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Akerna Announces Financial Results for Second Quarter 2022

·21-min read
Akerna Corp.
Akerna Corp.

Software revenue increases 33% for Q2 and 51% for the year-to-date

DENVER, Aug. 10, 2022 (GLOBE NEWSWIRE) -- Akerna (Nasdaq: KERN), a leading enterprise software company and developer of one of the most comprehensive technology infrastructures, ecosystems, and compliance engines powering the global cannabis industry, today reported its unaudited financial results for the quarter ended June 30, 2022.

"We have continued to take important steps to grow revenue, reduce costs, and position ourselves for growth in the future," said Jessica Billingsley, CEO of Akerna. “While client demand has been mixed thus far in 2022, and with softer sales and bookings in particular during the second quarter throughout the sector, we believe we are on pace for a year of solid growth in 2022, compared with last year. On the cost side, we’re pleased with our gross margin improvement over last year at 69%, and the expense reduction program across the board that we announced in Q2 should enable more material improvements going forward, beginning with our Q3 results.”

Second Quarter 2022 Financial Highlights and Supplemental Information

  • Software revenue was $5.9 million, up 33% year-over-year

  • Total revenue was $6.1 million, up 24% year-over-year

  • Gross profit of $4.2 million, or 69.8% of total revenues, was up 42% year-over-year compared to $3.0 million, or 60.9% of total revenues in the same period of 2021

  • Loss from operations was $29.2 million, including a $24.1 million impairment of certain long-lived assets, compared to a loss of $6.1 million year—over-year

  • Net loss was $29.6 million and, when excluding the impairment, was marginally lower than last year’s net loss of $6.1 million

  • Adjusted EBITDA* loss was $2.1 million compared with a loss of $1.6 million for the same quarter of 2021

  • Cash and Restricted Cash was $14.1 million as of July 5, 2022, following the closing of a $10 million financing via S-1 filed/effective on June 29, 2022

*See "Explanation of Non-GAAP Financial Measures" below

Second Quarter 2022 Key Metrics and Supplemental Financial Data

  • CARR of $18.9 million, up 9% year-over-year

  • Q2 software bookings of approximately $600K

  • Transaction volume up 9% year-over-year

  • Average new business deal decreased by 9% year-over-year

  • Retail order spend down 4% year-over-year

  • The company continues to pursue strategic alternatives to optimize the capital structure and strengthen the balance sheet

  • Expense reductions announced in June are expected to generate material cost savings in second half of 2022

  • The Board has approved Dean Ditto’s promotion from Interim to Full-Time CFO

The foregoing financial results are preliminary in nature. Final financial results and other disclosures will be reported in Akerna's quarterly report on Form 10-Q and may differ materially from the results and disclosures today due to, among other things, the completion of final review procedures, the occurrence of subsequent events or the discovery of additional information. You are encouraged to review the Form 10-Q in detail.

Conference Call Details

Akerna will host a conference call Thursday, August 11, 2022, at 8:30 a.m. Eastern Time to discuss its financial results and business highlights. A question-and-answer session will follow prepared remarks. Interested parties may listen to the call by dialing:

Toll-Free: 1-888-999-5318
Toll / International: 1 848-280-6460
Conference ID#: 4956626

The conference call will also be available via a live, listen-only webcast and can be accessed through the Investor Relations section of Akerna's website, https://ir.akerna.com/

To be included on the Company's email distribution list, please sign up at https://ir.akerna.com/news-events/email-alerts

About Akerna

Akerna (Nasdaq: KERN) is an enterprise software company focused on compliantly serving the cannabis, hemp, and CBD industry. First launched in 2010, Akerna has tracked more than $30 billion in cannabis sales to date and is the first cannabis software company listed on Nasdaq. The company's cornerstone technology, MJ Platform, one of the world's leading cannabis infrastructure as a service platform, powers retailers, manufacturers, brands, distributors, and cultivators.

For more information, visit https://www.akerna.com/.

