Item 2.01. Completion of Acquisition
or Disposition of Assets.
Consummation of Plan of Arrangement
As previously disclosed on December 18,
2019, Akerna Corp., a Delaware corporation (the “Company”), entered into an arrangement agreement, as amended
by Amendment to Arrangement Agreement dated February 28, 2020 (“Amendment to Arrangement Agreement”), Amendment
No. 2 to Arrangement Agreement dated May 26, 2020 (“Amendment No. 2 to Arrangement Agreement), and Amendment No. 3
to Arrangement Agreement dated June 1, 2020 (“Amendment No. 3 to Arrangement Agreement”) (the “Arrangement
Agreement”), among the Company, Akerna Canada Ample Exchange Inc., a corporation incorporated under the Business Corporations
Act (Ontario) (the “OBCA”) and a wholly-owned subsidiary of the Company (the “Purchaser”),
and Ample Organics Inc., a corporation incorporated under the OBCA (“Ample”), pursuant to which the Company
through the Purchaser agreed to acquire all of the issued and outstanding equity of Ample (the “Arrangement”).
On July 7, 2020 (the “Closing Date”), the Arrangement was consummated by way of a court-approved plan of arrangement
under Ontario law (the “Plan of Arrangement”) and Ample became an indirect wholly-owned subsidiary of the Company.
Pursuant to the Arrangement Agreement and
the Plan of Arrangement, on the Closing Date, holders of Ample common shares and Class A preferred shares (collectively, the “Ample
Shares”) received a number of redeemable preferred shares of the Purchaser (the “Exchangeable Shares”)
equal to the number of Ample Shares multiplied by the exchange ratio of 0.0524 (the “Exchange Ratio”). In the
aggregate, Ample shareholders received 3,294,574 Exchangeable Shares. The Exchange Ratio was agreed to on December 18, 2019, and
was not adjusted for any subsequent changes in market price of the Company’s common stock, par value $0.0001 per share (the
“Akerna Shares”) or the Ample Shares prior to the Closing Date. The Exchangeable Shares are exchangeable for
Akerna Shares on a 1:1 basis, as determined in accordance with the Arrangement Agreement.
Based on the closing price of the
Akerna Shares on the Closing Date, the consideration received by Ample shareholders in the aggregate had a value of
approximately $30.7 million. Of the 3,294,574 Exchangeable Shares that were issued to former Ample shareholders in connection with
the consummation of the Arrangement, an aggregate of 658,915 Exchangeable Shares were issued as “Closing
Consideration” and an aggregate of 2,635,659 Exchangeable Shares, constituting part of the “Escrowed
Consideration” were issued into escrow pursuant to an escrow agreement (the “Escrow Agreement”),
entered into on July 7, 2020 by and among the Company, Purchaser, John Prentice, as Shareholder Representative, and Odyssey
Trust Company. Under the Escrow Agreement, subject to unresolved claims by the Company under the Arrangement Agreement in
respect of fraud, the Escrowed Consideration shall be released to former Ample shareholders upon the six-, nine-, and
twelve-month anniversaries of the Closing Date in accordance with the following schedule - 988,372 shares on the six-month
anniversary, 823,643 shares on the nine-month anniversary, and 823,644 shares on the twelve-month anniversary.
In addition to the Exchangeable Shares, each
Ample shareholder, upon the Arrangement becoming effective on the Closing Date (the “Closing Time”), received
one Contingent Value Right (each a “CVR” and collectively the “CVRs”). Each CVR entitles
the holder to receive a portion of Deferred Consideration (as defined in the Arrangement Agreement) that the initial holder of
such CVR was entitled to receive in its capacity as an Ample shareholder, with an aggregate of up to CAD$10,000,000 additional
Exchangeable Shares issuable to the holders of the CVRs subject to downward adjustment pursuant to the Arrangement Agreement. Pursuant
to the Rights Indenture entered into on July 7, 2020 by and among the Company, Purchaser, John Prentice, as Shareholder Representative,
and Odyssey Trust Company (the “Rights Indenture”), holders of CVRs are entitled to additional Exchangeable
Shares if certain revenue targets are achieved by Ample during the twelve-month period following the Closing Date.
Ample’s shareholders adopted and approved
the Arrangement Agreement and the Plan of Arrangement on June 26, 2020. The Company’s shareholders approved the issuance
of the Akerna Shares (including the Akerna Shares issuable upon exchange of the Exchangeable Shares, including upon exchange of
additional Exchangeable Shares issuable pursuant to the CVRs) in connection with the Arrangement on June 26, 2020. The Ontario
Superior Court of Justice issued a final order approving the Plan of Arrangement on June 30, 2020.
Exchangeable Share Support Agreements and Voting and Exchange
Trust Agreement
On July 7, 2020, the Company entered into (i)
an Exchangeable Share Support Agreement together with the Purchaser, Akerna Canada Holdings Inc., a corporation incorporated under
the OBCA (“Callco”), and John Prentice, as Shareholder Representative, and (ii) a Voting and Exchange Trust
Agreement (the “Voting and Exchange Trust Agreement”) with the Purchaser, Callco, and Odyssey Trust Company
(the “Trustee”) solely for the purpose of ensuring that each Exchangeable Share is substantially the economic
and voting equivalent of an Akerna Share, and, following the registration of the Akerna Shares issuable upon exchange of the Exchangeable
Shares under the Securities Act of 1933, as amended (the “Securities Act”), ensuring that each Exchangeable
Share is exchangeable on a one-for-one basis for an Akerna Share, subject to certain limitations set forth therein. Together, the
Voting and Exchange Trust Agreement and the Exchangeable Share Support Agreement set forth the terms governing the Exchangeable
Shares. Through the Voting and Exchange Trust Agreement and the issuance by the Company to the Trustee of a special voting share
(the “Special Voting Share”), each holder of Exchangeable Shares effectively has the ability to cast votes along
with holders of Akerna Shares, as described below under Item 3.03 of this Current Report on Form 8-K. In addition, the Voting and
Exchange Trust Agreement grants exchange rights upon an event of insolvency of the Purchaser, or the liquidation, dissolution or
winding up of the Company.
The foregoing description of the Arrangement,
the Arrangement Agreement and the transactions consummated thereby is merely a summary of the material terms thereof, and is qualified
in its entirety by reference to the Arrangement Agreement filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on December 18, 2019, Amendment to Arrangement Agreement filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed on March 3, 2020, Amendment No. 2 to Arrangement Agreement and Amendment No. 3 to Arrangement Agreement
filed as Exhibits 2.3 and 2.4 to this Current Report on Form 8-K, respectively, and the Voting and Exchange Trust
Agreement, the Exchangeable Share Support Agreement, , the Escrow Agreement, and the Rights Indenture, filed as Exhibits 9.1,
10.1, 10.2, 10.3 and to this Current Report on Form 8-K, respectively.