase for the following reasons:

What could happen if the stockholders do not approve the Authorized Share Increase?

What dilutive effect will the Authorized Share Increase have?

If the stockholders approve the Authorized Share Increase, the Board may cause the issuance of additional shares of Common Stock without further vote of the stockholders of the Company, except as provided under Delaware corporate law or under the rules of any national securities exchange or automated quotation system on which shares of Common Stock of the Company are then quoted, listed or traded. The relative voting and other rights of holders of the Common Stock will not be altered by the authorization of additional shares of Common Stock. Each share of Common Stock will continue to entitle its owner to one vote. When issued, the additional shares of Common Stock authorized by the amendment will have the same rights and privileges as the shares of Common Stock currently authorized and outstanding. Issuance of significant numbers of additional shares of the Company’s Common Stock in the future (i) will dilute current stockholders’ percentage ownership, (ii) if such shares are issued at prices below what current stockholders’ paid for their shares, will dilute the value of current stockholders’ shares and (iii) by reducing the percentage of equity of the Company owned by present stockholders, would reduce such present stockholders’ ability to influence the election of directors or any other action taken by the holders of Common Stock and (iv) issuance of a material number of shares of Common Stock could create downward pressure on the per share price of the Common Stock, thereby further diminishing the value of stockholders’ shares of Common Stock.

If the Authorized Share Increase is approved, our stockholders will experience significant dilution as a result of shares of Common Stock issued pursuant to our outstanding Convertible Notes and the 365 Earn-out Payment, as described above. Further, we anticipate that we will need to raise additional capital and may elect to do so through the issuance of equity or convertible debt securities. The Authorized Share Increase will increase the total number of authorized shares of Common Stock. As a result, we would have a larger number of authorized but unissued shares from which to issue additional shares of Common Stock, or securities convertible or exercisable into shares of Common Stock, in equity or convertible debt financing transactions.

If the stockholders approve the Authorized Share Increase, does the Company have plans for future issuances of shares of Common Stock?

In addition to the issuance of shares of Common Stock upon settlement of the Convertible Notes and the 365 Earn-out Payment as described above and for settlement of current securities of the Company, as discussed above, given the Company’s current available capital, its cash and cash equivalents, its history of operating at a loss and its need for additional capital to implement its plan of operations, the Company currently anticipates that it will be required to commence an offering of its equity or convertible debt securities in the near future.

As of the date of this Proxy Statement, the Company has filed a shelf registration statement on Form S-3 to permit it to undertake a public offering of securities up to $100 million in aggregate market value and has filed a prospectus supplement for a $25 million at-the-market facility (“ATM Facility”). The Company has not entered into any formal agreements with respect to the securities it might offer for the remaining $75 million under the Form S-3 or the terms and conditions of such offerings, if any. The Company anticipates that if the Authorized Share Increase is approved it will utilize the ATM Facility in the months after the Annual Meeting to raise additional capital to meet its covenants under the Convertible Notes and meet operational cash flow requirements. The amount to be raised and number of shares of Common Stock to be issued is not known at this time and will depend on the trading price and volume of its shares of Common Stock on the Nasdaq. It also anticipates that it may offer units, shares of Common Stock, shares of preferred stock, Common Stock purchase warrants or other derivative securities of the Company in future equity offerings depending on the capital needs of the Company and the market for the Common Stock. Such securities would be offered at a price negotiated at arm’s length under the current market conditions at the time of pricing. However, the likely terms of the securities to be offered and timing for the offering remain indefinite at this time.

In addition, such offering will be made to third party investors, likely pursuant to a best efforts placement agency agreement with a FINRA-registered broker dealer. As of the date of this Proxy Statement, the size, pricing and other terms of the any potential offering have not been determined, including the amount to be raised off of the ATM Facility, and there can be no guarantee that we will be able to complete any offering. While the Company has filed a registration statement on Form S-3 with the SEC in anticipation of a potential future offering, the likely terms of the securities to be offered and timing for the offering remain indefinite at this time.