Forward Looking Statements

Certain statements made in this release are "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements include but are not limited to statements regarding our preliminary financial results which may differ from our final financial results, our preparation for a potential post-legalization landscape, our believe enterprise capabilities, including comprehensive compliance solutions and financial reporting integrations, will become increasingly important to the future leaders of the cannabis industry and the timing for management's conference call in relation to our quarterly results. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of significant known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside Akerna's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others that may affect actual results or outcomes, include (i) Akerna's ability to maintain relationships with customers and suppliers and retain its management and key employees, (ii) changes in applicable laws or regulations, (iii) changes in the market place due to the coronavirus pandemic or other market factors, (iv) and other risks and uncertainties disclosed from time to time in Akerna's filings with the U.S. Securities and Exchange Commission, including those under "Risk Factors" therein. You are cautioned not to place undue reliance on forward-looking statements. All information herein speaks only as of the date hereof, in the case of information about Akerna, or the date of such information, in the case of information from persons other than Akerna. Akerna undertakes no duty to update or revise the information contained herein. Forecasts and estimates regarding Akerna's industry and end markets are based on sources believed to be reliable; however, there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We attempt compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Adjusted EBITDA

We believe that Adjusted EBITDA, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance and allows for comparison of our performance and credit strength to our peers. Adjusted EBITDA should not be considered alternatives to net loss as determined in accordance with GAAP as indicators of our performance or liquidity.

We define EBITDA as net loss before interest expense, provision for income taxes, depreciation and amortization. We calculate Adjusted EBITDA as EBITDA further adjusted to exclude the effects of the following items for the reasons set forth below:

  • Impairment of long-lived assets, because it's a non-cash, non-recurring item, which effects the comparability of results of operations and liquidity;

  • Stock-based compensation expense, because this represents a non-cash charge and our mix of cash and share-based compensation may differ from other companies, which effects the comparability of results of operations and liquidity;

  • Cost incurred in connection with business combinations and mergers that are required to be expensed as incurred in accordance with GAAP, because business combination and merger related costs are specific to the complexity and size of the underlying transactions as well as the frequency of our acquisition activity these costs are not reflective of our ongoing operations;

  • Cost incurred in connection with non-recurring financing, including fees incurred as a direct result of electing the fair value option to account for our debt instruments;

  • Restructuring charges, which include costs to terminate a lease and the related write off of leasehold improvements and furniture, as we believe these costs are not representative of operating performance;

  • Gain on forgiveness of PPP loan, as this is a one-time forgiveness of debt that is not recurring across all periods and we believe inclusion of the gain is not representative of operating performance;

  • Equity in losses of investees because our share of the operations of investees is not representative of our own operating performance and may not be monetized for a number of years;

  • Changes in fair value of contingent consideration because these adjustments are not recurring across all periods and we believe these costs are not representative of operating performance; and

  • Other non-operating expenses which includes items such as a one-time gain on debt extinguishment and a one-time loss on disposal of fixed assets, which effects the comparability of results of operations and liquidity.

Related Non-GAAP Expense Measure

We reference in our earnings call non-GAAP Operating Expenses. We believe that this non-GAAP financial measure, when considered with the financial statements determined in accordance with GAAP, is helpful to management and investors in understanding our performance quarter over quarter and to the comparable quarter in our prior fiscal year by excluding the same items we exclude from EBITDA to derive Adjusted EBITDA that are included in GAAP operating expenses, as set forth above (impairment of long-lived assets, stock-based compensation expense, costs incurred with business combinations, costs incurred in connection with debt issuance, restructuring costs and certain other non-operating expenses, as described above) for the same reasons stated above-- principally, that these expenses are not, in management's opinion, easily comparable across reporting periods, are not reflective of ongoing operations and/or are not representative of our operating performance.

We define non-GAAP Operating Expenses, as GAAP Operating Expenses, excluding impairment of long-lived assets, stock-based compensation expense, costs incurred with business combinations, costs incurred in connection with debt issuance and restructuring costs.

This non-GAAP expense measure should not be considered an alternative to the corresponding GAAP financial measure as determined in accordance with GAAP as an indicator of our performance or liquidity. Please review the tables provided below, for a reconciliation of this non-GAAP expense measure to the corresponding GAAP financial measure.

