As filed with the Securities and Exchange Commission on October 13, 2023

Registration No. 333-271857

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

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Pre-Effective Amendment No. 3
Form S-4/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

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

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

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Copies to:

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

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

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

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

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

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

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

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

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

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

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

Subject to completion, dated October 13, 2023

PROPOSED MERGER
YOUR VOTE IS VERY IMPORTANT

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To the Stockholders of Akerna Corp.:

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

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

The estimated exchange ratio of shares of Akerna’s common stock for Gryphon Common Stock and Gryphon Preferred Stock will be approximately 1.56 shares of Akerna common stock for each one share of Gryphon Common Stock and Preferred Stock based on Merger Consideration of 31,678,025 shares of Akerna Common Stock. The estimated exchange ratio assumes: (i) a fully-diluted number of shares of Akerna common stock after giving effect to an assumed 20 to 1 reverse stock split in Akerna common stock of 2,655,081 shares at the effective time of the Merger, which includes (pre-reverse stock split) 9,802,018 shares outstanding on the date hereof, warrants exercisable to acquire 2,573,299 shares of Akerna common stock, restricted stock units which vest and settle for 9,347 shares of Akerna common stock, 12,611 shares issuable upon redemption of Akerna exchangeable shares, Akerna Series C Preferred Stock which will be exchanged at $0.50 per share into 3,918,847 shares of Akerna common stock, approximately 29,285,480 shares of Akerna common stock issuable upon conversion of $4.84 million principal amount of Akerna’s convertible notes and 7,500,000 shares of Akerna common stock issuable upon conversion of $1.5 million principal amount of Akerna’s promissory note held by MJ Acquisition Corp. (“MJ Acquisition”) at an assumed conversion price of $0.20 per share. The assumed number of shares issuable upon exchange of Akerna’s convertible notes is based on an assumed principal amount outstanding approximately $4.84 million ($6.8 million currently outstanding less $1.96 million exchanged into Series C Preferred Stock at an exchange price of $0.50 per share) and a conversion price of $0.50 per share (exchanged at 121% of principal amount). The estimated exchange ratio also assumes 20,246,949 shares of Gryphon Common Stock and Preferred Stock issued and outstanding at the closing of the Merger, Gryphon warrants to acquire 1,067,968 Gryphon Common Stock and a post-reverse stock split closing price per share of Akerna Common Stock of $4.00 on the date that is two trading days preceding the closing of the Merger, the trading day immediately preceding closing of the Merger and the 5-day volume weighted average price for the 5-day period ending on the trading day immediately prior to the closing of the Sale Transaction.

6.      approve the Akerna Corp. 2023 Omnibus Incentive Plan;

7.      approve the issuance of shares of Akerna Common Stock to MJ Acquisition Corp. upon the conversion of $1,500,000 in principal amount of a secured convertible promissory note held by MJ Acquisition Corp. in accordance with the terms of such secured convertible promissory note;

8.      authorize the adjournment of the Akerna special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 — 6; and

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

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

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

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

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

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

Sincerely,

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

The accompanying proxy statement/prospectus is dated           , 2023 and is first being mailed to Akerna stockholders on or about         , 2023.

AKERNA CORP.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON         , 2023

Dear Stockholders of Akerna:

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

The special meeting of stockholders of Akerna will be held on               , 2023 at local time, at for the following purposes:

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

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

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

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

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

6.      To approve the Akerna 2023 Omnibus Incentive Plan (the “2023 Plan”), in the form attached as Annex F to the accompanying proxy statement/prospectus.

7.      To approve the issuance of Akerna common stock upon the conversion of $1,500,000 in principal amount of a secured convertible promissory note held by MJ Acquisition Corp. in accordance with the terms of such secured convertible promissory note a copy of which is attached as Annex G to the accompanying proxy statement/prospectus (the “MJ Acquisition Promissory Note Conversion”).

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

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

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

Your vote is important. The affirmative vote of a majority of the votes properly cast at the Akerna special meeting, whether present at the special meeting or represented by proxy at the special meeting, is required for approval of Proposal Nos. 1, 6, 7 and 8. The affirmative vote of the holders of a majority of shares of Akerna common stock and preferred stock having voting power outstanding on the record date for the Akerna special meeting is required for approval of Proposal Nos. 2, 3, 4 and 5. The affirmative vote of the holders of a majority of shares of Akerna common stock having voting power outstanding on the record date for the Akerna special meeting and voting as a separate class is required for the approval of Proposal No. 4. Proposal No. 1 is conditioned upon the approval of Proposal Nos. 2, 3, 4, 5 and 6. Proposal No. 2 is conditioned upon the approval of Proposal No. 1 and 7. Therefore, the Merger cannot be consummated without the approval of the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase, the Akerna Name Change and the 2023 Plan, and the Sale Transaction cannot be consummated without the approval of the Merger Proposal and the MJ Acquisition Promissory Note Conversion.

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

By Order of Akerna Board,

Jessica Billingsley

Chief Executive Officer

Denver, Colorado

              , 2023

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

TABLE OF CONTENTS

GLOSSARY OF TERMS

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

“AD&D” means accidental death and dismemberment.

“AML” means anti-money laundering.

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

“ASC” means the Accounting Standards Codification.

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

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

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

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

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

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

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

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

“BTC” means bitcoin.

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

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

“CAD” means Canadian dollar.

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

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

“CFPB” means the Consumer Financial Protection Bureau.

“CFTC” means the Commodity Futures Trading Commission.

“CIS” means the Center for Internet Security.

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

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

“CRM” means customer relationship management.

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

“CSA” means the Controlled Substances Act.

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

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

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

“ERP” means enterprise resource planning software.

“FFIEC” means the Federal Financial Institutions Examination Council.

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

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

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

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

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

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

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

“NIST” means the National Institute of Standards and Technology.

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

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

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

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

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

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

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

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

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

“Securities Act” means the Securities Act of 1933.

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

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

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

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

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

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

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

QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

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

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

Q:     What are the Transactions?

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

Akerna has also entered into a Securities Purchase Agreement, dated April 28, 2023, as may be amended from time to time (the “Purchase Agreement”) with MJ Acquisition Corp. (“MJ Acquisition”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Purchase Agreement, Akerna will sell to MJ Acquisition all of the issued and outstanding membership interests of MJ Freeway LLC, a Colorado limited liability company (“MJ Freeway” and such membership interests, the “Membership Interests”), and Akerna’s wholly owned subsidiary Akerna Canada Ample Exchange Inc. (“Akerna Exchange”) will sell to MJ Acquisition all of the issued and outstanding common and preferred shares of Ample Organics Inc., an Ontario corporation (“Ample” and such common and preferred shares, the “Capital Stock”) for an aggregate cash purchase price of $2 million (the “Purchase Price”), subject to adjustments as set forth in the Purchase Agreement and a loan to Akerna from MJ Acquisition in the amount of $1,500,000 (funded $1,000,000 on April 28, 2023 and $500,000 on October 11, 2023), which principal amount will convert into shares of common stock of Akerna, par value $0.0001 per share (the “Akerna Common Stock”) at closing (the “Sale Transaction”). The $1.5 million loan was made pursuant to a secured convertible promissory note dated October 11, 2023 (the “MJA Promissory Note”) and related security documents, which the MJA Promissory Note will converted in full at the closing of the Sale Transaction with any interest being surrendered at the closing of the Sale Transaction. The $2 million will be paid in cash at closing. Akerna may at its sole option request that a portion of the $2 million to be paid at closing be paid prior to closing to fund ongoing operations and any such amounts funded will be moved from the Purchase Price to the MJA Promissory Note. Under specified circumstances, Akerna may be required to pay MJ Acquisition a termination fee, as further described in the section titled “The Purchase Agreement — Termination Fee” beginning on page 142 of this proxy statement/prospectus.

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

Q:     What will happen in the Merger?

A:     Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) each share of Gryphon’s common stock, par value $0.0001 per share (the “Gryphon Common Stock”), and Gryphon’s preferred stock, par value $0.0001 per share (the “Gryphon Preferred Stock,” collectively referred to herein with the Gryphon Common Stock as the “Gryphon Shares”) outstanding immediately prior to the Effective Time, will be converted into the right to receive a per share portion of the aggregate number of Akerna Common Stock, to be issued at the Effective Time as consideration for the Merger, as calculated pursuant to the

terms set forth in the Merger Agreement (the “Merger Consideration”) (subject to adjustment to account for the Akerna Reverse Stock Split), as described in more detail in the section titled “The Merger Agreement — Merger Consideration” beginning on page 116 of this proxy statement/prospectus.

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

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

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

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

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

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

A:     The Series C Preferred Stock is non-convertible, voting preferred stock. Each Akerna Note Holder will hold Series C Preferred Stock with voting power equal to 19.9% of the Akerna Common Stock outstanding as of the record date for the special meeting of stockholders of Akerna. Upon the closing of a change of control transaction, such as the Merger, the Series C Preferred Stock will be automatically redeemed pursuant to its terms for consideration of a share equivalent basis equal to the same consideration held after the consummation of the change of control transaction by a stockholder that held one share of Akerna Common Stock prior to the consummation of the change of control transaction (the “New Preferred Exchange Shares”). The Series C Preferred Stock can also be redeemed for cash at the option of Akerna and in limited circumstances redeemed for cash at the option of the holder.

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

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

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

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

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

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

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

A:     Under the MJA Promissory Note, the $1,500,000 in principal amount of the MJA Promissory Note will convert at the 5-day volume weighted average price of the Akerna Common Stock as quoted on The Nasdaq Capital Market for the 5 trading days immediately preceding the date of the closing of the Sale Transaction. Based on an assumed price per share of $0.20 per share, this would result in 7,500,000 shares of Akerna Common Stock being issued upon conversion or 375,000 shares of Akerna Common Stock post-reverse stock split assuming a 20 for 1 reverse stock split. This amount may increase if Akerna requests that a portion of the Purchase Price be loaned to Akerna prior to the closing, in which case, such additional amount loaned to Akerna will increase the principal amount of the MJA Promissory Note by the amount loaned and reduce the amount of cash payable to Akerna at the closing of the Sale Transaction. All shares of Akerna Common Stock issued upon conversion of the MJA Promissory Note will be included in the shares of Akerna Common Stock outstanding prior to the closing of the Merger and will be taken into account in calculating the Merger Consideration, which will dilute current Akerna stockholders.

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

A:     Akerna currently has outstanding Akerna Notes in aggregate principal amount of approximately $6.8 million and accounts payable of approximately $         million as of the date hereof that are not being assumed by MJ Acquisition in connection with the Sale Transaction. Further, as a condition to the closing of the Merger, Akerna must be free of debt, not have any outstanding accounts payable or other liabilities and have at least $500,000 in cash to help Gryphon cover any potential future liabilities arising from the Sale Transaction or otherwise.

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

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

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

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

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

Akerna has invested significant time and incurred, and expects to continue to incur, significant expenses related to the Transactions. In the event that either of the Transactions does not close, the Akerna Board may elect, among other things, to attempt to complete other strategic transactions or the Akerna Board may instead divest all or a portion of Akerna’s business or assets if viable alternative strategic transactions are not available. Under certain circumstances, Akerna may be obligated to pay Gryphon or MJ Acquisition a termination fee or reimburse certain expenses of Gryphon or MJ Acquisition, as more fully described in the section titled “Prospectus Summary — The Merger Agreement — Termination” beginning on page 128 of this proxy statement/prospectus, the section titled “The Merger Agreement — Termination Fee” beginning on page 130 of this proxy statement/prospectus, the section titled “Prospectus Summary — The Purchase Agreement — Termination” beginning of page 141 of this proxy statement/prospectus, and the section titled “The Purchase Agreement — Termination” beginning on page 141 of this proxy statement/prospectus.

Q:     What are the conditions to closing the Transactions?

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

Q:     Why are Akerna and Gryphon proposing to merge?

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

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

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

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

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

Q:     What is required to consummate the Merger?

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

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

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

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

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

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

•        the adoption of the 2023 Plan; and

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

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

The approval by the stockholders of Akerna of the issuance of Akerna Common Stock in the Merger in accordance with the terms of the Merger Agreement requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting. The approval of the Sale Transaction and the transactions contemplated under the Purchase Agreement requires the affirmative vote of the holders of a majority of the shares of Akerna Common

Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Reverse Stock Split requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Authorized Share Increase requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting and the affirmative vote of the holders of a majority of the shares of Akerna Common Stock, voting as a separate class, outstanding on the record date for the Akerna special meeting. The approval of the Akerna Name Change requires the affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna voting preferred stock, voting as one class, outstanding on the record date for the Akerna special meeting. The approval of the 2023 Plan requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting. The approval by the stockholders of Akerna of the issuance of Akerna Common Stock upon conversion of the MJA Promissory Note requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting.

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

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

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

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

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

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

Q:     What is required to consummate the Sale Transaction?

A:     To consummate the Sale Transaction, Akerna stockholders must authorize the Sale Transaction by approving the Purchase Agreement and the transactions contemplated thereby. The approval of the Purchase Agreement and the transactions contemplated thereby requires the affirmative vote of holders of a majority of the outstanding Akerna Common Stock and preferred stock having voting power on the record date for the Akerna special

meeting. In addition to the requirement of obtaining such stockholder approval and appropriate regulatory approvals, each of the other closing conditions set forth in the Purchase Agreement must be satisfied or waived. This includes approval of the MJA Promissory Note Conversion which requires the affirmative vote of a majority of the votes properly cast at the Akerna special meeting.

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

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

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

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

The estimated exchange ratio of shares of Akerna’s common stock for Gryphon Common Stock and Gryphon Preferred Stock will be approximately 1.56 shares of Akerna common stock for each one share of Gryphon Common Stock and Preferred Stock. The estimated exchange ratio assumes: (i) a fully-diluted number of shares of Akerna common stock after giving effect to an assumed 20 to 1 reverse stock split in Akerna common stock of 2,655,081 shares at the effective time of the Merger, which includes (pre-reverse stock split) 9,802,018 shares outstanding on the date hereof, warrants exercisable to acquire 2,573,299 shares of common stock, restricted stock units which vest and settle for 9,347 shares of Akerna common stock, 12,611 shares issuable upon redemption of Akerna exchangeable shares, Akerna Series C Preferred Stock which will be exchanged at $0.50 per share into 3,918,847 shares of Akerna common stock, approximately 29,285,480 shares of common stock issuable upon conversion of $4.84 million principal amount of Akerna’s convertible notes and 7,500,000 shares of Akerna common stock issuable upon conversion of $1.5 million principal amount of the MJA Promissory Note at a price of $0.20 per share. The assumed number of shares issuable upon exchange of Akerna’s convertible notes is based on an assumed principal amount outstanding approximately $4.84 million ($6.8 million currently outstanding less $1.96 million exchanged into Series C Preferred Stock and at an exchange price of $0.50 per share) and a conversion price of $0.50 per share (exchanged at 121% of principal amount). The estimated exchange ratio also assumes 20,246,949 shares of Gryphon Common Stock and Preferred Stock issued and outstanding at the closing of the Merger, Gryphon warrants to acquire 1,067,968 Gryphon Common Stock and a post-reverse stock split closing price per share of Akerna Common Stock of $4.00 on the date that is two trading days prior to the closing of the Merger, the trading day immediately preceding closing of the Merger and the 5-day volume weighted average price for the 5-day period ending immediately preceding the closing of the Sales Transaction.

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

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

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

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

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

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

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

A:     Shares of Akerna Common Stock are currently listed on The Nasdaq Capital Market under the symbol “KERN.” Akerna will file an application to list the shares of Akerna Common Stock comprising the Merger Consideration, and to continue to list the common stock of the combined company, on Nasdaq following the consummation of the Merger and the transactions contemplated by the Merger Agreement and the Purchase Agreement. After completion of the Merger, Akerna will be renamed “Gryphon Digital Mining, Inc.” and it is expected that the common stock of the combined company will trade on The Nasdaq Capital Market under the symbol “GRYP” On           , 2023 the last trading day before the date of this proxy statement/prospectus, the closing sale price of Akerna Common Stock was $           per share.

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

A:     Each of Akerna and Gryphon intends the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). In general and subject to the qualifications and limitations set forth in the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences,” if the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, the material tax consequences to U.S. Holders (as defined in the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences”) of Gryphon Shares should be as follows:

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

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

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

K&L Gates LLP, counsel to Gryphon, has delivered an opinion to Gryphon that, on the basis of certain representations made by Akerna and Gryphon, and subject to certain assumptions set forth therein, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. This opinion is attached as Exhibit 8.1 to the Registration Statement of which this proxy statement/prospectus forms a part. However,

tax matters are very complicated, and the tax consequences of the Merger to a particular Gryphon stockholder will depend on such stockholder’s circumstances. Accordingly, each Gryphon stockholder is strongly urged to consult with his, her or its tax advisor for a full understanding of the tax consequences of the Merger to that stockholder, including the applicability and effect of federal, state, local and non-U.S. income and other tax laws. For more information, please see the section titled “The Transactions — Certain Material U.S. Federal Income Tax Consequences” beginning of page 112 of this proxy statement/prospectus.

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

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

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

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

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

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

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

A:     The Akerna Board approved the proposal approving the amendment to the Akerna amended and restated certificate of incorporation effecting the Akerna Reverse Stock Split to ensure that the combined company has adequate available shares of common stock in financing ongoing operations through future equity financings, if required, so that the combined company can maintain working capital and meet its plan of operations. Currently, there are 150,000,000 shares of Akerna Common Stock authorized for issuance with 9,802,018 shares of Akerna Common Stock issued and outstanding, warrants exercisable to acquire 2,573,299 shares of Akerna Common Stock, and restricted stock units which vest and settle for 9,347 shares of Akerna Common Stock, exchangeable shares to be redeemed for 12,611 shares of Akerna Common Stock and the Akerna Notes which we estimate will be exchanged into shares of Series C Preferred Stock exchangeable into 3,918,847 shares of Akerna Common Stock and the remaining Akerna Notes convertible for approximately 29,285,480 shares of Akerna Common Stock (based on approximately $4.84 million outstanding principal amount after the exchange of a portion thereof into Series C Preferred Stock, 121% repayment premium and a conversion price of $0.50, which is the current conversion price for the Akerna Notes) and 7,500,000 shares of Akerna Common Stock estimated to be issuable upon conversion of $1.5 million in principal amount of the MJA Promissory Note at a conversion

price of $0.20 per share for an aggregate total of approximately 53,101,602 shares of Akerna Common Stock on a fully diluted basis immediately prior to the Reverse Stock Split. Assuming a Reverse Stock Split ratio of 20 to 1 in the Akerna Reverse Stock Split, this would result in approximately 2,655,081 shares of common stock outstanding on a fully diluted basis immediately prior to closing of the Merger and would result in the issuance of approximately 31,678,025 shares to Gryphon’s stockholders as Merger Consideration for an aggregate total of approximately 34,333,106 shares of common stock outstanding and leaving 115,666,894 shares of common stock available for issuance. To ensure that the combined company has adequate authorized share capital the Akerna Board is asking stockholders to increase the number of authorized shares of common stock from 150,000,000 to 300,000,000.

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

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

Q:     Why am I being asked to approve the 2023 Plan?

A:     The Akerna Board approved the proposal approving the 2023 Plan to ensure that the combined company has a comprehensive equity incentive plan in place to attract and retain qualified officers, directors, employees and consultants and to provide adequate incentive to align the goals of management of the combined company with increased stockholder value. The 2023 Plan will replace Akerna’s 2019 Long-Term Incentive Plan which is out dated and does not have sufficient shares of common stock authorized for issuance of awards thereunder to meet the needs of the combined company. The 2023 Plan modernizes the combined company’s equity incentive structure and will provide for sufficient shares to meet the combined company’s equity incentive goals.

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

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

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

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

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

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

the special meeting. Therefore an aggregate total of approximately     % of the outstanding shares entitled to vote on the matters at the Akerna special meeting are subject to the Merger Support Agreement, the Sale Transaction Support Agreement, the Merger Lender Support Letters or the Sale Transaction Lender Support Letters.

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

Q:     What do I need to do now?

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

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

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

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

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

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

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

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

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

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

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

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

Q:     Where and when is the Akerna Special Meeting?

A:     The Akerna special meeting will be held on            , 2023 at            Mountain Time at            . All Akerna stockholders of record as of the record date, or their duly appointed proxies, may attend the special meeting.

Q:     Who counts the votes?

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

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

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

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

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

Broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Akerna special meeting. Broker non-votes will not be treated as votes cast for or against a proposal and accordingly will not have any effect with respect to the outcome of the approval of the Merger Proposal, the approval of the 2023 Plan, the approval of the MJA Promissory Note Conversion or the Adjournment Proposal and will have the same effect as a vote AGAINST the Sale Transaction Proposal, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase and the Akerna Name Change.

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

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

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

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

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

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

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

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

RISK FACTORS

The combined company (for the purpose of this “Risk Factors” section, “we,” “us” and “our”) will be faced with a market environment that cannot be predicted and that involves significant risks and uncertainties, many of which will be beyond our control. You should carefully consider all of the information set forth in this proxy statement/prospectus. The combined company’s business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price its common stock would likely decline and you might lose all or part of your investment. In addition to the other information contained in this proxy statement/ prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of Akerna Common Stock. You should also read and consider the other information in this proxy statement/prospectus and additional information about Akerna set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the SEC. Please see the section titled “Where You Can Find More Information” beginning on page 274 of this proxy statement / prospectus for further information. This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. The combined company’s results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this proxy statement/prospectus and Akerna’s other SEC filings. See also “Cautionary Statement Concerning Forward-Looking Statements” on page 79 of this proxy statement / prospectus.

Risks Related to the Merger

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Furthermore, as noted above, certain Akerna securityholders who in the aggregate own or have the right to acquire approximately 1.6% of the outstanding voting securities of Akerna as of            , 2023, which is the record date for the special meeting have entered into the Merger Support Agreement or Merger Lender Support Letters. These Akerna stockholders also agreed to vote against any Acquisition Proposal with respect to Akerna that competes with the transactions contemplated by the Merger Agreement (See “Agreements Related to the Merger — Support Agreements”). As a result, the Merger Support Agreement and Merger Lender Support Letters may discourage other parties from attempting to engage in a transaction with Akerna, even if those parties would otherwise be willing to offer greater value to Akerna stockholders than that offered by Gryphon under the Merger.

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

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

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

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

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

Akerna or Gryphon could be subject to demands or litigation related to the Merger, whether or not the Merger is consummated. Such actions may create uncertainty relating to the Merger, or delay or enjoin the Merger, and responding to such demands could divert management time and resources. In addition, such demands or litigation could lead to a dissolution or bankruptcy of Akerna if the costs associated with such demands or litigation are significant enough. For additional information regarding certain pending litigation matters relating to the Merger, see “Akerna’s Business — Legal Proceedings” on page 190 of this proxy statement/prospectus.