The potential future offerings may be highly dilutive to current stockholders.

Our current strategy involves significant efforts to expand our customer base. To potentially become profitable, we will need to significantly increase our revenues. We do not expect that sales will increase sufficiently to cover our total costs of operations in 2022. We believe additional funding will be required in the next few months. It is likely that such funding would require authorized shares beyond what is currently authorized without affecting the Authorized Share Increase. Approval of the Authorized Share Increase will provide us with the necessary flexibility to raise capital and restructure our capital using equity, if and when the opportunities arise.

If the Authorized Share Increase is approved and we engage in one or more transactions involving the issuance of our equity securities, current stockholders of the Company may be substantially diluted as a result of such future issuances.

This Proxy Statement shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

Would the Authorized Share Increase have any Anti-Takeover Effects?

Although the Authorized Shares Increase is not motivated by anti-takeover concerns and is not considered by our Board to be an anti-takeover measure, the availability of additional authorized shares of Common Stock could enable the Board to issue shares defensively in response to a takeover attempt or to make an attempt to gain control of the Company more difficult or time-consuming. For example, shares of Common Stock could be issued to purchasers who might side with management in opposing a takeover bid that the Board determines is not in the best interests of our stockholders, thus diluting the ownership and voting rights of the person seeking to obtain control of the Company. In certain circumstances, the issuance of Common Stock without further action by the stockholders may have the effect of delaying or preventing a change in control of the Company, may discourage bids for our Common Stock at a premium over the prevailing market price and may adversely affect the market price of our Common Stock. As a result, increasing the authorized number of shares of our Common Stock could render more difficult and less likely a hostile takeover of the Company by a third-party, or a tender offer or proxy contest, assumption of control by a holder of a large block of our stock, and the possible removal of our incumbent management. We are not aware of any proposed attempt to take over the Company or of any present attempt to acquire a large block of our Common Stock.

Does the Board recommend approval of the Authorized Share Increase?

Yes. After considering the entirety of the circumstances, the Board has unanimously concluded that the Authorized Share Increase is in the best interests of the Company and its stockholders and the Board unanimously recommends that the Company’s stockholders vote in favor of the Authorized Share Increase.

What amendment is being made to the Certificate of Incorporation?

The FOURTH paragraph of the Certificate of Incorporation which currently reads as follows:

“FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 155,000,000 shares, of which 150,000,000 shall be common stock of the par value of $0.0001 per share (“Common Stock”) and 5,000,000 shares shall be preferred stock of the par value of $0.0001 per share (“Preferred Stock”).”

The Certificate of Amendment to the Certificate of Incorporation is attached hereto as Appendix B.

When will the amendment be made?

If our shareholders approve the Authorized Share Increase at the Annual Meeting, we will file the amendment to our Certificate of Incorporation with the office of the Secretary of State of Delaware to implement the increase in the authorized number of shares of Common Stock as soon as practicable following the Annual Meeting. Upon approval and following such filing with the Secretary of State of Delaware, the amendment will become effective on the date it is filed.

Required Vote of Stockholders

The affirmative vote of the holders of a majority of the outstanding voting stock is required to amend our Certificate of Incorporation to effect the Authorized Share Increase. Failures to vote, abstentions and broker “non-votes”, if any, will be the equivalent of a vote AGAINST this proposal.

IF OUR STOCKHOLDERS DO NOT APPROVE THE AUTHORIZED SHARE INCREASE, THE BOARD BELIEVES THAT THE LONG-TERM FINANCIAL VIABILITY OF THE COMPANY COULD BE THREATENED DUE TO (I) OUR INABILITY TO SETTLE OUR OBLIGATIONS UNDER THE CONVERTIBLE NOTES AND THE 365 SPA AND (II) THE COMPANY’S INABILITY TO CONSUMMATE FUTURE EQUITY OFFERINGS TO MEET ITS ONGOING EXPENSES. SOME OF THESE CONSEQUENCES MAY BE MITIGATED IF THE AUTHORIZED SHARE INCREASE IS APPROVED AND IMPLEMENTED.