The reconciliation of the above non-GAAP financial measures for the quarter ended June 30, 2022 are presented in the tables below. For comparative purposes, the reconciliation of these non-GAAP financial measures in the prior quarter ended March 31, 2022 are contained in our press release for that quarter dated May 9, 2022 and available in our current report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2022 and available here:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1755953/000121390022024908/ea159625-8k_akernacorp.htm

Key Performance Metrics

We use several key performance metrics in this press release.

We define committed annual recurring revenue (“CARR”) as the total amount of contracted annualized recurring revenue for which clients have signed contracts as of the end of the stated period, assuming any contract that expires during the next 12 months is renewed on its existing terms. CARR includes the annualized value of contracted subscriptions, the annualized value of contracted software support services active and the annualized value of contracted consulting services at the end of a reporting period and does not include revenue reported as “Other Revenue” in our consolidated statement of operations. We are monitoring these metrics because they align with how our customers are increasingly purchasing our software solutions and how we are managing our business. The CARR metric should be viewed independently of revenue and CARR is not an indicator of future revenue.

We define software bookings as the dollar amount of new signed software contracts, the value of which will be recognized over the life of the contract. We define the average new business deal size as the average monthly recurring revenue of bookings for new customers and expansion on existing accounts in the period. We monitor growth in bookings and deal size as a near-term leading indicator of our business’s performance. Software bookings should be reviewed independently of revenue and is not an indicator of future revenue.

We define transactions as the sale of cannabis good recorded on our system and including sales between a retailer and a consumer and sales throughout the supply chain throughout the wholesale process before the consumer transaction. We define transaction dollar amount as the total dollar value of transactions that are tracked on our systems during the reported period. We define transaction numbers as the total number of transactions that are recorded on our systems during the reported period. Transaction dollar amount and transaction value do not relate to transactions by Akerna but to transactions undertaken by our clients tracked on our systems. We track transaction dollar value and transaction numbers as a long-term leading indicator of our market share. These metrics should be viewed independently of revenue and are not an indicator of future revenue.

Investor Contacts
IR@akerna.com


 

AKERNA CORP.
 Condensed Consolidated Balance Sheets
  (unaudited)

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash

$

5,124,553

 

 

$

13,934,265

 

Restricted cash

 

8,261

 

 

 

508,261

 

Accounts receivable, net

 

1,882,084

 

 

 

1,403,774

 

Prepaid expenses and other current assets

 

2,155,446

 

 

 

2,383,764

 

Total current assets

 

9,170,344

 

 

 

18,230,064

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

143,026

 

 

 

153,151

 

Investment, net

 

226,101

 

 

 

226,101

 

Capitalized software, net

 

6,898,876

 

 

 

7,311,676

 

Intangible assets, net

 

17,640,833

 

 

 

21,609,794

 

Goodwill

 

9,080,177

 

 

 

46,942,681

 

Other noncurrent assets

 

9,700

 

 

 

9,700

 

Total Assets

$

43,169,057

 

 

$

94,483,167

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other accrued liabilities

$

7,050,679

 

 

$

6,063,520

 

Contingent consideration payable

 

6,300,000

 

 

 

6,300,000

 

Current portion of deferred revenue

 

2,403,512

 

 

 

3,543,819

 

Current portion of long-term debt

 

6,600,000

 

 

 

13,200,000

 

Derivative liability

 

11,282

 

 

 

63,178

 

Total current liabilities

 

22,365,473

 

 

 

29,170,517

 

 

 

 

 

 

 

 

 

Long-term portion of deferred revenue

 

602,086

 

 

 

582,676

 

Long-term debt, less current portion

 

6,788,000

 

 

 

4,105,000

 

Deferred tax liabilities

 

468,486

 

 

 

675,291

 

Total liabilities

 

30,224,045

 

 

 

34,533,484

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Preferred stock, par value $0.0001; 5,000,000 shares authorized, 1 share special voting preferred stock issued and outstanding at June 30, 2022 and December 31, 2021

 

 

 

 

 

Special voting preferred stock, par value $0.0001; 1 share authorized, issued and outstanding as of June 30, 2022 and December 31, 2021, with $1 preference in liquidation; exchangeable shares, no par value, 291,192 and 309,286 shares issued and outstanding as of June 30, 2022 and December 31, 2021 respectively

 

2,227,619

 

 

 

2,366,038

 