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

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

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

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

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

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

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

Risks Related to the Exchange Agreements

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

At closing of the Merger, both the Series C Preferred Stock and the conversion amount of any remaining Akerna Notes will be exchanged for shares of common stock of the combined company. The Series C Preferred Stock will exchange into            shares of common stock in the combined company and assuming the remaining portion of the Akerna Notes remains outstanding at closing of the Merger, then an additional            shares of common stock in the combined company will be issued to the Akerna Note Holders. The issuance of these shares of common stock will be counted in the calculation of fully diluted Akerna Common Stock for purposes of determining the numbers of share of Akerna Common Stock to be issued as Merger Consideration at the closing of the Merger. This will result in significant dilution to the Akerna stockholders in relation to their pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

Risks Related to the Proposed Sale Transaction

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The closing of the Merger is conditioned on the conditions precedent of the Sale Transaction being satisfied or waived such that the Sale Transaction can be consummated immediately after the closing of the Merger. If we fail to meet all the conditions precedent to consummate the Sale Transaction, the Merger may still proceed if Gryphon waives that condition to closing, provided that the other closing conditions contained in the Merger Agreement are satisfied or waived. The occurrence of these events would result in the combined company continuing to own MJ Freeway and Ample following the closing of the Merger, which could cause the combined company to incur unanticipated costs and expenses in connection with such continued ownership, or pursuit of an alternative disposition of MJ Freeway

and Ample. It is not currently anticipated that Gryphon would waive the condition of the conditions precedent to completion of the Sale Transaction being satisfied or waived and therefore failure to meet those conditions precedent to the Sale Transaction will likely result in the failure to consummate the Merger and will result in us continuing our operations, which may be adversely impacted by the failure of the Sale Transaction and Merger Transaction, seeking alternative transactions, which may have less value to the stockholders, or seeking to dissolve and liquidate Akerna.

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

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

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

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

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

At closing of the Sale Transaction, MJA Promissory Note will convert into shares of common stock of the combined company. The MJA Promissory Note will convert into 7,500,000 shares of common stock in the combined company assuming the 5-day volume weighted average price of Akerna Common Stock for the 5 days ending immediately prior to the closing of the Sale Transaction if $0.20 per share on a pre-reverse stock split basis. The issuance of these shares of common stock will be counted in the calculation of fully diluted Akerna Common Stock for purposes of

determining the numbers of share of Akerna Common Stock to be issued as Merger Consideration at the closing of the Merger. This will result in significant dilution to the Akerna stockholders in relation to their pro rata portion of the percentage of the combined company to be held by Akerna stockholders.

Risks Related to Akerna

Risks Related to Our Financial Condition and Operating History

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

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

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

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

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

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

•        market acceptance of our current and future products and services;

•        changing regulatory environments and costs associated with compliance;

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

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

•        existing client retention rates and the ability to upsell clients;

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

•        our ability to control costs, including operating expenses;

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

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

•        general economic conditions and events.

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

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

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

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

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

The current COVID-19 pandemic is creating extensive disruptions to the global economy. Governments, businesses, and the public are taking unprecedented actions to contain the spread of COVID-19 and to mitigate its effects, including quarantines, travel bans, shelter-in-place orders, closures of businesses, fiscal stimulus, and legislation designed to deliver monetary aid and other relief. While the scope, duration, and full effects of COVID-19 are rapidly evolving and not fully known, the pandemic and related efforts to contain it have disrupted global economic activity, adversely affected the functioning of financial markets, impacted interest rates, increased economic and market uncertainty, and disrupted trade and supply chains. If these effects continue for a prolonged period or result in sustained economic stress or recession, we may experience adverse effects on our operations. Specifically, if our clients are forced to reduce business hours or close their businesses for an extended period of time or if their customer base experiences financial hardship, our clients may experience a sharp decline in revenue and be unable to meet their obligations to us under existing agreements or be unwilling to extend their agreements past current terms, which may adversely impact our financial results. Further, we may experience a decrease in new clients due to a lack of financial resources or a decline in new markets as businesses and financial markets deal with the impact of COVID-19. As governments are focused on relief efforts and fiscal stimulus measures, important legislation to expand or clarify certain existing or new markets for our products may be postponed or abandoned, which may adversely impact our results. Further, these conditions may impact our ability to access financial markets to obtain the necessary funding to operate our business as currently contemplated, which may adversely affect our liquidity and working capital. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this registration statement, such as those relating to our operations and financial condition.

Due to the highly uncertain and dynamic nature of events relating to the COVID-19 pandemic, it is not currently possible to estimate the impact of the pandemic on our business. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely. Through December 31, 2022, we have experienced delays in our consulting projects and the corresponding delay in revenue recognition for such projects, which we believe could be the result of government shutdowns and other regulatory uncertainty surrounding COVID-19.

Risks Related to the Cannabis Industry

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

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

Marijuana remains illegal under U.S. federal law

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

Uncertainty of federal enforcement

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

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

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

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

We could become subject to racketeering laws

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

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

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

willingness of banks to lend to our clients and to us. The lack of banking and financial services presents unique and significant challenges to businesses in the cannabis industry and we may experience similar difficulties in obtaining and maintaining regular banking and financial services because of the activities of our clients.

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

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

Further legislative development beneficial to our operations is not guaranteed

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

The cannabis industry could face strong opposition from other industries

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

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

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

Changing legislation and evolving interpretations of the law

Laws and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect our clients and, in turn, our operations. Local, state, and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require our clients and thus us to incur substantial costs associated with modification of operations to help ensure such clients’ compliance. In addition, violations of these laws, or allegations of such violations, could disrupt our clients’ business and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will limit the amount of cannabis growth or related products that our commercial clients are authorized to produce. We cannot predict the

nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our operations.

Dependence on client licensing

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

Insurance risks

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

Bankruptcy risks

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

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

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

Risks Related to Our Business

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

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

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

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

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

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

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

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

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

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

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

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

Acquisitions and integration issues may expose us to risks.

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

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

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

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

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

While we believe we are a leading provider in the software solutions segment of the cannabis industry, there are general software design and integrated business platform companies seeking to provide online and software-based business solutions and operations integration to clients in numerous industries. The continued growth of the cannabis industry

will likely attract some of these existing companies and incentivize them to produce solutions that are competitive with those offered by us. Many of these potential competitors are a part of large diversified corporate groups with a variety of other operations and expansive resources. We may not be able to successfully compete with larger enterprises devoting significant resources to compete in our target market space, which may negatively affect operations.

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

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

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

Risks Related to Intellectual Property

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

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

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

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

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

Despite efforts to protect our trade secrets and proprietary rights through intellectual property rights, licenses, and confidentiality agreements, unauthorized parties may still copy or otherwise obtain and use our software and technology, as was the case when our source code was compromised in June 2017. We have taken significant actions

to improve security but will be required to regularly modify our systems to combat new hacking approaches as they develop. In addition, as our international operations expand, effective intellectual property protection may not be available or may be limited in foreign countries.

Others may assert intellectual property infringement claims against us.

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

Risks Related to Akerna’s Charter Documents

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

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

These provisions:

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to the Akerna Notes

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

The conversion of the Akerna Notes could result in the issuance of a significant number of shares of our common stock. The current $7.8 million principal amount of the Akerna Notes is convertible at a price of $0.50 per share, which would result in the issuance of approximately 15.6 million shares of Akerna Common Stock upon the conversion of the Akerna Notes in full. At the option of Akerna, the installment payments on the Akerna Notes can be converted into shares of Akerna Common Stock at a price per share equal to the lower of (i) the conversion price then in effect, or (ii) the greater of (x) the floor price of $10.80 and (y) 90% of the lower of (A) the volume-weighted average price of the common stock as of the trading day immediately preceding the applicable date of determination and (B) the quotient of (I) the sum of the volume-weighted average price of the common stock for each of the two (2) trading days with the lowest volume-weighted average price of the common stock during the ten consecutive trading day period ending on and including the trading day immediately prior to the applicable date of determination, divided by (II) two.

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

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

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

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

Under the Akerna Notes, the holders have certain rights upon an event of default. Such rights include (i) the remaining principal amount of the Akerna Notes bearing interest at a rate of 15% per annum, (ii) during the event of default the holders of the Akerna Notes will be entitled to convert all or any portion of the Akerna Notes at an alternate conversion price equal to the lower of (i) the conversion price then in effect, and (ii) 80% of the lower of (x) the volume weighted average price of the common stock as of the trading day immediately preceding the applicable date of determination and (y) the quotient of (A) the sum of the volume weighted average price of the common stock for each of the two (2) trading days with the lowest volume weighted average price of the common stock during the ten consecutive trading day period ending and including the trading day immediately prior to the applicable date of determination, divided by (B) two, but not less than the floor price, and (iii) the holder having the right to demand redemption of all or a portion of the Akerna Notes, as described below. At any time after certain notice requirements for an event of default are triggered, an Akerna Note Holder may require us to redeem all or any portion of the convertible note by delivering

written notice. The redemption price will equal the greater of (i) 115% of the outstanding principal of the convertible note to be redeemed and accrued and unpaid interest and unpaid late charges thereon, and (ii) an amount equal to the market value of the shares of the common stock underlying the Akerna Notes, as determined in accordance with the Akerna Notes. Upon the occurrence of certain events of default relating to the bankruptcy of Akerna, whether occurring prior to or following the maturity date, Akerna will be required to immediately redeem the Akerna Notes, in cash, for an amount equal to 115% of the outstanding principal of the Akerna Notes, and accrued and unpaid interest and unpaid late charges thereon, without the requirement for any notice or demand or other action by any holder or any other person or entity. We may not have sufficient funds to settle the redemption price and, as described above, this could trigger rights under the security interest granted to the holders and result in the foreclosure of their security interests and liquidation of some or all of our assets.

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

Risks Related to Akerna Common Stock

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

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

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

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

On September 19, 2023, Akerna received a determination letter (the “Determination Letter”) from The Nasdaq Stock Market stating that it had not regained compliance with Listing Rule 5550(a)(2) and is not eligible for a second 180 day period to regain compliance and that unless Akerna requested an appeal of this determination the trading of Akerna Common Stock would be suspended at the opening of business on September 28, 2023, and a Form 25-NSE would be filed with the SEC which will remove the Company’s securities from listing and registration on The Nasdaq Capital Market. The Company appealed the determination, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series and requested a hearing (the “Hearing”) before a Nasdaq Hearing Panel (the “Panel”) which is scheduled for November 9, 2023. The Hearing request stayed any delisting or suspension action pending the issuance of the Panel’s decision. The Akerna Common Stock will remain listed pending the outcome of the Hearing. There can be no assurance that the Panel will grant Akerna’s request for continued listing.

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

There can be no assurance that Akerna’s plan as presented to the Panel will be accepted by the Panel or that, if it is, Akerna will be able to regain compliance with the applicable Nasdaq listing requirements, or that a Panel will stay the suspension of Akerna’s securities.

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

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

Pursuant to the terms of the Exchange Agreements, we are required to complete a financing for $500,000 prior to a portion of the Akerna Notes being exchanged for Series C Preferred Stock. We anticipate that we will complete that financing prior to the record date of the special meeting. Per the requirements of the Exchange Agreement, half of the proceeds of such financing will be used to redeem outstanding principal amount of Akerna Notes.

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

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

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

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

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

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

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

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

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

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

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

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

The market for shares of Akerna Common Stock is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and we expect that our share price will continue to be more volatile than the shares of such larger, more established companies for the indefinite future. The volatility in our share price is attributable to a number of factors, including the fact that our shares are thinly traded relative to larger, more established companies. The price for shares of Akerna Common Stock could, for example, decline precipitously in the event that a large number of shares of Akerna Common Stock are sold on the market without commensurate demand. Currently, there are warrants to purchase 2,573,299 shares of Akerna Common Stock. Akerna’s warrants issued in 2019 are exercisable for 290,690 shares of Akerna Common Stock at $230.00 per share. Akerna’s warrants issued in July of 2022 are exercisable for a combined amount of 2,282,609 shares of Akerna Common Stock at $0.37 per share. Further, the current $7.8 million principal amount of the Akerna Notes is convertible at a price of $0.50 per share, which would result in the issuance of approximately 15.6 million shares of Akerna Common Stock upon the conversion of the Akerna Notes in full. If these securities are exercised or converted and sold into the open market could cause our stock price to decline. In addition, because we may be considered a speculative or “risky” investment due to our lack of profits to date, certain investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares of Akerna Common Stock on the market more quickly and at greater discounts, thus resulting in a rapid downward decline in the price of Akerna Common Stock. Many of these factors are beyond our control and may decrease the market price of Akerna Common Stock, regardless of our operating performance.

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

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

•        Variations in our revenues and operating expenses;

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

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

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

•        Developments in the financial markets and worldwide or regional economies;

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

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

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

•        Changes in the market valuations of other comparable companies.

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

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

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

General Risks

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to Gryphon

Risks Related to the Price of Bitcoin

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

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

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

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

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

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

•        Governmental and quasi-governmental regulation of crypto assets and their use, or restrictions on or regulation of access to and operation of the network or similar crypto asset systems;

•        Changes in consumer demographics and public tastes and preferences;

•        The maintenance and development of the open source software protocol of the network;

•        The availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;

•        General economic conditions and the regulatory environment relating to crypto assets; and

•        Consumer sentiment and perception of Bitcoin specifically and crypto assets generally.

Many crypto asset exchanges currently do not provide the public with significant information regarding their ownership structure, management teams, corporate practices or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, crypto asset exchanges, which may cause the price of Bitcoin to decline. For example, in the first half of 2022, each of Celsius Network LLC, et al. (“Celsius”), Voyager Digital Ltd., et al. (“Voyager”), and Three Arrows Capital (“Three Arrows”) declared bankruptcy, resulting in a loss of confidence among participants in the crypto asset ecosystem and negative publicity surrounding crypto assets more broadly. In November 2022, BlockFi Inc. (“BlockFi”) and FTX Trading Ltd. (“FTX”), the third largest crypto asset exchange by volume at the time, halted customer withdrawals and shortly thereafter, FTX and its subsidiaries filed for bankruptcy. In December 2022, Core Scientific Inc. (“Core”), one of the largest publicly traded crypto mining companies in the U.S., filed for bankruptcy. Most recently, in January 2023, Genesis Global Holdco, LLC, et al. (“Genesis”) filed for bankruptcy.

In response to these events, the crypto asset markets, including the market for Bitcoin specifically, have experienced extreme price volatility and several other entities in the crypto asset industry have been, and may continue to be, negatively affected, further undermining confidence in the crypto asset market and in Bitcoin. These events have also negatively impacted the liquidity of the crypto asset market as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the crypto asset market continues to be negatively impacted by these events, crypto asset prices, including the price of Bitcoin, may continue to experience significant volatility and confidence in the crypto asset markets may be further undermined. A perceived lack of stability in the crypto asset exchange market and the closure or temporary shutdown of crypto asset exchanges due to business failure, hackers or malware, government-mandated regulation or fraud, may reduce confidence at least in part in crypto asset networks and result in greater volatility in Bitcoin’s value. Because the value of Bitcoin is derived from the continued willingness of market participants to exchange government-issued currency that is designated as legal tender in its country of issuance through government decree, regulation or law for Bitcoin, should the marketplace for Bitcoin be jeopardized or disappear entirely, permanent and total loss of the value of Bitcoin may result. Such a decrease in Bitcoin price may have a material and adverse effect on Gryphon’s results of operations and financial condition as the results of Gryphon’s operations are significantly tied to the price of Bitcoin.

The failure or insolvency of large exchanges like FTX may cause the price of Bitcoin to fall and decrease confidence in the ecosystem, which could adversely affect an investment in Gryphon. Such market volatility and decrease in Bitcoin price may have a material and adverse effect on Gryphon’s results of operations and financial condition as the results of Gryphon’s operations are significantly tied to the price of Bitcoin.

As of the date hereof, Gryphon has not experienced any material impact resulting from the bankruptcy filings of FTX, Three Arrows, Celsius, Voyager, BlockFi, and Genesis and the attendant disruptions in the crypto asset markets. Genesis is owned by Digital Currency Group Inc. (“DCG”), which also owns Foundry Digital LLC (“Foundry”), one of Gryphon’s mining pool providers. However, at this time, Gryphon believes it is not subject to any material risks arising from its previous exposure to Genesis. Other than the Genesis entities, Gryphon (i) has no direct exposure to any crypto asset entities that have recently filed for bankruptcy; (ii) has no assets that may not be recovered due to these bankruptcies; and (iii) has no exposure to any other counterparties, customers, custodians or other crypto asset market third parties known to Gryphon to have (x) experienced material excessive redemptions or withdrawals or suspended redemptions or withdrawals of crypto assets, (y) the crypto assets of their customers unaccounted for, or (z) experienced material compliance failures. Similarly, Gryphon believes it is not subject to any material risks arising from its previous exposure to Core. Core provides hosting services for approximately 2% of Gryphon’s existing fleet and has continued to provide services throughout its bankruptcy process, with no noticeable impact to the level of service provided. Gryphon does not have any assets which may be lost due to the bankruptcy proceedings of Core.

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

The digital asset exchanges on which Bitcoin is traded are relatively new and largely unregulated. Many digital asset exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, such digital asset exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading. In 2022, FTX and a number of other digital asset exchanges filed for bankruptcy proceedings after failing to solve financial issues caused by the falling prices of Bitcoin and other cryptocurrencies. FTX and others became the subjects of investigations by various governmental agencies for, among other things, fraud, which caused a loss of confidence in cryptocurrency market participants and an increase in negative publicity for the digital asset ecosystem. As a result, many digital asset markets, including the market for Bitcoin, did and continue to experience increased price volatility. The Bitcoin ecosystem may continue to be negatively impacted and experience long term volatility if public confidence cannot rebound or decreases again due similar future events.

These events are continuing to develop and it is not possible to predict, at this time, every risk that they may pose to Gryphon, Gryphon’s service providers, or the digital asset industry as a whole. A perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital asset exchange’s failure could adversely affect an investment in Gryphon.

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

The failure of several cryptocurrency platforms has impacted and may continue to impact the broader cryptocurrency economy; the full extent of these impacts may not yet be known. Bitcoin is part of the cryptocurrency environment and is subject to price volatility resulting from financial instability, poor business practices, and fraudulent activities of players in the cryptocurrency market. When investors in cryptocurrency and cryptocurrency-based companies experience financial difficulty as a result of price volatility, poor business practices, and/or fraud, it has caused, and may continue to cause, loss of confidence in the cryptocurrency space, reputational harm to cryptocurrency assets, heightened scrutiny by regulatory authorities and law makers, and a steep decline in the value of Bitcoin, among other material impacts. Such adverse effects have affected, and may in the future continue to affect, the profitability of Gryphon’s bitcoin mining operations.

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

Cryptocurrencies that are represented and trade on a ledger-based platform may not necessarily benefit from viable trading markets. Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules, and monitor investors transacting on such platform for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies. The more relaxed a distributed ledger platform is about vetting issuers of cryptocurrency assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of the ledger due to a control event. These factors may decrease liquidity or volume or may otherwise increase volatility of investment securities or other assets trading on a ledger-based system. Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account, which in turn could harm investors.

Acceptance and/or widespread use of Bitcoin are uncertain.

Currently, there is a relatively limited use of Bitcoin in the retail and commercial marketplace. Banks and other established financial institutions may refuse to process funds for Bitcoin transactions, process wire transfers to or from Bitcoin exchanges, Bitcoin-related companies or service providers, or maintain accounts for persons or entities transacting in Bitcoin. Conversely, a significant portion of Bitcoin demand is generated by investors seeking a long-term store of value or speculators seeking to profit from the short- or long-term holding of the asset. Price volatility undermines Bitcoin’s role as a medium of exchange, as retailers are much less likely to accept it as a form of payment. Market capitalization for Bitcoin as a medium of exchange and payment method may always be low.

The relative lack of acceptance of Bitcoin in the retail and commercial marketplace limits the ability of end users to use bitcoin to pay for goods and services. Such lack of acceptance could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of Bitcoin Gryphon mines or otherwise acquires or holds for its own account.

The further development and acceptance of digital asset networks and other digital assets, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of digital asset systems may adversely affect an investment in Gryphon.

The use of cryptocurrencies to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs cryptocurrency assets, including Bitcoin, based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale acceptance of Bitcoin as a means of payment has not, and may never, occur. The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably. The factors include, but are not limited to:

•        continued worldwide growth in the adoption and use of Bitcoin as a medium of exchange;

•        governmental and quasi-governmental regulation of Bitcoin and its use, or restrictions on or regulation of access to and operation of the Bitcoin network or similar cryptocurrency systems;

•        changes in consumer demographics and public tastes and preferences;

•        the maintenance and development of the open-source software protocol of the network;

•        the increased consolidation of contributors to the Bitcoin blockchain through mining pools;

•        the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;

•        the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications;

•        general economic conditions and the regulatory environment relating to cryptocurrencies; and

•        negative consumer sentiment and perception of Bitcoin specifically and cryptocurrencies generally.

The outcome of these factors could have negative effects on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s business strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations as well as a potentially negative effect on the value of any bitcoin that Gryphon mines or otherwise acquires or holds for Gryphon’s own account, which would harm investors.

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

Halving is a process designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a proof-of-work consensus algorithm. At a predetermined block, the mining reward is cut in half, hence the term “halving.” For Bitcoin, the reward was initially set at 50 bitcoin currency rewards per block. This was cut in half to 25 on November 28, 2012 at block 210,000, and then again to 12.5 on July 9, 2016 at block 420,000. The most recent halving for Bitcoin happened on May 11, 2020 at block 630,000 and the reward reduced to 6.25. The next halving will likely occur in 2024 and the reward will reduce to 3.125. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million, which is expected around 2140.

While Bitcoin prices have historically increased around these halving events, which increases in price have correspondingly mitigated the decrease in mining reward, there is no guarantee that the price change would be favorable or would compensate for the reduction in mining reward. If a corresponding and proportionate increase in the trading price of Bitcoin or a proportionate decrease in mining difficulty does not follow these anticipated halving events, the revenue Gryphon earns from its bitcoin mining operations would see a corresponding decrease, which would have a material adverse effect on Gryphon’s business and the economics of Gryphon’s mining operations.

Gryphon aims to mitigate the impacts of halving by maintaining a breakeven profitability floor far below the network average. To do so, Gryphon has developed and implemented a curtailment agreement with its hosting partners to maximize the marginal profitability of its machines.

Gryphon’s partners have also implemented standard operating procedures to maximize the operational efficiency of its sites, such as preventative maintenance and cleaning of equipment. Gryphon believes that these steps can enable it to maintain survivability above its competitors and mitigate the downside risk of decreased rewards.

