Akerna (Nasdaq: KERN), a leading enterprise software company and developer of the most comprehensive technology infrastructure, ecosystem, and compliance engine powering the global cannabis industry, today announced that it will effect a 20-for-1 reverse stock split (the “Reverse Stock Split”) of its shares of common stock, $0.0001 par value (“Common Shares”) that will become effective on November 8, 2022 at 12:01 a.m. Eastern Standard Time. The Company’s Common Shares are expected to begin trading on a split-adjusted basis when the market opens on November 8, 2022 on the Nasdaq under the existing symbol “KERN.”
The Reverse Stock Split is primarily intended to bring the Company into compliance with the minimum bid price requirement for maintaining its listing on the Nasdaq Capital Market. The new CUSIP number for the Common Shares following the Reverse Stock Split will be 00973W300.
On November 5, 2022, the Company’s board of directors (the “Board”) approved that the Reverse Stock Split at a ratio of 20-for-1 should go effective at 12:01 a.m. on November 8, 2022, subject to approval by the Company’s stockholders. At the Company’s special meeting of stockholders on November 7, 2022 (the “Meeting”), the Company’s stockholders approved the proposal to authorize the Company, acting by its Board, to effect the Reverse Stock Split.
The Reverse Stock Split will affect all issued and outstanding Common Shares. All outstanding options, restricted stock awards, warrants, preferred stock and convertible notes and other securities entitling their holders to purchase or otherwise receive Common Shares will be adjusted as a result of the Reverse Stock Split, as required by the terms of each security. The number of shares available to be awarded under the Company’s equity incentive plans will also be appropriately adjusted.
No fractional shares will be issued in connection with the Reverse Stock Split. All fractional shares will be rounded up to the nearest whole share. The Reverse Stock Split will affect all stockholders uniformly and will not alter any stockholder’s percentage interest in the Company’s equity (other than as a result of the rounding of shares to the nearest whole share in lieu of issuing fractional shares).
The Reverse Stock Split will reduce the number of Common Shares issued and outstanding from approximately 80.4 million to approximately 4.0 million. Because the Reverse Stock Split did not reduce the number of authorized Common Shares, the effect of the Reverse Stock Split was to increase the number of Common Shares available for issuance relative to the number of Common Shares issued and outstanding. The Reverse Stock Split did not alter the par value of our Common Shares or modify any voting rights or other terms of our Common Shares.
The Company’s transfer agent, Continental Stock Transfer & Trust Company (“Continental”), will serve as exchange agent for the Reverse Stock Split and will provide instructions to stockholders of record regarding the Reverse Stock Split. Unless otherwise requested by the stockholder, Continental will be issuing all of the post-split shares in paperless, “book-entry” form, and unless otherwise requested by the stockholder, Continental will hold the shares in an account set up for the stockholder. All book-entry or other electronic positions representing issued and outstanding shares of our common stock will be automatically adjusted. Those stockholders holding our common stock in “street name” will receive instructions from their brokers.
