Gryphon Digital Mining(US:GRYP)2022-08-12 19:39Business 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]