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

Cryptocurrencies face significant scaling obstacles that can lead to high fees or slow transaction settlement times, and attempts to increase the volume of transactions may not be effective. Scaling cryptocurrencies is essential to the widespread acceptance of cryptocurrencies as a means of payment, which widespread acceptance is important to the continued growth and development of Gryphon’s business. Many cryptocurrency networks, including the Bitcoin network, face significant scaling challenges. For example, cryptocurrencies are limited with respect to how many transactions can occur per second. Participants in the cryptocurrency ecosystem debate potential approaches to increasing the average number of transactions per second that the network can handle and have implemented mechanisms or are researching ways to increase scale, such as increasing the allowable sizes of blocks, and therefore the number of transactions per block, and sharding (a horizontal partition of data in a database or search engine), which would not require every single transaction to be included in every single miner’s or validator’s block. However, there is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of cryptocurrency and, specifically, Bitcoin transactions will be effective, or how long they will take to become effective, which could adversely affect Gryphon’s business.

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

As the number of bitcoins awarded for solving a block in a blockchain decreases, the incentive for miners to continue to contribute to the Bitcoin network may transition from a set reward to transaction fees. In order to incentivize miners to continue to contribute to the Bitcoin network, the Bitcoin network may either formally or informally transition from a set reward to transaction fees earned upon solving a block. This transition could be accomplished by miners independently electing to record in the blocks they solve only those transactions that include payment of a transaction fee. If transaction fees paid for Bitcoin transactions become too high, the marketplace may be reluctant to accept Bitcoin as a means of payment and existing users may be motivated to switch from Bitcoin to another cryptocurrency

or to fiat currency. Either the requirement from miners of higher transaction fees in exchange for recording transactions in a blockchain or a software upgrade that automatically charges fees for all transactions may decrease demand for Bitcoin and prevent the expansion of the Bitcoin network to retail merchants and commercial businesses, resulting in a reduction in the price of Bitcoin that could adversely impact Gryphon’s business. Decreased use and demand for bitcoins that Gryphon has accumulated may adversely affect their value and may adversely impact an investment in Gryphon.

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

The global market for Bitcoin is characterized by supply constraints that differ from those present in the markets for commodities or other assets such as gold and silver. The mathematical protocols under which Bitcoin is mined permit the creation of a limited, predetermined amount of currency, while others have no limit established on total supply. To the extent that other vehicles investing in Bitcoin or tracking Bitcoin markets form and come to represent a significant proportion of the demand for Bitcoin, large redemptions of the securities of those vehicles and the subsequent sale of Bitcoin by such vehicles could negatively affect Bitcoin prices and therefore affect the value of the Bitcoin holdings Gryphon holds. Such events could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s new strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

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

To the extent that other cryptocurrencies are introduced into the market, gain traction and are supported by the deployment of significant resources, the success of any such cryptocurrency could lead to a decrease in demand and the potential exclusion of existing cryptocurrencies, such as Bitcoin.

In addition, central banks in some countries have started to introduce digital forms of legal tender. Whether or not they incorporate blockchain or similar technology, central bank digital currencies as legal tender in the issuing jurisdiction could have an advantage in competing with, or replacing, Bitcoin and other cryptocurrencies as a medium of exchange or store of value. As a result, the value of Bitcoin could decrease, which could have a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results.

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

If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on any digital asset network, including the Bitcoin network, it may be able to alter the blockchain by constructing alternate blocks if it is able to solve for such blocks faster than the remainder of the miners on the blockchain can add valid blocks. In such alternate blocks, the malicious actor or botnet could control, exclude or modify the ordering of transactions, though it could not generate new digital assets or transactions using such control. Using alternate blocks, the malicious actor could “double-spend” its own digital assets (i.e., spend the same digital assets in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintains control. To the extent that such malicious actor or botnet does not yield its majority control of the processing power or the digital asset community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible. Such changes could adversely affect an investment in Gryphon.

For example, in late May and early June 2014, a mining pool known as GHash.io approached and, during a 24- to 48-hour period may have exceeded, the threshold of 50% of the processing power on the Bitcoin network. To the extent that GHash.io did exceed 50% of the processing power on the network, reports indicate that such threshold was surpassed for only a short period, and there are no reports of any malicious activity or control of the blockchain performed by GHash.io. Furthermore, the processing power in the mining pool appears to have been redirected to other pools on a voluntary basis by participants in the GHash.io pool, as had been done in prior instances when a mining pool exceeded 40% of the processing power on the Bitcoin network.

The approach towards and possible crossing of the 50% threshold indicate a greater risk that a single mining pool could exert authority over the validation of digital asset transactions. To the extent that the digital assets ecosystems do not act to ensure greater decentralization of digital asset mining processing power, the feasibility of a malicious actor obtaining in excess of 50% of the processing power on any digital asset network (e.g., through control of a large mining pool or through hacking such a mining pool) will increase, which may adversely impact an investment in Gryphon.

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

The decentralized nature of the governance of cryptocurrency systems may lead to ineffective decision making that slows development or prevents a network from overcoming emergent obstacles. Governance of many cryptocurrency systems is by voluntary consensus and open competition with no clear leadership structure or authority. To the extent lack of clarity in corporate governance of the Bitcoin blockchain leads to ineffective decision making that slows development and growth of the Bitcoin network protocol, Gryphon’s business may be adversely affected.

The open-source structure of the Bitcoin network protocol means that the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol. A failure to properly monitor and upgrade the protocol could damage the Bitcoin network and an investment in Gryphon.

The Bitcoin network operates based on an open-source protocol maintained by contributors, largely on the Bitcoin Core project on GitHub. As an open-source project, Bitcoin is not represented by an official organization or authority. As the Bitcoin network protocol is not sold and its use does not generate revenues for contributors, contributors are generally not compensated for maintaining and updating the Bitcoin network protocol. The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner. Changes to a digital asset network that Gryphon is mining on may adversely affect an investment in Gryphon.

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

Geopolitical crises may motivate large-scale purchases of Bitcoin and other cryptocurrencies, which could increase the price of Bitcoin and other cryptocurrencies rapidly. This may increase the likelihood of a subsequent price decrease as crisis-driven purchasing behavior dissipates, which would adversely affect the value of Gryphon’s Bitcoin value following such downward adjustment. Such risks are similar to the risks of purchasing commodities in uncertain times, such as the risk of purchasing, holding or selling gold. Alternatively, as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturns may discourage investment in Bitcoin as investors focus their investments on less volatile asset classes as a means of hedging their investment risks.

As an alternative to fiat currencies that are backed by central governments, Bitcoin, which is relatively new, is subject to supply and demand forces. How such supply and demand will be impacted by geopolitical events is largely uncertain but could be harmful to Gryphon. Political or economic crises may motivate large-scale acquisitions or sales of Bitcoin either globally or locally. Such events could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s new strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

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

A disruption of the Internet may affect the use of Bitcoin. Generally, Bitcoin and Gryphon’s business of mining Bitcoin are dependent upon the Internet. A significant disruption in Internet connectivity could disrupt a currency’s network operations until the disruption is resolved and have an adverse effect on the price of Bitcoin and Gryphon’s ability to mine bitcoin.

Risks Related to Operations

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

Gryphon was formed in October 2020 and has a limited history upon which an evaluation of Gryphon’s performance and future prospects can be made. Gryphon began mining operations in September 2021, and had no previous existing operations. Gryphon’s current and proposed operations are subject to all of the business risks associated with new enterprises. These include likely fluctuations in operating results as Gryphon reacts to developments in its market,

manages its growth and operations, and responds to the entry of competitors into the market. Further, there is no assurance that Gryphon can successfully execute its business plan. Gryphon has had limited revenues generated since its bitcoin miners became operational in September 2021, and consequently recorded losses in 2020 and 2021. Gryphon generated minimal profits in 2022 and may not be able to sustain profitability in the future.

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

Gryphon’s purchase of its fleet of bitcoin miners was a capital intensive project, and Gryphon anticipates that future strategic growth initiatives will likewise be capital-intensive. Gryphon has raised limited capital through private placements to date and expects to raise additional capital to fund its operations and future strategic growth initiatives. If Gryphon raises additional capital through public or private equity offerings, the ownership interest of Gryphon’s existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect Gryphon’s stockholders’ rights. If Gryphon raises additional capital through debt financing, Gryphon may be subject to covenants limiting or restricting Gryphon’s ability to take specific actions, such as incurring additional debt or liens, making capital expenditures or declaring dividends. Further, Gryphon may be unable to raise capital in a timely manner, in sufficient quantities, or on terms acceptable to Gryphon, if at all. If Gryphon is unable to raise the additional capital needed to fund its operations or execute future strategic growth initiatives, Gryphon may be less competitive in its industry and its results of operations and financial condition may suffer. The value of its securities may also be materially and adversely affected.

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

On May 25, 2022, Anchorage Lending CA, LLC (“Anchorage”) entered into an Equipment Loan and Security Agreement (the “Anchorage Loan Agreement”) with Gryphon Opco I LLC (“Gryphon Opco”), a wholly owned subsidiary of Gryphon, pursuant to which Anchorage loaned Gryphon Opco the principal amount of 933.333333 bitcoin. The loan is payable in principal installments of 42.424242 bitcoin together with initial interest at 5.0% per annum, payable monthly in bitcoin. On March 29, 2023, Gryphon executed an amendment to the Anchorage Loan Agreement (the “Anchorage Loan Amendment”), which, among other things, increased the interest rate to 6.0% per annum.

The Anchorage Loan Agreement, as amended by the Anchorage Loan Amendment, contains certain covenants that limit Gryphon’s ability to engage in certain transactions that may be in Gryphon’s long-term best interest. Subject to certain limited exceptions, these covenants do or may limit Gryphon’s ability to or prohibit Gryphon from permitting any of its subsidiaries to, as applicable, among other things:

•        convey, sell, lease, transfer, assign, or otherwise dispose of all or any part of 7,200 of Gryphon’s bitcoin mining machines and the Coinmint Agreement (as defined below) that are posted as collateral for the loan;

•        keep Gryphon’s bitcoin mining machines at hosting facilities of Gryphon’s choice after March 31, 2024;

•        create, incur, assume, or be liable for any additional indebtedness, or create, incur, allow, or permit to exist any additional liens;

•        declare dividends or other distributions on Gryphon shares, redeem, retire or purchase for value any Gryphon shares, make any payment to retire or obtain the surrender of any Gryphon warrants or options, or make any payment with respect to any earnout obligation;

•        use bitcoin wallet custody or trading execution services of Gryphon’s choice; or

•        merge or consolidate with any entity where Gryphon is not the surviving entity without the execution of additional loan documents.

In addition, under the Anchorage Loan Agreement, Gryphon is required to maintain a collateral (mining equipment, digital assets or US dollars) coverage ratio of 110%. If this collateral coverage ratio decreases below 110%, including as a result of a decrease in the value of the bitcoin or bitcoin mining machines posted as collateral under the Anchorage Loan Agreement (due to volatility in the crypto asset markets or otherwise), Gryphon will have to provide Anchorage

with additional collateral in the form of bitcoin, U.S. dollars, or additional equipment. If Gryphon is unable to do so, Gryphon may be in default under the Anchorage Loan Agreement, which could have a material adverse effect on its operations, liquidity, financial condition, and results of operations.

While Gryphon has not previously breached and is currently in compliance with the covenants contained in the Anchorage Loan Agreement, as amended by the Anchorage Loan Amendment, Gryphon may breach these covenants in the future. Gryphon’s ability to comply with these covenants may be affected by events and factors beyond its control. In the event that Gryphon breaches one or more covenants, Anchorage may choose to declare an event of default and require that Gryphon immediately repay all amounts outstanding under the Anchorage Loan Agreement and terminate any commitment to extend further credit and foreclose on the collateral. The occurrence of any of these events could have a material adverse effect on Gryphon’s business, financial condition and results of operations.

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

Gryphon’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate the continuation of Gryphon as a going concern and the realization of assets and satisfaction of liabilities in the ordinary course of business.

Since Gryphon began revenue generation in September 2021, management has financed Gryphon’s operations through equity and debt financing and the sale of the digital assets earned through mining operations.

Gryphon may incur additional losses from operations and negative cash outflows from operations in the foreseeable future. In the event Gryphon does incur losses, it may need to raise debt or equity financing to finance its operations until operations are cashflow positive. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time and will depend on several factors, including the market price for the underlying commodity mined by Gryphon and its ability to procure the required mining equipment and operate profitably. Gryphon’s financial statements contained elsewhere in this proxy statement/prospectus have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. These financial statements do not include any adjustments that might result from Gryphon’s inability to continue as a going concern.

Gryphon’s loss of any of its management or advisory team, its inability to execute an effective succession plan, or its inability to attract and retain qualified personnel, could adversely affect Gryphon’s business.

Gryphon’s success and future growth will depend to a significant degree on the skills and services of its management and advisors, including Robby Chang, Gryphon’s Chief Executive Officer and President. Gryphon will need to continue to grow its management in order to alleviate pressure on its existing team and in order to continue to develop its business. If Gryphon’s management, including any new hires that Gryphon may make, fail to work together effectively and to execute Gryphon’s plans and strategies on a timely basis, Gryphon’s business could be harmed. Furthermore, if Gryphon fails to execute an effective contingency or succession plan with the loss of any member of management, the loss of such management personnel may significantly disrupt its business.

The loss of key members of management or advisory team could inhibit Gryphon’s growth prospects. Gryphon’s future success also depends in large part on its ability to attract, retain and motivate key management and operating personnel. As Gryphon continues to develop and expand its operations, it may require personnel with different skills and experiences, and who have sound understandings of Gryphon’s business and the Bitcoin network industry. The market for highly qualified personnel in this industry is very competitive, and Gryphon may be unable to attract such personnel. If Gryphon is unable to attract such personnel, its business could be harmed.

Any valuation at this stage is difficult to assess.

Gryphon’s valuation is based upon a number of estimates and assumptions that may prove later to be inaccurate or incomplete. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and investors may risk overpaying for their investments. Gryphon began its operations in September 2021 and has limited operating experience and performance history, which makes valuation difficult.

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

As the number of bitcoin rewards awarded for solving a block in a blockchain decreases, Gryphon’s ability to achieve profitability worsens. Decreased use and demand for bitcoin rewards may adversely affect Gryphon’s incentive to expend processing power to solve blocks. If the award of bitcoin rewards for solving blocks and transaction fees are not sufficiently high, Gryphon or other miners may not have an adequate incentive to continue mining and may cease mining operations. Miners ceasing operations would reduce the collective processing power on the network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to a blockchain until the next scheduled adjustment in difficulty for block solutions) and make the Bitcoin network more vulnerable to a malicious actor or botnet obtaining control in excess of 50 percent of the processing power active on a blockchain, potentially permitting such actor or botnet to manipulate a blockchain in a manner that adversely affects Gryphon’s activities. A reduction in confidence in the confirmation process or processing power of the network could result and be irreversible. Such events could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any Bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

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

Mining bitcoin requires massive amounts of electrical power, and electricity costs are expected to account for a significant portion of Gryphon’s overall costs. The availability and cost of electricity will restrict the geographic locations of Gryphon’s mining activities. Any shortage of electricity supply or increase in electricity costs in any location where Gryphon plans to operate may negatively impact the viability and the expected economic return for bitcoin mining activities in that location.

Further, Gryphon’s business model can only be successful and Gryphon’s mining operations can only be profitable if the costs, including electrical power costs, associated with bitcoin mining are lower than the price of Bitcoin itself. As a result, any equipment Gryphon deploys can only be successful if Gryphon can obtain access to sufficient electrical power on a cost-effective basis through hosting arrangements with mining data centers. Gryphon’s deployment of new mining equipment requires Gryphon to find sites where that is the case. Even if Gryphon’s electrical power costs do not increase, significant fluctuations in, and any prolonged periods of, low Bitcoin prices may also cause Gryphon’s electrical supply to no longer be cost-effective.

Furthermore, if cryptocurrency mining becomes more widespread, government scrutiny related to restrictions on cryptocurrency mining facilities and their energy consumption may significantly increase. The considerable consumption of electricity by mining operators may also have a negative environmental impact, including contribution to climate change, which could set the public opinion against allowing the use of electricity for bitcoin mining activities. This, in turn, could lead to governmental measures restricting or prohibiting the use of electricity for bitcoin mining activities. For example, in September 2022, the White House issued a report regarding the Climate and Energy Implications of Crypto-Assets in the United States. The report states that the Department of Energy and Environmental Protection Agency should initiate a process to solicit data and develop environmental performance and energy conservation standards for crypto-asset technologies, including mining equipment. Should such measures prove ineffective at achieving the Administration’s environmental goals, the report calls for the Administration to explore executive actions and legislation to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining in the United States. Any such development in the jurisdictions where Gryphon plans to operate could increase Gryphon’s compliance burdens and have a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results.

Additionally, the mining data centers at which Gryphon maintains its mining equipment could be materially adversely affected by power outages and similar disruptions. Given the power requirements for Gryphon’s mining equipment, it would not be feasible to run this equipment on back-up power generators in the event of a government restriction on electricity or a power outage. If Gryphon is unable to receive adequate power supply and is forced to reduce its operations due to the availability or cost of electrical power, it would have a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results.

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

There is a risk that some or all of Gryphon’s bitcoin could be lost or stolen. Cryptocurrencies are stored in cryptocurrency sites commonly referred to as “wallets” by holders of cryptocurrencies, which may be accessed to exchange a holder’s cryptocurrency assets. Access to Gryphon’s bitcoin assets could also be restricted by cybercrime (such as a denial of service attack) against a service at which Gryphon maintains a hosted hot wallet. A hot wallet refers to any cryptocurrency wallet that is connected to the Internet. Generally, hot wallets are easier to set up and access than wallets in cold storage, but they are also more susceptible to hackers and other technical vulnerabilities. Cold storage refers to any cryptocurrency wallet that is not connected to the Internet. Gryphon holds its bitcoin solely in cold custodial wallets with keys managed by BitGo Trust. Cold storage is generally more secure than hot storage, but is not ideal for quick or regular transactions, and Gryphon may experience lag time in its ability to respond to market fluctuations in the price of Gryphon’s bitcoin assets.

Hackers or malicious actors may launch attacks to steal, compromise or secure bitcoin, such as by attacking the Bitcoin network source code, exchange miners, third-party platforms, cold and hot storage locations or software, through phishing schemes or by other means. Several errors and defects in such codes have been found previously, including those that disabled some functionality for users and exposed users’ information. Exploitations of flaws in the source code that allow malicious actors to take or create money have previously occurred. Despite Gryphon’s efforts and processes to prevent breaches, Gryphon’s devices, as well as Gryphon’s miners, computer systems and those of third parties that Gryphon uses in its operations, are vulnerable to cybersecurity risks, including cyberattacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with Gryphon’s miners and computer systems or those of third parties that Gryphon uses in its operations. Any of these events may adversely affect Gryphon’s operations and, consequently, Gryphon’s investments and profitability. The loss or destruction of a private key required to access Gryphon’s digital wallets may be irreversible and Gryphon may be denied access for all time to its bitcoin holdings or the holdings of others held in those compromised wallets. Gryphon’s loss of access to its private keys or a data loss relating to Gryphon’s digital wallets could adversely affect Gryphon’s investments and assets.

Cryptocurrencies are controllable only by the possessor of both the unique public and private keys relating to the local or online digital wallet in which they are held, which wallet’s public key or address is reflected in the network’s public blockchain. Gryphon will publish the public key relating to digital wallets in use when Gryphon verifies the receipt of transfers and disseminates such information into the network, but Gryphon will need to safeguard the private keys relating to such digital wallets. We safeguard and keep private the private keys relating to our digital assets by relying on BitGo Trust’s (as defined herein) 100% cold storage custody solution held in a purpose-built physically-secure environment based on established, industry best practices to safeguard our digital assets from theft, loss, destruction or other issues relating to hackers and technological attack. Gryphon’s CEO, President and CFO each hold Gryphon side private keys that are protected with two-factor authentication. Gryphon confirms transactional validity and data for revenue recognition through a daily review and reconciliation of BitGo reports. Custodial side keys are held by BitGo Trust who verifies requests with two factor authentication and video reviews. To the extent such private keys are lost, destroyed or otherwise compromised, Gryphon will be unable to access its bitcoin rewards and such private keys may not be capable of being restored by any network. Any loss of private keys relating to digital wallets used to store Gryphon’s bitcoin could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its new strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

Our ability to adopt technology in response to changing security needs or trends and reliance on third party, Bitgo Prime, for custody poses a challenge to the safekeeping of our digital assets.

The history of digital asset exchanges has shown that exchanges and large holders of digital assets must adapt to technological change in order to secure and safeguard their digital assets. We rely on Bitgo Trust’s 100% cold storage custody solution held in a purpose-built physically-secure environment based on established, industry best practices to safeguard our digital assets from theft, loss, destruction or other issues relating to hackers and technological attack. We believe that it may become a more appealing target of security threats as the size of our bitcoin holdings grow. To the extent that either BitGo Trust or we are unable to identify and mitigate or stop new security threats, our digital assets may be subject to theft, loss, destruction or other attack, which could adversely affect an investment in us. To the extent that BitGo Trust is no longer, due to the current banking crisis, able to safeguard our assets, we would be at risk of loss if safeguarding protocols fail.

Incorrect or fraudulent cryptocurrency transactions may be irreversible.

Cryptocurrency transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent Bitcoin transactions could adversely affect Gryphon’s investments and assets. Cryptocurrency transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the cryptocurrency from the transaction. In theory, Bitcoin transactions may be reversible with the control or consent of a majority of processing power on the Bitcoin network; however, Gryphon does not now, nor is it feasible that Gryphon could in the future, possess sufficient processing power to effect such a reversal. Once a transaction has been verified and recorded in a block that is added to a blockchain, an incorrect transfer of a cryptocurrency or a theft thereof generally will not be reversible and Gryphon may not have sufficient recourse to recover its losses from any such transfer or theft. It is possible that, through computer or human error, or through theft, fraud, phishing schemes or other criminal action, Gryphon’s cryptocurrency rewards could be transferred in incorrect amounts or to unauthorized third parties or uncontrolled accounts. Further, at this time, there is no specifically enumerated U.S. or foreign governmental, regulatory, investigative or prosecutorial authority or mechanism through which to bring an action or complaint regarding missing or stolen cryptocurrency. In the event of a loss, Gryphon would be reliant on existing private investigative entities to investigate any such loss of Gryphon’s bitcoin assets. These third-party service providers rely on data analysis and compliance of Internet service providers with traditional court orders to reveal information such as the IP addresses of any attackers who may have targeted Gryphon. To the extent that Gryphon is unable to recover its losses from such action, error, theft or other criminal action, such events could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s new strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations of and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

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

Market prices for power, generation capacity and ancillary services, are unpredictable. Depending upon the effectiveness of any price risk management activity undertaken by Gryphon, including but not limited to attempts to secure hosting services contracts at fixed fees, an increase in market prices for power, generation capacity, and ancillary services may adversely affect Gryphon’s business, prospects, financial condition, and operating results. Long- and short-term power prices may fluctuate substantially due to a variety of factors outside of Gryphon’s control, including, but not limited to:

•        increases and decreases in generation capacity;

•        changes in power transmission or fuel transportation capacity constraints or inefficiencies;

•        volatile weather conditions, particularly unusually hot or mild summers or unusually cold or warm winters;

•        technological shifts resulting in changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools, expansion and technological advancements in power storage capability and the development of new fuels or new technologies for the production or storage of power;

•        federal and state power, market and environmental regulation and legislation; and

•        changes in capacity prices and capacity markets.

