Business Transactions - Akerna completed the sale of 365 Cannabis for $0.5 million and terminated an Earn-out Obligation valued at $2.3 million[140]. - The company exited the Enterprise software business by discontinuing operations of Viridian and selling LCA for $0.1 million[142]. - Akerna entered into a merger agreement with Gryphon Digital Mining, with Gryphon stockholders expected to own approximately 92.5% of the combined entity[145]. - The sale of MJF and Ample to MJ Acquisition is set for $5.0 million, including $4.0 million in cash and a $1.0 million loan[146]. - Akerna paid a termination fee of $0.2 million to POSaBIT after terminating the MJF-Ample SPA[144]. - Akerna's merger agreement was amended to set a minimum value of $115.6 million for Gryphon's post-merger ownership[148]. - The cash payment at closing for the SPA was reduced from $4 million to $2 million, with an additional $500,000 loan provided to Akerna for working capital[151]. - Akerna received a $1.0 million loan from MJ Acquisition, with a 10% annual interest rate, due by April 28, 2024[150]. Financial Performance - Total revenue decreased by 35% to $6.97 million for the nine months ended September 30, 2023, compared to $10.80 million for the same period in 2022[169]. - Software revenue declined by 32% to $6.91 million for the nine months ended September 30, 2023, primarily due to customer churn and the planned exit from certain platforms[170]. - Gross profit decreased by 40% to $3.98 million, with a gross profit margin of 57% for the nine months ended September 30, 2023, down from 61% in the prior year[175]. - Total operating expenses dropped by 80% to $10.25 million for the nine months ended September 30, 2023, compared to $50.38 million in 2022[169]. - Loss from operations improved by 86% to $6.27 million for the nine months ended September 30, 2023, compared to a loss of $43.76 million in the same period last year[169]. - For the three months ended September 30, 2023, total revenue decreased by 32% to $2.08 million from $3.06 million in the same quarter of 2022[181]. - Software revenue for the three months ended September 30, 2023, declined by 31% to $2.07 million, primarily due to customer churn and planned exits from certain platforms[182]. - Gross profit for the three months ended September 30, 2023, was $1.11 million, a decrease of 30% from $1.59 million in the same quarter of 2022[186]. - Adjusted EBITDA for the nine months ended September 30, 2023, improved to $(3,366,375) from $(7,092,597) in the same period of 2022, indicating a reduction in operational losses[197]. Restructuring and Operational Changes - Akerna incurred restructuring charges of less than $0.1 million related to the termination of employees during the sale of 365 Cannabis[140]. - The company plans to discontinue the Solo and Trellis platforms as existing contracts expired in the second quarter of 2023[136]. - Akerna has suspended efforts to seek new revenue opportunities for the discontinued business units[142]. - The company implemented a restructuring initiative in May 2022, resulting in a $0.5 million charge due to a 33% workforce reduction[156]. - Depreciation and amortization expense decreased by 89% to $0.18 million for the three months ended September 30, 2023, from $1.55 million in the prior year[190]. - Impairment charges for goodwill of $0.89 million were recognized in the three months ended September 30, 2023, with no impairment charges in the same period of 2022[191]. Cash Flow and Working Capital - As of September 30, 2023, the company had a working capital deficit of $11.2 million and only $0.2 million in cash available for future operations[199]. - The company reported cash used in operating activities of $(5,206,372) for the nine months ended September 30, 2023, a decrease from $(10,450,906) in the same period of 2022, primarily due to cost reductions from restructuring[201][203]. - Net cash provided by investing activities was $600,000 during the nine months ended September 30, 2023, resulting from the sale of the 365 Cannabis and LCA business units[205]. - The company made principal payments of $4.9 million on the Senior Convertible Notes during the nine months ended September 30, 2023, compared to $1.5 million in the same period of 2022[207]. Compliance and Future Viability - The company received notices from Nasdaq regarding non-compliance with minimum bid price and stockholders' equity requirements, with a compliance period of 180 days granted to regain compliance[199]. - The company is committed to a Sale Transaction to exit the SaaS industry and a Merger as a strategic alternative for stockholders, with no assurance of successful execution[200]. - The company’s ability to continue as a going concern is dependent on successfully executing the Sale Transaction and Merger, amid substantial doubt about its operational viability[200]. - The company’s cash flow from operating activities is primarily impacted by customer subscriptions, employee-related expenditures, and marketing expenses[202]. Revenue Composition - Revenue from software accounted for approximately 99% of total revenue for the nine months ended September 30, 2023[160]. - Consulting services contributed only about 3% of total revenue for the nine months ended September 30, 2022[160]. - General and administrative expenses include salaries and benefits for administrative functions, along with professional fees and corporate expenses[167]. - Akerna's critical accounting policies remain unchanged since the last annual report[168].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from / to Commission file number 001-39096 AKERNA CORP. (Exact name of registrant as specified in its charter) | Delaware | 83-2242651 | | --- | --- | | (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from / to Commission file number 001-39096 AKERNA CORP. (Exact name of registrant as specified in its charter) | Delaware | 83-2242651 | | --- | --- | | (State or other juris ...