THE BOARD RECOMMENDS A VOTE “FOR” THE AMENDMENT OF THE CERTIFICATE OF
INCORPORATION TO EFFECT THE AUTHORIZED SHARE INCREASE.

PROPOSAL SIX – INCENTIVE PLAN AMENDMENT

The Board has unanimously adopted a resolution authorizing, approving, declaring advisable and recommending to the stockholders for their approval an amendment to the Incentive Plan. The Incentive Plan is currently comprised of 1,565,308 shares of Common Stock to be reserved for issuance, in the form of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, performance awards and other customary equity incentives. The proposed amendment would increase the number of shares of Common Stock reserved for issuance under the Incentive Plan 2,934,962 shares, resulting in an aggregate of 4,500,000 shares of Common Stock reserved for issuance under the Incentive Plan. The Incentive Plan, as amended, is attached as Appendix C.

Reason for the Amendment

The significant number of acquisition transactions undertaken by the Company in the past two years have rapidly expanded the number of officers and employees of the Company in the past 21 months since the stockholders last approved an increase in July of 2020. The Board and the Company need additional shares of Common Stock available under the Incentive Plan to attract and retain essential personnel and to ensure the competitive nature of the Company in its industry. Currently, there are only 459,539 shares available under the Incentive Plan for issuance, the Company having issued 422,002 shares under previously granted awards under the Incentive Plan and there are 683,767 shares underlying currently outstanding awards under the Incentive Plan. The proposed increase of 2,934,962 shares will leave the Company with a total of 3,394,501 shares available for issuance under the Incentive Plan. This amount represents approximately 9.9% of the Company’s issued and outstanding shares of Common Stock on March 31, 2022. The Company and the Board believe that this amount is appropriate for the purposes of the Incentive Plan, given the Company’s current size, number of employees, the recent trading price for the shares of Common Stock and the prospective needs of the Company under the Incentive Plan in the next 3-4 years.

2019 Long Term Incentive Plan Summary

The purpose of the Incentive Plan is to enable the Company to offer its employees, officers, directors and consultants whose past, present and/or potential future contributions to the Company have been, are, or will be important to its success, an opportunity to acquire a proprietary interest in the Company. The various types of incentive awards that may be provided under the Incentive Plan are intended to enable the Company to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its business.

Plan Administration

The Incentive Plan is administered by the compensation committee of the Board (the “Compensation Committee”) or by the full Board, which may determine, among other things, (1) the persons who are to receive awards, (2) the type or types of awards to be granted to such persons, (3) the number of shares of common stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with the awards, (4) the terms and conditions of any awards, (5) whether, to what extent, and under what circumstances awards may be settled or exercised in cash, shares of common stock, other securities, other awards or other property, or cancelled, forfeited, or suspended and the method or methods by which awards may be settled, exercised, cancelled, forfeited, or suspended, (6) whether, to what extent, and under what circumstances the delivery of cash, shares of common stock, other securities, other awards or other property and other amounts payable with respect to an award, and (7) make any other determination and take any other action that the Compensation Committee deems necessary or desirable for the administration of the Incentive Plan.

Stock Options

Stock options granted under the Incentive Plan may be of two types: (i) Incentive Stock Options (as defined in the Incentive Plan) and (ii) Non-qualified Stock Options (as defined in the Incentive Plan). Any stock option granted under the Incentive Plan shall contain such terms, as the Compensation Committee may from time to time approve.

The term of each stock option shall be fixed by the Compensation Committee; provided, however, that no stock option may be exercisable after the expiration of ten years from the date of grant; provided, further, that no Incentive Stock Option granted to a person who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of voting stock of the Company (“10% Shareholder”) may be exercisable after the expiration of five years from the date of grant.

