Gryphon Digital Mining(US:GRYP)2021-08-12 21:28Revenue and Growth - Revenue for the six months ended June 30, 2021, was comprised of approximately 93% from software and 7% from consulting services, compared to 86% and 14% respectively for the same period in 2020[111]. - Total revenue for the six months ended June 30, 2021, was $8.9 million, a 47% increase from $6.1 million in the same period of 2020[124]. - Software revenue increased to $8.3 million for the six months ended June 30, 2021, up 59% from $5.2 million in 2020, accounting for 93% of total revenue[125]. - Consulting revenue decreased to $0.6 million for the six months ended June 30, 2021, down 29% from $0.8 million in 2020, representing 7% of total revenue[126][127]. - Akerna's consulting services are expected to grow as more states legalize cannabis, driven by the demand for pre-application and operational phase solutions[114]. - The company focuses on expanding its customer reach to include larger multi-state and multi-vertical operations, which represent significant long-term growth opportunities[103]. Financial Performance - Gross profit for the six months ended June 30, 2021, was $5.6 million, a 94% increase from $2.9 million in 2020, with a gross profit margin of 62%[124]. - Operating expenses totaled $15.1 million for the six months ended June 30, 2021, a 9% increase from $13.9 million in 2020[124]. - Loss from operations improved to $9.6 million for the six months ended June 30, 2021, compared to a loss of $11.1 million in 2020, a 14% reduction[124]. - For the six months ended June 30, 2021, the company reported a net loss of $12.56 million, compared to a net loss of $10.67 million for the same period in 2020[150]. - Adjusted EBITDA for the six months ended June 30, 2021, was $(3.47) million, an improvement from $(6.75) million in the prior year[150]. Cash Flow and Liquidity - As of June 30, 2021, the company had cash of $11.8 million and working capital of $3.1 million[153]. - The company used $3.7 million in cash from operations for the six months ended June 30, 2021[153]. - Cash and restricted cash balances were $12.3 million as of June 30, 2021, down from $24.7 million in 2020[157]. - Net cash used in operating activities decreased to $3.7 million for the six months ended June 30, 2021, a reduction of $4.9 million compared to $8.6 million in 2020[158]. - The company incurred approximately $2.7 million in one-time, non-recurring expenses during the six months ended June 30, 2021, including business combination and merger-related costs[153]. - The company believes it can implement cost reduction initiatives to manage liquidity, including deferring expenses and negotiating salary arrangements[154]. - The company is evaluating the potential forgiveness of its $2 million PPP loan as part of its liquidity strategy[154]. Expenses and Investments - Product development expenses include significant investments in enhancing technology infrastructure and developing new solutions[117]. - Product development expenses increased by 50% to $3.0 million for the six months ended June 30, 2021, primarily due to acquisitions[131]. - Sales and marketing expenses decreased by 14% to $3.6 million for the six months ended June 30, 2021, due to reduced customer event spending[132]. - General and administrative expenses decreased by 5% to $6.2 million for the six months ended June 30, 2021, primarily due to non-recurring acquisition-related costs in 2020[133]. Strategic Initiatives - The company plans to continue investing in marketing and sales to build brand awareness and attract new clients[118]. - Akerna's platforms provide a comprehensive seed-to-sale tracking solution, ensuring compliance and operational efficiency for cannabis businesses[105]. - Akerna's software has monitored compliance for over $20 billion in legal cannabis sales across more than 30 states and multiple countries[102]. - The company aims to provide compliance solutions for the expanding national and international legal cannabis market[110]. - The company has integrated five new brands into its product and service offerings from 2019 to 2021, enhancing its cannabis ecosystem[101]. Financial Revisions - The net loss for the year ended June 30, 2019, was revised from $12,403,215 to $14,419,027, and for the year ended June 30, 2020, from $15,534,345 to $13,572,311[162]. - The cumulative adjustments for the misclassification of Private Warrants as derivative liabilities were determined to be material, necessitating revisions to prior financial statements[161]. - The net loss for the six-month period ended December 31, 2020, was revised from $16,957,334 to $16,210,482, solely due to the inclusion of the fair value of derivative liability[162].