Financial Performance - The company reported net losses of $79.1 million and $31.3 million for the years ended December 31, 2022, and 2021, respectively, due to substantial investments in developing monitoring and compliance platforms[147]. - The company has substantial doubt about its ability to continue as a going concern, which could limit its ability to raise additional funds through equity or debt securities[145]. - The company anticipates continuing to incur losses in the near term, although at lower levels due to restructuring actions taken in 2022[147]. - Government contracts for Leaf Data Systems® accounted for 22% and 18% of revenue in 2022 and 2021, respectively[171]. Strategic Alternatives and Mergers - Akerna plans to sell its membership interests in MJ Freeway and Ample Organics for a total purchase price of $4.0 million[47]. - The company aims to enhance shareholder value through strategic alternatives, including mergers and acquisitions[42]. - Akerna is currently in the process of a proposed merger with Gryphon, which is subject to various closing conditions, including stockholder approval[111]. - If the merger with Gryphon does not complete, Akerna's board will evaluate other strategic alternatives, which may not be as favorable to stockholders[112]. - The company is committed to a Sale Transaction to exit the SaaS industry and a Merger as the most favorable strategic alternative for stockholders[145]. - The company may incur costs related to the Sale Transaction, including legal, accounting, and financial advisory fees, even if the transaction is not completed[139]. Market and Industry Trends - The U.S. legal cannabis sales surpassed $25 billion in 2021, representing a 40% growth from $18 billion in 2020, with forecasts predicting sales to reach $46 billion by 2026, a CAGR of 14%[60]. - Global cannabis sales reached nearly $29 billion in 2021, an increase of 45% over 2020, with projections to grow to $61 billion by 2026, reflecting a CAGR of over 16%[60]. - The global CBD market was valued at USD 2.8 billion in 2020, expected to expand at a CAGR of 21.2% from 2021 to 2028[62]. - The anti-counterfeit packaging market is projected to grow from $105.9 billion in 2018 to $182.2 billion by 2023, at a CAGR of 11.5%[63]. Compliance and Regulatory Risks - The cannabis industry faces risks such as federal illegality and changing regulatory environments, which could adversely affect demand for the company's products[154][155]. - The company is exposed to racketeering laws due to receipt of funds from clients involved in cannabis operations, which could result in significant penalties[159]. - The Appropriations Rider, which protects state medical marijuana laws, is set to expire on September 30, 2023, increasing federal enforcement risks if not extended[157]. - Legislative developments beneficial to the cannabis industry are uncertain, with potential opposition from established businesses in other sectors[163]. - The company relies on clients obtaining and retaining various licenses, with no assurance that these will be granted or renewed[167]. Operational Challenges - The COVID-19 pandemic has created extensive disruptions that may adversely impact the company's operations and financial results[152]. - Cybersecurity threats pose a significant risk to the company's IT systems, potentially leading to operational disruptions and reputational damage[175]. - Changes in marijuana laws and regulations could require substantial compliance costs and adversely affect client operations[165]. - The evolving nature of the cannabis industry necessitates adaptability to changing market dynamics for sustained growth[170]. Financial Instruments and Shareholder Impact - The company has $14.7 million in Senior Convertible Notes convertible at $4.75 per share, potentially resulting in the issuance of 3,086,890 shares upon full conversion[197]. - Up to 26,562,911 shares of Common Stock could be issued at the floor price upon conversion of the Senior Convertible Notes, leading to significant dilution for stockholders[198]. - The market price of the Common Stock is highly volatile, with significant fluctuations expected due to factors such as trading volume and market conditions[209]. - The company may face additional risks due to material weaknesses in internal control over financial reporting, potentially leading to regulatory actions and negative impacts on stock price[208]. - The company has not paid dividends in the past and does not expect to pay dividends for the foreseeable future, intending to retain future earnings for business development and expansion[212]. Employee and Operational Structure - As of December 31, 2022, Akerna employed 112 full-time employees, with a majority in engineering and technical roles[107]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to utilize extended transition periods for compliance with new accounting standards[108]. - Attracting and retaining qualified personnel is critical for the company's growth, with intense competition in the cannabis industry for talent[179]. Legal and Compliance Costs - The company is subject to increased legal and financial compliance costs due to being a public company, which may divert management's attention from business operations[215]. - The company identified material weaknesses in internal controls over financial reporting as of December 31, 2022, which could result in material misstatements in financial statements if not remediated[214].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from / to Commission file number 001-39096 AKERNA CORP. 1550 Larimer Street, #246 Denver, Colorado 80202 (Address of principal executive offices) (Zip Code) Registrant's ...