The exercise price per share purchasable under a stock option shall be determined by the Compensation Committee at the time of grant; provided, however, that the exercise price of a stock option may not be less than 100% of the fair market value on the date of grant; provided, further, that the exercise price of an Incentive Stock Option granted to a 10% Shareholder may not be less than 110% of the fair market value on the date of grant.

Stock Appreciation Rights

The Compensation Committee may grant Stock Appreciation Rights in tandem with a stock option or alone and unrelated to a stock option. The Compensation Committee may grant stock appreciation rights to participants who have been or are being granted stock options under the Incentive Plan as a means of allowing such participants to exercise their stock options without the need to pay the exercise price in cash. In the case of a Non-qualified Stock Option, a stock appreciation right may be granted either at or after the time of the grant of such Non-qualified Stock Option. In the case of an Incentive Stock Option, a stock appreciation right may be granted only at the time of the grant of such Incentive Stock Option. Stock appreciation rights shall be exercisable as shall be determined by the Compensation Committee. All or a portion of a stock appreciation right granted in tandem with a stock option shall terminate and shall no longer be exercisable upon the termination or after the exercise of the applicable portion of the related stock option.

Restricted Stock and Restricted Stock Units

Shares of restricted stock may be awarded either alone or in addition to other awards granted under the Incentive Plan. The Compensation Committee shall determine the eligible persons to whom, and the time or times at which, grants of restricted stock will be awarded, the number of shares to be awarded, the price (if any) to be paid by the holder, any restriction period, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the awards. In addition, the Compensation Committee may award restricted stock units, which may be subject to vesting and forfeiture conditions during the applicable restriction period, as set forth in an agreement.

Restricted stock constitutes issued and outstanding shares of common stock for all corporate purposes. The holder will have the right to vote such restricted stock and to exercise all other rights, powers and privileges of a holder of common stock with respect to such restricted stock, subject to certain limited exceptions. Upon the expiration of the restriction period with respect to each award of restricted stock and the satisfaction of any other applicable restrictions, terms and conditions, all or part of such restricted stock shall become vested in accordance with the terms of the agreement. Any restricted stock that do not vest shall be forfeited to the Company and the holder shall not thereafter have any rights with respect to such restricted stock.

The Compensation Committee may provide that settlement of restricted stock units will occur upon or as soon as reasonably practicable after the restricted stock units vest or will instead be deferred, on a mandatory basis or at the holder’s election, in a manner intended to comply with tax laws. A Holder will have no rights of a holder of common stock with respect to shares subject to any restricted stock unit unless and until the shares are delivered in settlement of the restricted stock unit. If the Committee provides, a grant of restricted stock units may provide a holder with the right to receive dividend equivalents.

Other Stock-Based Awards

Other Stock-Based Awards may be awarded, subject to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of common stock, as deemed by the Compensation Committee to be consistent with the purposes of the Incentive Plan, including, without limitation, purchase rights, shares of common stock awarded which are not subject to any restrictions or conditions, convertible or exchangeable debentures, or other rights convertible into shares of common stock and awards valued by reference to the value of securities of or the performance of specified subsidiaries.

