Akerna (US:KERN)2025-05-15 20:06Mining Performance - Gryphon mined approximately 17 bitcoins in Q1 2025, a decrease of 88% from 142 bitcoins mined in Q1 2024 [182]. - Mining revenues fell to $1,558,000 in Q1 2025, down 79.2% from $7,490,000 in Q1 2024 [191]. - The average value of bitcoin mined increased by 76% to $93,000 in Q1 2025 from $53,000 in Q1 2024 [193]. - The cost to mine one bitcoin surged to $120,117 in Q1 2025, compared to $34,070 in Q1 2024, reflecting a significant increase in operational costs [183]. - The average daily global hashrate rose by 42% to 802.3 exahash in Q1 2025 from 564.7 exahash in Q1 2024 [194]. Financial Performance - The company reported a loss before provision for income taxes of $6,280,000 in Q1 2025, a 46.5% improvement from a loss of $11,744,000 in Q1 2024 [192]. - The company reported a net loss of $6,280,000 for the three months ended March 31, 2025, compared to a net loss of $11,744,000 for the same period in 2024 [235]. - Adjusted EBITDA for the three months ended March 31, 2025, was $(4,368,000), a decrease from $1,895,000 in the same period of 2024 [235]. Expenses and Costs - General and administrative expenses increased by 21.9% to $3,000,000 in Q1 2025 from $2,461,000 in Q1 2024 [196]. - Stock-based compensation expense increased to $772,000 for Q1 2025, up from $208,000 in Q1 2024, due to restricted stock units issued to the Board and Captus management team [201]. - Depreciation expense decreased to $1,071,000 for Q1 2025, down from $3,247,000 in Q1 2024, attributed to a reduction in the average remaining useful life of the mining fleet [202]. - The cost of revenues decreased to $2,054,000 in Q1 2025 from $4,837,000 in Q1 2024, primarily due to increased Bitcoin network hashrate and higher energy costs [195]. Cash Flow and Capital Resources - Net cash used in operating activities was approximately $3,219,000 in Q1 2025, compared to $983,000 in Q1 2024, primarily due to cash expenditures for operating activities [214]. - Net cash used in investing activities was approximately $1,780,000 in Q1 2025, which included $558,000 for mining equipment purchases and $1,222,000 for deposits under asset acquisition agreements [216]. - Net cash provided by financing activities was approximately $4,582,000 in Q1 2025, significantly higher than $1,805,000 in Q1 2024, driven by proceeds from the issuance of common stock [217]. - As of March 31, 2025, the company had cash and cash equivalents of $318,000, down from $735,000 as of December 31, 2024, with an accumulated deficit of approximately $73,652,000 [210]. - The company anticipates needing additional capital resources to fund operations and may consider selling additional equity or debt securities, which could dilute existing shareholders [211]. Accounting and Reporting - The adoption of ASU 2023-08 on January 1, 2024, resulted in a $740,000 increase in the company's digital assets [236]. - The company has implemented ASU 2023-07, which requires the disclosure of significant segment expenses and expanded interim disclosures [237]. - The company considers accounting estimates critical if they involve highly uncertain assumptions and could materially impact financial results [230]. - No new accounting standards updates (ASUs) were assessed as applicable to the company's financial position as of the issuance of the consolidated financial statements [232]. - The company defines adjusted EBITDA as GAAP net income (loss) plus adjustments for depreciation, interest expense, income tax expense, and non-cash/non-recurring items [233]. - The company is subject to new segment reporting requirements effective for fiscal years beginning after December 15, 2023 [237]. Unrealized Gains and Losses - The company incurred an unrealized loss on digital assets of $127,000 in Q1 2025, compared to an unrealized gain of $1,703,000 in Q1 2024, with Bitcoin's fair market value dropping from approximately $71,000 to $83,000 [203]. - Unrealized loss on marketable securities was $66,000 in Q1 2025, a significant improvement from a loss of $216,000 in Q1 2024, reflecting a decrease in the fair market value of underlying securities [205]. - The company recognized a gain of $449,000 from the extinguishment of accounts payable following a settlement agreement with Sphere 3D [206].