Financial Data and Key Metrics Changes - Akerna reported Q3 2022 revenue of $5.4 million, with $5.3 million (98%) from software sales, showing year-over-year growth driven by acquisitions [36] - Gross margin for the quarter was 62%, consistent with the previous year, while year-to-date gross margin improved to 67% from 62% [12][38] - Adjusted EBITDA for Q3 2022 was a loss of approximately $1.4 million, an improvement from a loss of $2.3 million in the previous quarter [45] Business Line Data and Key Metrics Changes - Software revenue grew by 17% year-over-year and nearly 40% year-to-date [11] - Committed Annual Recurring Revenue (CARR) was approximately $17 million, slightly below the previous quarter, with a noted reduction in CARR due to client contract negotiations [17][18] - Q3 software bookings were approximately $0.5 million, lower than expected, indicating a need to closely monitor cost structures [22] Market Data and Key Metrics Changes - Transaction volume increased by 10% sequentially, while transaction dollar amount decreased by 10%, reflecting supply and demand dynamics in the legal cannabis market [23] - The company noted that competitive market pressure is high, emphasizing the importance of differentiation in their product offerings [24] Company Strategy and Development Direction - Akerna is focused on integrating acquisitions and improving cost structures to position for future market opportunities [9][10] - The company is taking measures to solidify its leadership position in the market, with cost-saving initiatives saving approximately $600,000 per quarter [14] - Akerna aims to capitalize on new market openings and regulatory changes, particularly with the potential for federal banking actions [27][28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis market's growth potential and the company's ability to adapt to economic challenges [34][35] - The company is positioned to benefit from emerging markets, particularly in the Southern US and Latin America [55] - Management acknowledged the challenges posed by customer churn and economic pressures but remains confident in the core software's necessity for clients [46][59] Other Important Information - Akerna completed a $10 million funding round and took steps to maintain compliance with NASDAQ listing standards, including a reverse stock split [26] - The company reported cash and restricted cash of approximately $9.5 million as of September 30, 2022, with net cash used in operating activities at $3.2 million for the quarter [48] Q&A Session Summary Question: Strategy to drive bookings and growth amidst economic challenges - Management highlighted strong growth opportunities in markets like Pennsylvania and Puerto Rico, with emerging activity in New Jersey and Southern US states [55] Question: Positioning in states with licensing applications - Akerna has existing clients in application phases and is working with consulting clients to ensure they are positioned competitively [56] Question: Impact of service level declines on bookings - Management indicated uncertainty but noted that they are working closely with clients to navigate economic challenges, positioning themselves for future growth [58][60]

The cannabis economy runs on Akerna October 2022 1 October 2022 Safe Harbor Forward-Looking Statements This Presentation includes "forward‐looking statements" regarding Akerna Corp. ("Akerna") and its wholly-owned subsidiary MJ Freeway LLC ("MJF" and, together with Akerna, the "Company"), its financial condition and results of operations that reflect the Company's current views and information currently available. This information is, where applicable, based on estimates, assumptions and analysis that MJF b ...