Change of Control Provisions

The Incentive Plan provides that in the event of a change of control event, (1) all of the then outstanding options and stock appreciation rights granted pursuant to the Incentive Plan will immediately vest and become immediately exercisable as of a time prior to the change in control and (2) any performance goal restrictions related to an award will be deemed achieved at 100% of target levels and all other conditions met as of a time prior to the change in control. In the event of the sale of all of the Company’s assets or a change of control event, then the Compensation Committee may (1) accelerate the vesting of any and all Stock Options and other awards granted and outstanding under the Incentive Plan; (2) require a holder of outstanding options to relinquish such award to the Company upon the tender by the Company to holder of cash, stock or other property, or any combination thereof pursuant to the terms of the Incentive Plan and (3) terminate all incomplete performance periods in respect of awards in effect on the date the acquisition occurs, determine the extent to which performance goals have been met based upon such information then available as it deems relevant and cause to be paid to the holder all or the applicable portion of the award based upon the Compensation Committee’s determination of the degree of attainment of performance goals, or on such other basis determined by the Compensation Committee. The Board may at any time, and from time to time, amend alter, suspend or discontinue any of the provisions of the Incentive Plan, but no amendment, alteration, suspension or discontinuance shall be made that would impair the rights of a holder under any agreement theretofore entered into hereunder, without the holder’s consent, except as set forth in this Incentive Plan or the agreement. Notwithstanding anything to the contrary herein, no amendment to the provisions of the Incentive Plan shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy any provision of the Ethics Code or other applicable law or the listing requirements of any national securities exchange on which the Company’s securities are listed.

Incentive Plan Participants

All officers, directors, employees and natural person consultants of the Company, its subsidiaries and its affiliates who are deemed to have rendered or to be able to render significant services to the Company or its subsidiaries and who are deemed to have contributed or to have the potential to contribute to the success of the Company or its subsidiaries may participate in the Incentive Plan. Currently there are approximately the following number of persons in each class eligible to participate in the Incentive Plan:

Non-employee Directors: 3

Executive Officers: 4

Employees: 204

Natural Person Consultants: 1

Outside of Incentive Stock Options, which, assuming the Incentive Plan Amendment is approved, may not be granted to any person who is not an employee of the Company, a Subsidiary or Parent (including any non-employee directors) at the time of grant, all classes can participate equally in the equity awards granted under Incentive Plan. Participation in the Incentive Plan is determined in the sole discretion of the Compensation Committee or the Board.

Benefits under the Incentive Plan

The Compensation Committee has not determined any benefits to be granted under the Incentive Plan pursuant to the Incentive Plan Amendment nor has the Company entered into any agreements pursuant to which options or awards will be granted under the Incentive Plan conditional upon the approval of the Incentive Plan Amendment. Since the benefits and amounts to be awarded under the Incentive Plan are determined at the sole discretion of the Compensation Committee it is not possible to determine either (i) the specific benefits or amounts that will be granted to our chief executive officer, other named executive officers, our executive officers as a group, our non-executive directors as a group, any associate of an executive officer, any employee or our employees as group if the Incentive Plan Amendment is approved; or (ii) the benefits or amounts which would have been received by or allocated to each such person or group for the last completed fiscal year if the Incentive Plan Amendment had been in effect. No person is set to receive 5% or more of the options or other awards under the Incentive Plan if the Incentive Plan Amendment is approved.

Currently, there are restricted stock units and restricted shares outstanding under the Incentive Plan and held by persons in the following categories:

Market for Shares

The Common Stock is listed for trading on the Nasdaq Capital Market under the symbol “KERN”. On March 27, 2022, the last reported trading price for the common stock as reported on the Nasdaq Capital Market was $1.16.

U.S. Federal Income Tax Consequences

The following is a brief summary of certain United States federal income tax consequences with respect to the issuance and exercise of options granted under the Incentive Plan and the grants of awards under the Incentive Plan. This summary does not describe all federal tax consequences, including the consequences of owning and selling the shares, nor does it describe state, local or foreign tax consequences.

Scope of This Disclosure

This summary does not address the U.S. federal income tax consequences of participation in the Incentive Plan by a non-U.S. Participant. For purposes of this summary, a “U.S. Participant” is a participant in one of the Incentive Plan who is either a citizen of the U.S. or a resident alien of the U.S. for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and the Canada-U.S. Tax Convention. For purposes of this summary, a “non-U.S. Participant” is a participant in the Incentive Plan who is not a U.S. Participant.