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

To remain competitive in Gryphon’s industry, Gryphon seeks to grow its hash rate to match the growing network hash rate and increasing network difficulty of the Bitcoin blockchain, and if Gryphon is unable to grow its hash rate at pace with the network hash rate, Gryphon’s chance of earning bitcoin from its mining operations would decline.

As the adoption of Bitcoin has increased, the price of Bitcoin has generally appreciated, causing the demand for new bitcoin rewards for successfully solving blocks on the Bitcoin blockchain to likewise increase. This has encouraged more miners to attempt to mine bitcoin, which increases the global network hash rate deployed in support of the Bitcoin blockchain.

Because a miner’s relative chance of successfully solving a block and earning a new bitcoin reward is generally a function of the ratio the miner’s individual hash rate bears to the global network hash rate, as the global network hash rate increases, a miner must increase its individual hash rate to maintain its chances of earning new bitcoin rewards. Therefore, as new miners enter the industry and as miners deploy greater and greater numbers of increasingly powerful machines, existing miners must seek to continually increase their hash rates to remain competitive. Thus, a feedback loop is created: as Bitcoin gains popularity and its relative market price increases, more miners attempt to mine bitcoin and the Bitcoin network hash rate is increased; in response, existing miners and new miners devote more and more hash rate to the Bitcoin blockchain by deploying greater numbers of increasingly powerful machines in an attempt to ensure their abilities to earn additional bitcoin rewards do not decrease. Compounding this feedback loop, the network difficulty of the Bitcoin network (i.e., the amount of work (measured in hashes) necessary to solve a block) is periodically adjusted to maintain the pace of new block additions (with one new block added to the blockchain approximately every ten minutes), and thereby control the supply of Bitcoin. As miners deploy more hash rate and the Bitcoin network hash rate is increased, the Bitcoin network difficulty is adjusted upwards by requiring more hash rate to be deployed to solve a block. Thus, miners are further incentivized to grow their hash rates to maintain their chances of earning new bitcoin rewards. In theory, these dual processes should continually replicate themselves until the supply of available bitcoin is exhausted. In response, miners have attempted to achieve greater hash rates by deploying increasingly sophisticated and expensive miners in ever greater quantities. This has become the Bitcoin mining industry’s great “arms race.” Moreover, because there are very few manufacturers of miners capable of producing a sufficient number of miners of adequate quality to meet this need, scarcity results and miner prices increase. Compounding this phenomenon, it has been observed that some manufacturers of bitcoin miners may increase their prices for new miners as the market price of Bitcoin increases.

Accordingly, for Gryphon to maintain its chances of earning new bitcoin rewards and remaining competitive in its industry, Gryphon must seek to continually add new miners to grow its hash rate at pace with the growth in the Bitcoin network hash rate. However, as demand has increased and scarcity in the supply of new miners has resulted, the price of new miners has increased, and Gryphon expects this process to continue in the future as demand for bitcoin increases. Therefore, if the price of Bitcoin is not sufficiently high to allow Gryphon to fund its hash rate growth through new miner acquisitions, and if Gryphon is otherwise unable to access additional capital to acquire these miners, Gryphon’s hash rate may stagnate and Gryphon may fall behind its competitors. If this happens, Gryphon’s chances of earning new bitcoin rewards would decline and, as such, its results of operations and financial condition may suffer.

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

Gryphon’s business is dependent upon digital asset mining equipment suppliers providing an adequate supply of new generation digital asset mining machines at economical prices to customers intending to purchase its hosting and other solutions. The growth in Gryphon’s business is directly related to increased demand for hosting services and digital assets such as Bitcoin, which is dependent in large part on the availability of new generation mining machines offered for sale at a price conducive to profitable digital asset mining, as well as the trading price of digital assets such as Bitcoin. The market price and availability of new mining machines fluctuates with the price of Bitcoin and can be volatile. Higher Bitcoin prices increase the demand for mining equipment and increase the cost. In addition, as more companies seek to enter the mining industry, the demand for machines may outpace supply and create mining machine equipment shortages. There are no assurances that digital asset mining equipment suppliers will be able to keep pace with any surge in demand for mining equipment. Further, manufacturing mining machine purchase contracts are not favorable to purchasers and Gryphon may have little or no recourse in the event a mining machine manufacturer defaults on its mining machine delivery commitments. If Gryphon and its customers are not able to obtain a sufficient number of digital asset mining machines at favorable prices, its growth expectations, liquidity, financial condition and results of operations will be negatively impacted.

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

In order to build and sustain Gryphon’s self-mining operations, Gryphon will depend on third parties to provide it with ASIC chips and other critical components for its mining equipment, which may be subject to price fluctuations or shortages. For example, the ASIC chip is the key component of a mining machine as it determines the efficiency of the device. The production of ASIC chips typically requires highly sophisticated silicon wafers, which currently only a small number of fabrication facilities, or wafer foundries, in the world are capable of producing. ASIC chips were recently subject to significant price increases and shortages that may occur again in the future.

There is also a risk that a manufacturer or seller of ASIC chips or other necessary mining equipment may adjust the prices according to Bitcoin, other cryptocurrency prices or otherwise, so the cost of new machines could become unpredictable and extremely high. As a result, at times, Gryphon may be forced to obtain mining machines and other hardware at premium prices, to the extent they are even available. Such events could have a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results.

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

The performance and reliability of Gryphon’s miners and its technology is critical to Gryphon’s reputation and its operations. Because Gryphon currently only uses Bitmain Antminer type miners, if there are issues with those machines, such as a design flaw in the ASIC chips they employ, Gryphon’s entire system could be affected. Any system error or failure may significantly delay response times or even cause Gryphon’s system to fail. Any disruption in Gryphon’s ability to continue mining could result in lower yields and harm its reputation and business. Any exploitable weakness, flaw, or error common to Bitmain miners could affect all of Gryphon’s miners; therefore, if a defect or other flaw exists and is exploited, Gryphon’s entire miner fleet could be adversely impacted. Any interruption, delay or system failure could result in financial losses, a decrease in the value of Gryphon’s stock and damage to Gryphon’s reputation.

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

Gryphon’s mining operations can only be successful and profitable if the costs of mining Bitcoin, including hardware and electricity costs, associated with mining Bitcoin are lower than the price of a bitcoin. As Gryphon’s mining facility operates, Gryphon’s miners experience ordinary wear and tear, and may also face more significant malfunctions caused by a number of extraneous factors beyond Gryphon’s control. The physical degradation of Gryphon’s miners will require Gryphon to, over time, replace those miners which are no longer functional. Additionally, as the technology evolves, Gryphon may be required to acquire newer models of miners to remain competitive in the market.

Also, because Gryphon expects to depreciate all new miners, Gryphon’s reported operating results will be negatively affected. Further, the global supply chain for bitcoin miners is presently heavily dependent on China, which has been severely affected by the emergence of the COVID-19 coronavirus global pandemic. The global reliance on China as a main supplier of bitcoin miners has been called into question in the wake of the COVID-19 pandemic and China’s ban on cryptocurrency mining and trading in 2021. Should similar outbreaks or other disruptions to the China-based global supply chain for Bitcoin hardware occur, Gryphon may not be able to obtain adequate replacement parts for Gryphon’s existing miners or to obtain additional miners from the manufacturer on a timely basis. Such events could have a material adverse effect on Gryphon’s ability to pursue Gryphon’s new strategy, which could have a material adverse effect on Gryphon’s business.

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

Gryphon receives bitcoin rewards from its mining activity through a third-party mining pool operator. Mining pools allow miners to combine their processing power, which increases miners’ chances of solving blocks and receiving bitcoin rewards from the network. The rewards are distributed by the pool operator, proportionally to Gryphon’s contribution to the pool’s overall mining power, after deducting the applicable pool fee, if any, used to solve a particular block on the Bitcoin blockchain. Should the pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other issue, Gryphon’s ability to mine and receive revenue will be negatively impacted.

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

Gryphon relies on its hosting arrangements with Coinmint, LLC and, to a lesser degree, Core Scientific, Inc., to provide mining data centers and host its mining equipment. If these mining data centers fail to perform their obligations under their agreements with Gryphon, Gryphon may be forced to look for alternative mining data centers to host its mining equipment, which may not be available on favorable terms or at all. Additionally, if the mining data centers shut down or cannot accommodate additional miners as Gryphon expands its fleet, Gryphon may be forced to look for alternative centers.

In May 2021, China’s State Council issued a statement signaling its intent to restrict cryptocurrency mining and trading activities, resulting in provincial governments taking proactive measurements to prohibit cryptocurrency mining. On September 24, 2021, China’s central bank and its National Development and Reform Commission issued a nation-wide ban on cryptocurrency mining and declaring all financial transactions involving cryptocurrencies illegal. As a result, mining data centers previously operating in China have been forced to shut down and owners of cryptocurrency mining equipment located in China have been attempting to relocate the equipment to mining data centers in other jurisdictions, with a particular focus on locations within the United States. Combined with the increase in the price of bitcoin in 2021, the influx of cryptocurrency miners from China has created conditions of great demand for mining data centers and limited supply. Due to these conditions, there is no assurance that Gryphon will be able to procure alternative hosting agreements on acceptable terms in a timely manner or at all.

Significant competition for suitable mining data centers is expected to continue, and other government regulators, including local permitting officials, may potentially restrict the ability of potential mining data centers to begin or continue operations in certain locations. They can also restrict the ability of electricity suppliers to provide electricity to mining operations in times of electricity shortage, or may otherwise potentially restrict or prohibit the provision of electricity to mining operations. While Gryphon is not aware of the existence of any such restrictions in New York, Georgia and North Carolina, the jurisdictions in which the mining data centers that Gryphon is currently maintaining its machines at are located, new ordinances and other regulations at the federal, state and local levels can be introduced at any time and can be triggered by certain adverse weather conditions or natural disasters, among other reasons.

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

Gryphon maintains its mining equipment at mining data centers in New York, Georgia and North Carolina. 98% of Gryphon’s miners are in New York, 1.1% are in Georgia, and 0.6% are in North Carolina. The mining data centers at which Gryphon maintains its mining equipment, and any future mining data centers at which Gryphon maintains its mining equipment will be, subject to a variety of risks relating to physical condition and operation, including:

•        the presence of construction or repair defects or other structural or building damage;

•        any non-compliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements;

•        any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; and

•        claims by employees and others for injuries sustained at Gryphon’s properties.

For example, the mining data centers at which Gryphon maintains its mining equipment could be rendered inoperable, temporarily or permanently, as a result of a fire or other natural disaster or by a terrorist or other attack on the facilities where Gryphon’s mining equipment is located. The security and other measures Gryphon takes to protect against these risks may not be sufficient. Any property insurance Gryphon obtained in the future may not be adequate to cover the losses Gryphon suffers as a result of any of these events. In the event of an uninsured loss, including a loss in excess of insured limits, at any of the mining data centers at which Gryphon maintains its mining equipment, such mining data centers may not be adequately repaired in a timely manner or at all and Gryphon may lose some or all of the future revenues anticipated to be derived from Gryphon’s equipment located at such mining data centers. Additionally, Gryphon is exposed to regulatory risk in New York given the high concentration of Gryphon’s mining equipment in the state. The recent regulatory changes in New York have not impacted Gryphon’s operations due the scope of the changes being limited to carbon-based electricity. However, Gryphon is acutely aware that further regulatory changes could impact its ability to operate in the state and is prepared to shift its operations to alternative jurisdictions should it be required. Such a shift could be costly, which could have a material adverse effect on Gryphon’s business, financial condition and results of operations.

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

Gryphon may not be able to compete successfully against present or future competitors. Gryphon does not have the resources to compete with larger providers of similar services at this time. The Bitcoin industry has attracted various high-profile and well-established operators, some of which have substantially greater liquidity and financial resources

than Gryphon does. With the limited resources Gryphon has available, Gryphon may experience great difficulties in expanding and improving its network of computers to remain competitive. Competition from existing and future competitors, particularly those that have access to competitively-priced energy, could result in Gryphon’s inability to secure acquisitions and partnerships that Gryphon may need to expand Gryphon’s business in the future. This competition from other entities with greater resources, experience and reputations may result in Gryphon’s failure to maintain or expand its business, as Gryphon may never be able to successfully execute its business plan. If Gryphon is unable to expand and remain competitive, its business could be negatively affected.

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

Gryphon competes with other users and/or companies that are mining Bitcoin and other potential financial vehicles, including securities backed by or linked to Bitcoin through entities similar to Gryphon. Market and financial conditions, and other conditions beyond Gryphon’s control, may make it more attractive to invest in other financial vehicles, or to invest in Bitcoin directly. The emergence of other financial vehicles and exchange-traded funds have been scrutinized by regulators and such scrutiny and the negative impressions or conclusions resulting from such scrutiny could be applicable to Gryphon and impact Gryphon’s ability to successfully pursue its strategy or operate at all, or to establish or maintain a public market for Gryphon’s securities. Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account, and harm investors.

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

The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or an alternative to distributed ledgers altogether. Gryphon’s business utilizes presently existent digital ledgers and blockchains and Gryphon could face difficulty adapting to emergent digital ledgers, blockchains, or alternatives thereto. This may adversely affect Gryphon and Gryphon’s exposure to various blockchain technologies and prevent Gryphon from realizing the anticipated profits from its investments. Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s strategy at all, which could have a material adverse effect on its business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for Gryphon’s own account, which could in turn harm investors.

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

Competitive conditions within the Bitcoin industry require that Gryphon use sophisticated technology in the operation of Gryphon’s business. The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements and evolving industry standards. New technologies, techniques or products could emerge that might offer better performance than the software and other technologies Gryphon currently utilizes, and Gryphon may have to manage transitions to these new technologies to remain competitive. Gryphon may not be successful, generally or relative to Gryphon’s competitors in the Bitcoin industry, in timely implementing new technology into Gryphon’s systems, or doing so in a cost-effective manner. During the course of implementing any such new technology into Gryphon’s operations, Gryphon may experience system interruptions and failures during such implementation. Furthermore, there can be no assurances that Gryphon will recognize, in a timely manner or at all, the benefits that Gryphon may expect as a result of implementing new technology into its operations. As a result, Gryphon’s business and operations may suffer.

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

Proof of stake is an alternative method in validating Bitcoin transactions. Should the algorithm shift from a proof of work validation method to a proof of stake method, mining would require less energy and may render any company that maintains advantages in the current climate (for example, from lower priced electricity, processing, real estate, or hosting) less competitive. Gryphon, as a result of its efforts to optimize and improve the efficiency of its bitcoin

mining operations, may be exposed to the risk in the future of losing the benefit of Gryphon’s capital investments and the competitive advantage Gryphon hopes to gain from this as a result, and may be negatively impacted if a switch to proof of stake validation were to occur. Such events could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its new strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account.

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

To the extent that a significant majority of users and miners on a cryptocurrency network install software that changes the cryptocurrency network or properties of a cryptocurrency, including the irreversibility of transactions and limitations on the mining of new cryptocurrency, the cryptocurrency network would be subject to new protocols and software. However, if less than a significant majority of users and miners on the cryptocurrency network consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork” of the network, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of the cryptocurrency running in parallel, yet lacking interchangeability and necessitating exchange-type transactions to convert currencies between the two forks. Additionally, it may be unclear following a fork which fork represents the original asset and which is the new asset. Different metrics adopted by industry participants to determine which is the original asset include: referring to the wishes of the core developers of a cryptocurrency, blockchains with the greatest amount of hashing power contributed by miners or validators, or blockchains with the longest chain. A fork in the Bitcoin network could adversely affect Gryphon’s ability to operate.

Gryphon may not be able to realize the economic benefit of a fork, either immediately or ever, which could adversely affect Gryphon’s business. If Gryphon holds bitcoin at the time of a hard fork into two cryptocurrencies, industry standards would dictate that Gryphon would be expected to hold an equivalent amount of the old and new assets following the fork. However, Gryphon may not be able, or it may not be practical, to secure or realize the economic benefit of the new asset for various reasons. For instance, Gryphon may determine that there is no safe or practical way to custody the new asset, that trying to do so may pose an unacceptable risk to Gryphon’s holdings in the old asset, or that the costs of taking possession and/or maintaining ownership of the new cryptocurrency exceed the benefits of owning the new cryptocurrency. Additionally, laws, regulations or other factors may prevent Gryphon from benefitting from the new asset even if there is a safe and practical way to custody and secure the new asset.

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

The ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, has caused substantial disruption in international and U.S. economies and markets. The outbreak has potential to have an adverse impact on the digital mining industry and, if repercussions of the outbreak are prolonged, could have a significant adverse impact on Gryphon’s business, which could be material. Gryphon’s management cannot at this point estimate the impact of the outbreak on Gryphon’s business and no provision for this outbreak is reflected in the accompanying financial statements.

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

The physical risks of climate change may impact the availability and cost of materials and natural resources, sources and supply of energy, demand for Bitcoin and other cryptocurrencies, and other operating costs. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements on Gryphon’s operations, or if Gryphon’s operations are disrupted due to physical impacts of climate change, Gryphon’s business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted.

Risks Related to Governmental Regulation and Enforcement

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

Gryphon believes that it is not engaged in the business of investing, reinvesting, or trading in securities, and it does not hold itself out as being engaged in those activities. However, under the Investment Company Act of 1940 (the “Investment Company Act”), a company may be deemed an investment company under section 3(a)(1)(C) thereof if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.

As a result of Gryphon’s investments and its mining activities, including investments in which it does not have a controlling interest, the investment securities Gryphon holds could exceed 40% of Gryphon’s total assets, exclusive of cash items and, accordingly, Gryphon could determine that it has become an inadvertent investment company. The bitcoin that Gryphon owns, acquires or mines may be deemed an investment security by the SEC, although Gryphon does not believe any of the bitcoin it owns, acquires or mines are securities. An inadvertent investment company can avoid being classified as an investment company if it can rely on one of the exclusions under the Investment Company Act. One such exclusion, Rule 3a-2 under the Investment Company Act, allows an inadvertent investment company a grace period of one year from the earlier of (a) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis. As of the date of this proxy statement / prospectus, Gryphon does not believe it is an inadvertent investment company. Gryphon may take actions to cause the investment securities held by it to be less than 40% of its total assets, which may include acquiring assets with Gryphon’s cash and bitcoin on hand or liquidating Gryphon’s investment securities or bitcoin or seeking a no-action letter from the SEC if Gryphon is unable to acquire sufficient assets or liquidate sufficient investment securities in a timely manner.

As the Rule 3a-2 exception is available to a company no more than once every three years, and assuming no other exclusion were available to Gryphon, Gryphon would have to keep within the 40% limit for at least three years after it ceases being an inadvertent investment company. This may limit Gryphon’s ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on Gryphon’s earnings. In any event, Gryphon does not intend to become an investment company engaged in the business of investing and trading securities.

Classification as an investment company under the Investment Company Act requires registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive and would require a restructuring of Gryphon’s operations, and Gryphon would be very constrained in the kind of business it could do as a registered investment company. Further, Gryphon would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance would result in Gryphon incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact to conduct Gryphon’s operations.

If regulatory changes or interpretations of Gryphon’s activities require its registration as a money services business under the regulations promulgated by The Financial Crimes Enforcement Network under the authority of the U.S. Bank Secrecy Act, Gryphon may be required to register and comply with such regulations. If regulatory changes or interpretations of Gryphon’s activities require the licensing or other registration of Gryphon as a money transmitter (or equivalent designation) under state law in any state in which Gryphon operates, Gryphon may be required to seek licensure or otherwise register and comply with such state law. In the event of any such requirement, to the extent Gryphon decides to continue, the required registrations, licensure and regulatory compliance steps may result in extraordinary, non-recurring expenses to Gryphon. Gryphon may also decide to cease its operations. Any termination of certain operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

To the extent that Gryphon’s activities cause it to be deemed a money service business under the regulations promulgated by the Financial Crimes Enforcement Network of the U.S. Treasury Department (“FinCEN”) under the authority of the U.S. Bank Secrecy Act, Gryphon may be required to comply with FinCEN regulations, including those that would mandate Gryphon to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.

To the extent that Gryphon’s activities cause Gryphon to be deemed a money transmitter or equivalent designation under state law in any state in which Gryphon operates, Gryphon may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. Currently, the New York Department of Financial Services maintains a comprehensive “BitLicense” framework for businesses that conduct “virtual currency business activity.” Gryphon will continue to monitor for developments in New York legislation, guidance and regulations.

Such additional federal or state regulatory obligations may cause Gryphon to incur extraordinary expenses, which could affect Gryphon’s business in a material and adverse manner. Furthermore, Gryphon and its service providers may not be capable of complying with certain federal or state regulatory obligations applicable to money service businesses and money transmitters. If Gryphon is deemed to be subject to and determined not to comply with such additional regulatory and registration requirements, Gryphon may act to dissolve and liquidate Gryphon. Any such action may adversely affect an investment in Gryphon.

Gryphon is subject to an extensive, highly evolving and uncertain regulatory and business landscape and any adverse changes to, or its failure to comply with, any laws and regulations, and adverse business reactions from counterparties could adversely affect its brand, reputation, business, operating results, and financial condition.

Gryphon’s business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance, as well as counterparty risk in the markets in which it operates, including regulatory aspects from financial services, federal energy and other regulators, the SEC, the CFTC, credit, crypto asset custody, exchange, and transfer, cross-border and domestic money and crypto asset transmission, consumer and commercial lending, usury, foreign currency exchange, privacy, data governance, data protection, cybersecurity, fraud detection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing, as well as the same regulatory risks applicable to counterparties, most notably hosting businesses, as well as the recent economic issues and bankruptcies befalling some in this industry. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, crypto assets, and related technologies. As a result, some applicable laws and regulations do not contemplate or address unique issues associated with the crypto economy, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of Gryphon’s business and the significant uncertainty surrounding the regulation of the crypto economy requires Gryphon to exercise its judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with Gryphon’s conclusions. To the extent Gryphon has not complied with such laws, rules, and regulations, it could be subject to significant fines, revocation of licenses, limitations on its products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect its business, operating results, and financial condition.