Common stock, par value $0.0001; 75,000,000 shares authorized, 36,826,733 and 31,001,884 issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

3,680

 

 

 

3,100

 

Additional paid-in capital

 

150,438,437

 

 

 

146,027,258

 

Accumulated other comprehensive income

 

302,352

 

 

 

61,523

 

Accumulated deficit

 

(140,027,076

)

 

 

(88,508,236

)

Total equity

 

12,945,012

 

 

 

59,949,683

 

Total liabilities and equity

$

43,169,057

 

 

$

94,483,167

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

AKERNA CORP.
 Condensed Consolidated Statements of Operations
(unaudited)

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Software

$

5,920,929

 

 

$

4,456,728

 

 

$

12,429,442

 

 

$

8,251,881

 

Consulting

 

115,300

 

 

 

410,884

 

 

 

542,309

 

 

 

583,631

 

Other revenue

 

49,652

 

 

 

39,275

 

 

 

64,971

 

 

 

85,399

 

Total revenue

 

6,085,881

 

 

 

4,906,887

 

 

 

13,036,722

 

 

 

8,920,911

 

Cost of revenue

 

1,835,977

 

 

 

1,914,380

 

 

 

4,039,648

 

 

 

3,368,547

 

Gross profit

 

4,249,904

 

 

 

2,992,507

 

 

 

8,997,074

 

 

 

5,552,364

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product development

 

1,761,428

 

 

 

1,527,258

 

 

 

3,866,789

 

 

 

2,951,358

 

Sales and marketing

 

3,185,318

 

 

 

1,826,143

 

 

 

6,421,431

 

 

 

3,562,058

 

General and administrative

 

2,419,109

 

 

 

4,375,981

 

 

 

4,989,541

 

 

 

6,228,943

 

Depreciation and amortization

 

1,982,833

 

 

 

1,314,132

 

 

 

3,976,224

 

 

 

2,367,015

 

Impairment of long-lived assets

 

24,122,066

 

 

 

 

 

 

39,600,587

 

 

 

 

Total operating expenses

 

33,470,754

 

 

 

9,043,514

 

 

 

58,854,572

 

 

 

15,109,374

 

Loss from operations

 

(29,220,850

)

 

 

(6,051,007

)

 

 

(49,857,498

)

 

 

(9,557,010

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (expense) income, net

 

(212,984

)

 

 

(163,125

)

 

 

(213,724

)

 

 

(937,505

)

Change in fair value of convertible notes

 

(294,000

)

 

 

(16,405

)

 

 

(1,727,000

)

 

 

(2,007,677

)

Change in fair value of derivative liability

 

33,845

 

 

 

133,125

 

 

 

51,896

 

 

 

(42,871

)

Other expense (income), net

 

 

 

 

243

 

 

 

 

 

 

243

 

Total other (expense) income

 

(473,139

)

 

 

(46,162

)

 

 

(1,888,828

)

 

 

(2,987,810

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before income taxes and equity in losses of investee

 

(29,693,989

)

 

 

(6,097,169

)

 

 

(51,746,326

)

 

 

(12,544,820

)

Income tax (expense) benefit

 

128,042

 

 

 

(4,300

)

 

 

227,486

 

 

 

(10,570

)

Equity in losses of investee

 

 

 

 

(3,782

)

 

 

 

 

 

(7,564

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(29,565,947

)

 

$

(6,105,251

)

 

$

(51,518,840

)

 

$

(12,562,954

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average common stock outstanding

 

35,477,788

 

 

 

24,530,169

 

 

 

33,694,681

 

 

 

23,375,981

 

Basic and diluted net loss per common share

$

(0.83

)

 

$

(0.25

)

 

$

(1.53

)

 

$

(0.54

)


 

 

 

 

 

 

AKERNA CORP.
Condensed Consolidated Statements of Cash Flows
(unaudited)

 

 

 

 

For the Six Months Ended

 

 

June 30,

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(51,518,840

)

 

$

(12,562,954

)

Adjustment to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Equity in losses of investment

 

 

 

 

7,564

 

Bad debt expense

 

112,475

 

 

 

150,294

 

Stock-based compensation expense

 

477,681

 

 

 

1,074,621

 

Loss on write off of fixed assets

 

 

 

 