Tax Consequences With Respect to Options

The following is a summary of certain anticipated material U.S. federal income tax consequences with respect to options granted pursuant to the Incentive Plan. This summary is based on the Code, Treasury Regulations, published IRS rulings, published administrative positions of the IRS. In general, the following tax consequences will apply to U.S. Participants:

Non-Qualified Stock Options

Incentive Stock Options

For purposes of the AMT, an incentive stock option will be treated as a non-qualified option. Accordingly, a U.S. Participant must recognize ordinary income for purposes of the AMT in the amount by which the fair market value of the common stock at the time of exercise exceeds the option exercise price. As a result, if a U.S. Participant recognizes a substantial amount of AMT income upon exercise of an incentive stock option in relation to their taxable income from wages and other sources in the year in which they exercise the option, they may be subject to the AMT. Furthermore, the fact that a U.S. Participant recognizes AMT income at the time they exercise an incentive stock option may not alter the amount of regular income they must recognize at the time they sell or otherwise dispose of the shares acquired upon exercise of the incentive stock option.

U.S. Participants should consult their own tax advisor regarding the effect of the AMT and the desirability of selling or otherwise disposing of shares acquired upon exercise of an incentive stock option in the same calendar year in which they acquired the shares to avoid having the AMT apply in the year they exercise the option and the regular tax apply in the year they sell the shares. U.S. Participants should also consult their own tax advisor regarding the benefit that may be available from a tax credit for a prior year’s minimum tax liability provided for in Section 53 of the Code.

If a U.S. Participant pays the exercise price for an incentive stock option by tendering shares of the Company’s common stock already owned by them, and they acquired such tendered shares by exercising another incentive stock option, Section 1036 of the Code generally provides that they will recognize no gain or loss with respect to the tendered shares (except possibly for purposes of the AMT as described above), as long as they have held the tendered shares for a period of time ending at least two years after the date the option for the tendered shares was granted and at least one year after they acquired the tendered shares upon exercise of the option.

If a U.S. Participant sells or otherwise disposes of shares acquired upon exercise of an incentive stock option before the holding periods described above are satisfied, then they will recognize ordinary income at the time of the disposition in an amount equal to the lesser of (1) the difference between the exercise price and the fair market value of the shares at the time the option was exercised or (2) the difference between the exercise price and the amount realized upon disposition of the shares, and they will recognize long-term or short-term capital gain or loss (depending on whether they have held the shares for more than 12 months or for 12 months or less) in an amount equal to the difference between the sale price of the shares and the fair market value of the shares on the date they exercised the option.

Tax Consequences With Respect to Awards of Restricted Shares or Restricted Stock Units

There are no tax consequences to a U.S. Participant or the Company by reason of the grant of restricted stock or restricted stock units under the Incentive Plan.  If an award is payable in shares that are subject to a substantial risk of forfeiture, unless a special election is made by the holder of the award under section 83(b) of the Code, the holder must recognize ordinary income equal to the fair market value of the shares received (determined as of the first time the shares become transferable or not subject to substantial risk of forfeiture, whichever occurs earlier).

The holder’s basis for the shares acquired under the Incentive Plan will be the amount of ordinary income recognized either when the shares are received (for restricted stock units) or when the shares are vested (for restricted stock awards, subject to earlier recognition if a section 83(b) election is made).  The Company will generally be entitled at that time to a U.S. income tax deduction for the same amount, subject to the rules of Section 162(m) of the Code.

U.S. Participants Subject to Section 16(b) of the Securities Exchange Act

If a U.S. Participant is an executive officer or director subject to Section 16(b) of the Securities Exchange Act of 1934, any shares received upon exercise of an option may be treated as restricted property for purposes of Section 83 of the Code. In that case, such U.S. Participant may be deemed to have acquired the shares at a date up to six months after the date of exercise, and such U.S. Participant will recognize (and be taxed on) ordinary income as of the later date, rather than as of the date of exercise. However, Section 83(b) of the Code allows a U.S. Participant to elect to recognize ordinary income as of the date of exercise, without regard to Section 16(b) restrictions. The U.S. Participant must make the election in the manner specified in Section 83(b) within 30 days after the shares are paid out. If (1) the shares paid out are treated as restricted property for purposes of Section 83 of the Code because of the application of Section 16(b) of the Securities Exchange Act of 1934 and (2) the U.S. Participant does not make a Section 83(b) election within the required time period, the U.S. Participant will recognize and be taxed on ordinary income in the amount of the fair market value of the shares at the later date, rather than recognizing, and being taxed on, ordinary income in the amount of the fair market value of the shares on the exercise date.