Additionally, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in other countries may adopt new laws and regulations, the direction and timing of which may be influenced by changes in the governing administrations and major events in the crypto economy. The collapse of TerraUSD and Luna and the bankruptcy filings of FTX and its subsidiaries, Three Arrows, Celsius, Voyager, Genesis and BlockFi have resulted in calls for heightened scrutiny and regulation of the digital asset industry, with a specific focus on digital asset exchanges, platforms, and custodians. Federal and state legislatures and regulatory agencies are expected to introduce and enact new laws and regulations to regulate digital asset intermediaries, such as digital asset exchanges and custodians. The U.S. regulatory regime — namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (“FDIC”), and the Federal Bureau of Investigation) as well as the White House have issued reports and releases concerning digital assets, including Bitcoin and digital asset markets. In the near future, various governmental and regulatory bodies, including in the United States, may introduce new policies, laws, and regulations relating to crypto assets and the crypto economy generally, and crypto asset platforms in particular. However, the extent and content of any forthcoming laws and regulations are not yet ascertainable with certainty, and it may not be ascertainable in the near future. The failures of risk management and other control functions at other companies that played a role in these events could accelerate an existing regulatory trend toward stricter oversight of crypto asset platforms and the crypto economy.

Although Gryphon is not directly connected to the recent cryptocurrency market events, Gryphon may still suffer reputational harm due to its association with the cryptocurrency industry in light of the recent disruption in the crypto asset markets. Due to its business activities, Gryphon may be subject to ongoing examinations, oversight, and reviews and currently are, and expect in the future, to be subject to investigations and inquiries, by U.S. federal and state regulators, many of which have broad discretion to audit and examine its business. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying Gryphon from offering certain products or services offered by its competitors or could impact how it offers such products and services. Adverse changes to, or its failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on its reputation and brand and its business, operating results, and financial condition.

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

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently, with certain governments deeming cryptocurrencies illegal, and others allowing their use and trade without restriction. In some jurisdictions, such as in the U.S., digital assets, like cryptocurrencies, are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. On March 8, 2022, President Biden announced an executive order on cryptocurrencies, which seeks to establish a unified federal regulatory regime for cryptocurrencies. In connection with FTX’s collapse and bankruptcy filing, the U.S. Department of Justice brought criminal charges, including charges of fraud, violations of federal securities laws, money laundering, and campaign finance offenses against FTX’s former CEO and others. FTX is also under investigation by the SEC, the Justice Department, and the Commodity Futures Trading Commission, as well as by various regulatory authorities in the Bahamas, Europe and other jurisdictions. Regulatory and enforcement scrutiny has also increased, including from the DOJ, the SEC, the CFTC, the White House and Congress. Gryphon is unable to predict the nature or extent of new and proposed legislation and regulation potentially stemming from the Biden Administration executive order and proceedings surrounding FTX.

Bitcoin is the oldest and most well-known form of cryptocurrency. Bitcoin and other forms of cryptocurrencies have been the source of much regulatory consternation, resulting in differing definitional outcomes without a single unifying statement. Bitcoin and other digital assets are viewed differently by different regulatory and standards setting organizations globally as well as in the United States on the federal and state levels. For example, the Financial Action Task Force (“FATF”) and the Internal Revenue Service (“IRS”) consider a cryptocurrency as currency or an asset or property. Further, the IRS applies general tax principles that apply to property transactions to transactions involving virtual currency.

If regulatory changes or interpretations require the regulation of Bitcoin or other digital assets under the securities laws of the United States or elsewhere, including the Securities Act of 1933, the Exchange Act and the 1940 Act or similar laws of other jurisdictions and interpretations by the SEC, the CFTC, the IRS, Department of Treasury or other agencies or authorities, Gryphon may be required to register and comply with such regulations, including at a state or local level. To the extent that Gryphon decides to continue operations, the required registrations and regulatory compliance steps may result in extraordinary expense or burdens to Gryphon. Gryphon may also decide to cease certain operations and change Gryphon’s business model. Any disruption of Gryphon’s operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to Gryphon.

Current and future legislation and SEC-rulemaking and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoin or other cryptocurrencies are viewed or treated for classification and clearing purposes. In particular, Bitcoin and other cryptocurrencies may not be excluded from the definition of “security” by SEC rulemaking or interpretation requiring registration of all transactions unless another exemption is available, including transacting in bitcoin or cryptocurrency among owners and require registration of trading platforms as “exchanges”.

Gryphon cannot be certain as to how future regulatory developments will impact the treatment of Bitcoin and other cryptocurrencies under the law. While Gryphon received crypto assets other than Bitcoin from the private placement of stock, Gryphon has long since sold these assets and currently does not hold any crypto assets other than Bitcoin. Additionally, Gryphon does not intend to expand its business by acquiring digital assets other than Bitcoin. Nonetheless,

if Bitcoin becomes subject to additional regulatory and registration requirements, and Gryphon fails to comply with these, Gryphon may seek to cease certain of its operations or be subjected to fines, penalties and other governmental action. Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its business model at all, which could have a material adverse effect on its business, prospects or operations and potentially the value of any cryptocurrencies Gryphon plans to hold or expect to acquire for its own account.

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

A number of companies that engage in Bitcoin and/or other cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with Bitcoin may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action, particularly in China, where regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China. In January 2023, the Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation issued a joint statement effectively discouraging banks from doing business with clients in crypto-asset industries. The Federal Reserve also issued a policy statement broadening its authority to cover state-chartered institutions. Moreover, in January 2023, the White House issued a statement cautioning deepening ties between crypto-assets and the broader financial system. Gryphon also may be unable to obtain or maintain these financial services for Gryphon’s business. The difficulty that many businesses that provide Bitcoin and/or derivatives on other cryptocurrency-related activities have and may continue to have in finding banks and financial institutions willing to provide them services could decrease their usefulness and harm their public perception in the future and may be decreasing the usefulness of Bitcoin as a payment system and harming public perception of Bitcoin.

The usefulness of Bitcoin as a payment system and the public perception of Bitcoin could be damaged if banks or financial institutions were to close the accounts of businesses engaging in Bitcoin and/or other cryptocurrency-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock exchanges and commodities derivatives exchanges, the over-the-counter market, and the Depository Trust Company, which, if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect Gryphon’s relationships with financial institutions and impede Gryphon’s ability to convert bitcoin to fiat currencies. Such factors could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and harm investors.

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

As Bitcoin has grown in both popularity and market size, governments around the world have reacted differently to Bitcoin; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as in the U.S., subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. Until recently, little or no regulatory attention has been directed toward Bitcoin and the Bitcoin network by U.S. federal and state governments, foreign governments and self-regulatory agencies. As Bitcoin has grown in popularity and in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the Commodity Futures Trading Commission, the SEC, FinCEN and the Federal Bureau of Investigation) have begun to examine the operations of the Bitcoin network, Bitcoin users and the Bitcoin exchange market.

One or more countries such as China and Russia, which have taken harsh regulatory action in the past, may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these cryptocurrency assets or to exchange for fiat currency. In many nations, particularly in China and Russia, it is illegal to accept payment in Bitcoin and other cryptocurrencies for consumer transactions and banking institutions are barred from accepting deposits of Bitcoin. Such restrictions may adversely affect Gryphon as the large-scale use of Bitcoin as a means of exchange is presently confined to certain regions globally. Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any Bitcoin that Gryphon mines or otherwise acquires or holds for its own account, and harm investors.

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

The Office of Financial Assets Control of the U.S. Department of Treasury (“OFAC”) requires Gryphon to comply with its sanction program and not conduct business with persons named on its specially designated nationals list. However, because of the pseudonymous nature of blockchain transactions, Gryphon may inadvertently and without Gryphon’s knowledge engage in transactions with persons named on OFAC’s specially designated nationals list. Gryphon’s policy prohibits any transactions with such specially designated national individuals, but Gryphon may not be adequately capable of determining the ultimate identity of the individual with whom Gryphon transacts with respect to selling bitcoin assets. Moreover, federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child pornography. Recent media reports have suggested that persons have imbedded such depictions on one or more blockchains. Because Gryphon’s business requires it to download and retain one or more blockchains to effectuate Gryphon’s ongoing business, it is possible that such digital ledgers contain prohibited depictions without Gryphon’s knowledge or consent. To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, Gryphon may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm Gryphon’s reputation.

Gryphon’s management and compliance personnel have limited experience handling a listed cryptocurrency mining-related services company.

Gryphon’s management and compliance personnel have limited experience in handling regulatory and compliance matters relating to a listed cryptocurrency mining-related services company. Gryphon’s key compliance documents and compliance programs, such as AML and KYC procedures, also have a recent history only. Gryphon believes that its measures designed to limit its counterparty risks are appropriate. While Gryphon has been devoting a substantial amount of time and resources to various compliance initiatives and risk management measures, including but not limited to, developing a dedicated internal compliance function, Gryphon cannot assure you the practical application and effectiveness of its compliance program and risk management measures, nor that there will not be a failure in detecting regulatory compliance issues or managing risk exposure, which may adversely affect its reputation, business, financial condition and results of operations

Risks Related to the Combined Company

In determining whether you should approve the issuance of shares of Akerna Common Stock and other matters related to the Merger, as the case may be, you should carefully read the following risk factors in addition to the risks described above.

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

Following completion of the Merger, the combined company will be susceptible to many of the risks described in the sections herein entitled “Risks Related to Akerna” and “Risks Related to Gryphon.” To the extent any of the events in the risks described in those sections occur, those events could cause the potential benefits of the Merger not to be realized and the market price of the combined company’s common stock to decline.

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

There has been no public market for Gryphon’s common stock. Although the Akerna’s Common Stock is listed on Nasdaq, and Gryphon and Akerna will apply to have the combined company’s common stock listed on Nasdaq, an active trading market for the combined company’s common stock may never develop or be sustained following the Merger. Gryphon, Akerna and their financial advisors will set the final ratio of the Akerna Reverse Stock Split to target a trading price to provide for sufficient liquidity. The price that the combined company trades at immediately following the Merger may not necessarily reflect the price at which investors in the market will be willing to buy and sell the shares on a sustained basis. In addition, an active trading market may not develop following the consummation of the Merger or, if it is developed, may not be sustained. The lack of an active market may impair your ability to sell your

shares at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair the combined company’s ability to raise capital by selling shares of common stock and may impair the combined company’s ability to acquire other businesses or technologies using the combined company’s shares of common stock as consideration, which, in turn, could materially adversely affect the combined company’s business. The market price of the combined company’s common stock may fluctuate significantly in response to numerous factors, many of which are beyond the combined company’s control, including:

•        overall performance of the equity markets;

•        the combined company’s operating performance and the performance of other similar companies;

•        the published opinions and third-party valuations by banking and market analysts;

•        changes in the combined company’s projected operating results that it provides to the public, the combined company’s failure to meet these projections or changes in recommendations by securities analysts that elect to follow the combined organization’s common stock;

•        regulatory or legal developments in the United States and other countries;

•        the level of expenses related to operations;

•        the combined company’s failure to achieve its goals in the timeframe it announces;

•        announcements of acquisitions, strategic alliances or significant agreements by the combined company;

•        recruitment or departure of key personnel;

•        the economy as a whole and market conditions in the combined company’s industry;

•        trading activity by a limited number of stockholders who together beneficially own a majority of the combined company’s outstanding common stock;

•        the expiration of market standoff or contractual lock-up agreements;

•        the size of the combined company’s market float;

•        political uncertainty and/or instability in the United States;

•        the ongoing and future impact of the COVID-19 pandemic and actions taken to slow its spread; and

•        any other factors discussed in this proxy statement / prospectus / information statement.

In addition, the equity markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many data mining and cryptocurrency companies. Stock prices of many data mining and cryptocurrency companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. The trading prices for common stock of other cryptocurrency mining companies have also been highly volatile as a result of the COVID-19 pandemic. In the past, stockholders have filed securities class action litigation following periods of market volatility. If the combined company were to become involved in securities litigation, it could subject the combined company to substantial costs, divert resources and the attention of management from the combined company’s business and adversely affect its business.

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

As a public company, the combined company will continue to incur significant legal, accounting, and other expenses that Gryphon did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. The combined company’s management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase the combined company’s legal and financial compliance costs and will make some activities more time-consuming and costly.

Pursuant to Section 404, the combined company is required to furnish a report by its management on its internal control over financial reporting, which may include an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. While the combined company remains a “smaller reporting company” with less than $100 million in annual revenues, it will not be required to include an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. Following the closing of the Merger, the combined company will need to continue to dedicate internal resources, potentially engage outside consultants, maintain a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite the combined company’s efforts, there is a risk that neither it nor its independent registered public accounting firm if required will be able to conclude that its internal control over financial reporting remains effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of the combined company’s financial statements.

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

If, after listing, the combined company fails to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist the combined company’s common stock. Such a delisting would likely have a negative effect on the price of the combined company’s common stock and would impair your ability to sell or purchase the combined company’s common stock when you wish to do so. In the event of a delisting, the combined company can provide no assurance that any action taken by the combined company to restore compliance with listing requirements would allow the combined company’s common stock to become listed again, stabilize the market price or improve the liquidity of the combined company’s common stock, prevent the combined company’s common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

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

Gryphon expects the combined company’s operating results to be subject to annual and quarterly fluctuations. The combined company’s net income and other operating results will be affected by numerous factors, including:

•        the combined company’s execution of any additional collaboration or similar arrangements, and the timing of payments the combined company may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements;

•        additions and departures of key personnel;

•        strategic decisions by the combined company or its competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; and

•        changes in general market and economic conditions.

If the combined company’s operating results fall below the expectations of investors or securities analysts, the price of the combined company’s common stock could decline substantially. Furthermore, any fluctuations in the combined company’s operating results may, in turn, cause the price of its stock to fluctuate substantially.

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

Immediately following the completion of the Merger, the combined company’s executive officers, directors and greater than 5% stockholders will own, in the aggregate, approximately            % of the combined company’s outstanding common stock (assuming no exercise of outstanding warrants). As a result, such persons or their appointees to the combined company’s board of directors, acting together, will have the ability to control or significantly influence all matters submitted to the combined company’s board of directors or stockholders for approval, including the appointment of the combined company’s management, the election and removal of directors and approval of any significant transaction, as well as the combined company’s management and business affairs. This concentration of ownership may have the effect of delaying, deferring or preventing a change in control, impeding a merger,

consolidation, takeover or other business combination involving the combined company, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of the combined company’s business, even if such a transaction would benefit other stockholders.

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

Sales of a substantial number of shares of the combined company’s common stock in the public market or the perception that these sales might occur could significantly reduce the market price of the combined company’s common stock and impair the combined company’s ability to raise adequate capital through the sale of additional equity securities.

Upon the closing of the Merger, the combined company will have outstanding a total of                shares of common stock, assuming no exercise of outstanding warrants and without giving effect to the Akerna Reverse Stock Split. Of these shares,                million shares of common stock will be freely tradable, without restriction, in the public market immediately following the Merger, unless they are purchased by one of the combined company’s affiliates.

Sales of these shares, or perceptions that they will be sold, could cause the trading price of the combined company’s common stock to decline.

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

The combined company’s amended and restated certificate of incorporation (as amended) and bylaws contain provisions that could depress the trading price of the combined company’s common stock by acting to discourage, delay or prevent a change of control of the combined company or changes in its management that the stockholders of the combined company may deem advantageous. These provisions include the following:

•        establish a classified board of directors so that not all members of the combined company’s board of directors are elected at one time;

•        permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships;

•        provide that directors may only be removed for cause and only by the affirmative vote of the holders of 75% or more of the outstanding shares of the combined company’s capital stock then entitled to vote;

•        require super-majority voting to amend some provisions in the combined company’s amended and restated certificate of incorporation and bylaws;

•        prohibit stockholders from calling special meetings of stockholders;

•        prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of the combined company’s stockholders;

•        provide that the board of directors is expressly authorized to amend or repeal the combined company’s bylaws;

•        restrict the forum for certain litigation against the combined company to Delaware; and

•        establish advance notice requirements for nominations for election to the combined company’s board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of the combined company’s amended and restated certificate of incorporation (as amended) or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for the combined company’s stockholders to receive a premium for their shares of the combined company’s common stock, and could also affect the price that some investors are willing to pay for the combined company’s common stock.

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

The combined company’s amended and restated bylaws provide that, unless it consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (1) any derivative action or proceeding brought on the combined company’s behalf under Delaware law, (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of the combined company’s directors, officers or other employees to the combined company or its stockholders, (3) any action or proceeding asserting a claim against the combined company or any of its directors, officers or other employees arising pursuant to any provision of the DGCL, the combined company’s amended and restated certificate of incorporation or bylaws, (4) any action or proceeding to interpret, apply, enforce or determine the validity of the combined company’s amended and restated certificate of incorporation or bylaws, (5) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery (the “Chancery Court”) of the State of Delaware, or (6) any other action or proceeding against the combined company or any of its directors, officers or other employees asserting a claim that is governed by the internal affairs doctrine, shall be the Chancery Court (or, if and only if the Chancery Court lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) in all cases subject to the court having jurisdiction over indispensable parties named as defendants. These exclusive forum provisions do not apply to claims under the Securities Act or the Exchange Act.

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

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. However, the combined company’s amended and restated certificate of incorporation contains a federal forum provision which provides that unless the combined company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in any of the combined company’s securities shall be deemed to have notice of and consented to this provision. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the combined company or its directors, officers or other employees, which may discourage lawsuits against the combined company or its directors, officers and other employees. If a court were to find the exclusive forum provision in the combined company’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, the combined company may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm the combined company’s results of operations.

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

Additional capital will be needed in the future to continue the combined company’s planned operations. To the extent the combined company raises additional capital by issuing equity securities, its stockholders may experience substantial dilution. The combined company may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner it determines from time to time. If the combined company sells common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to the combined company’s existing stockholders, and new investors could gain rights superior to existing stockholders.

Pursuant to the 2023 Plan, the combined company’s board of directors is authorized to grant stock options and other equity-based awards to its employees, directors and consultants, which equity-based awards would also cause dilution to its stockholders. The number of shares of the combined company’s common stock reserved for issuance under the

2023 Plan will be         . If the board of directors of the combined company elects to increase the number of shares available for future grant by the maximum amount each year, stockholders may experience additional dilution, which could cause the combined company’s stock price to fall.

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

Gryphon has never declared or paid any cash dividend on Gryphon common stock. The expectation is that the combined company will retain future earnings for the development, operation and expansion of the combined company’s business and Gryphon does not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the Anchorage Loan Agreement prohibits Gryphon, and will prohibit the combined company, from declaring or paying any cash dividends without Anchorage’s prior written consent, and the terms of any future debt agreements may preclude the combined company from paying dividends. Any return to stockholders will therefore be limited to the appreciation of their stock. There is no guarantee that shares of the combined company’s common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares.

If the Merger does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. Holders of Gryphon Shares will be required to recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Gryphon Shares for Akerna Common Stock in the Merger.

The U.S. federal income tax consequences of the Merger to U.S. Holders (as defined under the heading “The Transactions — Certain Material U.S. Federal Income Tax Consequences of the Merger”) will depend on whether the Merger qualifies as a “reorganization” for U.S. federal income tax purposes. K&L Gates LLP, counsel to Gryphon, has delivered an opinion to Gryphon that, on the basis of certain representations made by Akerna and Gryphon, and subject to certain assumptions set forth therein, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. This opinion is attached as Exhibit 8.1 to the Registration Statement of which this proxy statement/prospectus forms a part. However, if the Merger fails to qualify as a reorganization within the meaning of Section 368(a) of the Code, a U.S. Holder of Gryphon Shares would recognize gain or loss for U.S. federal income tax purposes on each Gryphon Share surrendered in the Merger for Akerna Common Stock. For a more complete discussion of the material U.S. federal income tax consequences of the Merger, please carefully review the information set forth in the section entitled “The Transactions — Certain Material U.S. Federal Income Tax Consequences of the Merger.”

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

The historical financial information of Gryphon included elsewhere in this proxy statement / prospectus reflects assumptions and allocations made by Gryphon based in part on its status as a privately held company. The historical results and financial condition of Gryphon presented herein may be different from those that would have resulted had Gryphon been operated as a public company during the applicable periods or at the applicable dates. As a result, the historical financial information of Gryphon may not be indicative of the future operating results or financial position of the combined company.

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

The unaudited pro forma condensed combined financial information included elsewhere in this proxy statement / prospectus has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Merger been completed as of the date indicated, nor is it indicative of future operating results or financial position. The unaudited pro forma condensed combined financial information has been derived from the historical financial statements of Akerna and Gryphon and adjustments and assumptions have been made regarding the combined company after giving effect to the Merger and the Sale Transaction. Akerna is also planning to effect the Akerna Reverse Stock Split, subject to the approval of the Akerna stockholders, and the Akerna Reverse Stock Split will impact the financial information on a per share basis. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the unaudited pro forma condensed combined financial information

does not reflect all costs that are expected to be incurred by the combined company as an operating company after the Merger. The assumptions used in preparing the unaudited pro forma condensed combined financial information may not ultimately be accurate, and other factors may affect the combined company’s results and financial condition following consummation of the Merger. The unaudited pro forma condensed combined financial information does not reflect the costs of integration activities contemplated as part of the Merger. Accordingly, the unaudited pro forma condensed combined financial information included elsewhere in this proxy statement / prospectus does not reflect what Akerna’s or Gryphon’s results or financial condition would have been had Akerna and Gryphon been a consolidated entity during all periods presented.

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

Akerna, under the new name “Gryphon Digital Mining, Inc.,” will be required to meet the initial listing requirements of Nasdaq to maintain the listing and continued trading of its shares on Nasdaq. These initial listing requirements are more difficult to achieve than the continued listing requirements. Pursuant to the Merger Agreement, Akerna agreed to use its commercially reasonable efforts to cause the shares of Akerna Common Stock being issued in the Merger to be approved for listing on Nasdaq at or prior to the Effective Time. Based on information currently available to Akerna, Akerna anticipates that its stock will be unable to meet the $4.00 minimum bid price (or, to the extent applicable, $3.00 or $2.00 minimum closing price) initial listing requirement at the closing of the Merger unless it effects the Akerna Reverse Stock Split. The Akerna Board intends to effect the Akerna Reverse Stock Split of the Akerna Common Stock. In addition, often times a reverse stock split will not result in a trading price for the affected common stock that is proportional to the ratio of the split. If Akerna is unable to satisfy Nasdaq listing requirements, neither party is obligated to close the Merger. Also, following the Merger, if the combined company is unable to satisfy Nasdaq listing requirements, Nasdaq may notify the combined company that its shares of common stock will not be listed on Nasdaq. Upon a potential delisting from Nasdaq, if the combined company’s common stock is not then eligible for quotation on another market or exchange, trading of the shares could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it is likely that there would be significantly less liquidity in the trading of the combined company’s common stock; decreases in institutional and other investor demand for the shares, coverage by securities analysts, market making activity and information available concerning trading prices and volume; and fewer broker dealers willing to execute trades in the combined company’s common stock. Also, it may be difficult for the combined company to raise additional capital if the combined company’s common stock is not listed on a major exchange. The occurrence of any of these events could result in a further decline in the market price of the combined company’s common stock and could have a material adverse effect on the combined company.