1,045,180

 

Impairments of long-lived assets

 

39,600,587

 

 

 

 

Amortization of deferred contract cost

 

205,408

 

 

 

242,110

 

Non-cash interest expense

 

60,500

 

 

 

926,968

 

Depreciation and amortization

 

3,976,224

 

 

 

2,367,014

 

Foreign currency loss (gain)

 

14,689

 

 

 

(17,344

)

Change in fair value of convertible notes

 

1,727,000

 

 

 

2,007,677

 

Change in fair value of derivative liability

 

(51,896

)

 

 

42,871

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

(580,387

)

 

 

286,118

 

Prepaid expenses and other current assets

 

23,530

 

 

 

(115,934

)

Accounts payable, accrued expenses and other accrued liabilities

 

119,355

 

 

 

1,463,669

 

Deferred tax liabilities

 

(206,805

)

 

 

 

Deferred revenue

 

(1,146,966

)

 

 

(633,052

)

Net cash used in operating activities

 

(7,187,445

)

 

 

(3,715,198

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Developed software additions

 

(1,737,120

)

 

 

(2,004,609

)

Fixed asset additions

 

(27,383

)

 

 

 

Cash returned from business combination working capital settlement

 

400,000

 

 

 

 

Net cash used in investing activities

 

(1,364,503

)

 

 

(2,004,609

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Value of shares withheld related to tax withholdings

 

(13,167

)

 

 

(333,847

)

Principal payments of convertible notes

 

(1,515,000

)

 

 

 

Proceeds from stock offering, net

 

761,178

 

 

 

 

Net cash used in financing activities

 

(766,989

)

 

 

(333,847

)

Effect of exchange rate changes on cash and restricted cash

 

9,225

 

 

 

(124

)

Net change in cash and restricted cash

 

(9,309,712

)

 

 

(6,053,778

)

Cash and restricted cash - beginning of period

 

14,442,526

 

 

 

18,340,640

 

Cash and restricted cash - end of period

$

5,132,814

 

 

$

12,286,862

 

Cash paid for interest

$

151,500

 

 

$

50,854

 

Cash paid for income taxes

$

19,466

 

 

$

64,963

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

Settlement of convertible notes in common stock

$

3,925,500

 

 

$

10,196,382

 

Conversion of exchangeable shares to common stock

 

138,419

 

 

 

12,453,853

 

Settlement of other liabilities in common stock

 

49,528

 

 

 

377,325

 

Stock-based compensation capitalized as software development

 

12,618

 

 

 

 

Vesting of restricted stock units

 

7

 

 

 

 

Capitalized software included in accrued expenses

 

1,045,299

 

 

 

 

Shares returned in connection with 365 Cannabis acquisition

 

940,000

 

 

 

 

365 Cannabis working capital reduction to accrued expenses

 

160,000

 

 

 

 


 

 

Akerna Corp.
The reconciliation of net loss to EBITDA and Adjusted EBITDA is as follows:
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30, 2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Net loss

$

(29,565,946

)

 

$

(6,105,251

)

 

$

(51,518,840

)

 

$

(12,562,954

)

 

Adjustments:

 

 

 

 

 

 

 

 

Interest expense (income)

 

212,983

 

 

 

163,124

 

 

 

213,724

 

 

 

937,504

 

 

Change in fair value of convertible notes

 

294,000

 

 

 

16,405

 

 

 

1,727,000

 

 

 

2,007,677

 

 

Change in fair value of derivative liability

 

(33,845

)

 

 

(133,125

)

 

 

(51,896

)

 

 

42,871

 

 

Income tax expense (benefit)

 

(128,042

)

 

 

4,300

 

 

 

(227,486

)

 

 

10,570

 

 

Depreciation and amortization

 

1,982,833

 

 

 

1,314,132

 

 

 

3,976,224

 

 

 

2,367,015

 

 

Other

 

-

 

 

 

(243

)

 

 

-

 

 

 

(243

)

 

EBITDA

$

(27,238,017

)

 

$

(4,740,658

)

 

$

(45,881,274

)

 

$

(7,197,560

)

 

Impairment of long-lived assets

 

24,122,066

 

 

 

-

 

 

 

39,600,587

 

 

 

-

 