Change in Control

Depending on the terms of a U.S. Participant’s award agreement, upon a change in control of the Company, restrictions on a U.S. Participant’s award may lapse, or a U.S. Participant’s award may mature on an accelerated schedule. If this type of benefit, or other benefits and payments connected with a U.S. Participant’s award that result from a change in control of the Company, are granted to certain individuals (such as the Company’s executive officers), the benefits and payments may be deemed to be “parachute payments” within the meaning of Section 280G of the Code. Section 280G provides that if parachute payments to an individual equal or exceed three times the individual’s “base amount,” the excess of the parachute payments over one times the base amount will be subject to a 20% excise tax payable by the individual. Any amount that is subject to an excise tax is also not deductible by the Company. “Base amount” is the individual’s average annual compensation over the five taxable years preceding the taxable year in which the change in control occurs. Each U.S. Participant should consult his or her own tax advisor own tax advisor regarding potential tax liability upon a change in control of the Company.

Certain Special Rules

The foreign earned income exclusion provisions and the foreign tax credit provisions of the Code may, under certain circumstances, reduce the U.S. federal income tax liability of a U.S. Participant with respect to participation in the Incentive Plan. U.S. Participants should consult their own tax advisor regarding the foreign earned income exclusion provisions and the foreign tax credit provisions of the Code.

Income Tax Deduction

Subject to the usual rules concerning reasonable compensation, including the Company’s obligation to withhold or otherwise collect certain income and payroll taxes, the Company may be entitled to a corresponding income tax deduction at the time a participant recognizes ordinary income from awards made under the Incentive Plan. However, Section 162(m) of the Code prohibits publicly held corporations from deducting more than $1,000,000 per year in compensation paid to certain current and former named executive officers (the “covered executives”). Therefore, annual compensation paid to a covered executive in excess of $1,000,000 will generally not be deductible.

Required Vote and Akerna Board’s Recommendation

Approval of the Incentive Plan Amendment requires the affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the Incentive Plan Amendment.

OUR BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE INCENTIVE PLAN
AMENDMENT.

PROPOSAL SEVEN - ADJOURNMENT OF THE ANNUAL MEETING TO SOLICIT ADDITIONAL
PROXIES

Adjournment of the Annual Meeting

In the event that the number of shares of Common Stock present in person via attendance at the Annual Meeting or represented by proxy at the Annual Meeting and voting “FOR” the adoption of any of the proposals specified in the Notice of Annual Meeting is insufficient to adopt every or any proposal, we may move to adjourn the Annual Meeting in order to enable the Board to solicit additional proxies in favor of the adoption of such proposal specified in the Notice of Annual Meeting. In that event, we will ask stockholders to vote upon the adjournment proposal and on the other proposals discussed in this proxy statement. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Vote Required and Board Recommendation

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of voting stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes, which are not considered “votes cast,” will have no effect on the outcome of the Adjournment Proposal. Because this proposal is a routine matter, brokers will have discretionary voting on this matter if they do not receive instructions.

OUR BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT
PROPOSAL

OTHER MATTER

MATTERS

The Company knows of no other matters to be submitted to the shareholders at the AnnualSpecial Meeting. If any other matters properly come before the shareholders at the AnnualSpecial Meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their best judgment.