The Merger will result in changes to the Akerna Board and the combined company will pursue different strategies than Akerna pursued independently.

If Akerna and Gryphon complete the Merger, the composition of the Akerna Board will change in accordance with the Merger Agreement. Following completion of the Merger, the combined company’s board of directors is expected to consist of seven members, one of whom shall be designated by Akerna and the other six of whom shall be designated by Gryphon. Currently, it is anticipated that the combined company will continue to advance the business strategies of Gryphon.

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

As a public company, the combined company will incur significant legal, accounting and other expenses that Gryphon did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules implemented by the SEC and Nasdaq, impose various requirements on public companies, including those related to corporate governance practices. The combined company’s management and other personnel will need to devote a substantial amount of time to these requirements. Certain members of Gryphon’ management, which will continue as the management of the combined company, do not have significant experience in addressing these requirements. Moreover, these rules and regulations will increase the combined company’s legal and financial compliance costs relative to those of Gryphon and will make some activities more time-consuming and costly.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement / prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “seek,” “should,” “will” or the negative of these terms or other similar expressions.

All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, forward-looking statements include any statements of the plans, strategies and objectives of management for future operations, including the execution of integration and restructuring plans and the anticipated timing of filings; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. Forward-looking statements may also include any statements of the plans, strategies and objectives of management with respect to the approval and consummation of the Merger, Akerna’s ability to solicit a sufficient number of proxies to approve the Merger and other matters related to the consummation of the Merger.

For a discussion of the factors that may cause Akerna, Gryphon or the combined company’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, or for a discussion of risk associated with the ability of Akerna and Gryphon to complete the Merger and the effect of the Merger on the business of Akerna, Gryphon and the combined company, see the section titled “Risk Factors” in this proxy statement / prospectus.

These forward-looking statements include, but are not limited to, statements concerning the following:

•        the expected benefits of and potential value created by the Merger for the stockholders of Akerna and Gryphon;

•        likelihood of the satisfaction of certain conditions to the completion of the Merger and whether and when the Merger will be consummated;

•        Akerna’s ability to control and correctly estimate its operating expenses and its expenses associated with the Merger;

•        any statements of the plans, strategies and objectives of management for future operations;

•        any statements concerning the attraction and retention of highly qualified personnel;

•        any statements regarding expectations concerning Gryphon’s relationships and actions with third parties; and

•        future regulatory, judicial and legislative changes in Gryphon’s industry.

You should not rely upon forward-looking statements as predictions of future events. Neither Akerna nor Gryphon can assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, statements that “we believe” and similar statements reflect the beliefs and opinions on the relevant subject of Akerna, Gryphon or the combined company, as applicable. These statements are based upon information available as of the date of this prospectus, and while Akerna, Gryphon or the combined company, as applicable, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation, the risk that the conditions to the closing are not satisfied, including the failure to timely, or at all, obtain stockholder approval for the Merger; uncertainties as to the timing of the consummation of the

Merger; risks related to Akerna’s ability to correctly estimate its operating expenses and its expenses associated with the Merger; competitive responses to the Merger; unexpected costs, charges or expenses resulting from the Merger; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; and legislative, regulatory, political and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere.

If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of Akerna, Gryphon or the combined company could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement / prospectus are current only as of the date on which the statements were made. Akerna and Gryphon do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events, except as otherwise required by the federal securities laws.

THE SPECIAL MEETING OF AKERNA STOCKHOLDERS

Date, Time and Place

The Akerna special meeting will be held on held on            , 2023 at            Mountain Time at            , unless postponed or adjourned to a later date. Akerna is sending this proxy statement/prospectus to its stockholders in connection with the solicitation of proxies by Akerna Board for use at the Akerna special meeting and any adjournments or postponements of the Akerna special meeting. This proxy statement/prospectus is first being furnished to Akerna stockholders on or about            , 2023.

Purposes of the Akerna Special Meeting

The purposes of the Akerna special meeting are:

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

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

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

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

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

6.      to approve the Akerna Corp. 2023 Omnibus Incentive Plan;

7.      approve the MJA Promissory Note Conversion;

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

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

Proposal No. 1 is referred to herein as the Merger Proposal. Proposal No. 2 is referred to herein as the Sale Transaction Proposal. Proposal No. 3 is referred to herein as the Akerna Reverse Stock Split Proposal. Proposal No. 4 is referred to herein as the Akerna Authorized Shares Proposal. Proposal No. 5 is referred to herein as the Akerna Name Change Proposal. Proposal No. 6 is referred to herein as 2023 Plan Proposal. Proposal No. 7 is referred to herein as the MJA Promissory Note Conversion. The approval of the Merger Proposal, the Sale Transaction Proposal, the Akerna Reverse Stock Split Proposal, the Akerna Authorized Shares Proposal, the Akerna Name Change Proposal and the 2023 Plan Proposal are all conditions to the completion of the Merger. The approval of the Merger Proposal and the MJ Acquisition Promissory Note Conversion are conditions to the completion of the Sale Transaction.

Recommendation of Akerna Board

•        The Akerna Board has determined and believes that the issuance of shares of Akerna Common Stock pursuant to the Merger Agreement is advisable, fair to, in the best interests of Akerna and its stockholders and has approved such issuance. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” Merger Proposal to approve the issuance of shares of Akerna Common Stock pursuant to the Merger Agreement and the change of control resulting from the Merger.

•        The Akerna Board has determined and believes that the sale of the Membership Interests of MJ Freeway and the Capital Stock of Ample pursuant to the Purchase Agreement is advisable, fair to, in the best interests of Akerna and its stockholders and has approved such sale. The Akerna Board unanimously

recommends that Akerna stockholders vote “FOR” the Sale Transaction Proposal to approve the Purchase Agreement and the sale of the Membership Interests of MJ Freeway and the Capital Stock of Ample pursuant to the Purchase Agreement and the transactions contemplated thereby.

•        The Akerna Board has determined and believes that it is in the best interests of Akerna and its stockholders to approve the amendment to the amended and restated certificate of incorporation of Akerna to effect the Akerna Reverse Stock Split, as described in this proxy statement/prospectus. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the Reverse Stock Split Proposal to approve the Akerna Reverse Stock Split.

•        The Akerna Board has determined and believes that it is in the best interests of Akerna and its stockholders to approve the amendment to the amended and restated certificate of incorporation of Akerna to increase the number of authorized shares of Akerna Common Stock. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the Authorized Shares Proposal to approve the Akerna Authorized Share Increase.

•        The Akerna Board has determined and believes that it is in the best interests of Akerna and its stockholders to approve the amendment to the amended and restated certificate of incorporation of Akerna to change the corporate name from Akerna Corp. to “Gryphon Digital Mining, Inc.”, as described in this proxy statement/prospectus. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the Name Change Proposal to approve the Akerna Name Change.

•        The Akerna Board has determined and believes that it is in the best interests of Akerna and its stockholders to approve the 2023 Plan, in the form attached as Annex F to the accompanying proxy statement/prospectus. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the 2023 Plan Proposal.

•        The Akerna Board has determined and believes that it is in the best interests of Akerna and its stockholders to approve the MJA Promissory Note Conversion pursuant to the terms of the MJA Promissory Note in the form attached as Annex G. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the MJA Promissory Note Conversion Proposal.

•        The Akerna Board has determined and believes that adjourning the Akerna special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the other proposals is in the best interests of Akerna and its stockholders and has approved and adopted the proposal. The Akerna Board unanimously recommends that Akerna stockholders vote “FOR” the Adjournment Proposal to adjourn the Akerna special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the other proposals.

Record Date and Voting Power

Only holders of record of Akerna Common Stock and Akerna voting preferred stock at the close of business on the record date of            , are entitled to notice of, and to vote at, the Akerna special meeting. At the close of business on the record date, there were            registered holders of record of Akerna Common Stock and there were shares of Akerna Common Stock issued and outstanding and there were            registered holders of record of Akerna voting preferred stock, consisting of holders of Series C Preferred Stock, with the right to vote an equivalent of ______ shares of Akerna Common Stock and the holder of Akerna’s special voting preferred share, with right to vote an equivalent of _____ share of Akerna Common Stock. Each share of Akerna Common Stock entitles the holder thereof to one vote on each matter submitted for stockholder approval. Each share of Akerna Series C Preferred Stock entitles the holder thereof to vote the equivalent of            shares of Akerna Common Stock on each matter submitted for stockholder approval. The special voting preferred share entitles the holder thereof to vote the equivalent of ______ shares of Akerna Common Stock on each matter submitted for stockholder approval.

Voting and Revocation of Proxies

The proxy accompanying this proxy statement/prospectus is solicited on behalf of Akerna Board for use at the Akerna special meeting.

If, as of the record date referred to above, your shares were registered directly in your name with the transfer agent for Akerna Common Stock, CST, or with Akerna for the Akerna voting preferred stock, then you are a stockholder of record. Whether or not you plan to attend the Akerna special meeting online, Akerna urges you to fill out and return the proxy card or vote by proxy over the telephone or on the internet as instructed below to ensure your vote is counted.

The procedures for voting are as follows:

If you are a stockholder of record, you may vote at the Akerna special meeting. Alternatively, you may vote by proxy by using the accompanying proxy card, over the internet or by telephone. Whether or not you plan to attend the Akerna special meeting, Akerna encourages you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Akerna special meeting, you may still attend the Akerna special meeting and vote during the virtual meeting. In such case, your previously submitted proxy will be disregarded.

•        To vote at the Akerna special meeting, attend the Akerna special meeting and follow the instructions to vote at the special meeting.

•        To vote using the proxy card, simply complete, sign and date the accompanying proxy card and return it promptly in the envelope provided. If you return your signed proxy card before the Akerna special meeting, Akerna will vote your shares in accordance with the proxy card.

•        To vote by proxy over the internet, follow the instructions provided on the proxy at vote at .

•        To vote by telephone, you may vote by proxy by calling the toll-free number found on the proxy card.

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote in person at the Akerna special meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy.

Akerna provides internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

If you do not give instructions to your broker, your broker cannot vote your Akerna shares during the Special Meeting for anything besides the Reverse Stock Split Proposal and the Name Change Proposal because all the other proposals are considered “non-discretionary,” non-routine items.

All properly executed proxies that are not revoked will be voted at the Akerna special meeting and at any adjournments or postponements of the Akerna special meeting in accordance with the instructions contained in the proxy. If a holder of Akerna Common Stock or Akerna voting preferred stock executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted “FOR” all of the proposals in accordance with the recommendation of Akerna Board.

If you are a stockholder of record of Akerna and you have not executed the Merger Support Agreement, the Sale Transaction Support Agreement, a Merger Lender Support Letter or a Sale Transaction Lender Support Letter, you may change your vote at any time before your proxy is voted at the Akerna special meeting in any one of the following ways:

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

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

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

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

If your shares of Akerna Common Stock or Akerna voting preferred stock are held by your broker, bank or other agent, you should follow the instructions provided by them.

Required Vote

The affirmative vote of a majority of the votes properly cast at the Akerna special meeting, whether present at the special meeting or represented by proxy at the special meeting, is required for approval of Proposal Nos. 1, 6, 7 and 8. The affirmative vote of the holders of a majority of shares of Akerna Common Stock and Akerna preferred stock, voting as one class, having voting power outstanding on the record date for the Akerna special meeting is required for approval of Proposal Nos. 2, 3, 4 and 5. The affirmative vote of the holders of a majority of shares of Akerna Common Stock, voting as a separate class, having voting power outstanding on the record date for the Akerna special meeting is required for approval of Proposal No 4. Proposal No. 1 is conditioned upon Proposal Nos. 2, 3, 4, 5 and 6. Proposal No. 2 is conditioned upon Proposal No. 1 and Proposal No. 7. Therefore, the Merger cannot be consummated without the approval of the Sale Transaction, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase, the Akerna Name Change and the 2023 Plan, and the Sale Transaction cannot be consummated without the approval of the Merger and the MJ Acquisition Promissory Note Conversion.

Votes will be counted by the inspector of election appointed for the meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and any broker non-votes. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. Abstentions and broker non-votes will have no effect on the Merger Proposal, the 2023 Plan Proposal, the MJA Promissory Note Conversion and the Adjournment Proposal but will have the same effect as votes “AGAINST” the Sale Transaction Proposal, the Reverse Stock Split Proposal, the Authorized Share Increase Proposal and the Name Change Proposal.

Certain Akerna securityholders, including certain directors and executive officers of Akerna who in the aggregate own or have the right to acquire approximately 1.6% of the outstanding shares of Akerna Common Stock or voting preferred stock, are parties to the Merger Support Agreement. the Sale Transaction Support Agreement, the Merger Lender Support Letters or the Sale Transaction Lender Support Letters. The Akerna securityholders who are party to such Merger Support Agreement, the Sale Transaction Support Agreement, the Merger Lender Support Letters or the Sale Transaction Lender Support Letters have agreed to vote (a) in favor of the Akerna stockholder proposals set forth herein, and (b) against any “acquisition proposal,” as defined in the Merger Agreement or Purchase Agreement, as applicable, and subject to certain exceptions, have also agreed not to transfer their shares of Akerna Common Stock or voting preferred stock.

Solicitation of Proxies

In addition to solicitation by mail, the directors, officers, employees and agents of Akerna may solicit proxies from Akerna stockholders by personal interview, telephone, email, fax or otherwise. Akerna will pay all of the costs of printing and filing this proxy statement/prospectus and proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Akerna Common Stock or Akerna voting preferred stock for the forwarding of solicitation materials to the beneficial owners of Akerna Common Stock or Akerna voting preferred stock. Akerna will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials.

Akerna has retained            to assist it in soliciting proxies using the means referred to above. Akerna will pay the fees of            , which Akerna expects to be approximately $            , plus reimbursement of out-of-pocket expenses.

Other Matters

As of the date of this proxy statement/prospectus, Akerna Board does not know of any business to be presented at the Akerna special meeting other than as set forth in the notice accompanying this proxy statement/prospectus. If any other matters should properly come before the Akerna special meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

THE TRANSACTIONS

This section and the sections titled “The Merger Agreement” and “The Purchase Agreement” in this this proxy statement/prospectus describe the material aspects of the Merger, including the Merger Agreement, and the Sale Transaction, including the Purchase Agreement, respectively. While Akerna believes that this description covers the material terms of the Merger and the Merger Agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus for a more complete understanding of the Merger and the Merger Agreement and the other documents to which you are referred in this proxy statement/prospectus. Additionally, while Akerna believes that this description covers the material terms of the Sale Transaction and the Purchase Agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus for a more complete understanding of the Sale Transaction and the Purchase Agreement, including the annexes to which you are referred herein. See the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

Background of the Transactions

The terms of the Purchase Agreement are the result of arm’s-length negotiations between the Akerna Board and management team and the MJ Acquisition management team, along with their respective advisors. The terms of the Merger Agreement are the result of arm’s-length negotiations between the Akerna Board and management team, the Gryphon management team, under the guidance of Gryphon’s board of directors, along with their respective advisors. In this process, Akerna was assisted by experienced outside financial and legal advisors in examining and evaluating potential transactions and transaction candidates through outreach to a variety of companies and prospective strategic partners. Overall Akerna entered 21 non-disclosure agreements based on outreach to 36 potential strategic partners. Of those potential partners, only POSaBIT submitted a bid to acquire the assets of Akerna. Certain of the non-disclosure agreements entered into with Akerna contained stand-still provisions related preventing the other party from making unsolicited bids for Akerna or its assets, but those provisions either expired or were waived prior to the date hereof. MJ Acquisition and its related parties were not among those parties that signed a non-disclosure agreement with Akerna prior to Akerna entering in the POSaBIT Purchase Agreement and the Merger Agreement.

Following is a summary of the events leading up to the decision by the Akerna Board to explore strategic alternatives, the process undertaken by the Akerna Board and its management team to identify and evaluate prospective counterparties, and the negotiation of the Purchase Agreement with MJ Acquisition and the Merger Agreement with Gryphon. The following chronology summarizes the key meetings and events that led to the signing of the agreements. The following chronology does not catalogue every conversation among the respective parties, their boards of directors and management, their respective representatives, or other parties.

The Akerna Board and its management team have regularly evaluated the long-term strategic goals and plans, its operations and financial performance, and overall industry conditions. As part of these evaluations, Akerna has considered, among other things, potential opportunities for strategic partnerships and collaborations, business combinations, acquisitions and other financial and strategic alternatives, including a sale of Akerna.

On January 25, 2022, a meeting of the Akerna Board was held via teleconference during which management for Akerna presented to the Board regarding, among other items, the financial results of the year ended December 31, 2021 and the 2022 budget and operational plan. At the meeting the Akerna Board requested that the management for Akerna prepare a go-forward plan including cost reduction scenarios and strategic options.

On February 10, 2022, a meeting of the Akerna Board was held via teleconference during which management for Akerna presented the requested go-forward plan including Akerna’s 2022 business plan, current and prospective capital markets outlook, cost reduction scenarios and strategic options available to Akerna to address potential liquidity concerns and challenges in the upcoming fiscal year. The Akerna Board discussed whether to institute a hiring freeze, a reduction in work force or to hire a re-structuring consultant. The Akerna Board instructed Akerna management to institute a hiring freeze and seek budget reductions.

On February 16, 2022, a meeting of the Akerna Board was held via teleconference during which management for Akerna presented a liquidity and debt management update, including updated budgeting items, cash flow scenarios for the coming fiscal year, the debt covenants and potential challenges for meeting debt covenants in the coming fiscal year, capital markets solutions, including accessing Akerna’s at-the-market facility, engaging in a larger equity transaction, either public or private, or renegotiating the debt terms and covenants to address potential liquidity challenges through-out

the coming fiscal year. The Akerna Board instructed Akerna management to continue to implement targeted budget cuts to assist in cash flows and begin initial conversations with a banker regarding potential strategic alternatives, on a preliminary basis, if and when such alternatives make sense in the best interests of the stockholders.

On March 18, 2022, a meeting of the Akerna Board was held via teleconference during which management provided an update on financial performance to date, including revenue, operating expenses, summary budget and performance to budget, new bookings and cash position.

On March 30, 2022, Akerna management held an initial meeting with representatives of JMP to discuss their engagement to assist the Akerna Board in exploring strategic alternatives for Akerna.

On April 1, 2022, JMP began initial outreach activities to selected parties regarding potential strategic transactions with Akerna.

On April 5, 2022, Akerna and JMP entered into an engagement letter regarding JMP providing investment banking and related services in connection with the possible merger, consolidation, tender or exchange offer, leveraged buyout, leveraged recapitalization, sale of assets or equity interests, lease, license or other transaction involving a majority of the business, assets or equity interests of Akerna and/or its subsidiaries and affiliates in one or more transactions.

From April 18, 2022 through August 2022, Akerna management made presentations to potential strategic partners regarding the business of Akerna.

On April 19, 2022, a meeting of the Akerna Board was held via teleconference during which, among other items, Akerna management provided a review of potential strategic partners and deals to maximize shareholder value and the Akerna Board discussed overall strategy for Akerna moving forward, including discussing various budget scenarios and strategic options. The Akerna Board determined that management of Akerna should continue to work with JMP to seek strategic alternatives with the goal of finding partners to purchase the business, purchase parts of the business or provide strategic opportunities that could assist Akerna in improving its financial position and reach break even or profitable operations in the near future. The Akerna Board tasked the management of Akerna with seeking strategic alternatives that would bring the highest value for the assets of Akerna or permit Akerna to reach break even or profitable operations by the end of the year or early next year.

On April 29, 2022, a meeting of the Akerna Board was held via teleconference during which management of Akerna presented regarding the status of managing Akerna’s convertible debt and cash balances.

On May 9, 2022, a meeting of the Akerna Board was held via teleconference during which management of Akerna presented to the Board regarding strategic priorities going forward, including enterprise software, payment opportunities, data revenue growth and go-forward scenario planning and cash forecasts and 2022 budget planning.

On May 16, 2022, Akerna granted access to its dataroom for its first potential strategic partner pursuant to a non-disclosure agreement. Over the course of the process to follow, 21 non-disclosure agreement would be signed based on outreach to 36 potential strategic partners.

On May 17, 2022, Akerna announced the engagement of JMP to advise Akerna on investment banking and related services in connection with the possible merger, consolidation, tender or exchange offer, leveraged buyout, leveraged recapitalization, sale of assets or equity interests, lease, license or other transaction involving a majority of the business, assets or equity interests of Akerna and/or its subsidiaries and affiliates in one or more transactions.

On May 20, 2022, a meeting of the Akerna Board was held via teleconference during which, among other items, Akerna management provided an update on the process with representatives of JMP and finding potential strategic partners. The Akerna Board reviewed the process with JMP and discussed with management for Akerna the scope of the strategic partners being reviewed relative to the Akerna Board’s goals for the strategic process as determined in the April 19, 2022 meeting of the Akerna Board.

On May 24, 2022, a meeting of the Akerna Board was held via teleconference during which management for Akerna presented regarding proposed restructuring of Akerna including a reduction in workforce.

On May 27, 2022, Akerna announced its restructuring and work force reduction.

On June 7, 2022, a meeting of the Akerna Board was held via teleconference during which representatives of JMP presented an update on the effort to find strategic partners for Akerna, including efforts to date, current state of interested parties and handling of the process and related items. The Akerna Board reviewed with representatives of JMP each of the interested parties that JMP had reached out to, those parties that had entered into non-disclosure agreements and the status of process with each of those parties. At that time, none of the other interested parties had made a proposal or sought to discuss an initial proposal for a strategic transaction with Akerna. The Akerna Board instructed the management of Akerna and JMP to continue with the process as several parties were still active in the dataroom and other potential partners were still being pursued.

On July 1, 2022, management of Akerna made its first presentation to POSaBIT to discuss Akerna business, process and current capital structure.

On July 6, 2022, management of Akerna and POSaBIT held a call to discuss high level model and other current Akerna metrics.

