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Akerna (KERN) - 2024 Q1 - Quarterly Report
KERNAkerna (KERN)2024-05-13 23:23

Mining Performance - For Q1 2024, Gryphon mined approximately 142 bitcoins, a decrease of 33% from 212 bitcoins mined in Q1 2023[164] - Mining revenues for 2023 totaled 21,052,000,withQ12024revenuesat21,052,000, with Q1 2024 revenues at 7,490,000, reflecting a 55% increase from Q1 2023's 4,840,000[165]−Thecosttomineonebitcoinincreasedsignificantlyfrom4,840,000[165] - The cost to mine one bitcoin increased significantly from 12,910 in Q1 2023 to 34,063inQ12024,indicatingariseof16434,063 in Q1 2024, indicating a rise of 164%[165] - Gryphon's breakeven cost for total Bitcoin Equivalent Coins generated was 34,063 in Q1 2024, compared to 12,385inQ12023,markinga17512,385 in Q1 2023, marking a 175% increase[166] - The average value of one mined bitcoin rose from 22,830 in Q1 2023 to 52,746inQ12024,anincreaseof13152,746 in Q1 2024, an increase of 131%[165] Financial Overview - Total revenues for the three months ended March 31, 2024, were 7,490,000, up 47.6% from 5,076,000inthesameperiodof2023[176]−Costofrevenuesincreasedto5,076,000 in the same period of 2023[176] - Cost of revenues increased to 4,837,000 for the three months ended March 31, 2024, from 2,737,000in2023,ariseof76.72,737,000 in 2023, a rise of 76.7%[180] - General and administrative expenses rose to 2,461,000 for the three months ended March 31, 2024, compared to 1,354,000in2023,anincreaseof81.81,354,000 in 2023, an increase of 81.8%[181] - The company reported a loss from operations of 1,560,000 for the three months ended March 31, 2024, a slight improvement from a loss of 1,688,000inthesameperiodof2023[176]−Otherexpensesincreasedsignificantlyto1,688,000 in the same period of 2023[176] - Other expenses increased significantly to 10,184,000 for the three months ended March 31, 2024, compared to 5,222,000in2023,markinga95.05,222,000 in 2023, marking a 95.0% increase[176] - The company reported a net loss of 11,744,000 for Q1 2024, compared to a net loss of 6,910,000inQ12023[217]CashFlowandCapitalResources−Thecompanyhadcashandcashequivalentsof6,910,000 in Q1 2023[217] Cash Flow and Capital Resources - The company had cash and cash equivalents of 1,737,000 as of March 31, 2024, up from 915,000asofDecember31,2023[199]−Theaccumulateddeficitincreasedtoapproximately915,000 as of December 31, 2023[199] - The accumulated deficit increased to approximately 58,180,000 as of March 31, 2024, from 47,175,000asofDecember31,2023[199]−Thecompanyanticipatesneedingadditionalcapitalresourcestofundoperationsandmayconsidersellingadditionalequityordebtsecurities[200]−NetcashusedinoperatingactivitiesforQ12024wasapproximately47,175,000 as of December 31, 2023[199] - The company anticipates needing additional capital resources to fund operations and may consider selling additional equity or debt securities[200] - Net cash used in operating activities for Q1 2024 was approximately 983,000, compared to a net cash provided of 1,807,000inQ12023[202][203][204]−CashproceedsfromthesaleofdigitalcurrencyinQ12024wereapproximately1,807,000 in Q1 2023[202][203][204] - Cash proceeds from the sale of digital currency in Q1 2024 were approximately 6,106,000, with operating expenditures of approximately 7,089,000[203]−NetcashprovidedbyfinancingactivitiesinQ12024wasapproximately7,089,000[203] - Net cash provided by financing activities in Q1 2024 was approximately 1,805,000, primarily from cash proceeds of 1,395,000fromtheissuanceofcommonstock[202][206]OperationalStrategy−Gryphonhasdeployedapproximately8,800S19jProAntminers,withafocusonusingnetcarbonneutralenergyinitsoperations[160][162]−Gryphon′sstrategyincludesworkingwithpowerhostingpartnerscommittedtoclimatescience,utilizingapproximately28megawattsofrenewablehydroenergy[163]−TheCoinmintAgreementinvolveshostingservicesfor7,200S19jProAntminermachinesatahydro−poweredfacility[207]MarketandAssetValuation−TheaveragevalueofBitcoinrosetoapproximately1,395,000 from the issuance of common stock[202][206] Operational Strategy - Gryphon has deployed approximately 8,800 S19j Pro Antminers, with a focus on using net carbon neutral energy in its operations[160][162] - Gryphon's strategy includes working with power hosting partners committed to climate science, utilizing approximately 28 megawatts of renewable hydro energy[163] - The Coinmint Agreement involves hosting services for 7,200 S19j Pro Antminer machines at a hydro-powered facility[207] Market and Asset Valuation - The average value of Bitcoin rose to approximately 53,000 for the three months ended March 31, 2024, compared to 23,000forthesameperiodin2023,anincreaseofapproximately13023,000 for the same period in 2023, an increase of approximately 130%[178] - Gryphon's electricity costs increased from 0.059 per kilowatt hour in Q1 2023 to 0.082perkilowatthourinQ12024,reflectinga390.082 per kilowatt hour in Q1 2024, reflecting a 39% rise[168] - The global hashrate of the Bitcoin network increased sequentially by 18.9%, 9.1%, 21.6%, and 19.0% over the last four quarters ending March 31, 2024[168] Future Offerings - The company has initiated a new At The Market offering program with an aggregate offering price of up to 70,000,000, having sold 32,032 shares for total net proceeds of 44,958asofMay9,2024[175]−Thecompanyfiledaprospectussupplementforanofferingofupto44,958 as of May 9, 2024[175] - The company filed a prospectus supplement for an offering of up to 70.0 million of common stock under an at-the-market issuance sales agreement[201] - The company has a remaining capacity of 69,955,042undertheATMasofMay9,2024[201]AccountingandFinancialAdjustments−AdjustedEBITDAforQ12024wasapproximately69,955,042 under the ATM as of May 9, 2024[201] Accounting and Financial Adjustments - Adjusted EBITDA for Q1 2024 was approximately 1,895,000, down from 4,235,000inQ12023[217]−TheadoptionofASU2023−08resultedina4,235,000 in Q1 2023[217] - The adoption of ASU 2023-08 resulted in a 739,000 increase in digital assets as of January 1, 2024[218] - The company has no off-balance sheet arrangements that could materially affect its financial condition[209]