Stockholder Proposals

For any proposal to be considered for inclusion in our proxy statement and form of proxy for submission to the stockholders at our 2022 annual meeting2023 Annual Meeting of stockholders,Stockholders, it must be submitted in writing and comply with the requirements of Rule 14a-814a-8 of the Exchange Act. Such proposals must be received by the Company at its headquarters at 1550 Larimer Street #246, Denver, Colorado 80202 no later than December 23, 2022.

In addition, our Amended and Restated Bylaws, as amended, provide notice procedures for stockholders to nominate a person as a director and to propose business to be considered by stockholders at a meeting. Notice of a nomination or proposal must be delivered to us not less than 90 days and not more than 120 days prior to the date we first mailed our proxy materials for the preceding year’s annual meetingAnnual Meeting of stockholders, or if the date of the annual meetingAnnual Meeting is advanced more than thirty (30) days prior to or delayed by more than sixty (60) days after the anniversary of the preceding year’s annual meeting,Annual Meeting, to be timely, notice by the stockholder must be so received not later than the close of business on the tenth (10^th) day following the day on which notice of the date of the annual meetingAnnual Meeting was mailed or public disclosure of the date of the annual meetingAnnual Meeting is first given or made (which for this purpose shall include any and all filings of the Company made on the EDGAR system of the SEC or any similar public database maintained by the SEC), whichever first occurs. Accordingly, for our 2023 annual meeting,Annual Meeting, notice of a nomination or proposal must be delivered to us no later than January 22, 2023 and no earlier than December 23, 2022. Nominations and proposals also must satisfy other requirements set forth in the Amended and Restated Bylaws.Bylaws, as amended. If a stockholder fails to comply with the foregoing notice provision or with certain additional procedural requirements under SEC rules, the Company will have authority to vote shares under proxies we solicit when and if the nomination or proposal is raised at the annual meetingAnnual Meeting of stockholders and, to the extent permitted by law, on any other business that may properly come before the annual meetingAnnual Meeting of stockholders and any adjournments or postponements. The Chief Executive Officer may refuse to acknowledge the introduction of any stockholder proposal not made in compliance with the foregoing procedures.

In addition to satisfying the foregoing requirements under our Amended and Restated Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees for the 2023 annual meeting must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 26, 2023, unless the date of our 2023 annual meeting has changed by more than 30 days calendar days from this year’s annual meeting in which case such notice will be due on the later of 60 calendar days prior to the date of the annual meeting or the 10th calendar day following the day on which public announcement of the date of the annual meeting is first made.

Householding Information

Unless we have received contrary instructions, we may send a single copy of this Proxy Statement to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. This process, known as “householding,” reduces the volume of duplicate information received at any one household and helps to reduce our expenses. However, if stockholders prefer to receive multiple sets of our disclosure documents at the same address this year or in future years, the stockholders should follow the instructions described below. Similarly, if an address is shared with another stockholder and together both of the stockholders would like to receive only a single set of our disclosure documents, the stockholders should follow these instructions:

•        If a bank, broker or other nominee holds the shares, the stockholder should contact the bank, broker or other nominee directly.

Where You Can Find More Information

We file annual and quarterly reports and other reports and information with the SEC. These reports and other information can be inspected and copied at, and copies of these materials can be obtained at prescribed rates from, the Public Reference Section of the SEC, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549-1004.20549-1004. We distribute to our stockholders annual reports containing financial statements audited by our independent registered public accounting firm and, upon request, quarterly reports for the first three quarters of each fiscal year containing unaudited financial information. In addition, the reports and other information are filed through Electronic Data Gathering, Analysis and Retrieval (known as “EDGAR”) system and are publicly available on the SEC’s site on the Internet, located at www.sec.gov. We will provide without charge to you, upon written or oral request, a copy of the reports and other information filed with the SEC.

Any requests for copies of information, reports or other filings with the SEC should be directed to Akerna Corp., 1550 Larimer Street #246, Denver, Colorado 80202, Attn: Secretary.

50APPENDIX A3

A-4