On July 12, 2022, a meeting of the Akerna Board was held via telephone conference during which, among other items, Akerna management provided an update on the process of finding potential strategic partners. The Akerna Board and Akerna management discussed POSaBIT and the potential to sell POSaBIT Akerna’s MJ Freeway business. The Akerna Board also discussed the status of other parties that had entered into non-disclosure agreements and the management of Akerna presented to the Akerna Board that the process had slowed significantly with other parties, with many having completed their due diligence activities without making any proposal or seeking to discuss a proposal for a strategic transaction with Akerna. The Akerna Board discussed with management of Akerna the likelihood of getting any offers for a strategic transaction from other interested parties, which Akerna management viewed as unlikely at the time of the meeting.

On July 25, 2022, management of Akerna and Gryphon held an introductory call.

On July 28, 2022, management for POSaBIT submitted an initial offer for the MJ Freeway business for $5,000,000 in cash.

On August 1, 2022, management for Akerna and representatives of JMP held a call to discuss files that were prepared for POSaBIT.

On August 2, 2022, representatives of JMP and POSaBIT management held a call to discuss the current bid from POSaBIT. Representatives of JMP recommended there was no path forward with the current bid as a full company sale would be better than winding down a public company shell and suggested POSaBIT management speak with Akerna management to better understand the business. Valuation was not discussed on the call.

On August 8, 2022, management for Akerna, management for POSaBIT and representatives of JMP held a call to discuss Akerna’s business and POSaBIT requested a follow-up demo call.

On August 16, 2022, representatives of JMP and Gryphon management held a call to discuss a potential transaction. Gryphon management noted they wanted access to public markets and listing and would be contributing all of Gryphon to Akerna. Gryphon management provided an overview of their business and shared a financial model with JMP.

On August 17, 2022, Akerna management and POSaBIT management held a call for a demonstration of MJ Freeway software.

On August 19, 2022, Akerna management and POSaBIT management held a call for a demonstration of Akerna’s 365 software.

On August 25, 2022, POSaBIT management and representatives of JMP held a call to discuss POSaBIT’s interest in a transaction. POSaBIT noted that they didn’t want to acquire Akerna’s 365 business. The parties discussed the Akerna Notes and working capital adjustments related to shutting down other business units and dealing with the debt.

On August 29, 2022, Akerna management, Gryphon management and representatives of JMP held a call to discuss Gryphon’s business and business model, including Gryphon’s mining operations and financial model assumptions and projections.

On September 15, 2022, POSaBIT management and representatives of JMP held a call to discuss potential transaction with Akerna and Gryphon. POSaBIT management discussed that they were still considering whether they wanted to acquire the entire business of Akerna. POSaBIT management indicated that they were comfortable not taking the public company and only acquiring MJ Freeway and Leaf Data Systems.

On September 16, 2022, Akerna management, Gryphon management and representatives of JMP held a call to discuss deal structure and timing for a deal with Akerna, Gryphon and POSaBIT. The parties discussed the Akerna Notes, revisited Gryphon’s preference on deal structure and the resulting balance sheet.

On September 21, 2022, representatives of JMP presented to the Akerna Board regarding the status of their efforts in finding strategic partners and purchasers for Akerna. Mr. Sozio presented a general overview of the current status of the process with each interested party. Representatives of JMP presented to the Board regarding the status of their efforts, current state of interested parties and the handling of the process and related items. The Akerna Board reviewed and discussed with JMP each of the various interested parties, including POSaBIT and Gryphon and reviewed the proposal from POSaBIT and the potential of a combined deal with POSaBIT and Gryphon. The Akerna Board evaluated the potential deal in relation to its stated goals in seeking a strategic transaction and discussed that no other parties that had entered into non-disclosure agreements that were previously interested in Akerna had made any proposals for transactions or pursued negotiating an initial proposal and had either directly stated that they were not interested in a transaction with Akerna or had gone silent in relation to ongoing diligence or requests by JMP and management of Akerna to discuss a potential transaction. Based on the state of Akerna’s business and the need to complete a strategic transaction, the Akerna Board authorized representatives of JMP and management of Akerna to proceed with the potential transaction with POSaBIT and Gryphon seeking to get the highest value possible for stockholders of Akerna.

On September 27, 2022, Akerna management and representatives of JMP held a call to discuss potential deal valuations and deal mechanics.

On September 30, 2022, POSaBIT management and representatives of JMP held a call to discuss deal mechanics and eliminating Akerna debt.

On October 11, 2022, Akerna management, Gryphon management and representatives of JMP held a call to discuss an initial term sheet from Gryphon. The parties discussed governance issues, the Akerna Notes and the holders of the Akerna Notes. The parties discussed and negotiated the proposed stock split for the resulting combined company focusing on the proposed 92.5% and 7.5% split.

On October 18, 2022, the Akerna Board held a meeting at which Mr. Sozio presented an update on strategic alternatives, the possible transactions with Gryphon and POSaBIT, progress with other interested parties and related matters. The Akerna Board discussed the Gryphon and POSaBIT transactions and the presented terms of such transactions. The Akerna Board reviewed that although Akerna had reached out to 36 other potential strategic partners and 21 of those parties had entered into non-disclosure agreements, many of the other interested parties had conducted only limited diligence reviews and of those few parties that had conducted more extensive diligence review and engaged in preliminary discussions with Akerna, such other interested parties had determined not to proceed with discussions of a potential transaction of any kind with Akerna. Based upon the significant amount of time spent seeking strategic alternatives, the financial position of Akerna, including decreasing available capital and upcoming payment events, including the earn-out payment to the stockholders who has sold Akerna its 365 business and other related factors, the Akerna Board determined to move forward with the potential transactions with Gryphon and POSaBIT.

On October 20, 2022, Gryphon delivered a non-binding term sheet to Akerna management.

On October 27, 2022, POSaBIT delivered a non-binding term sheet to Akerna management.

On November 3, 2022, the Akerna Board approved by written consent entering into non-binding letters of intent with Gryphon and POSaBIT with a 45-day exclusivity period.

On November 7, 2022, Akerna entered into the non-binding letters of intent with Gryphon and POSaBIT.

On November 8, 2022, Akerna management, POSaBIT management and representatives of JMP held a call with POSaBIT for the introduction to certain Akerna employees, learn about Akerna culture, and discuss timeline and mechanics.

On November 10, 2022, Akerna management and representatives of JMP held a call to discuss timeline for definitive agreements for POSaBIT and Gryphon transactions.

On November 15, 2022, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to discuss timeline and definitive documents.

On November 16, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to discuss timeline and definitive documents.

On November 22, 2022, Akerna management, POSaBIT management and representatives of JMP held calls to discuss key metrics and state contracts.

On November 29, 2022, Akerna management, POSaBIT management and representatives of JMP held a due diligence call and further discussed Akerna’s state contracts.

On November 29, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to provide an update on transaction timeline and definitive documents.

On December 1, 2022, Akerna management, POSaBIT management and representatives of JMP held calls to discuss the Ample business.

On December 1, 2022, the Akerna Board held a meeting via telephone conference at which (i) Akerna management presented to the Board regarding the 2023 budget and financial projections, including cash forecasts, likely cash shortfall in early 2023, the need for further cost reductions and the need to raise capital to meet operating expenses and service the Akerna Notes and (ii) representatives of JMP and Akerna management presented to the Board the status of the definitive documents with Gryphon and POSaBIT and discuss deal points and timing.

On December 5, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to discuss Ample metrics and an update on state contracts.

On December 6, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to discuss timeline and current mechanics for the transaction.

On December 10, 2022, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to discuss status of definitive agreements, deal mechanics and timeline.

On December 13, 2022, Akerna management, Gryphon management and representatives of JMP held a call to discuss status of definitive deal documents and mechanics for the transaction and timeline.

On December 14, 2022, Akerna and POSaBIT agreed to an extension of the exclusivity period in the non-binding letter of intent.

On December 16, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to provide an update on process and timeline.

On December 19, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to discuss Akerna employees and deal terms.

On December 20, 2022, the Akerna Board held a meeting via telephone conference at which representatives of JMP presented to the Board regarding the sale of The NAV People, Inc. and general market conditions for Akerna and the downturn in the SaaS market.

On December 20, 2022, Akerna management, Gryphon management and representatives of JMP held an update call on timing.

On December 21, 2022, Akerna management, POSaBIT management and representatives of JMP held a call regarding status of state contracts, working capital and Ample agreements.

On December 23, 2022, Akerna management, POSaBIT management and representatives of JMP held a call to discuss definitive documents and employee process.

On December 27, 2022, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On December 27, 2022, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On December 27, 2022, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding the status of the definitive documents with Gryphon and POSaBIT and related items on timing for the transactions.

On December 29, 2022, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 3, 2023, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 3, 2023, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 10, 2023, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 10, 2023, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 12, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding the status of the definitive documents with Gryphon and POSaBIT, the current deal terms, the negotiations with the Akerna Note Holders and related items on timing for the transactions.

On January 17, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding the status of the definitive documents with Gryphon and POSaBIT, the current deal terms, the negotiations with the Akerna Note Holders and related items on timing for the transactions.

On January 18, 2023, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to work through the definitive documents and discuss deal points and timing.

On January 20, 2023, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to discuss voting agreement and updates on definitive documents.

On January 24, 2023, Akerna management, Gryphon management, legal counsel for both parties and representatives of JMP held a call to work through lender agreements and definitive deal documents.

On January 24, 2023, Akerna management, POSaBIT management, legal counsel for both parties and representatives of JMP held a call to work through lender agreement and definitive documents.

On January 25, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding the definitive documents with Gryphon and POSaBIT, the deal terms and related items on timing for the transactions.

On January 26, 2023, a meeting of the Akerna board of directors was held via teleconference, which representatives of Akerna management, representatives of JMP and legal counsel for Akerna attended. At this meeting, Akerna’s legal counsel provided a detailed legal review of the Merger Agreement and the POSaBIT Purchase Agreement and representatives of JMP provided a presentation regarding its financial analyses of the Merger and the Sale Transaction with POSaBIT and the fairness from a financial point of view to Akerna of the consideration to be received by Akerna in the Sale Transaction and the consideration to be paid by Akerna in the Merger, following which the Board approved the Merger Agreement and the Merger and determined that the Merger was fair to the Akerna stockholders and approved the POSaBIT Purchase Agreement and the Sale Transaction and determined that the Sale Transaction was fair to the Akerna stockholders.

On January 27, 2023, Akerna and Gryphon entered into the Merger Agreement and Akerna and POSaBIT entered into the POSaBIT Purchase Agreement.

On February 3, 2023, the Akerna Board received an unsolicited letter of intent from Alleaves regarding an acquisition proposal for the Membership Interests and the Ample Shares at a price of $6 million in cash but contingent on completion of due diligence.

On February 5, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented the February 3, 2023 letter of intent from Alleaves, representatives of JMP presented to the Akerna Board regarding the financial considerations and the superior financial offer of $6 million in cash over $4 million in cash, legal counsel presented to the Board regarding its fiduciary duties under Delaware law and the contractual provisions of the POSaBIT Purchase Agreement and the Akerna Board directed Akerna management to present the Alleaves letter to POSaBIT.

On February 6, 2023, Akerna management and POSaBIT management held a call to discuss the February 5, 2023 letter of intent from Alleaves.

On February 7, 2023, Akerna management and POSaBIT management held a call to discuss POSaBIT’s response to the February 3, 2023 letter of intent from Alleaves.

On February 8, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding POSaBIT’s response to the Alleaves letter of intent, legal counsel summarized the Akerna Board’s fiduciary duties and contractual obligations under the POSaBIT Purchase Agreement, the Board reviewed JMP’s prior presentation and the Board determined that the Alleaves February 3, 2023 letter of intent wasn’t a superior offer because of the extensive deal risk of needing to complete due diligence before entering into a definitive agreement.

On February 14, 2023, the Akerna Board received an unsolicited letter of support from Alleaves which provided that in support of the $6 million cash offer, Alleaves would agree to enter into the same purchase agreement as POSaBIT, subject to review of the schedules thereto, financial supporting documents showing ability to pay, and a shortened list of due diligence items with a statement that due diligence could be completed with 48 hours.

On February 15, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board the February 14, 2023 support letter from Alleaves and the Board directed Akerna management to present the support letter to POSaBIT.

On February 16, 2023, Akerna management held a call at which Akerna management presented the February 14, 2023 support letter from Alleaves to POSaBIT management.

On February 18, 2023, Akerna management and POSaBIT management held a call at which POSaBIT management presented their view of the support letter from Alleaves and asked Akerna management to share with Alleaves the commercial agreement between Akerna and POSaBIT.

On February 19, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding POSaBIT’s response to the Alleaves support letter, legal counsel summarized the Akerna Board’s fiduciary duties and contractual obligations under the POSaBIT Purchase Agreement, the Board reviewed JMP’s prior presentation and the Board determined that the Alleaves February 3, 2023 letter of intent wasn’t a superior offer because of the extensive deal risk of Alleaves completing due diligence, the need for Gryphon’s consents and the potential that Alleaves would not find the commercial agreements between Akerna and POSaBIT favorable and the Board directed Akerna management to present the POSaBIT commercial agreements to Alleaves.

On March 3, 2023, the Akerna Board received an unsolicited revised support letter from Alleaves, pursuant to which Alleaves reaffirmed their offer of $6 million in cash, offered to make $1-2 million available upon execution of the purchase agreement and mentioned that the deal had been discussed with Gryphon which support the Alleaves offer.

On March 3, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding Alleaves revised support letter, the need for additional capital to get to closing and the ongoing issues presented by the Akerna Notes and the Akerna Board directed Akerna management to present the revised support agreement to POSaBIT.

On March 9, 2023, Akerna management held a call with POSaBIT management to discuss the revised support letter from Alleaves dated March 3, 2023.

On March 9, 2023, Akerna management held a call with POSaBIT management to discuss POSaBIT’s response to the revised support letter from Alleaves.

On March 10, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding POSaBITs response to the Alleaves revised support letter and the Board determined to take no action in relation to the Alleaves revised support letter.

On March 17, 2023, the Akerna Board received an unsolicited revised letter of intent from Alleaves pursuant to which Alleaves revised its offer to $5 million in cash with $1 million being made available upon signing of the purchase agreement in the form of a loan and setting forth that Alleaves would agree to indemnify Gryphon for any legal actions caused as a result of the transaction with Alleaves.

On March 19, 2023, the Akerna Board held a meeting via telephone conference at which Akerna management presented to the Board regarding the revised letter of intent from Alleaves and the revised terms of the offer, legal counsel to Akerna described the Akerna Board’s fiduciary duties, the Board went through a number of financial, business and legal considerations and the Board directed Akerna management to present the revised letter of intent to POSaBIT management with the likely determination that it was a superior offer.

On March 21, 2023, Akerna management and POSaBIT management held a call to discuss the revised letter from Alleaves.

On March 21, 2023, Akerna management and POSaBIT management held a call to discuss POSaBIT’s response to the revised letter from Alleaves.

On March 22, 2023, the Akerna Board received an unsolicited signed indemnification agreement from Alleaves and Gryphon pursuant to which Alleaves agreed to indemnify Gryphon, with Akerna as a third-party beneficiary, for certain liabilities arising from any actual or alleged breach or violation of the POSaBIT Purchase Agreement by Akerna in connection with the acceptance of the Alleaves proposal or the termination of the POSaBIT Purchase Agreement related to such acceptance of the Alleaves proposal.

On March 23, 2023, Akerna management and POSaBIT management held a call to discuss the revised letter from Alleaves and the indemnity agreement.

On March 24, 2023, the Akerna Board held a meeting via telephone conference at which the revised letter of intent from Alleaves was discussed in detail, including a review of the presentation from representatives of JMP regarding the financial terms, a review of various business considerations and a review of the Akerna Board’s fiduciary duties and obligations under the POSaBIT Purchase Agreement. The Akerna Board discussed whether a new fairness opinion should be requested from JMP. Based upon (i) the fact that the POSaBIT deal was a cash only deal and that deal with MJ Acquisition was also cash only with a premium of an additional $1 million in purchase price representing an increase of value of 25% and a superior offer, (ii) the consideration to be received by Akerna in the Merger remained unchanged (iii) the transaction with MJ Acquisition provided Akerna with access to $1 million of the cash purchase price immediately upon signing of the Purchase Agreement in the form of a secured bridge loan, which additional cash resources increased the likelihood of Akerna being able to fund operations and corporate expenses through closing of the Merger and the Sale Transaction, making such closing more likely under the transaction with MJ Acquisition than the transaction with POSaBIT, (iv) the business and prospects of Akerna had not change materially from January 26, 2023, the date the opinion was delivered by JMP and (v) the significant cost and delay in timing of obtaining a new fairness opinion created additional risk to the closing of the Merger and the Sale Transaction, the Akerna Board determined that an updated fairness opinion was not advisable to evaluate the Alleaves letter of intent as being a superior offer and being advisable, fair and in the best interests of Akerna and its stockholders. The Akerna Board determined that the Alleaves letter of intent along with the indemnity agreement between Gryphon and Alleaves was reasonably likely to be a superior offer under the terms of the POSaBIT Purchase Agreement and directed management to provide appropriate notice to POSaBIT under the terms of the POSaBIT Purchase Agreement.

On March 24, 2023, Akerna delivered notice to POSaBIT of the Akerna Board’s determination with the Alleaves documents to follow on March 27, 2023.

On April 3, 2023, Akerna management and POSaBIT management held a call to discuss Akerna’s notice to POSaBIT and POSaBIT determined not to offer to change the terms of their transaction in the POSaBIT Purchase Agreement.

On April 4, 2023, the Akerna Board held a meeting via telephone conference at which the revised letter of intent from Alleaves was discussed in detail, including a review of the presentation by representatives of JMP regarding the financial terms, a review of various business considerations and a review of the Akerna Board’s fiduciary duties and obligations under the POSaBIT Purchase Agreement. The Board again reviewed the financial terms of the combined Gryphon and Alleaves transaction against those of the combined Gryphon and POSaBIT transaction and continued to believe that an updated fairness opinion was not required. The Akerna Board determined that the Alleaves letter of intent along with the indemnity agreement between Gryphon and Alleaves was a superior offer under the terms of the POSaBIT Purchase Agreement and advisable, fair and in the best interests of Akerna and its stockholders and directed management to provide appropriate notice to POSaBIT under the terms of the POSaBIT Purchase Agreement to terminated the POSaBIT Purchase Agreement.

On April 5, 2023, Akerna management delivered notice of termination to POSaBIT under the terms of the POSaBIT Purchase Agreement.

On April 6, 2023, Akerna management and management for Alleaves held a call to begin due diligence and discuss deal mechanics and timing.

On April 17, 2023, the Akerna Board held a meeting via telephone conference at which legal counsel presented to the Board regarding the Purchase Agreement with MJ Acquisition, the promissory note for the $1 million bridge loan and related security documents were discussed and the Board reviewed JMP’s prior financial analysis regarding the Merger and Sale Transaction. The Board again reviewed the financial terms of the combined Gryphon and Alleaves transaction against those of the combined Gryphon and POSaBIT transaction and continued to believe that an updated fairness opinion was not required.

On April 27, 2023, the Akerna Board by way of written consent approved the Purchase Agreement and related documents and determined that the Purchase Agreement was advisable, fair and in the best interests of Akerna and its stockholders.

On April 28, 2023, Akerna entered into the Purchase Agreement, the promissory note and related security documents.

On May 17, 2023, management for Akerna met with management for Gryphon to discuss the pricing terms for a proposed private placement of common stock of Akerna. Akerna needed to complete the private placement as Akerna needed additional cash to fund ongoing operating, corporate and administrative costs of Akerna until the Transactions close and Akerna was obligated to complete a $500,000 equity raise under the terms of the Exchange Agreements. Management of Akerna presented to management of Gryphon the proposed price per share of $0.50 that Akerna was able to negotiate with the private investor. Management for Gryphon presented that Gryphon would not accept the price per share of the private placement unless Akerna agreed to the Second Amendment to the Merger Agreement, which changed the Merger Consideration Akerna stockholders would receive from a fixed 7.5% of the combined company on a fully-diluted basis to a formula by which Gryphon would receive a minimum valuation of approximately $115 million based on the closing sales price of Akerna Common Stock on the Nasdaq two trading days prior to the closing of the Merger. Management to Akerna and management for Gryphon discussed the basis for the valuation, which included JMP’s financial analysis as presented to the Akerna Board on January 26, 2023.

On May 17, 2023, counsel to Gryphon sent counsel to Akerna a draft of the Second Amendment to the Merger Agreement setting forth a change in the definition of Merger Consideration by which Gryphon would receive the greater of (a) a number of shares of common stock of Akerna equal to (i) the quotient obtained by dividing (A) Akerna’s fully-diluted share number by (B) 0.075, minus (ii) Akerna’s fully diluted share number (iii) the adjusted number of shares reserved for Gryphon warrants, and (b) a number of shares of common stock of Akerna equal to the quotient obtained by dividing (i) $115,625,000 by (ii) the closing price of Akerna’s common stock two trading days before closing of the Merger.

On May 19, 2023, the Akerna Board met with management for Akerna, representatives of JMP and legal counsel to Akerna, to discuss the Second Amendment to the Merger Agreement. Akerna management presented to the Akerna Board the impact of the revised consideration relative to changes in the price of Akerna shares. The Akerna Board discussed with the representatives of JMP the financial analysis previously presented to the Akerna Board by representatives of JMP on January 26, 2023 and the impact of the revised consideration. The Akerna Board discussed various alternative courses of action, including not proceeding with the private placement, proceeding without Gryphon’s express consent based on certain provisions in the Merger Agreement, negotiating a smaller minimum valuation and other tactical and timing considerations. Counsel to Akerna presented to the Akerna Board regarding the Akerna Board’s fiduciary

duties under Delaware law and legal alternatives to not agreeing to the Second Amendment to the Merger Agreement, including not conducting the private placement or conducting the private placement without the consent of Gryphon. The Akerna Board considered whether a new fairness opinion was required to evaluate the Second Amendment to the Merger Agreement. Given that a decrease in share price of Akerna Common Stock to $0.01 per share of Akerna Common Stock would only result in a decrease in value to Akerna stockholders of approximately 1% of the combined company on a fully diluted basis and since the combined deal value of the Merger and Sale Transaction together had been increased by $1 million through entering into the transaction with MJ Acquisition, the Board determined that the overall deal value to Akerna since January 26, 2023 had not materially changed and the business and prospectus of Akerna had not materially changed since January 26, 2023 and therefore a new fairness opinion was not necessary. The Akerna Board approved the Second Amendment to the Merger Agreement and determined that the Merger was advisable, fair and in the best interests of Akerna and its stockholders. The Board authorized management to Akerna to executed and deliver the Second Amendment to the Merger Agreement concurrently with the closing of the private placement transaction.