Business Operations - Akerna's software has monitored compliance for over $30 billion in legal cannabis sales across more than 30 states and multiple countries[114] - The company has integrated six new brands into its product and service offerings since 2019, enhancing its cannabis ecosystem[113] - Akerna's solutions are designed to be scalable, targeting both mid-market and emerging enterprise-level operators in the cannabis industry[115] - The company provides a Seed-to-Sale tracking system that captures every step in a plant's life cycle, ensuring compliance and operational efficiency[117] - Akerna's platforms allow state-licensed clients to manage inventory and compliance in a single integrated system, enhancing operational capabilities[119] - The company focuses on expanding its international reach and adapting its solutions for compliance in various jurisdictions[123] - Akerna's anti-counterfeiting technology aims to build consumer trust and enhance brand security within the cannabis market[120] - The company leverages anonymized data from its Seed-to-Sale platform to provide cannabis market insights and intelligence[121] Financial Performance - Total revenue for the six months ended June 30, 2022, was $13.0 million, a 46% increase from $8.9 million in the same period of 2021[147] - Software revenue increased to $12.4 million for the six months ended June 30, 2022, up 51% from $8.3 million in the prior year, accounting for 95% of total revenue[148] - Consulting revenue decreased to $0.5 million for the six months ended June 30, 2022, down 7% from $0.6 million in the same period of 2021, representing 4% of total revenue[149] - Gross profit for the six months ended June 30, 2022, was $9.0 million, a 62% increase from $5.6 million in the same period of 2021, with a gross profit margin of 69%[152] - Total revenue for the three months ended June 30, 2022, was $6.1 million, an increase of $1.2 million, or 24%, compared to $4.9 million for the same period in 2021[158] - Software revenue increased by $1.5 million, or 33%, to $5.9 million for the three months ended June 30, 2022, driven by enterprise offerings[159] - Gross profit increased by $1.3 million, or 42%, to $4.2 million for the three months ended June 30, 2022, with a gross profit margin improvement from 61% to 70%[163] Expenses and Losses - Total operating expenses surged to $58.9 million for the six months ended June 30, 2022, compared to $15.1 million in the same period of 2021, primarily due to impairment of long-lived assets[147] - Sales and marketing expenses rose to $6.4 million for the six months ended June 30, 2022, an 80% increase from $3.6 million in the same period of 2021, driven by acquisitions[154] - Product development expenses increased to $3.9 million for the six months ended June 30, 2022, a 31% rise from $3.0 million in the same period of 2021, influenced by acquisitions and restructuring costs[153] - The company incurred approximately $0.7 million in severance benefits related to a workforce reduction of 33% in May 2022[133] - Impairment charges totaled $36.4 million for the six months ended June 30, 2022, including $23.5 million related to goodwill, compared to no impairment charges for the same period in 2021[157] - For the six months ended June 30, 2022, the company reported a net loss of $51.5 million, compared to a net loss of $12.6 million for the same period in 2021, representing an increase in losses of approximately 309%[174] - Adjusted EBITDA for the six months ended June 30, 2022, was $(4.4) million, compared to $(3.5) million for the same period in 2021, indicating a deterioration in operational performance[174] - The company incurred losses from operations of $25.7 million and $9.6 million for the six months ended June 30, 2022, and 2021, respectively, indicating a significant increase in operational losses[176] Cash Flow and Capital Management - Cash used in operating activities increased to $7.2 million for the six months ended June 30, 2022, from $3.7 million in the same period of 2021, reflecting a rise of approximately 94%[184] - As of June 30, 2022, the company had a working capital deficit of $13.2 million and $5.1 million in cash available for future operations[176] - The company plans to use remaining net proceeds for general corporate purposes, including working capital and product development[131] - Net cash used in investing activities was $1.4 million for the six months ended June 30, 2022, down from $2.0 million in the same period of 2021, indicating a reduction in capital expenditures[186] - The company made principal payments of $1.5 million on the Senior Convertible Notes during the six months ended June 30, 2022[188] - The company received approximately $2 million in cash from a Unit Offering subsequent to June 30, 2022, to support working capital needs[176] - The company anticipates that its initiatives will provide sufficient liquidity to operate through the second half of 2022[179] Stock and Market Compliance - The company has established a daily cash test requirement of at least $7 million as part of its Convertible Notes Amendment[125] - Akerna entered into a Unit Offering on June 30, 2022, selling 29,382,861 units at a public offering price of $0.23 per unit[126] - The company plans to implement a 1-to-20 reverse stock split to address the minimum listing requirements for the Nasdaq Market[178] - The company emphasizes the importance of non-GAAP financial measures for evaluating ongoing operations and performance comparison[169]

Akerna Corporation (KERN) Q2 2022 Earnings Conference Call August 11, 2022 9:00 AM ET Company Participants Jessica Billingsley - Chairman, Chief Executive Officer Dean Ditto - Chief Financial Officer Peter Seltzberg - Investor Relations Conference Call Participants Ryan Kintslinger - Alliance Global Ray Rasa - Operator Good morning and welcome to Akerna’s second quarter 2022 financial results conference call. As a reminder, today’s call is being recorded. At this time, I would like to turn the call over to ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from / to Commission file number 001-39096 AKERNA CORP. (Exact name of registrant as specified in its charter) | Delaware | 83-2242651 | | --- | --- | | (State or other juris ...