 

Stock-based compensation expense

 

132,133

 

 

 

521,335

 

 

 

445,056

 

 

 

1,024,715

 

 

Business combination and merger related costs

 

6,062

 

 

 

63,735

 

 

 

5,425

 

 

 

107,726

 

 

Non-recurring financing fees

 

325,529

 

 

 

111,761

 

 

 

353,483

 

 

 

129,594

 

 

Restructuring charges

 

503,709

 

 

 

2,406,832

 

 

 

1,067,944

 

 

 

2,454,019

 

 

Equity in losses of investee

 

-

 

 

 

3,782

 

 

 

-

 

 

 

7,564

 

 

Adjusted EBITDA

$

(2,148,518

)

 

$

(1,633,213

)

 

$

(4,408,780

)

 

$

(3,473,942

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akerna Corp.
The reconciliation of operating expenses to non-GAAP operating expenses is as follows:
(unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30, 2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Operating Expenses

$

33,470,756

 

 

$

9,043,514

 

 

$

58,854,572

 

 

$

15,109,374

 

 

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,982,833

 

 

 

1,314,132

 

 

 

3,976,224

 

 

 

2,367,015

 

 

Stock-based compensation expense

 

107,979

 

 

 

480,674

 

 

 

413,494

 

 

 

954,970

 

 

Business combination and merger related costs

 

6,062

 

 

 

63,735

 

 

 

5,425

 

 

 

107,726

 

 

Non-recurring financing fees

 

325,529

 

 

 

111,761

 

 

 

353,483

 

 

 

129,594

 

 

Restructuring charges

 

503,709

 

 

 

2,406,832

 

 

 

1,067,944

 

 

 

2,454,019

 

 

Impairment of long-lived assets

 

24,122,066

 

 

 

-

 

 

 

39,600,587

 

 

 

-

 

 

Non-GAAP Operating Expenses

$

6,422,578

 

 

$

4,666,380

 

 

$

13,437,416

 

 

$

9,096,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akerna Corp.
The reconciliation of product development expense to non-GAAP product development expense is as follows:
(unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30, 2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Product development expense

$

1,761,428

 

 

$

1,527,259

 

 

$

3,866,789

 

 

$

2,951,358

 

 

Stock-based compensation expense

 

(39,812

)

 

 

186,014

 

 

 

188,630

 

 

 

407,907

 

 

Restructuring charges

 

168,127

 

 

 

-

 

 

 

168,127

 

 

 

-

 

 

Non-GAAP product development expense

$

1,633,113

 

 

$

1,341,245

 

 

$

3,510,032

 

 

$

2,543,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akerna Corp.
The reconciliation of sales and marketing expense to non-GAAP sales and marketing expenses is as follows:
(unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30, 2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Sales and marketing expense

$

3,185,318

 

 

$

1,826,143

 

 

$

6,421,431

 

 

$

3,562,058

 

 

Stock-based compensation expense

 

1,707

 

 

 

125,387

 

 

 

(45,082

)

 

 

243,587

 

 

Restructuring charges

 

277,049

 

 

 

-

 

 

 

277,049

 

 

 

-

 

 

Non-GAAP product sales and marketing

$

2,906,562

 

 

$

1,700,756

 

 

$

6,189,464

 

 

$

3,318,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akerna Corp.
The reconciliation of general and administrative expense to non-GAAP general and administrative expenses is as follows:
(unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30, 2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

General and administrative expense

$

2,419,110

 

 

$

4,375,981

 

 

$

4,989,541

 

 

$

6,228,943

 

 

Stock-based compensation expense

 

146,084

 

 

 

169,273

 

 

 

269,946

 

 

 

303,477

 

 

Business combination and merger related costs

 

6,062

 

 

 

63,735

 

 

 

5,425

 

 

 

107,726

 

 

Non-recurring financing fees

 

325,529

 

 

 

111,761

 

 

 

353,483

 

 

 

129,594

 

 

Restructuring charges

 

58,532

 

 

 

2,406,832

 

 

 

622,768

 

 

 

2,454,019

 

 

Non-GAAP general and administrative expense

$

1,882,903

 

 

$

1,624,380

 

 

$

3,737,920

 

 

$

3,234,126