On June 14, 2023, Akerna closed the private placement for $500,000 of common stock of Akerna at a price per share of $0.50 and Akerna and Gryphon entered into the Second Amendment to the Merger Agreement.

On September 8, 2023, Akerna received a notice from MJ Acquisition Corp. noting that several conditions to closing the Sale Transaction were unlikely to be met by the outside date in the Purchase Agreement and indicating their intention to terminate the Purchase Agreement.

On September 13, 2023, management for Akerna and management for MJ Acquisition Corp. met to discuss revised terms for the Purchase Agreement including a reduction of the cash Purchase Price to $2 million and providing Akerna with an additional loan of $500,000 to be added to the existing promissory note of $1 million with the entire promissory note being made convertible in Akerna Common Stock at closing.

On September 14, 2023, the Akerna Board met with management of Akerna to discuss the revised terms proposed by MJ Acquisition Corp. and discuss alternative courses of action and negotiating the revised terms with MJ Acquisition Corp.

On September 26, 2023, the Akerna Board met with management of Akerna to discuss the proposed terms of the Purchase Agreement Amendment. The Akerna Board discussed the likely timing of the closing of the Merger, the need for additional cash to meet operating costs to get to the closing of the Merger, the lack of other interested parties for the assets under the Purchase Agreement, the lack of progress in negotiations with MJ Acquisition Corp. regarding the proposed revised terms for the Sale Transaction and the relative value to stockholders of Akerna of getting to the closing of the Merger. The Akerna Board considered whether to obtain a new fairness opinion in relation to entering into the Purchase Agreement Amendment subsequent to the January 26, 2023 opinion delivered by JMP. The Akerna Board determined that such fairness opinion was not necessary in determining that the Purchase Agreement Amendment was advisable, fair and in the best interests of Akerna and its stockholders for the following reasons: (i) the combined deal value of the Merger and the Sale Transaction to the stockholders of Akerna was not materially decreased by the reduction in the cash Purchase Price, (ii) Akerna needed the additional $500,000 loan from MJ Acquisition Corp. to cover operating expenses to close and (iii) the Board’s determination in coordination with Akerna management that business and prospectus of Akerna had not materially changed since January 26, 2023.

On September 28, 2023, Akerna and MJ Acquisition Corp. entered into the Purchase Agreement Amendment and on October 11, 2023, Akerna issued the amended and restated secured convertible promissory note to MJ Acquisition.

Akerna’s Corporate History

On October 10, 2018 (as amended on April 17, 2019), Akerna (f/k/a MTech Acquisition Holdings Inc.) entered into a definitive merger agreement with MTech Acquisition Corp. (“MTech”), MJ Freeway, MTech Purchaser Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Akerna (“Purchaser Merger Sub”), MTech Company Merger Sub LLC, a Colorado limited liability company and a wholly-owned subsidiary of Akerna (“Company Merger Sub”), MTech Sponsor LLC (“MTech Sponsor”), a Florida limited liability company, in the capacity as the representative for our equity holders (other than the Sellers) thereunder, and MJ Freeway and Jessica Billingsley (as successor to Harold Handelsman), in the capacity as the representative for the Sellers thereunder. The agreement provided for two mergers: (i) the merger of Purchaser Merger Sub with and into MTech, with MTech continuing as the surviving entity (the “Purchaser Merger”); and (ii) the merger of Company Merger Sub with and into MJF, with MJF continuing as the surviving entity (the “Company Merger” and together with the Purchaser Merger, the “Business Combination”).

On June 17, 2019, MTech held a Special Meeting at which the MTech stockholders considered and approved, among other matters, the merger agreement with MJ Freeway et al.

On June 17, 2019, the parties consummated the Business Combination.

Upon closing of the Business Combination, MTech’s units ceased trading, and Akerna Common Stock and warrants began trading on The Nasdaq Stock Market under the symbols “KERN” and “KERNW,” respectively, Akerna changed its name from MTech Acquisition Holdings Inc. to “Akerna Corp.”, and MJF became our wholly-owned subsidiary.

Executing upon our expansion strategy, we acquired complementary cannabis brands to grow the scope of Akerna’s cannabis ecosystem. Since 2019, we have integrated six new brands into the Akerna product and service offering. Our first acquisition, Solo Sciences (“Solo”), was initiated in the fall of 2019, with the full acquisition completed in July 2020. We added Trellis Solutions (“Trellis”) to our portfolio on April 10, 2020 and finalized the acquisition of Ample and Last Call Analytics (“Last Call”) on July 7, 2020. More recently, on April 1, 2021 we completed our acquisition of Viridian Sciences Inc. (“Viridian”), a cannabis business management software system built on SAP Business One, followed by the acquisition of The NAV People, Inc. d.b.a 365 Cannabis (“365 Cannabis”), a cannabis business management software system built on Microsoft Business Central, on October 1, 2021.

In May 2022, we announced that we were exploring strategic alternatives to enhance shareholder value and engaged JMP as our financial advisor to assist in this process. In May 2022, we announced the implementation of a strategic restructuring with the objective of preserving capital. Our board of directors approved a restructuring plan following a review of our operations, cost structure and growth opportunities. The restructuring included a reduction in headcount and operating costs. We recorded a charge of $0.6 million in the six months ended June 30, 2022 as a result of the restructuring, which consisted of one-time termination benefits for employee severance, benefits and related costs, all of which resulted in cash expenditures which were paid out by the end of 2022.

On January 11, 2023, we completed the sale of 365 Cannabis to 365 Holdco LLC (the “Buyers”) pursuant to a stock purchase agreement (the “365 SPA”) for (i) cash in the amount of $0.5 million and the (ii) the termination and release of our obligation to the Buyers for contingent consideration in connection with our original acquisition of 365 Cannabis from the Buyers in 2021 (the “Earn-out Obligation”), subject to customary post-closing adjustments, if any. Any post-closing adjustments are generally limited to certain adjustments in accounts payable and indemnification obligations in accordance with the 365 SPA. Upon completion of the sale, $0.4 million of the total cash proceeds was placed into restricted accounts held as security for the Senior Convertible Notes while $0.1 million was subject to a hold-back (the “365 Holdback”) by the Buyers to be released to us and also placed into certain restricted accounts (the “Restricted Accounts”) after all post-closing adjustments, if any, are resolved. In accordance with the 365 SPA, we and the Buyers agreed that the value of the Earn-out Obligation was $2.3 million, a reduction of $4.0 million from the original estimate, for purposes of the sale of 365 Cannabis and is reflected on our consolidated balance sheets as Contingent consideration payable.

Akerna Reasons for the Transactions

At a meeting held on January 26, 2023, among other things, the Akerna Board unanimously (i) the Akerna Board unanimously determined that the Merger Agreement, the Merger and other transactions contemplated thereby and the Purchase Agreement, the Sale Transaction and other transactions contemplated thereby are advisable, fair to and in the best interests of Akerna and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Purchase Agreement, (iii) determined to solicit, upon the terms and subject to the conditions set forth in the Merger Agreement and the Purchase Agreement, the approval of the Akerna stockholders of the Merger Agreement and the Purchase Agreement, and (iv) approve and adopt the other transactions contemplated by the Merger Agreement and the Purchase Agreement and to recommend that the Akerna stockholders approve the Merger, the Sale Transaction, the Akerna Reverse Stock Split, the Akerna Authorized Share Increase, the Akerna Name Change, the 2023 Plan and the Adjournment Proposal.

During the course of its evaluation of the Merger Agreement and the Purchase Agreement and the transactions contemplated thereby, the Akerna Board held numerous meetings, consulted with Akerna’s senior management, legal counsel and financial advisor, and reviewed and assessed a significant amount of information. In reaching its

decision to approve the Merger Agreement and Purchase Agreement and the transactions contemplated by the Merger Agreement and Purchase Agreement, the Akerna Board considered a number of factors that it viewed as supporting its decision to approve the Merger Agreement and the Purchase Agreement, including:

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

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

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

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

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

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

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

•        the Akerna Board’s consideration of the expected cash resources of the combined company as of the closing of the Merger, with approximately $5.8 million of cash and cash equivalents on a pro forma basis after giving effect to the Merger;

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

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

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

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

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

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

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

The Akerna Board also reviewed the terms of the Merger Agreement and the Purchase Agreement and related transaction documents, including those described below, and concluded that the terms of the Merger Agreement and the Purchase Agreement and related transaction documents, in the aggregate, were reasonable under the circumstances:

•        the calculation of the ratio and the estimated number of shares of Akerna Common Stock to be issued in the Merger;

•        the aggregate purchase price to be received by Akerna from MJ Acquisition pursuant to the Sale Transaction, the limited adjustments to the purchase price at closing, the limited indemnity granted by Akerna to MJ Acquisition under the Purchase Agreement and the indemnification by MJ Acquisition to Akerna for certain material litigations and liabilities;

•        the number and nature of the conditions to Gryphon’s and Akerna’s respective obligations to complete the Merger and the likelihood that the Merger will be completed on a timely basis, as more fully described below under the caption “The Merger Agreement — Conditions to the Completion of the Merger,” beginning on page 119 in this proxy statement/prospectus;

•        the rights of, and limitations on, Akerna under the Merger Agreement to consider and engage in discussions regarding unsolicited acquisition proposals under certain circumstances, and the limitations on the Akerna Board to change its recommendation in favor of the Merger, as more fully described below under the caption “The Merger Agreement — No Solicitation,” beginning on page 122 in this proxy statement/prospectus;

•        the right of Akerna to terminate the Merger Agreement to accept an unsolicited Acquisition Proposal in certain circumstances, subject to payment of a termination fee, as more fully described below under the caption “The Merger Agreement — Termination Fee,” beginning on page 130 in this proxy statement/prospectus;

•        the conclusion of the Akerna Board that the potential termination fee of $275,000, payable by Akerna to Gryphon, the reimbursement by Akerna of Gryphon’s expenses up to a maximum of $100,000, and the circumstances when such fees may be payable, were reasonable, as more fully described below under the caption “The Merger Agreement — Termination Fee,” beginning on page 130 in this proxy statement/prospectus; and

•        the Merger Support Agreement and Merger Lender Support Letters, pursuant to which certain securityholders of Akerna and stockholders of Gryphon, respectively, have agreed, solely in their capacities as stockholders, to vote all of their shares of Akerna Common Stock or Akerna voting preferred stock or Gryphon Shares, as applicable, in favor of the proposals submitted to them in connection with the Merger and against any alternative acquisition proposals, as more fully described below under the caption “Agreements Related to the Merger — Support Agreements,” beginning on page 131 in this proxy statement/prospectus.

•        the number and nature of the conditions to MJ Acquisition’s and Akerna’s respective obligations to complete the Sale Transaction and the likelihood that the Sale Transaction will be completed on a timely basis, as more fully described below under the caption “The Purchase Agreement — Conditions to the Completion of the Sale Transaction,” beginning on page 135 in this proxy statement/prospectus;

•        the rights of, and limitations on, Akerna under the Purchase Agreement to consider and engage in discussions regarding unsolicited acquisition proposals under certain circumstances, and the limitations on the board of directors of Akerna to change its recommendation in favor of the Merger, as more fully described below under the caption “The Purchase Agreement — No Solicitation,” beginning on page 137 in this proxy statement/prospectus;

•        the right of Akerna to terminate the Purchase Agreement to accept an unsolicited Acquisition Proposal in certain circumstances, subject to payment of a termination fee, as more fully described below under the caption “The Purchase Agreement — Termination Fee,” beginning on page 142 in this proxy statement/prospectus;

•        the conclusion of the Akerna Board that the potential termination fee of $290,000 and reimbursement for up to a maximum of $60,000 in reasonable fees and expenses, payable by Akerna to MJ Acquisition, and the circumstances when such fees may be payable, were reasonable, as more fully described below under the caption “The Purchase Agreement — Termination Fee,” beginning on page 142 in this proxy statement/prospectus; and

In the course of its deliberations, the Akerna Board also considered a variety of risks and other countervailing factors related to entering into the Merger and the Sale Transaction, including:

•        the potential effect of the $275,000 termination fee payable by Akerna to Gryphon, Akerna’s expense reimbursement obligations to Gryphon of up to $100,000, the potential termination fee of $290,000 and reimbursement for up to a maximum of $60,000 in reasonable fees and expenses payable by Akerna to MJ Acquisition, in each case, upon the occurrence of certain events and in deterring other potential acquirors from proposing an alternative acquisition proposal that may be more advantageous to Akerna stockholders;

•        the prohibition on Akerna to solicit alternative acquisition proposals during the pendency of the Merger and Sale Transaction;

•        the substantial expenses to be incurred by Akerna in connection with the Merger and Sale Transaction;

•        the possible volatility of the trading price of the Akerna Common Stock resulting from the announcement, pendency or completion of the Merger and Sale Transaction;

•        the risk that the Merger or Sale Transaction might not be consummated in a timely manner or at all;

•        the fact that the representations and warranties in the Merger Agreement and Purchase Agreement do not survive the closing of the Merger and Sale Transaction and the potential risk of liabilities that may arise post-closing;

•        the lack of availability of appraisal rights under the DGCL to holders of Akerna Common Stock which would not allow holders to seek appraisal of the fair value of their shares of Akerna Common Stock; and

•        the various other risks associated with the combined company and the transaction, including those described in the sections entitled “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” in this proxy statement/prospectus.

The foregoing information and factors considered by the Akerna Board are not intended to be exhaustive but are believed to include all of the material factors considered by the Akerna Board. In view of the wide variety of factors considered in connection with its evaluation of the Merger and Sale Transaction and the complexity of these matters, the Akerna Board did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of the Akerna Board may have given different weight to different factors. The Akerna Board conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, the Akerna management team and the legal and financial advisors of Akerna, and considered the factors overall to be favorable to, and to support, its determination.

Gryphon Reasons for the Merger

Acting by unanimous written consent on January 26, 2023, the Gryphon Board unanimously (i) determined that the Merger is fair to, advisable for, and in the best interests of, Gryphon and its stockholders, (ii) approved and declared advisable the Merger Agreement and (iii) determined to recommend, upon the terms and subject to the conditions set forth in the Merger Agreement, that its stockholders approve the Merger.

In the course of reaching its decision to approve the Merger, the Gryphon Board consulted with Gryphon’s management, financial and tax advisors and legal counsel, reviewed a significant amount of information and considered a number of factors, including, among others:

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

•        the exchange ratio to be paid by Akerna pursuant to the Merger and the related anticipated allocation of the equity interests of the combined company, on a fully diluted basis, following completion of the Merger;

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

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

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

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

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

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

•        the Gryphon Board’s belief that no alternatives to the Merger were reasonably likely to create greater value for Gryphon’s stockholders, after reviewing the various financing and other strategic options to enhance shareholder value that were considered by the Gryphon Board;

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

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

•        the terms and conditions of the Merger Agreement, including, without limitation, the following:

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

•        the limited number and nature of the conditions of the obligation of Akerna to consummate the Merger;

•        the expectation that the Merger will be treated as a reorganization for U.S. federal income tax purposes;

•        the belief that the other terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, were reasonable in light of the entire transaction;

•        the shares of Akerna Common Stock issued to Gryphon’s stockholders will be registered on the Registration Statement of which this proxy statement/prospectus forms a part and will become freely tradable for Gryphon’s stockholders who are not affiliates of Gryphon and who are not parties to lock-up agreements;

•        the Merger Support Agreement and Lender Support Letters, pursuant to which certain directors, officers and securityholders of Gryphon and Akerna, respectively, have agreed, solely in their capacity as securityholders of Gryphon and Akerna, respectively, to vote all of their Gryphon Shares or Akerna Common Stock and Akerna Preferred Stock in favor of the adoption or approval, respectively, of the Merger Agreement;

•        the Merger may enable certain stockholders of Akerna and Gryphon to increase the value of their current shareholding; and

•        the likelihood that the Merger will be consummated on a timely basis.

The Gryphon Board also considered a number of uncertainties and risks in its deliberations concerning the Merger and the other transactions contemplated by the Merger Agreement, including the following:

•        the possibility that the Merger might not be completed and the potential adverse effect of the public announcement of the Merger on the reputation of Gryphon and the ability of Gryphon to obtain financing in the future in the event the Merger is not completed;

•        the exchange ratio used to establish the number of shares of Akerna Common Stock to be issued to Gryphon’s stockholders in the Merger is fixed, except for adjustments due to issuances of equity securities by Akerna prior to Closing, and thus the relative percentage ownership of Akerna stockholders and Gryphon’s stockholders in the combined company immediately following the completion of the Merger is similarly fixed;

•        the risk that the Merger might not be consummated in a timely manner or at all;

•        the additional expenses and obligations to which Gryphon’s business will be subject following the Merger that Gryphon has not previously been subject to, and the operational changes to Gryphon’s business, in each case that may result from being a public company;

•        the fact that the representations and warranties in the Merger Agreement do not survive the closing of the Merger and the potential risk of liabilities that may arise post-closing; and

•        various other risks associated with the combined company and the Merger, including the risks described in the section entitled “Risk Factors” in this proxy statement/prospectus.

The foregoing information and factors considered by the Gryphon Board are not intended to be exhaustive but are believed to include all of the material factors considered by the Gryphon Board. In view of the wide variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, the Gryphon Board did not find it useful to attempt, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of the Gryphon Board may have given different weight to different factors. The Gryphon Board conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, Gryphon’s management team, the legal and financial advisors of Gryphon, and considered the factors overall to be favorable to, and to support, its determination.

Certain Projected Financial Information

The information set forth below regarding cash spending projections of Akerna was used by Akerna in connection with its review of the business combination, as described below. Additionally, the information below constitutes all of the projection information provided by Akerna to JMP in connection with their preparation of their opinion to the Akerna Board regarding the business combination.

Akerna’s Financial Projections

In connection with their analyses of the business combination, Akerna provided JMP and Gryphon with the financial projections below.

Neither the management of Akerna nor any of its representatives, advisors or affiliates has made or makes any representation to any person regarding the ultimate expenses and receipts of Akerna compared to the information contained in the financial projections, and none of them intends to or undertakes any obligation to update or otherwise revise the financial projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events in the event that any or all of the assumptions underlying the financial projections are shown to be in error. You are cautioned in relying on the financial projections in making a decision regarding the transaction, that actual results may be materially different than the financial projections.

The financial projections of Akerna are forward-looking statements that are based on assumptions that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond Akerna’s control. These include the risks described in the section entitled “Risk Factors.” There will be differences between actual and projected revenue and spending, and actual revenue and cash spending may be materially greater or materially less than those contained in the financial projections. The inclusion of the financial projections in this proxy statement/prospectus should not be regarded as an indication that Akerna or its representatives considered or currently consider the financial projections to be a reliable prediction of future events, and reliance should not be placed on the financial projections.

The projections were prepared by, and are the responsibility of, the management of Akerna. The projections were not prepared with a view towards compliance with GAAP, the published guidelines of the SEC, or the guidelines established by the American Institute of Certified Public Accountants for preparation of prospective financial information. Marcum LLP, Akerna’s independent registered public accounting firm, has not examined, compiled or otherwise applied procedures with respect to the accompanying prospective financial information presented herein and, accordingly, does not express an opinion or any other form of assurance on it. The report of Marcum LLP included in this proxy statement/prospectus relates to historical financial information of Akerna. It does not extend to the projections and should not be read as if it does.

The key elements of the financial projections of Akerna provided to Gryphon and JMP are summarized in the table below (in thousands of dollars, unaudited).

Modeling Assumptions:

•        The following business units are shut down at the beginning of 2023: Enterprise, Trellis, Solo Sciences, LCA and Consulting. Although, at the time this forecast was made, we had not notified every customer or negotiated the contract termination dates with every customer. We do not expect that all customer contracts will have the same termination date, and Akerna will continue to provide services to each customer through their contact termination date. We expect this will create a revenue tail, that is consistent with the company’s revenue recognition policy. For forecasting purposes, we included an estimate of this trailing revenue in the “Other” revenue line item.

•        Dedicated and shared costs to support discontinued business will cease, resulting in Business Unit Direct and Corporate Overhead cost reductions.

•        The MJ Platform will be revamped and relaunched in mid-2023 as MJ Operations. Updated functionality and user experience will drive a resurgence of growth.

•        MJ Operations will include a universal ERP bridge functionality allowing Akerna to partner with any partner selling /re-selling ERP solutions. This drives MJ Operations growth and partnering fees.

•        In 2023, Ample will decline due to churn. No significant development will be done on the system due to focus on MJ Operations development.

•        In early 2024, MJ Operations will include the functionality offered by Ample, which will be replaced by a common platform, which will regain Canadian market share and result in technical cost efficiencies.

•        Business Unit Costs will decline initially due to shut down and cost efficiencies associated with standardization of technologies. In the out years, cost targets will include zero year-over-year increases (efficiencies offset economics).

•        Small and medium business (SMB) sales growth will be supported with the existing SMB team, which has considerable extra band-width.

•        Corporate overhead costs will decline initially due to shut down/transferring costs to 365. In the out years, the business will continue to implement efficiencies that more than offset economics.

•        Capitalized Software estimate of 13% Business Unit Direct Expenses based on historical capitalization rates.

•        No income tax during forecast period due to ongoing net losses.

•        Depreciation & Amortization largely consists of software amortization. MJP & Ample is amortized over 2 years and Leaf over 5 years. Estimate is based on forecasted capitalized software amortized over 2 years.

Except as set forth above, no projection information was provided by Akerna to JMP in connection with their preparation of their opinion to the Akerna Board regarding the business combination.

Gryphon’s Financial Projections

In connection with their analyses of the business combination, Gryphon provided JMP and Akerna with the financial projections below.

The financial projections of Gryphon are forward-looking statements that are based on assumptions that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond Gryphon’s control. These include the risks described in the section entitled “Risk Factors.” There will be differences between actual and projected revenue and spending, and actual revenue and cash spending may be materially greater or materially less than those contained in the financial projections. The inclusion of the financial projections in this proxy statement/prospectus should not be regarded as an indication that Gryphon or its representatives considered or currently consider the financial projections to be a reliable prediction of future events, and reliance should not be placed on the financial projections.

The projections were prepared by, and are the responsibility of, the management of Gryphon. The projections were not prepared with a view towards compliance with GAAP, the published guidelines of the SEC, or the guidelines established by the American Institute of Certified Public Accountants for preparation of prospective financial information. RBSM LLP, Gryphon’s independent registered public accounting firm, has not examined, compiled or otherwise applied

procedures with respect to the accompanying prospective financial information presented herein and, accordingly, does not express an opinion or any other form of assurance on it. The report of RBSM LLP included in this proxy statement/prospectus relates to historical financial information of RBSM LLP. It does not extend to the projections and should not be read as if it does.

The key elements of the financial projections of Gryphon provided to Akerna and JMP are summarized in the table below.