Akerna : Failure to Satisfy Listing Rule - Form 8-K

Item 3.01

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

As previously disclosed, on March 22, 2023, Akerna Corp. (the "Company") received a letter from the Listing Qualifications Staff (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it is no longer in compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed companies to maintain a minimum bid price of $1.00 per share. The letter noted that the bid price of the Company's common stock was below $1.00 for a 30-day period. The notification letter had no immediate effect on the Company's listing on The Nasdaq Capital Market. In accordance with Listing Rule 5810(c)(3)(A), Nasdaq provided the Company with 180 days, or until September 18, 2023, to regain compliance with the minimum bid price requirement by having a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

On September 19, 2023, the Company received a determination letter (the "Determination Letter") from the Staff 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. Unless the Company requests an appeal of this determination the trading of the Company's common stock will be suspended at the opening of business on September 28, 2023, and a Form 25-NSE will be filed with the Securities and Exchange Commission (the "SEC"), which will remove the Company's securities from listing and registration on The Nasdaq Capital Market. The Company may appeal the Staff's determination, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series, no later than 4:00 pm Eastern Time on September 26, 2023. The Company plans to timelyfile such an appeal and request a hearing (the "Hearing") before a Nasdaq Hearing Panel (the "Panel"). A Hearing request will stay any delisting or suspension action by the Staff pending the issuance of the Panel's decision. The Company's common stock will remain listed on Nasdaq, pending the outcome of the Hearing. There can be no assurance that the Panel will grant the Company's request for continued listing.

In addition, as previously disclosed, on March 23, 2023, the Company received a notice from the Staff notifying the Company that the Company's stockholders' equity, as reported in its Annual Report on Form 10-K for the period ended December 31, 2022, did not satisfy the continued listing requirement under Nasdaq Listing Rule 5550(b)(1) for The Nasdaq Capital Market, which requires that a listed company's stockholders' equity be at least $2,500,000 (the "Equity Rule"). Based on the Company's representations made in its compliance plan submitted to the Staff on May 8, 2023, on June 15, 2023, the Staff granted the Company an extension until September 19, 2023, to regain compliance with the Equity Rule. However, the Staff 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, the Company should address its non-compliance with the Equity Rule before a Hearings Panel (the "Panel") if it appeals the Staff's determination.

The Company believes that its ongoing and previously announced transactions with Gryphon Digital Mining, Inc. and MJ Acquisition Corp., which transactions will include a reverse stock split in the Company's common stock, will be closed or close to closing prior to the Hearing before the Panel and should serve as a sufficient basis for the Panel to grant an extension for the Company to regain compliance with both Rule 5550(a)(2) and Rule 5550(b)(1).

There can be no assurance that the Company's plan as presented to the Panel will be accepted by the Panel or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements, or that a Panel will stay the suspension of the Company's securities. If the Company's securities are delisted from Nasdaq, it could be more difficult to buy or sell the Company's common stock or to obtain accurate quotations, and the price of the Company's common stock could suffer a material decline. Delisting could also impair the Company's ability to raise capital and/or trigger defaults and penalties under outstanding agreements or securities of the Company.